76901285.xls.

ms_office Module 4 old - Formulating a strategy - 14%

1/118

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

2/118

Ansoff product-market matrix '=> for identification and assessment of strategic option '=> 2 dimension: product focused and market focused, Ansoff model of growth and diversification options '=> 1st step identify it current position and concentrate on existing product and maket and leverage the capabilities '=> If unable to increase market share from existing product and market , using rational appoach to strategy: Product develo movie new product and market that r related or unrelated to current business at the same time '=> Market/Product Existing markets Existing Product Market penetration - existing products in existing markets -increase frequent usage -increase the quantity of product used -find new applocation for current users -attract new customer to gain market share of existing customer segment Market development - existing products into new markets (some risk) -Target new customer segment in same geographic regsion -expanding geographically

New Market

solutions, not products or services solution strategy - meet total customer needs organisation views its products or service as a commodity vertical integration backward integration - acquiring control over suppliers or develop new supply operations forward integration - gain control over customers or develop new customer outlets and distribution New product development '=> Critial factor that udnerlie successful product development Product advantage Execution Company environment variables Opportunity variables '=> Typical cause of failure Developing wrong product or service (market rearch is an integal compenent of the process Inadequate planning and control Schedule delays Performance issues '=> The ability to learn faster than your competitor may be the only sustainable competitive advantahe - Arie De Geus New product and development will be a strategic capability of the organisation

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% '=>

3/118

'=> '=>

'=>

Key setps of a generic new product and development process 1 Generating and capturing ideas 5 2 Screening ideas 6 3 Product development 7 4 Test market Linking new product development project to strategy -project need to be assessed fro their consistency with business strategy and spending breadown must reflect strategic p Key consideration to achieve balanced portfolio - Risk verus reward - Timeing issues - Project type issues - Resource allocation issues Intellectual property and new product development - company need to confirm the owernship of IP which they plan t ouse. Infringe this right lead to costly litigation -counterfiet product cost a lot of money. Org cannot fully exploit financial reward from the resource invested in produ

Key success factors for new product development '=> right context - have in place organisational support for new product developemtn as a growth strategy in aligment with '=> business leadership and org alignment - have formal system & processess for evaluating product and svc convepts to id '=> customer input- involve customer and using formal product development methodology for capturing unmet needs and c '=> right capability- use cross-functional development teams with representation from key organisational divison and use o

New market development '=> Cabilities for developing new market '=> Cusomter market - aggregates of consumer group with similar need Group be distrbution channel e.g. retailer or customer '=> Geographic markets- extending operation to new market either domestically or internationally Strategic reason include market-related factor efficiency-seeking factor resource-related factor quality of business environment '=> Objective of market entry Market size and growth of local market is limited Resources Secure accuess to critical resources , access to skilled low cost abour , and ac Learning undstand state of art technology, close to best practice, learn to compete in di Coordination set up base for global or reginal development '=> Market attractiveness -Selecting attractive new market requires research The size and value of propsed market

Market growth - all factor applied to remote environment analysis to undstand what is driving grow Market profitbaility- all factor applied to industry analusis to understand what is driving the profita profitability Growth of economy Nature of demand- GDP of countery growth Obsolescence and leapfrogging of products Prices - the expenditure pattern of consumer will vary in different country based on what they view Substitution economic and political risk -work out effective entry stratgey selection of market scale of entry

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

4/118

'=>

entry objectives timing of entry mode of entry Key success factory for new market development The identiiable benefits of expanding into new market must be in line with long term strategic goals org must ensure that it has sufficient cash reserve to finance the new business until it become self su org should perform both internal and external analyses extra condition for internationalisation that affect basic strategy location specific advantage of oversea market must provide requisite motivation for ompany to inve company must have strategic competencies to counteract the disadvantage of relative unfamiliarity w -

company must have organisational capabilities so as to get better returns from leveraging its strateg mechanism such as contracts and licence

=> success will depend on the effectiveness of their international business strategies.

Accounting issue in global stratgey (account challenge) '=> Foreign exchange risk Market expansion into new geographic areas without presence in those countires exchange risk can be from both customer and supplier side of business and must be considered as pa Entering a new international market by establishing wholly owened enterprise

finanical statement for foreign operation will reflect minimal exchange risk.. But the process of con reflect any exposure to such risk. E.g.inital fund from parent company and senior staff salary sent fr

'=>

'=>

'=>

'=>

'=>

Product diversification the introduction of exchange risk to the costing of a product can create complication in that it introd => add significatntly to the cost of producion due not only to fluctuations in exchange rate but also increase need for sp Preparing multiple sets of accounts create multiple set of account for different operating entities or in different jurisdiction additional complex if there are related entities with different year ends. Incompatible IT systems may have cost to combine 2 IT system if acquiring an existing operating in a new market cost of installing and establishing the account package at new location which can run across all ent other related entitiy account package is different data integrity issue Varing bsuiness conduct standards Regulation from differn country add cost to operation including the need to have qualified staff to e compliance. Taxation of revenue Varation on taxation rate and complicance requirement add to the complexity of accounting functio Collection, reporting and purch of consumption taxs and states duties add further level of complexi Transfer price

we attempt to set transfer price that maximise profit in lower taxing country. However, countries im Common modes of entry into new geographic market Ownership None or limited control Joint venture with minority, equal or non-absolute Intensity of High position investment Consortium partner

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% Los arm's-length arrangement Distributor Licensing Agent Representative Franschisee Correspondent

5/118

Strategic alliance '=> Equity Strategic Alliances are partners that take a share, or equity, in one anothers businesses a mean of entry to an unfamiliar market '=> Purpose a mean of accelerating learning of new technology to share research and development cost of ne product to share marketing cost or distribution channels Advantage improve competitive position reduced cost through increase production '=> entry to new market enhanced purchasing and financial arrangement access to critical skill and sharing of risk or cost of major development projects suppliers, custom stronger negotiating position with increase versatility greater access to critical resources opportunities for large-scale marketing effors Disadvanatge Building cooperative ventures required careful partner selection '=> Ensuring the full exploitation of knowledge sharing and preventing outflow of knowledge the comp Mergers and acquisitions Consolidation Diversification '=> Value Global reach Option Vertical integration Faster and more efficient way of entering oversea market '=> Advantage Increase market share Obtain brand recognition and good will short term value e.g. cash benefit through tax concession, disposal of asset or immidiate cost saving long term strategic value-enhanced efficiency greater economices of scale, specialisation of produc acquiring new technology tight control over operatings for better global strategic coordination better protection for intellectual property right then other mode of entry Disadvantage high up front investment high political risk exposure significant work over time in transforming the accuired company to achieve its real potential extra effoct on action plans for intergrating 2 business take into account the intangible asset of the m Company may focus on finanical matters and system of due diligence at the expenses of looking at t

Wholly owned sybsidiary (investing in greenfield operation) Advantage orginal image of company may be created with marketing, and customer will not have any preconcp state of art technology and product can be developed tight control over operationg in different countriers that is necessary for engaging in global strategic better protection for intellectual property right Disadvantage high up front investment , most costly method of serving foreign market. Firm do so must bear the f Low speed of entry high political risk exposure

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

6/118

Adv and disadv Exporting Licensing Franchising Joint Venture => indicate the issues that need to be addressed for the organisation to achieve its current business strategy

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% ->

7/118

Business strategy Question 2 and 3 : Product and market business options - Ansoff model of growth and diversification options organisation begin as a single business with a narrow product and market scope before it ventures into ad -

expansion into related products or market should provide plenty of opportunities to focus and consolidate

expansion into unrelated products or market generally of dubious( uncertain) value that not allo average performance is quite poor

- strategic options: product-market matrix Product Market Present New Related Unrelated Product Market Present

New

Related

Unrelated

- solutions, not products or services solution strategy - meet total customer needs organisation views its products or service as a commodity vertical integration backward integration - acquiring control over suppliers or develop new supply op -

forward integration - gain control over customers or develop new customer outlet

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% -> Business strategy Question 4 : Generic strategy options * Porter - generic strategies differentiation, focus, low cost

8/118

Basis of competitive advantage Cost Lowest cost leadership 1. no-frill product 2. simple product design 3. an inexpensive location for operations 4. process innovation 5. purchasing low-priced assets Focus - cost 1. narrow product line 3. narrow geographic segment 2. narrow customer segment 4. focussed functional capability Competitive scope Broad target market Degree of differention Narrow target market

- Hubbard , Pocknee and Taylor Leader strategy - both differentiation and low cost high Differentiation Stuck in the middle low

high

* best cost or value for money tries to combine both differentiation and low cost approaches not the lowest cost or the highest differentiation risk to become a stuck in the middle strategy unless both sufficient differentiation everyday low prices or value for money - Wal-Mart based on several elements * Treacy and Wiersema value disciplines() as generic strategies operationally excellent customer intimacy() product leadership - can further development to Porter's generic strategies - differentiation * strategic flexibility * effective execution perform a set of activities better than competitors * stuck in the middle does not choose one of the generic strategies no sustainable competitive advantage -> Business strategy Question 5 : Business position options

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

9/118

Corporate strategy formulation => 4 questions appoach to the corporate strategy 1. Does the corporation want to grow? -> growth -> consolidation -> downsizing -> withdrawal 2. What is the 'vision' of the corporation that holds the businesses together? 3. Are the businesses related to each other? If so, what is the basis of this relatedness? If not, why are the businesses held within the one corporation? 2 basic ways in the organisations may seem to be related product-market relatedness capability relatedness 4. What position does the corporation plan to achieve in the future? financial performance as a corporate goal or consistent positioning across industri

