Strategics for Strategic Decision Making

What key lessons may be learned from any comparison of these two quite different accounts of the same strategic decision?

Strategic decision Chosen alternative that affects key factors which determine the success of an organization's strategy. In comparison, a tactical decision impacts the day-to-day implementation of steps necessary to reach the goals of a strategy.

From these two accounts there are fundamental lessons which can be learnt as far as strategic decision can be involved.

Strategy flexibility. Since strategy is not written on stones, sometimes it must undergo some changes to be able to have the ability to match with the true market environment at particular entry moment. Sometimes one technique only fails unless a mixture of both i. e. emergent strategy as well as deliberate strategy.

Ability to turn-on customer loyalty and tastes toward something whose image is completely spoiled. While most motorcyclists were without doubt decent people, sets of rowdies who went around on motorcycles and called themselves by such names as 'Hells Angels', 'Satan's Slaves', gave motorcycling an awful image. Some steps Hondas took were re-designing of their product to complement with the market needs i. e. from larger machines to smaller lightweight motorcycles.

The inevitability of proper and efficient market scanning. It is possible to enter the market with a very wrong strategy due to numerous reasons including failure to effectively scan the market needs. At start Hondas failed to know what US market needed and however they brought a wrong product of bigger machines while Americans needed smaller ones.

Difficulties in the first entry to the market are not the end of business. Difficulties can be used as crucial mirrors for re-defining the technique to a successful one.

References:

CASE STUDY 2: LAURA ASHLEY

Question 1: Map Laura Ashley's stakeholders utilizing a power/interest matrix.

Stakeholders are those individuals or groups who rely upon the organisation to fulfil their own goals and on whom, in turn, the organisation depends. (Johnson et al, pp. 132)

Laura Ashley power-interest matrix is as follows

LOW POWER HIGH

LOW INTERST HIGH

Harmless stakeholders: THE 11 CEO's,

Media Group

Business Analysts

Laura Ashley Customers

Chief executive of Pearson

Laura Ashley and the husband Bernard

Ann Iverson a new CEO in 1995

Richard Pennycook a fresh FD in 1997

Shareholders like Malayan United Industries (MUI)

LOW INTEREST LOW POWER: That is a harmless stakeholder group which requires less attention. This group is represented by the retired CEOs e. g. The 11 CEOs over the last 14 years. 'I'd really rather focus on driving the business forward', he says.

LOW INTEREST HIGH POWER: This group is not always bad but must be watched because when not satisfied it turns out to be harmful to the business.

Laura Ashley's Customers; Customers have very high power to the business enterprise because without customers there is absolutely no business at all.

HIGH INTEREST LOW POWER: This group is essential to the business because it contains stakeholders with interest using what is done by the business including core customers of the business products and/or services. This group is represented by

Media groups: likes to find out about the businesses but offers less power.

Business Analysts: loves to get information for analysis although they have less power.

HIGH INTEREST HIGH POWER: Here you can find all key business stakeholders whose expectations and interests are always in the bigger side. This group is represented by Chief executive of Pearson

Laura Ashley and the husband Bernard

Ann Iverson a fresh CEO in 1995

Richard Pennycook a new FD in 1997

Shareholders like Malayan United Industries (MUI) & its chairman Dr Khoo Kay Peng, David Cook, Laura's Finance director

CASE STUDY 3: THE BALANCED SCORE CARD

QESTION 1: Why do you consider organizations often find the Balanced Scorecard difficult to implement in practice?

Definition: The balanced scorecard is a strategic planning and management system that is utilized extensively running a business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization.

Among various options for measuring business performance, scorecard appears to be superior because of its advantages over other conventional financial methods. Balanced Scorecard incorporates future variables as well as multiple measures of performance compared to other methods. You will discover about four perspectives under this technique that are financial perspective, Customer Perspective, Internal perspective and innovation & Learning perspective. Listed below are reasons for organizations' difficulties toward implementation of any balanced score card;

The problem facing organizations on implementing balanced scorecard is the architecture and assumptions applied especially on selecting appropriate measures and variety of measures to incorporate toward bettering corporate performance as is seen in the Shell crisis concerning overstatement of its oil reserves. Research from the Hackett Group shows an extremely small percentage of companies with mature and good mixture of financial and operational metrics in their scorecards.