The role fo the CPA in formulating strategy

Formulate a business strategy => important first step - assess the gaps which exist between the external / internal environment and current business strate =>

the aim of strategy formulation and implementation is to seek external and internal consistency by resolving these gaps

Gap analysis => Hubbard, Pocknee and Taylor - formalised gap analysis process -> External environment and the business strategy gasps - remote environment - business strategy gaps list the key trends and consider to be important in terms of their impact on the fut Element Economic Socio/ cultural Demographic Sustainability Key trend Slow growth expected

Work-life balance becoming key issue; difficult to get g High growth expected

Expectation for 50% recycling of waste materials in ind

- industry environment - business strategy gaps should change in functional strategy or change in business strategy if the industry Industry environment element Threat of new entrants Supplier power Buyer power Power High Low Average

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% Buyer power Substitute power Industry rivalry Buyers' buyers Suppliers' suppliers Government - industry rivals - business strataegy gaps - 4 variables -> Average Low Average Low High

10/118

financial performance market position technology performance service performance

Internal environment and the business strategy gasps

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

11/118

business strategy can be compared with the organisation's capabilities, its performance and key stakeholde elements and the current strategy

- capability - business strategy gaps list all the important capabilities required to carry out the main business activities assess the organisations' competitive position on each of these capabilities Business strategy - capability gaps - Figure 4.6 - organisational performance - business strategy gaps identify the key elements of the strategy of the organisation determines the goals or organisation's current performance is recorded against each goal - key stakeholder - business strategy gaps gap is rarely calculated expectations of key stakeholders are often non-quantitative and quite personal key stakeholders will

-> =>

Gap analysis at the corporation level assess the corporate strategy - corporate capabiltities gap assess the corporate strategy - corporate performance gap not occur - corporate industry analysis will do at the business level for each business within the corporation

address the 5 questions in its business strategy and will have several business-level options -> Business strategy Question 1 : Growth options - growth not only owner and - consolidate - downsize - withdraw only way to servive if they are unprofitable in the long term appropriate strategy for organisations in stagnant( inactive) industries improve efficiencies or reduce the scale of an organisation's operations

especially for diversified organisations which would like to focus on core busines improve their prospects for competing in the market

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% Revised

12/118

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% 4.5

13/118

sification options d leverage the capabilities ppoach to strategy: Product development and Market development

New product Product development - new products into existing markets -add product features and refinement -expanding product line -developing new generation product -developing new product Diversification - new product to new market (greater risk) -counter seasonal diversification -counter-cyclical diversification -where limited industry prospect in org's existing and related product market This can either related or unrelated to current activities

4.7 /4.9

4.11/4.14

4.16

4.17

new supply operations customer outlets and distribution operations 4.19

4.19

compenent of the process

ve advantahe - Arie De Geus

4.19 4.22

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% 4.20 Commercialisation Launch Service 4.21 4.22

14/118

breadown must reflect strategic priorities

4.23 4.24 4.25

ght lead to costly litigation om the resource invested in product development

growth strategy in aligment with overall business strategy ng product and svc convepts to identify most promising concepts y for capturing unmet needs and converting them into product design specification y organisational divison and use outsourcing na dpartnering to

4.25 4.26 4.26

4.28

to skilled low cost abour , and access to supplier st practice, learn to compete in difficult & sophisticated markets 4.30

to undstand what is driving growth and confirm the attractivess in furure growth rstand what is driving the profitability of industry and confirm the attractivness in future 4.34 4.31 4.31 4.31 4.32 4.35

t country based on what they view as essential

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

15/118

4.37

ine with long term strategic goals of the org w business until it become self supporting

ite motivation for ompany to invest there vantage of relative unfamiliarity with foreign markets

eturns from leveraging its strategic strengths internally rather than through external

4.38

ness and must be considered as part ofr business expansion strategy

hange risk.. But the process of consolidating these report into the report of parent company any and senior staff salary sent from parent company

eate complication in that it introduces an aspect of uncertainty to the production costs. e rate but also increase need for specialised staff to account for such transaction 4.40

different jurisdiction

erating in a new market tion which can run across all entities. Otherwise mamually input is necessary if parent and

4.41

he need to have qualified staff to establish any required framework and monitor regularoty

4.42 4.43 4.44

complexity of accounting function ies add further level of complexity

g country. However, countries impose significant fine and penalties for breah in this area

4.45 4.46

Full or absolute control Wholly owned subsidiary by greenfield investment Fully or dominant acquistion join venture with absolute majority above

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% Regioal headquarters Marketing subsidiary Procurement office Representative office Technical observatory

16/118

Q4.5 /4.51

gh increase production ng and financial arrangement g position with suppliers, customer and regulatory agencies itical resources rge-scale marketing effors 4.52

g outflow of knowledge the company wish to retain demand precise 4.53

4.54

of asset or immidiate cost saving of scale, specialisation of products

o achieve its real potential count the intangible asset of the marging organsiation nce at the expenses of looking at the intangible assets e.g. business culture. Human capital ,

tomer will not have any preconcptions

ry for engaging in global strategic coordination

market. Firm do so must bear the full cost and risk of setting up overseas operation

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

17/118

4.6

usiness strategy

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

18/118

ket scope before it ventures into additional products or markets

portunities to focus and consolidate on these new related markets

uncertain) value that not allow existing capabilities to be applied to the new busines and the

Present Current position Related diversification

New Related Related diversification

=>

=> New Related

Present

Product diversification : growth in existing product-markets - increase penetration related products for existing markets Market diversification : existing products into related markets Product and market diversification : related products into related markets

commodity

suppliers or develop new supply operations

ers or develop new customer outlets and distribution operations

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

19/118

Basis of competitive advantage Cost

Differentiation Differentiation 1. product quality 2. product reliability 3. product innovation 4. product range Focus - differentiation

2. narrow customer segment . focussed functional capability

Differentiation Stuck in the middle Relative cost

Differentiation and low cost (Leader) Low cost

ost approaches

unless both sufficient differentiation and low enough price

-Mart based on several elements

ategies - differentiation

ors

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14%

20/118

onsistent positioning across industries

onment and current business strategy.

nsistency by resolving these gaps or inconsistencies

t in terms of their impact on the future growth rate of the industry Strategy consistency Inconsistent Inconsistent - need good people for Consistent - market will provide growth Consistent procedures already

ed

ecoming key issue; difficult to get good people

ed

% recycling of waste materials in industry

in business strategy if the industry environment cannot be altered() Cause or power Growing industry Undifferentiated products Chains developing Business consistency / inconsistency Consistency Consistency Inconsistency

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% Fragemented market No real substitute High growth Different segments Must have product Not applicable here High cost to government Inconsistency Consistency Consistency Consistency Consistency Consistency

21/118

76901285.xls.ms_office Module 4 old - Formulating a strategy - 14% its performance and key stakeholder expectations to establish whether any gaps exist between these

22/118

rry out the main business activities on each of these capabilities

against each goal

-quantitative and quite personal

ant( inactive) industries organisation's operations

would like to focus on core business

Index by Author Revised Revised 3 Generic strategies Porter 3.18 4 questions approach to corporate strategy analysis 3.18 5 forces analysis and internet industry Porter 2.41 5 forces analysis and paint industry 2.51 5 forces model Porter 2.40 5 questions approach to business strategy analysis Hubbard 3.12 7-S model of implementation Waterman 6.16 8 forces analysis 2.52 8-th S Higgins 6.18 Accountant as a strategic business driver 1.8 Accountant's role in organisational strategy implentation 1.7 Accounting issues in global strategy 4.38 Actual strategy versus planned strategy 3.30 Balance portfolio 4.22 Balance scorecard Kaplan 3.37 Basic of competition 2.59 Bencharmking Hubbard 3.36 Bendigo Bank- strategic think in practice Bendigo bank 1.29 Best cost or value for money Hubbard 3.26 Blue ocean strategy Kim 3.2 business strategy analysis - 5 questions approach Hubbard 3.12 business strategy gaps - capabilities 3.51 business strategy gaps - industry environment 3.51 business strategy gaps - industry rivals 3.51 business strategy gaps - key stakeholder 3.51 business strategy gaps - organisational performance 3.51 business strategy gaps - remote environment 3.51 business strategy option 3.53 Capabilities 3.39 Centralisation versus decentralisation 6.37 Challenges of implementing strategy 6.8 Common modes of entry into new geographic market 4.46 Competitive advantages 5.22 Competitive advantages strategy 1.9 Competitive environment benchmark 3.35 Competitor analysis 2.62 Competitors in Australian pharmaceutical and toiletry wholesaling industry 2.63 Corporate strategy 3.5 Cost and benfit analysis 5.14 Cross-selling 4.10 CSR Ltd: a leading diversified manufacturer CSR Ltd 3.6 Customer market segmentation 2.57 Definition - capabilities Hubbard 3.40 Definition - ethics Ferrell and Fraedrich 1.37 Definition - ethics Oxford Companion to Philosophy 1.37 Definition - industry 2.6 Definition - rational approach strategy Chandler 1.17 Definition - strategic ledership Hanson 1.32 Definition - strategy Grant 1.6 Definition - strategy 1.5 /1.3 Definition - strategy 4.21 Definition - strategy 1.17 Definition - strategy Hubbard 3.4 Differentiation - 3 Generic strategies Porter 3.18 Disruptive technologies 4.19 distinct between leadership and management Bass 1.6 distinct between leadership and management Mullins 1.7 distinct between rational and processual approach Mintzberg 1.18

23/118

Index by Author distinguishing between social responsibility and business eithics Ferrell and Fraedrich 1.37 Downsizing 3.13 Effective measurement criteria - performance measurement 3.34 Environmental analysis 2.4 Evaluating strategic option 5.17 Evolutionary() approach Whittington 1.20 Gathing data for industry external environment analysis 2.6 General Electric : Imagination at work General Electric 3.6 Global context of business Lasserre 1.9 Globalisation's Benefits Lasserre 1.15 Globalisation's Challenges & Benefits 1.12 Globalisation's driver Gunter & Van der Hoeven 1.11 Great Southern Rail Ltd Great Southern Rail Ltd 3.10 growth of the industry 2.20 Hofstede's cultural dimensions Hofstede 6.28 How it implelment strategy 6.12 HSBCs case 5.12 Indirect substitutes 2.48 Industry environment analysis 2.40 Industry key success factors 2.61 Industry life cycle Hubbard 2.17 Industry segmentation Segmentation 2.13 Industry value chain IFC 2.9 Innovation Kim and Mauborgne 3.28 Intellectual property 4.23 Key stakeholder requirement Hubbard 3.8 Key success factors for new market development Dunning 4.37 Key success factors for new product development Drake et al 4.25 Key success factors for processed vegetable manufacturing industry 2.61 Koetter's eight steo process for leadning organisation change Kotter 6.44 Leader strategy - differentiation and low cost Hubbard 3.25 leadership style -behavioural style Robbins 1.33 leadership style -traits () Thompson and McHugh 1.33 learning organisation's concept Senge 3.28 Levels of strategy 1.30 Link market to industries 2.55 Locacalisation's value 1.16 Low cost and focus - 3 Generic strategies Porter 3.18 Making recommendation to key decision makers 5.25 Managing across culture 6.28 Market development resources 4.32 Market myopia Levitt 2.7 Mechanistic vs organic system 6.38 Mergers and acquisitions 4.53 Military nature of strategy language 1.5 Mining of new product success 4.20 New business development 5.6 New product development Cooper 4.19 Offshoring - value chain Brown 2.13 organisataional mission and vision Thompson and Strickland 1.23 Organisational design 6.34 Paralysis by analysis Hrebiniak 6.8 Performance management 6.20 performance measurement 3.34 Politics 6.39 Poor coordination and misalignment Hrebiniak 6.8 Portfolio consideration Copper 5.8 Price corridor of the mass Kim 4.22 Processual approach strategy - pattern in a stream of decisions Mintzberg 1.19 Product and market evaluation criteria 5.4/5.24 Product-Market martix Ansoff 4.5

24/118

Index by Author profitability of the industry 2.51 Quantity cost and benefit and what if analysis 5.14 Rational approach strategy Ansoff 1.17 rational approach strategy - steps 1.17 Rational decision-making 5.26 Relatedness 4.9 Remote environmental anaysis 2.19 Remote environmental summary for Australian pulp and paper industry 2.37 Researching and selection new geographic market - 6 key indicator IMD world competitive year book 4.36 Reward systems Hill 6.22 Risk assessment Hubbard 5.11 Risk assessment 5.11 Role of leadership Katz and Kahn 1.6 Rumelt's criteria Rumelt 5.17 Segments in the US music industry 2.14 Shareholder view - org performance measurement 3.32 solution strategy Foote 4.16 Specific market 2.56 Stakeholder view - org performance measurement 3.34 Standard approach Lasserre 4.32 Stategt imperative 6.36/Q6.8 Strategic alliance 4.51 Strategic analysis 6.51 Strategic analysis process 2.5 strategic capabilities - sample 4.25 Strategic fit or stretch - leading edge of strategy Hamel and Prahalad 1.27 Strategic groups 2.66 Strategic initative 5.17 Strategic leadership style 6.45 Strategic plannin process 5.26 Strategic planning 1.26 Strategic thinking 1.25 Strategy implrmentation 6.4 strategy process 1.22 Strrategic bucket 4.22 Substitutes for strategy Weick Reading 1.2 , 1.36 Substituting patented medicines with generic medicine 2.47 SWOT analysis 3.39 Systemic approach Johnson & Scholes 2002 1.20 Temples for remote environment Wootoon 2.21 The importance of strategic leadership 1.34 The role of CPAs in strategic implementation 6.14 The role of leaders in strategic thinking 6.49 Timing of entry 4.37 Tranasactional leadership 6.47 Transformational leadership 6.47 Types of risk 5.11 Tyson Foods Inc.: Supply protein-based food to the world Tyson Foods Inc 3.7 Understanding customers and market Mcdonald 2.55 Understanding the external environment 1.23 Understanding the internal environment 1.24 Value and strategy Collins and Porras 3.27 Value and strategy Hubbard 3.27 Value creation in relation to org fin issue Whittington 1.8 Vertial intergation 4.17 Virgin Blue - low cost generic strategy Virgin Blue 3.24 Wicker problem Camillus 6.11

25/118

76901285.xls.ms_office 26/118 old Index by module Orginal Orginal Revised Revised Definition - strategy Grant 1.6 Definition - strategy Von Clausewitz .03 1 1.5 /1.3 Definition - strategy Cooper R1.1 4.21 Definition - strategy Robert Burgelmann R1.1 Definition - strategy Chandler R1.1 1.17 Accountant's role in organisational strategy implentation 1.7 Accountant as a strategic business driver 1.8 Value creation in relation to org fin issue Whittington 1.8 Global context of business Lasserre 1.9 Globalisation's driver Gunter & Van der Hoeven 1.11 Globalisation's Challenges & Benefits 1.12 Globalisation's Benefits Lasserre 1.15 Locacalisation's value 1.16 Substitute for leadership Kerr & JermierR1.1 Military nature of strategy language Thompson & Strickland 1.04 1.5 Competitive advantages strategy Johnson & Scholes 2002 1.04 1.9 Vitality and broadening relevance of strategy Grant 1.05 Definition - rational approach strategy Chandler 1.06 Chandler 1.17 rational approach strategy - steps 1.06 1.17 Rational approach strategy Whittington 1.07 Ansoff 1.17 Processual approach strategy - pattern in a stream of decisions Mintzberg 1.07 Mintzberg 1.19 Rational approach strategy can not satisfy because of 3 condition Mintzberg 1.07 distinct between rational and processual approach Whittington 1.08 distinct between rational and processual approach Mintzberg 1.09 Mintzberg 1.18 Evolutionary() approach Whittington 1.09 Whittington 1.20 Systemic approach Johnson & Scholes 2002 Johnson & Scholes 2002 1.10 1.20 Jan Carlzon, CEO of Scandinavian Airline System (SAS) Wood -Vision 1.11 Role of leadership Katz and Kahn1.11 Katz and Kahn 1.6 distinct between leadership and management Bass 1.12 Bass 1.6 distinct between leadership and management Mullins 1.12 Mullins 1.7 strategy process 1.13 1.22 organisataional mission and vision Thompson and1.13 Strickland Thompson and Strickland 1.23 Understanding the external environment Thompson and1.13 Strickland 1.23 Understanding the internal environment 1.24 Strategic thinking Hardy and Plamer 1.16 1.25 Strategic planning 1.26 Strategic fit or stretch - leading edge of strategy Hamel and Prahalad 1.17 Hamel and Prahalad1.27 Levels of strategy 1.18 1.30 Definition - strategic ledership Hanson 1.20 Hanson 1.32 leadership style -traits () Thompson and1.20 McHugh Thompson and McHugh 1.33 leadership style -behavioural style Robbins 1.21 Robbins 1.33 Leadership skill Parry 1.22 Leadership skill Goldrick 1.22 The importance of strategic leadership Thompson and1.24 McHugh 1.34 The importance of strategic leadership Hall 1.24 Substitutes for strategy WeickReading 1.2 , 1.36 Definition - ethics Ferrell and Fraedrich 1.26 Ferrell and Fraedrich .37 1 Definition - ethics Shorter Oxford1.26 English dictionary Definition - ethics Oxford Companion to PhilosophyCompanion 1.37 1.26 Oxford to Philosophy distinguishing between social responsibility and business Ferrell and Fraedrich eithics 1.27 Ferrell and Fraedrich .37 1

social eithics Bendigo Bank- strategic think in practice 1.29 Environmental analysis 2.4 Offshoring - value chain 2.13 Strategic analysis process 2.5 Gathing data for industry external environment analysis 2.6 Definition - industry 2.04 2.6 Market myopia Levitt 2.7 Industry value chain IFC 2.9 Industry segmentation Segmentation 2.13 Segments in the US music industry 2.14 Industry life cycle Hubbard 2.17 Remote environmental anaysis 2.06 2.19 growth of the industry Remote environment analysis 2.06 2.20 Temples for remote environment Wootoon 2.21 Remote environmental summary for Australian pulp and paper industry 2.37 Industry environment analysis 2.40 5 forces analysis and internet industry Porter 2.41 5 forces model Porter 2.15 Porter 2.40 Substituting patented medicines with generic medicine 2.47 Indirect substitutes 2.48 5 forces analysis and paint industry 2.51 profitability of the industry Industry analysis 2.14 2.51 8 forces analysis 2.21 2.52 Understanding customers and market Mcdonald 2.55 Link market to industries 2.55 Specific market 2.56 Customer market segmentation 2.57 Basic of competition 2.59 Industry key success factors 2.61 Key success factors for processed vegetable manufacturing industry 2.61 Competitors in Australian pharmaceutical and toiletry wholesaling industry 2.63 Strategic groups 2.66 Public sector analysis 2.25 Competitor analysis 2.29 2.62 Competitve positioning 2.30 Understanding customer 2.31 Downsizing 3.13 Definition - strategy Hubbard 3.4 Corporate strategy 3.5 General Electric : Imagination at work General Electric 3.6 CSR Ltd: a leading diversified manufacturer CSR Ltd 3.6 Tyson Foods Inc.: Supply protein-based food to the worldTyson Foods Inc 3.7 Key stakeholder requirement Hubbard 3.8 Great Southern Rail Ltd Great Southern Rail3.10 Ltd 5 questions approach to business strategy analysis Hubbard 3.03 Hubbard 3.12 business strategy analysis - 5 questions approach Hubbard 3.03 Hubbard 3.12 fuzzy strategy Hubbard 3.08 4 questions approach to corporate strategy analysis 3.11 3.18 3 Generic strategies Porter 3.18 Differentiation - 3 Generic strategies Porter 3.18