There are processes in setting and implementing the scorecards known as translating the vision, communication and linkage, setting targets through planning and finally getting the feedback. Failing woefully to follow this process organization faces the difficulty of failing woefully to translate the strategic objectives to match with measurements incorporated in the balanced scorecard which in turn causes confusion than serving the purpose.

The persuasion I'd use to convince the organization to look at balanced scorecard is to discuss its advantages over other methods which are the following

Multiple measures of performance: incorporates a variety of variables that measure performance against a multiple set of goals.

Forward Looking: incorporates variables that are indicators of future performance including profitability.

References:

CASE STUDY 4-FIAT

Question: Post at least 4 factors, ie a 'Strength', a 'Weakness', an 'Opportunity' and a 'Threat', from one or both of your SWOT's (2004 or 2008). Briefly clarify your analysis.

SWOT analysis is a strategic planning method used to judge the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business enterprise. It involves specifying the aim of the business enterprise venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective.

The following is the analysis using SWOT tool of the FIAT Company showing its different milestones running a business within two periods of 2004 and 2008.

SWOT

2004

2008

STRENGTHS

Strong management team, e. g. CEO Mr. Marchione.

Young and energetic personnel with strong experience. "The kids are truly devoted to the reason. They are the heart of the success".

Having cars with relatively lower average emissions

Product innovation

Fiat is the market leader in Brazilian market.

WEAKNESSES

Unappealing models or Odd cars which Mr. Marchione refers it as an arrogance of thinking.

Limited resources.

Licensing innovation to other manufacturers.

A truck-making joint venture between Iveco and SAIC in China, it is weak in China, India and Russia.

OPPORTUNITIES

New products -Alfa's immediate future i. e. the new MiTo, which is based on the Punto and has been made to match the driving dynamics of BMW's Mini, and the 149, successor to the compact 147 hatchback.

Divorce from a 5-years GM partnership and becoming an unbiased player.

Partnership with other strong manufacturers like TATA and SAIC.

THREATS

Immergence of new Innovative brands in the automobile market by new rivals.

Its five-year partnership with GM. It had not worked, for many reasons. Sharing platforms, engines and purchasing had not produced the expected economies of scale and Fiat's ability to act independently.

When new EU rules on carbon-dioxide emissions enter into force

At the time when Marchione chipped in Fiat witnessed an obvious future as can be shown through re-shuffle of very old workforce.

CASE STUDY 6: THE NOVOTEL VALUE CHAIN

Question 1: What exactly are Novotel's competitive advantages?

competitive advantage can be an advantage over opponents gained by offering customers greater value, either through lower prices or by providing greater benefits and service that justifies higher prices.

Novotel Competitive advantages

Multi skilling: Multi-skilling is to develop staff as a team in a position to perform tasks and are needed in a flexible manner, this might have many advantages of hotel management, especially in smoothing the necessity for several types of staff at peak bottleneck periods of your day or evening.

Standardized levels of its services: Something to monitor standard procedures was introduced in 1987 which became known as the '95 Bolts'. This technique was designed to be a template for learning whose standards was completed by an internal team of inspectors who visited each hotel approximately twice each year. They worked as 'mystery shoppers' for the reason that they made reservations, arrived, stayed and departed unnoticed.

Sophisticated marketing and distribution systems: Novotel operates within both individual and corporate business and leisure markets. Novotel usually have special promotions and advertising themes done in different locations and in various countries with tailored promotions to local holidays and lifestyles.

Partnership programs: Novotel linked programs strengthening relationship marketing; especially the supplier partnership programmes, associated with purchasing and learning efficiencies delivering both scale and scope economies.