76901285.xls.ms_office old Index by module Ferrell and Fraedrich 1.28 Bendigo bank Hubbard, Samuels, Heap and Cocks 2.04 Brown

27/118

76901285.xls.ms_office 28/118 old Index by module Low cost and focus - 3 Generic strategies Porter 3.18 Blue ocean strategy Kim 3.2 Virgin Blue - low cost generic strategy Virgin Blue 3.24 Leader strategy - differentiation and low cost Hubbard 3.25 Best cost or value for money Hubbard 3.26 corporate strategy analysis - 4 questions approach 3.11 Value and strategy Collins and Porras 3.13 Collins and Porras 3.27 Value and strategy Hubbard 3.13 Hubbard 3.27 Innovation Kim and Mauborgne 3.14 Kim and Mauborgne 3.28 learning organisation's concept Senge 3.14 Senge 3.28 Actual strategy versus planned strategy 3.30 Definition - capabilities Nelson & Winter 3.16 strategic capabilities - 5 major classes of activities Leonard 3.18 strategic capabilities Christensen 3.18 strategic capabilities Chaney 3.18 strategic capabilities - 4 element to success Hubbard 3.18 strategic capabilities - sample 3.20 4.25 performance measurement 3.23 3.34 Effective measurement criteria - performance measurement 3.34 Shareholder view - org performance measurement 3.32 Stakeholder view - org performance measurement 3.34 Competitive environment benchmark 3.35 Bencharmking Hubbard 3.36 Balance scorecard Kaplan 3.37 Capabilities 3.39 SWOT analysis 3.39 Definition - capabilities Hubbard 3.40 formalised gap analysis process Hubbard, Pocknee and Taylor 4.04 business strategy gaps - remote environment 4.04 3.51 business strategy gaps - industry environment 4.05 3.51 business strategy gaps - industry rivals 4.05 3.51 business strategy gaps - capabilities 4.06 3.51 business strategy gaps - organisational performance 4.08 3.51 business strategy gaps - key stakeholder 4.08 3.51 business strategy option 4.09 3.53 Product-Market martix Ansoff 4.5 Relatedness 4.9 Cross-selling 4.10 solution strategy Foote 4.14 Foote 4.16 Vertial intergation 4.17 Mining of new product success 4.20 Disruptive technologies 4.19 New product development Cooper 4.19 Balance portfolio 4.22 Strrategic bucket 4.22 Price corridor of the mass Kim 4.22 Intellectual property 4.23 Key success factors for new product development Drake et al 4.25 Standard approach Lasserre 4.32 Market development resources 4.32 Researching and selection new geographic market - 6 key-indicator IMD world competitive year book 4.36

76901285.xls.ms_office old Index by module Timing of entry Key success factors for new market development Dunning Accounting issues in global strategy Common modes of entry into new geographic market Strategic alliance Mergers and acquisitions Product and market evaluation criteria Portfolio consideration Copper Risk assessment Hubbard New business development Risk assessment Types of risk HSBCs case Cost and benfit analysis Quantity cost and benefit and what if analysis Strategic initative Evaluating strategic option Rumelt's criteria Rumelt Competitive advantages Rational decision-making Making recommendation to key decision makers Strategic plannin process Challenges of implementing strategy Poor coordination and misalignment Hrebiniak Paralysis by analysis Hrebiniak Wicker problem Camillus How it implelment strategy The role of CPAs in strategic implementation Strategy implrmentation 7-S model of implementation Waterman 8-th S Higgins Performance management Reward systems Hill Managing across culture Hofstede's cultural dimensions Hofstede Organisational design Stategt imperative Centralisation versus decentralisation Mechanistic vs organic system Politics Koetter's eight steo process for leadning organisation change Kotter Strategic leadership style Transformational leadership Tranasactional leadership The role of leaders in strategic thinking Strategic analysis leader strategy - both differentiation and low cost Hubbard, Pocknee and Taylor 4.19 best-cost or value for money generic strategies 4.20 value disciplines as generic strategies Treacy and Wiersema 4.20 Rumelt's criteria for evaluating stategy Rumelt 4.26 criteria of rational decisions Harsanyi 4.27

29/118 4.37 4.37 4.38 4.46 4.51 4.53 5.4/5.24 5.8 5.11 5.6 5.11 5.11 5.12 5.14 5.14 5.17 5.17 5.17 5.22 5.26 5.25 5.26 6.8 6.8 6.8 6.11 6.12 6.14 6.4 6.16 6.18 6.20 6.22 6.28 6.28 6.34 6.36/Q6.8 6.37 6.38 6.39 6.44 6.45 6.47 6.47 6.49 6.51

76901285.xls.ms_office old Index by module rational decision-making model Davis & Devinney 4.27 Implementation task 5.03 Implementation strategy - 7-S model McKinsey & Co 5.05/R5.1 Implementation strategy - 8 big managerial components Thompson & Strickland 5.06 Definition - Implementation - Culture Schein 1985 5.07 Implementation - Culture Thompson & Strickland 5.08 Implementation process - Culture - dynamics and issues Edgar Schein 1985 5.08 Implementation successful - Cadbury Schweppes PLC Johnson & Scholes 2002 5.09 Implementation failure - HIH Haigh 2003 5.09 Implementation - managing across cultures - global market Miller & Dess 5.10 1996 Hofstede - tool for diagnose national cultures Samson & Daft 2003 5.10 Implementation - actions to link the international success Thompson & Strickland 2002 5.12 Implementation - performance management Johnson & Scholes 2002 5.12 bottom up business planning 5.13 Implementation - reward Brown 1995 5.14 Structure - designing to success the strategy Thompson & Strickland 2002 5.16 Structures - 3 main components of all organisational Robbins & Barnwell 1998 5.17 Type of organisational structure 5.18 Corporate Level Thompson & Strickland 2002 5.18 Business Level Thompson & Strickland 2002 5.19 Functional Level Thompson & Strickland 2002 5.19 Cluster organisation Quinn et al, in 5.21 Mintzberg and Quinn 1996 Organisational design - Definition Galbraith 19775.22 2 ways relationship - structure follows or influence by structure & Hardy 2002 Palmer 5.22 Centralisation versus decentralisation 5.23 organisational configurations ()- mechanistic and organic Mintzberg & Quinn 1996 5.24 Politics - Power - Definition Perrow 1986 5.25 Managing interpersonal conflict Esisenhardt et al. 1997 5.29 Hierarchy of leadership Jim Collins 2001 6.07 Definition - strategic leadership Kotter 6.04 Level 5 leadership Collins and Porras 6.07 mirror and window concept - level 5 leadership Jim Collins 2001 6.08 successful strategic requirement - 8 key steps Kotter 1995 6.10 type of transformational leadership Dunphy and Stace 1993 6.11 balance stability and change model Zakon and Lochridge 6.16 how to the detriment of where to - role of leaders in setting direction 6.22 Nanus 1992 Implementation - communication - technique to persuade Williams and Miller 2002 people 6.27 Implementation - reasons for resistance to change Tichy and Devanna 1990 6.29 3 technique to address resistance to change Hiebert & Klatt 2001 6.29 situational approach Blanchard, Zigarmi and Zigarmi 1985 6.31 leadership styles 6.32 strategic leadership - 4 types Rothschild 1993 6.33

30/118

Segment map

Cover Module 1 An introduction to strategy and leadership Module 3 Internal analysis Module 4 Product and market development Analysis

31/118

Module 2 External analysis

Module 5 Making strategic choices

Choice

Module 6 Leadership and Implementation of strategy

Implementation

Module 1 - An introduction to strategy and leadership The origins and importance of strategy Leadership defined The role of accountant in strategy development The global context of business Approches to strategy The rational approach The processual approach Other perspectives on strategy The strategy process Organisational purpose Understanding the organisation environment Analysing strategic position Formulation and implementation of strategy Strategic thinking and analysis Levels of strategy Corporate strategy Business strategy Functional strategy Strategic leadership Approaches to leadership styles Leadership skills in a changing workplace The importance of strategic leadership Leadership and ethics The classical view of ethics The socioeconomic view of ethics The ethical responsibilities of leaders

new 1.5 1.6 1.7 1.9 1.17 1.18 1.20 1.22

1.25 1.30

1.32

1.36

Cover Module 2 - Understanding the external environment Analysing the external environment Defining the industry Understanding the industry life cycle Remote environment analysis Remote environment trends Summarising the remote environment analysis Industry analysis Porter's five forces model for industry analysis Drawing conclusions about industry profitability Extending Porter's five forces analysis: Eight forces analysis From industry to market analysis Understanding customers Understanding competitiors: Competitor analysis Competitive positioning: Strategic groups Industry anlaysis for the public sector CPAs and external environment analysis Module 3 - Understanding the internal environment Key stakeholders and strategy a What do key stakeholders want to get from their involvement? b How consistent are key stakeholder attitudes and values with those of the organisation? Identifying the existing business strategy: The five questions approach The five questions (5Qs) approach to business strategy analysis 1. Does the organisation plan to grow? 2. What products and services does it plan to produce? 3. What customer and geographic markets does it plan to service? 4. What generic strategy does it plan to follow to position itself uniquely against competitors? a do something different from competitors b do something better than competitors do it 5. What position in the industry does it plan to hold in the future? Clear and fuzzy() strategy So how can a business strategy be stated? Other issues in developing business or corporate strategy Values and strategy Innovation and learning as keys to changing strategy over time Actual strategy is different from planned strategy Measuring the performance of strategic capabilities Measuring organisational performance The shareholder view The shakeholder view Summary Comparing performance measures Standards of comparison Benchamrking Getting the information Assessing overall performance Summary Strategic capabilities From static to dynamic capabilities Identifying strategic capabilities 1. Is it valuable to customers? 2. Is it better than the capabilities of most competitiors? 3. Is it difficult to imitate or replicate? Summary Gap analysis External environment and the business strategy gaps Internal environment and the business strategy gaps Business strategic options

32/118 2.4 2.6 2.17 2.19 2.36 2.40 2.41 2.51 2.52 2.55 2.57 2.62 2.66 N/A N/A

3.8

3.12

3.27

3.32

3.36

3.39

3.49

3.53

Cover Module 4 - Product and market development Product and market optiong Ansoff product-market martix - Market penetration -Product development -Market development -Diversification New product development Key success factors for new product development New market development Development of new geographic markets Accounting issue in Global strategt Common modes of entry into geographic markert Module 5 - Making stragetic choices Evaluating options Product and market evaluation criteria Risk assessment Evaluating strategic option Making recommendation to key decision makers Module 6 - Leading and implementing strategy Reviewing the implementation process The challenges of impemeenting strategy 3Cs of communication, commitment and coordination How to implement strategy Leadership and the CPA 7-S model of implementation Performance mgt Hofstede's cultural dimensions Leading the impleementation of strategy The nature of strategic leadership The importance of leadership Organisational levels of leadership Character and leadership A hierarchy of leadership The role of leaders in strategic thinking Balancing stability and change The role of leaders in strategic analysis External analysis Internal analysis Performance measurement The role of leaders in setting direction Visionary leadership The role of leaders in strategy formulation and selection The role of leaders in implementing strategy Communication Communicating the vision and strategy Overcoming resistance and cementing change in an organisation Surfacing and dealing with resistance Empowerment and developing future leaders Followership Leadership styles Future challenges The pace of change Globalisation and the need for golbal leadership Technology

33/118

4.5

4.18 4.25 4.27 4.38 4.46

5.4 5.4 5.11 5.17 5.25

6.3 6.4 6.12

6.20 6.28 6.41

6.58

34

Refer to Module 2 1.1 How would you define the industry to be analysed?

Case Scenario 1 Industry define as a group of organisations or business units producing close substitutes. narrow - easy to analysis but more likely to miss the new trend, the industry is shopping center industry in Australia which is to provide rental service or place for retail shop. It is global through internet It is Australia based Building a physial shopping center with basic infaststructure-> repairing and maintance the shopping center -> promote the shopping center and arrange event to increase traffic for tenant from retail industry -> rent for space to retail shop owever and provide other bulidng mgt and rental service e.g electricity and water. Different type of rental charge to tenant based on the consumer traffic in shopping center (i.e. high rent, high traffic) Maturity and Shake out stage Characteristics of Maturity stage, majority of industries stay in for most of their live in current sitation. This explain why author write this article to alert the shopping center owner the threat from online shopping Characteristic of Shake out stage, there is no clear evident to show the ROI is unsatisfactory. However, about 12% of all US retaining will be done either online or via mobile device. The figures will be higher in Australia, because of slow response from australian retailer and increase targeting of Australian consumer by overseas online store and nature of the early adapopters of technology in Austrlian customer. In other word consumers spend more time on online retailing in stead of window shopping in shopping center. This directly affect the consumer traffic in shopping centre. In return less rent can be charged and ROI is affected . Other evident is new model of doing business are being devleoped. The manufacturing can now market and sell directly to the consumer in stead of pass through retailer and shopping center. As competition become more intense, it becomes increaslingly ncessary for organisation to use strategic mgt concept to protect their industry

1.2 Is the industry global 1.3 Is the organisation mentioned Australia or overseas 1.4 based make any inference about the industry value chain Can u from the article? 1.5 What r the key product and services segment in the industry? 1.6 R u able to identify the stage of industry life-cycle from the fact in this articule?

2.1 What have been the remote environment trends that have driven the industry to its current state? 2.2 R these factors changing? technological Negative, Internet has enabled consumers to shop in internet easily with information on product range and price. Since australia is early adopters, the gownth of on line shopping is expected. This means that less consumer traffic in shopping center. So technology has had a negative impact on the historical growth of the shopping center industry and this trend is expected to continue in future Negative, The funnelling will have happened in the onlind world, where search engines will have proposed shops and product for consumer to visit. economic Negative, Most of the product in shopping center is not daily necessarities focusing on brand product, financal crisis reduced disposable income available to purchase this discretionary items. Although economic factors are expected to improv, change in consumer behaviour caused by tighter economic conditions have changed purchasing pattern This have negative impact on future growth of the industry Negtaive, Chaning purchasing patterns from shopping in shopping center to ontline retailing via mobile phone or and broadband Negtaive, Chaning information power and distribution power from shopping center to customer viaonline view and out bouard searching Positive, Geographic speaking, Since US website advise they could not ship on line retail product to Australia market, In other word, Australian only can purchase US product from shopping center. . Positive number of brands need fewer stores, it is expected failiing demand reatil soace. The high street and independently located retail space will suffer while shopping centers consolidate their share of a declining demand. political legal environmental sociodemographic N/A N/A N/A Positive, public still want to touch before purchasing and many people see shopping as partly entertainment , so consumers will still want to wander around shopping centres as a form of information gathering and social internaction.

market

35

Refer to Module 2 2.3 What will be their impact on future growth in the industry?

Case Scenario 1 Based on above analysis, future growth of shopping industry is predicted to experience low and possibly negative grwoth 1. Invest in technology and devleop new business model, new partnership may be required with mobile technology and retail shop owners. For example, customer's smartphone download pointers to items on sale now and matches their past purchasing pattern, 2. Cooordination with retail shop to create band experience and perhaps trialing a product and less about store sales to capture of the brower 3. Coordination with retail shop to offer fantasic online shopping experience- low prices and vast range, plus easy to use software to cpature knowledgeable consumer who has access to global pricing range and avilability information

4. Provide assistant for customer service- Consumer will still need to have products replace if they are faulty or serviced if they fail. Competition for servicing consumer need will expend. 3.1 What r the forces within the industry that determine the current profitability of industry? 3.2 R these factors changing? Barrier to entry are high threat of new entrants Medium -comprises companies that build develop and mange shopping centers in Australia Industriry size Medium- new entrant with little market share will not enjoy the cost advantage of those already established competitor e.g. efficient capacity economies of scale product differentiation Hard- Well established shopping center with major brand retailer make it difficult for a new entrant to capture. Well known retailer company will not set up 2 retails shop in a location Intellual property capital requirements switching costs access to distribution channel government policy power of suppliers nothing of significance Large- a large investment for building up a shopping center. Marketing and promotion also need significant investment High based on lease term. If tenant have comiited to rent the place, there are high cost of chaning to alternative. New entrants have difficulty distributing their vacancy place through established distribution channels as those have already been locked in by existing competitors Many buldling regulation is required to follow. Low Buildnig material is not unique and and widle available from local and international supplier Building a shopping center require a large percentage of supplier's output and is therefore relative important to supplier power of buyers High Rent is always is a high percentage of the cost of tenant' cost in which case they are more likely to negtiate for the best deal available and will have an incentive to shop around There are few costs of chaning supplier eg. Shopping outlet is easy to find due to fewer store is required in the market due to the effect on line shopping power of substitutes Intensity of industry rivalry High, Rent in high street is cheaper than in shopping center, it is not expensive to set up a website for online retailing compared with rent a place in shopping center Low and increasing Low capacity- the area for shopping center is limited High exit barrier due to high fixed cost on building High loyalty due to contract with the tenant however since fewer store is required under the effect of online shopping, there will be pressusre to reduce lease term and cost N/A High, Buyer's buyer can avoid the retail shop in shopping center go direct to on line manfacturer Buyer's buyer can get information of producr from internet in stead of vistin shopping center

The role of governement Buyers' Buyer

3.3 What will be their impact on future profitability in the industry? The industry valaue chain is chaning due to on line shopping, which ean that new capabilities e.g. offering a fantasic online shopping expereience (low price and vast range plus east ti use software) will be required to complete and access new customer markets. Also competitin for servicing need will expend e.g. post sales service. Change in relation between manufacturing and retailer 4.1 Does the articule make any reference to the different customer market segments in the industry Geographic - group the tenant based on consumer traffice in shopping center,