Staff exchanges: There was Exchange between countries, locations and kind of customer mix which contributed to multi-culture is vital to finding customers. The exchange provides opportinity for staff motivation especially in the industry whose labor turnover is crucial.

References:

CASE STUDY 8: THE VIRGIN GROUP

QUESTION 3: Does the Virgin Group, as a corporate parent, add value to its businesses? If just how?

Corporate parent: Is often a business which owns and controls the functions of other businesses by either possessing outright ownership or controlling a majority of the voting stock.

Virgin was founded in 1970 as a mail-order record business and developed as an exclusive company in music publishing and retailing. However, by 2002, the group included over 200 businesses spanning three continents and including financial services, planes, trains, cinemas and music stores.

The group succeeded on adding values to its businesses regardless of decentralization of decision making. How exactly does Virgin group add values to its businesses?

Standards: The group had standards which enabled the firms to perform toward the same goals. There were performance reviews which made employees being held in charge of their performance as well as promotions from within. For instance by using stock options, bonuses and profit sharing.

Support services: This calls for centralised support services. For example, providing HRM, marketing, financial, etc support services and human resource management systems were in destination to keep people committed.

Corporate development: Branson adopted his own personal design of management within units, boosting himself on effectively adding value to customers through employee involvement and taking their ideas.

Managing linkages: In the first 1970s Branson spent his good time soliciting funds for the business to be solvent.

References:

CASE STUDY 11: RESTRUCTURING SONY

Question 1: How many times did Sony restructure itself during the period covered by the case study?

Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of which makes it more profitable, or better organized because of its present needs.

Introduction:

On 7 May 1946, Masaru Ibuka and Akio Morita (4) co-founded a corporation called Tokyo Tsushin Kogyo Kabushiki Kaisha (Tokyo Telecommunications Engineering Corporation) with an initial capital of Ґ190, OOOin the city of Nagoya, Japan. By the 1960s, the business had established itself in Japan and changed its name to Sony Corporation.

In its milestones Sony underwent several business restructuring aiming at bettering the company's focus on high potential products and expediting your choice making process to help make the company more responsive to changing market conditions.

Restructuring of electronics business (1994): In such a new structure, the regrouping of electronic businesses were adopted engaging in eight divisional companies. These eight companies will be the Consumer Audio & Video Products Company, the Recording Media &: Energy Company, the Broadcast Products Company, the Business & Industrial Systems Company, the InfoCom Products Company, the Mobile Electronics Company, the Components Company, and the Semiconductor Company.

Leadership by team of executives: Here the new framework required Sony to be led with a team of executives at the top management level.

The Ten-Company Structure (1996): In January 1996, a new ten-company structure was announced, replacing the previous eight-company structure whereby the prior Consumer Audio & Video (A&V) company was put into three new companies - the Display Company, the house AV Company and the Personal AV Company.

The Unified-Dispersed Management Model: In April 1999 another change was announced aiming at changes in its organizational structure. The new framework required the company to streamline its business operations to be able to exploit the internet technology opportunities.

Restructuring Efforts in 2001: Once again in March 2001 Sony provided announcement about another round of organizational restructuring. This was about transforming itself into a Personal Broadband Network Solutions company by launching a variety of broadband products and services because of its customers around the world.

References:

CASE STUDY 12: SAMSUNG ELECTRONICS

Qustion 2 : How significant was Jong-Yong Yun's role in the change process?

Change process It is an organizational process aimed at empowering employees to accept and embrace changes in their current business environment.

INTRODUCTION:

Samsung can be an Asian Electronic Company located in Suwon South Korea.

The firm has experienced stiff competition from rivals such as Sony, Nokia, and Motorola based on its revolutionary products.

Jong-Yong Yun's role in the change process

Reorientation: This helped the firm to develop new capabilities. He recruited new capable employees such as managers and engineers, a lot of whom had developed considerable experience in the United States.

Retrenchment: There is a layoff of lots of employees amounting 30, 000, representing more than one third of its entire workforce.

Reduction of quantity of factories.

Discarding a Failing Strategy: Even though the firm was making money, Yun was worried about the future prospects of a company that was counting on a strategy of competing on price with products that were based. The success of the strategy was tied to the Samsung's ability to continually scout for locations that could allow it to keep its manufacturing costs down.

Developing a Premium Brand: Having were able to cut down the losses, Yun planned to shift Samsung from its strategy of competition which based mainly on the low priced products. Consequently, he began to push the firm to build up its products rather than to copy those that other businesses had developed.

Pushing for New Products: Through its new product development processes Yun struggled a lot to make it work ensuring higher margins as compared to its rivals.

Designing for the Digital Home: Yun's long term plan is to ensure Samsung's dominance in digital home technologies. He believes that his firm is at a much better position to take advantage of the day when all home appliances, from handheld computers to intelligent refrigerators, will be associated with the other person and adapt to the personal needs of consumers.

References:

Case Study 10: Mantero Seta Spa: a strategy for China

Question 1: Will you recommend Mantero Seta Spa's entry into the Chinese market?

Market growth An increase in the demand for a specific service or product as time passes. Market growth can be slow if consumers do not adopt a higher demand or rapid if consumers find the product or service ideal for the price level.

YES I would recommend Montero Seta Spa's entry in to the Chinese market because of the following scenarios

Market Growth: Chinese market promises for the stable growth of the style business as you can see Inside the mid 2000s, stable financial growth had brought substantial income to many sets of people, and with it a growing demand for the satisfaction of more impressive range needs. Also Upper-class and middle-class people became increasingly considering their social life, and chose to spend money to better enjoy their free time. There was a huge potential to market luxury goods to these groups: 2 per cent of the 1. 3 billion people living in China.

Identifiable retail Distribution: The federal government of China had adopted a series of policies to propel the retail industry through an activity of fundamental transformation. The move had sparked dramatic changes in Chinese retailing, with market growth reshaping purchasing habits. Being a result in the mid 2000s there have been many types of retailing methods, predicated on different products and market strategy.

Geographical Differences: The reasons for the variations were various. In northern China consumers made choices predicated on seasonal factors. Values and beliefs of folks in north China were predicated on their imperial history and social traditions, with clear distinctions between different social groups and classes. The distinction was underlined in lots of ways, including clothing. People in the north were alert to their appearance, and wanted others to recognise their wealth and ability. In the south the climate was temperate; therefore consumers chose lighter, more comfortable and durable material for everyday wear.

Marketing Communications: Communication processes in the style business focused on the brand image and the values embodied in the merchandise, rather than on the merchandise itself. Processes included photographs, shows, showrooms, models, displays, videos and sample collections.

References:

CASE STUDY 5: THE PROFITABILITY OF UK RETAILERS

Question: Are British supermarkets more profitable than their European and US counterparts?

Profitability is the capability to gain profit

Profit is the positive gain from an investment or business operation after subtracting for any expenses.

Profitability = TR-TC ( TR = Total Revenue, TC = Total cost)

Return on capital employed ( ROCE ) is the ratio that indicates the efficiency and profitability of company capital investments.

British supermarkets are profitable in comparison to US and other Europe due to following reasons:-

Cost of labor: Labor costs are reduced the UK due to lessen social cost borne by employers. This reduces procedure cost and makes the British companies to become more profitable.

Technology: British companies have a lead in putting it on in their distributions' systems with deliveries in few companies' warehouses, the use of technology in distribution system reduce the expense of operation adding to higher profits.

Buying power: The British supermarkets have high buying power and tend to be more centralizing than some of the US and other European countries. This help them in reducing cost as well as the British firm are more experienced and skillful in using their buying power to negotiate better terms or price from other supplier.

Because they have got dominated the marketplace the British supermarkets impose the bigger than a normal price to consumers (oligopoly power). As the British supermarkets have high buying power and the utilization of oligopoly make sure they are more profitable compared to the US and other European counterparts.

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