36

Refer to Module 2

Case Scenario 1 (for retail industry only) Distribution - group tenant based on distribtuion channel such as online or at shopping center or the shop in high street or independently located reatil spaces

Customer traffic in shopping center 4.2 Can u make an assessment of what drives customer (for retail industry only) fantastic online shopping experience (low prices vast range plus easy t use software to locate the product and shop) demand in them? 5.1 Given your remote and industry environment analyses, and your customer and market analysis, are you able to assess the basic of competition in the industry? Demand - What drives demand for the products and Locaton of the shopping center servies of the industry? Marking and Promotion of shopping center Inflastructure of the shopping center Age of the shopping center Choice - What drives price, product performance and The lease term and cost supply availability? Shop mix in the shopping cetner The brand of the retail shop company Based on the space (larger place, higher commpn expenses e.g. water, electricity) and consumer traffic Price - How is the price determined in the industry? Building material Costs - What are the main driver of cost in the industry? Current and potential risks - What r the current and labour cost for building mgt and marking potential risks? Common expense e.g. water electricity 5.2 What are the few factors that r critical for the 2.61 Strong band name , understanding the customer, product quality, effective marketing, product distribution and awaremess organisation to do well to be successful? 5.3 R there any strategic groups that organisations in 2.66 N/A (for retail - online shopping) industry compete in? 5.4 Analyse the competitors if mentioned in the article, to (for retail) gain a clear and specific profile of each major competitor in the industry. Shop in highstreet or On line retail shop provider Shopping centers independly Value prosposition Provide online retail serive with delivery in Provide shopping experience in Build complexes which provided retail other service intenet a physial shop Easy of purchase and ease of access range Only can purchase and access Strength/Weakness Only can purchase and access information of product in shop and information information of product in shop With delievery serivce N/A N/A Only can see the product in pic with online Can touch and try the product Can touch and try the product review Shopping is a form of social lack of social function Shopping is a form of social interaction and entertainment interaction and entertainment Limted brand and choice Limted brand and choice Mix of strong brand with varity of choice Limited operating expense and investment for Medium operating expenses maintance a website and investment Highest operating expesnes and investment

Refer to Module 3 1.1 Who r the key stakeholders of organisation

Case 2 CEO - Sue Morphet

Major shareholder - Paul Fiani

Chairman- James MacKenzie James expected the company can be saved from ledge of collapse and growth

1.2 and what r their expectation from the organisation?

Major shareholder is interestd in receiving divdend. It is proved by the release of dividends in last first half under Sue concern the sense of achievement because she is quits excited about the company opportunity for company loss situation. Certain pressure may be done from next three year shareholder on CEO. Also, he expected the company can be saved from ledge of collapse and growth

2.1

What is the current business strategy of the organisation? Does the organisation plan to grow? What products and services does it plan to produce? What customer and geographic markets does it plan to service? What generic strategy does it plan to follow to position itself uniquely against competitors?

The company want to cost-cutting to achieve profitable growth in its strategy and downsizing 3.13 Making clothing in any capacity Customer segment - the main customer is from retailer e.g. K-mark and to direcrtly to custsome through own stores , Geographic markets it seems the company only sell its product in Australia although it has operation through other place. This is like many local manufactuer. do something different from competitors - Focus cost. It is supported by it three year resturcturing strategy: cost cutting, recorganing, simplifying losgistic and operations and developing capabilities required as brank marketer, capital mgt and debt refinancing and sourcing production and downsizing. Downsizing may be the only way to survive if they are unprofitable int the long term. Thisinvolves reducing underperforming activities or selling unprofitable parts of bsuiness in order to retain those parts that are performing. Downsizing may involve moving manufacturing operation offshore to countries where production cost are lowers

What desired() position in the industry does it plan fully understand that the markets' tough and polarised, the company plan to remove the complexity around them to ensure they have absolute long- term opportunity. And therefore the position may be the nnumber on in their category and focus a key dozen key brand to hold in the future? R u able to assess how the organisation has performed 2.2 to date in meeing its objectives based on the given By using balance scorecard under stakeholder view a one point of time facts Good performance overall , made up as follow: 1. significant cost saving in 2011 at $150 million through closing down 10 local factories and cutting about 1800 jobs and cuts in advertising and marketing 2. Although company had 166 million loss, the main reason is due to written down value at 175 million instead of weak margin. The first half earning b4 interest, tax and amortisation increased 30.1 % to 104.5 millio. 3. rising cost of cotton and chinese labour and reight and weak sales from fickle retail environment is to be concerned 4. reduce debt and reinstate dividend Weak performance ovearl, made up as follow: 1. declining sales of cornerstone Barng bond at first time, 2. Customer will either buy no. one brand or price point offer the retailers are follow suit and therefore company introduce product of focus to satisfy the customer need. Sales have been down in department stores and supermarket channels Good perfomrance overall, made up as follow: 1. cutting of cost base by shift productin to China, , and cutting about 1800 jobs and marketing expenses. 2. Focus on key segment on underwear, workwear , footwear and outerwear by selling selling off non key product business - bed and foam business. 3. Strong EBIT margins that the company has achieved indicated that high focus on economic of scale had delivered te results Medium performance, make up as follow 1. boost its local design abilities and expanding the Sheridan brand and retail strategt visa it own stores

financial

customer

internal process

innovation and learning

3.1 Identify the capabilities of organisation in the context of the competitive environment, and analyse them to determine whether these capabilities are strategic capabilities Valued by customer Size, giving rise to economic of scare Outsourcing production business model Strong quality focus Speed of response in operation Operational flexibility Human resources Culture and mgt Distribution Yes, the last big Australian producer still making clothing in any capacity for customer Yes, low cost production will reflect in the price of the product Yes , the company boost the design abilites by sell off non key band indsutry Yes , the first mainstream blue -collar companies to focus on strong band to become brand marketer Yes streamlining of the brand by reduce the complexibility of capability Yes, recuit experience strong market focus good manager to implenet the focuing strategy to implement the company stratgey Yes, inspiring leader to lead the company Yes, setting up own retail shop without any constraint on dislpay of product Better than the compeitor Yes , the last big company No, many local manufactor do the same thing Not enough infomration Yes, hard to compete with this well established brand Not enough infomration Not enough infomration Not enough infomration Not enough infomration Not easily replicated Yes build up over time No, easy Not enough infomration Yes, hard to copy the established strong brand Not enough infomration Not enough infomration Not enough infomration Not enough infomration

Refer to Module 3

Case 2

4.1 Determine whether there are any inconsistencies (gap) between current business strategy and remote environment, the industry environment and the performance of the organisation compared to its key competitors. 4.2 Review the current business strategy against the expectation of the key stakeholders, the organisation's performance and the capabilities of the organisation Currrent business stategy : three year resturcturing strategy: cost cutting, reorganisng, simplifying logistic and operations and developing capabilities required as brank marketer, capital mgt and debt refinancing and sourcing production Extermal environment 1.Economically speaking finanincal crisi discourage customer to purchase item which is not daily necessaritiy. This will indireclty affect the goal of cost cutiing that is to make profit . 2. Also rising cost remote environment to business strategy gap for cotton, chinese labour, freight also affect profit. the industry environment to business strategy gap Industry competitor gap to business strategy gap Internal environment capabilities of to business strategy gap key stakeholders to business strategy gap 1. Customer -retailer like Kmart prefer replace lable with irs own home-brand product. This will cause the strategy to be brand maker more difficult. This is because without the channel of retailer, brand can't be acknowledged by consumer. 2. 3. Market has changed and beomce polarised. Customer either buy no. one brand or the price point offer. Retail follow their buying pattern.This afftect profit. 1. Many local manufactuer, shifted work offshore to china to cut cose. Pacifc brand do the same thing to narrow the inconsistence 1.The company don't have reliable senior manager to simplify opertaion. This explain why the company need to hire some senior executive in the new team. 1. The article didn't mentioned any thing about capital mgt and debt refinancing except reducing debt 2.But the company can indeed cut the cost to 150 million in 2011 with 30.1 increase in EBITA and reinstated the dividend to investor . This can partly fullfill the expextation of key stakeholder 1. The company did cost cutting to 150 million, recorganise the the business into 4 segment , simplifiying the logistic by selling off non key brand beds and foam business, shift production to china and develop local design abiliies and open retail shop for the strategy in relation to brand maker

the organisation's performance to business strategy gap

5 A review of these gap, and an extended SWOT analysis, may reveal some possible alternative and strategies that the organisation could purse. These will often relate to improving the operational side of organisation while strategic growth option usually fall into the category of new product and/or new market, which is discussed in Module 4 Strength - S Weaknesses-W - Focus on strong band -Too complex for capabilities e.g. still trouble foot wear -Local design abilities increase - high debt level Opportunities-O S/O options W/O option - Reduction operation cost by shift production to China, experience to market in China since they have experience to start business in china by their strong band Selling off the complex capablites to oversea investor to pay the debt develop the operate in China - Globalizatin Threats-T S/T options W/T options Market's polarised Expanding the new strong band to be the top brand Franchise the retail shop to sell the top brand product with franchise income Retailer develop their own band e.g. Kmart Open their own retail shop to expanding their brand and income source Sell the complex capablites to retailer Refer to Module 6 1 What challenges r the organisation is likely to face, or is experienceing, in implementing its strategies? Lack of model to guide the implementation effort, resulting in uncoordinated and conflict decision and actions. According to the article, the company were the first mainstream blue collar companies to make a significan shift (i.e. outsource the the production offshore to china) without any related model to follow in the industry Unsupportive power structure. One of the reason for hiring senior managers e.g. Collette Garney may be the reault of lacking critical support from exisiting senior manager in implementing its strategies Since the company cut 1800 jobs for life and how a lack of loyalty to their employees, this in turn has led to an equivalent lack of loyalty or committent by many employee to their company Paralysis by analysis 6.10 Politics and resistance 6.10 Environmental uncertainty 6.11 2 Has the organisation considered any misalignments with all the iterconnected"7-S" aspects of the implementation plan? Yes - structuce is downsizing from 900 lables to 350 old bands to less than 100. And integerated into 4 segment underwear, workwearm foot wear and outerwear Structure No The issue in relation to a market capitalisaiotn that had sunk to 100 million haven't planned to solved . Strategy Yes Part of operartion is outsourced to china. This will deprives its skill and technology. Qualtiy oand control issue is another concern. But without doing this, it cannot save the company from edge of System collapse Staff Skill Style Shared value Yes Cutting about 1800 jobs will affect the morale and loyality of the employe, it cannot save the company from edge of collapse Yes Sell off part of business can incease it local deisgn abilities Yes,in the large scale of the change, leader will be required to force the change through the organization in order for strategic success as strong resitance . Although, Morhphet was criticised for everything, she still insist to implement the 3 3 restructing Yes, the organsiation did consisder some misalignments in share value so new senior manager was hired to change this situation

Refer to Module 3 Case 2 3 How has the organisation performed in its implementation of the strategy? Refer to Blue book question 3.9 or 3.37 Customer perspective Internal processss perspective Learning and growth perspectivemeet and exceed customer needs in areas of time, quality performance and svc and cost , yes cut the cost through offshore , and focus on leading band to fit the customer purchasing pattern, and has retail stragey for wider distrisbution channel not just supermarket measure of internal process and perfmance that deliver customer expectation. E.g. quality standard, employee skill, productivty level, outsourcing allow company to concentrate it owen energies and resources on its key value chain activities. Sell off part of business can make the company less complex in value chain measure the and manage human information and organisation capital (intangible assets ) with its strategy , hiring expertise to bring innovative idea to company. Also after sell some businesss, local designer abilities can be focus and grow

Financial perspective state how improvement to their process and quality of the product will improve market share and increase profit. Profit margin increase 30.1 % 4 Determine the fit between the desired strategy and the business systems of the organisation the organisational structure and internal politics of the organisation Desired strategy Reward system 6.22 No Information system 6.23 No Structure 6.37 and 6.36 Yes - outsourcing and down sizing Internal politic 6.39 Hiring and give power to the senior staff who is on your side 5 Is there a good fit between the desired strategy and the organisational culture? Consider any cross-cultural issue for the organisation organisational culture 6.26 6.32 Selecting people for key position is another important step in mgt of culture China - stong work ethic in long term vs short term orientation in culture 6 How is and/or should the process of change be implemented in the organisation? Kotter eight step process for leading organisation change 6.44 7 Review the nature and scale of change required to gain an understanding of the type of leadership required to lead it. the nature and scale of change 6.43 Large and complex due to the resistence 6.10 type of leadership 6.42 an executive who build lasting greatness 8 How has, or should have, the leader performed in their strategic analysis, selection and implementation role? their strategic analysis 6.46 Surgeons selection 6.51 implementation role 6.55

Refer to Module 4 Case Scenario 3 1.1 Consider whehther the organisation has leveraged its existing capabilities to its maximum market position and market penetration. Yes Lavazza is one of the world's largest coffeee maunfacturers and leader in the Italian. To maximum its market position and increase the amount and value of business with exisintg customer in existing coffee manufacturing and coffee chain market (market penetration), following exisiting capabilties has leveraged. 1. Understanding of customers real need by serious responded to the indutry commentator comment including more conscious consumption, profliferation in caf chain and increase out of home consmption. One of the respond is to its vertical intergeration to coffee chain and expanding the coffee chain product to India Lavazza is also full use of its strong reputation for quality by named its coffee shop as Barista Crme Lavazza To maintain its leader position in italy, effective advertising such as long tv running TV advertiement Paradiso camaign and Lavaazza has been used over years There are effecive salesfore as a result og effective tranning provided to employee all about coffee and how to serve it in 44 traning centres With the experience of running franshise business since 1994, high speed of new market development can enhance its maket penetration Through infomration exchanges, shareamrkeing opportunties and growing consumer markets in ESE and Lavazza consortium also help to maximum the market penetration . One of the largest size in coffee manufacturing and efficient distribution from 4 factories in italy also contribute to its marker leader position Technical superiodrity is another exisitng capabilties. Lavazzza always take a lead in general development of indutry e.g . Coffee studies and research with charimanship of European Coffee association, European Coffee Federation and through it traning centres. e,g Luigi Lavazza Centre Continuing product innovation through the signed agreement between Lavazza and Politecnico di Torino - established university in itlay . The aim is at enhancing Lavazza's research and development activieies The ability and experience of acquired companies e.g acqusition of Ercom, an italian company with international brands in 2010 also can maiintaining its position in exiting markets 1.2 Does the article indicate any strategy regarding development of new products or expanding its markets to remain cometitive and/or to grow Related diversification. As for development new product and new market- Launch of new capsule coffee maker in US market in 2012, the company adopted related diversification. Since the capacility of making new product can be applied to the exising system, it is obiviouly related product development. It is the first time for Lazza to enter US market through strategic alliance. All of these can support that it is related diversification. As for the development of market in relation to 3 new acquistion (to italian company with international brand, Bulgararia largest chain of coffee shop and Argentinean company operating in the office service business) nad build a new high tech production plan in India, the strategy is market penetration and market development. Market Penetration 1. Acquriting an italian company can increase the amount and value of Lavazza with global customer in it export makert. This is Market Penetration in term of customer segment in gobal market 2 Building High tech, high capacity production plan in India can help Lavazza to become leader in role of manufacturer industry in customer segment. This is Market Penetration to increase the amount and value of the espresso coffee secto rwith existing customer in exisiting maketing as a hub in the region 3. One of the division of Lavazza is food service . However, Aquriting Bulgararia largest chain of coffee shop is a new market for Lavazza. And therefore this is Market development under geographic segment 4. Similarily Vending coffee machine to office segment is not an new issue for Lavazza. For exmaple the office the product is Espresso Point , Maxi etc However the market is new in Agrentina. This is Market Development for acquiring argentinean company operating in office coffee servuice business

Market Penetration

Market Development Market Developmen

Refer to Module 4 Case Scenario 3 1.3 Or is it possinle that the companay is taking another approach to growth? (e.g. vertical integration)? backward integration to Broker/Agent or Grower- acquiring control over suppliers in value chain. This can give advantahe of ccertainty , quality or suply relibaility and cost control 2.1 If the organisatin is considering new product development, review the important aspects to consider, including key success factors for new product development New product - new capsule coffe maker which can make cappuccino coffee - adding feature - Risk verus reward - Timeing issues - Project type issues - Resource allocation issues 4.22 4.22 4.22 4.22

The new product is developed unter strategic alliance with Green Moutain. right capability- use cross-functional development teams with representation from key organisational divison and use outsourcing na dpartnering to -the full exploitation of knowledge sharing and preventing outflow of knowledge the company wish to retain demand precise -Intellectual property and new product development '- company need to confirm the owernship of IP which they plan t ouse. Infringe this right lead to costly litigation Building cooperative ventures required careful partner selection and planning -right context - have in place organisational support for new product developemtn as a growth strategy in aligment with overall business strategy -business leadership and org alignment - have formal system & processess for evaluating product and svc convepts to identify most promising concepts customer input- involve customer and using formal product development methodology for capturing unmet needs and converting them into product design specification 3.1 If the organisation is considering new market development, is the organisation trying to enter a new customer or geographic market, both? Geographic market- extend to internationall market USA, india and Argenital and Bulgaria customer market- exisitng market for vendor buinesss in term of grouping customer by distribution channel 3.2 Review the important consideration for new market development, including the strategic objectives for new market entry, evaluating the attractiveness of new markets, the key sucess factors for new market development and advantages and disadvantages of different modes of market entry. the strategic objectives Market Resources Learning Coordination

size and growth of local market is limited, want to e second biggest player in US market Secure accuess to critical resources , access to skilled low cost abour , and access to supplier in USA learn to compete in difficult & sophisticated markets in USA market Full use of india - asia pacific center for USA region in eastern coast of the Eastern Pacific Ocean;

Refer to Module 4 Case Scenario 3 attractiveness of new markets The size and value of propsed market- USA is the laregest market in the world by coffee consumption USA italian India Bulgararia Sales growth % Strongth growth for capsules double in 5 years to 2008 USA is the world's larges market by coffee comsumption 5%

Agrentina 7% 33%

Market growth - growth in world consumption of coffeeis low at about 1.2 % per year. Consumption is static in many high income countriesall factor applied to remote environment analysis to undstand what is driving growth and confirm the attractivess in furure growth -advance technological , USD economic bad but welcome investment under poor economic , competitve market, stable political , legal with strict accounting reporting, environmental - good relation with community by sustainability project in 3 growing communities in south ameria. The prjstc included construction of drying and processing plant, sociodemographic as central in people social and business life

-advance technological , , competitve market, stable political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

-advance technological , , competitve market notvery political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

-advance technological , , competitve market, stable political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

-advance technological , , competitve market, stable political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

Market profitbaility- all factor applied to industry analusis to understand what is driving the profitability of industry and confirm the attractivness in future profitability - high threat of new entrants, low power of suppliers- Lavazza is supplier, high power of buyers, many alternative, switching cost is low, high power of substitutes, high intensity of industry rivalry udner low growth environment

high intensity of industry rivalry - over 1500 individual roaster serving their local region in italy , Competition is characterised Coffee chain are major buyer- customer power is high by constant launch of new blends and flavour, high quality packagin and expensive market campaigns

Growth of economy Nature of demand- GDP of countery growth- recession but it is daily necessarity Obsolescence and leapfrogging of products- yes Prices - the expenditure pattern of consumer will vary in different country based on what they view as essential, daily necessaity for USA Substitution - tea consumption drop economic and political risk- stable the key sucess factors The identiiable benefits of expanding into new market must be in line with long term strategic goals of the org org must ensure that it has sufficient cash reserve to finance the new business until it become self supporting- sot of production plan in india 20milion euros , in 2007 turnove exceeded one billion euro

Refer to Module 4 Case Scenario 3 advantages and disadvantages of different modes of market entry. Strategic alliance '=> Equity Strategic Alliances are partners that take a share, or equity, in one anothers businesses '=> Purpose a mean of entry to an unfamiliar market a mean of accelerating learning of new technology to share research and development cost of ne product to share marketing cost or distribution channels '=> Advantage improve competitive position entry to new market access to critical skill and sharing of risk or cost of major development projects increase versatility '=> Disadvanatge Building cooperative ventures required careful partner selection

Q4.5 /4.51

reduced cost through increase production enhanced purchasing and financial arrangement stronger negotiating position with suppliers, customer and regulatory agencies greater access to critical resources opportunities for large-scale marketing effors
4.52

Ensuring the full exploitation of knowledge sharing and preventing outflow of knowledge the company wish to retain demand precise Mergers and acquisitions '=> Advantage Faster and more efficient way of entering oversea market Increase market share Obtain brand recognition and good will short term value e.g. cash benefit through tax concession, disposal of asset or immidiate cost saving long term strategic value-enhanced efficiency greater economices of scale, specialisation of products acquiring new technology tight control over operatings for better global strategic coordination better protection for intellectual property right then other mode of entry high up front investment high political risk exposure significant work over time in transforming the accuired company to achieve its real potential extra effoct on action plans for intergrating 2 business take into account the intangible asset of the marging organsiation Company may focus on finanical matters and system of due diligence at the expenses of looking at the intangible assets e.g. business culture. Human capital , comopany structure
4.54

Disadvantage

Refer to Module 4 Wholly owned sybsidiary (investing in greenfield operation) Advantage

Case Scenario 3 orginal image of company may be created with marketing, and customer will not have any preconcptions state of art technology and product can be developed tight control over operationg in different countriers that is necessary for engaging in global strategic coordination better protection for intellectual property right

Disadvantage

high up front investment , most costly method of serving foreign market. Firm do so must bear the full cost and risk of setting up overseas operation

Low speed of entry high political risk exposure 3.3 Cconsider the accounting challenges that moving into new products ot markets are likely to bring Accounting issue in global stratgey (account challenge) 4.38 Foreign exchange risk '=> Market expansion into new geographic areas without presence in those countires exchange risk can be from both customer and supplier side of business and must be considered as part ofr business expansion strategy Entering a new international market by establishing wholly owened enterprise finanical statement for foreign operation will reflect minimal exchange risk.. But the process of consolidating these report into the report of par Product diversification the introduction of exchange risk to the costing of a product can create complication in that it introduces an aspect of uncertainty to the product => add significatntly to the cost of producion due not only to fluctuations in exchange rate but also increase need for specialised staff to account for such transaction Preparing multiple sets of accounts '=> 4.40 create multiple set of account for different operating entities or in different jurisdiction additional complex if there are related entities with different year ends. Incompatible IT systems '=> may have cost to combine 2 IT system if acquiring an existing operating in a new market 4.41 cost of installing and establishing the account package at new location which can run across all entities. Otherwise mamually input is necessary data integrity issue Varing bsuiness conduct standards '=> 4.42 Regulation from differn country add cost to operation including the need to have qualified staff to establish any required framework and monito Taxation of revenue '=> 4.43 Varation on taxation rate and complicance requirement add to the complexity of accounting function 4.44 Collection, reporting and purch of consumption taxs and states duties add further level of complexity Transfer price '=> we attempt to set transfer price that maximise profit in lower taxing country. However, countries impose significant fine and4.45 penalties for breah

Refer to Module 4

Case Scenario 3

Refer to Module 5 Case Scenario 3 1 Evaluate each of the strategic options, such as different product and market option on the basis of appropriate criteria, having regard for effective mgt of the organisation's portfolio

Related diversification. Market Penetration Market Development Launch of new capsule coffee maker in US Building High tech market through strategic alliance Acquriting an italian company (export) Aquriting Bulgararia largest chain of coffee shop acquiring argentinean company operating in office cof Size and value of the market is the world's larges market by coffee comsumption USA 7% 62% x 50% = 31% 7% 33% Growth Strongth growth for capsules double in 5 years to 2008, in asia-pacific regsion High growth and Limited High growth of caf chain Distribution access Exisitng channel from allaiance can be used. Market is easily accessed through 200 outlet well established in exisitng system by acquiring can be used Distribution is its own caf outlet inExisitng channel India Exisitng channel by acquiring can be used value proposition Oyster throught strategic alliance but have new technology break throughPearls Pearls Pearls Pearls Capabilities not mentioned in licensing technolgoy, no experience on strategic allowance Building exisiing capabilies Lavazza factoriesexisiing capabilies Similar with exisiing capabilies with experience on acq Solid experience and expertieSimilar with High tech from 4 withSimilar withon acquisition in experience with experience on acquisition Resources People and time and money Capacity Too many big projects in 2010 and 2011 no sure enough people to work on it Service All have infrasture except for the prject in India, which is a developing country Risk Transition risk e.g. Technology shift, process obsolete , 3 acquistition in a year enough man power handle? , Project risk e.g. system, development - differencemaket development andand legal inSpe Specific risk for maket developmentrisk e.h. brand collapse, brand erosion risk forfailed on strategic alliance due not careless buildingmarket Brand - difference in economic, political and legal maket culture attitude and exthics across different - difference syste Specific Specific risk for in economic, political planning, eco Benefit

a mean of entry to an unfamiliar market Faster and more efficient way of entering oversea market a mean of accelerating learning of new technologymarket share Increase to share research and development cost of ne product recognition and good will Obtain brand to share marketing cost or distribution channels short term value e.g. cash benefit through tax concession, disposal of asset or immidiate cost saving long term strategic value-enhanced efficiency greater economices of scale, specialisation of products acquiring new technology acquiring new technology acquiring new technologyacquiring new technology tight control over operatings for better global strategic coordination better protection for intellectual property right then other mode of entry 2 What r the risks assessed for eah of strategic options? Scenario planning should be undertaken in order to quantify and compare the variation in their potential outcomes risk refer to Question 1 Add up all the cost associated with an initiative , then add all the benefit and so able to determine the benefit are greater than the cost of individual initiative 3 Evaluate each of the strategic options in terms of their consistency with the organsation's external and internal environments, the feasibility of successfully undertaking the option and the competitive advantage it will give Q5.5 Related diversification. Market Penetration Market Development Launch of new capsule coffee maker in US Building High tech market through strategic alliance Acquriting an italian company (export) Aquriting Bulgararia largest chain of coffee shop acquiring argentinean company operating in office cof is the strategy consistent with the external environment? How does the business strategic option fit with the industryknowledgable and-demanding inthe orginisation focus competition becomeMaturityAsia pacific hub is an evidence high growthdemandingthroughcharacterist of l Maturity - customer become more life cycle Maturity in this stage USA Shake out- The is on efficiency , Building intense, the company need to keep dominate the industry in the takeoverin Eu office segment more a -customer become more knowledgable and rate is one of coffee chain GrowthHow does the business strategic option fit with trends in external environemtn that source green coffee locally and growth (temple) cost this option can extent it market with it quality is enough room for everyone. It is w Yes for new product to satify the demanding customercan are influencing future in italy can further enhancedYes Yes , This 'Leader industry minimise shipping At this stage there product to fullfill the need -advance technological , USD economic bad but welcome investment under poor economic , competitve market, stabletechnological ,to, coffee market, technological , ,, competitvewith -accounting -advance technological and transportationt simplified,shipment of -advancecompetitve,tea with strict accountingpolitical legal legal strictstrict accou -advance technological , competitve market, political legal competitve market, stable political environmental, sociodem good, , stable political , same strict accounting reporting, , with market, stable p -advance stable reporting, environmental good relati How does the business strategic option support emerging in office isIncreasingwith the fragmenetion in all overof home consumption The option alsofrom brand coffeein asia also is consistent the market penentration optio developing the vending business trends in the industry? matched market trend on increasing outmarket fragmention also drinking habit support to coffeTrend of invlovein caf chain Acquriting an italianalso Increaseing the word, and changin casued the internal tea the trend company become valuable. of roliferation coffee in social and business life com How does the business strategic optionafit with emerging markets inIt will enable a competitve addvantage overalower cost productionItfrom large scale of production It will enable a competitve It will enable a competitve addvanta It will enable competitve addvantage over the industry? lower cost production It will enable competitve addvantagewill enable acost production over lower competitve addvantage over lower cost production addvantage over lower cost

Refer to Module 4

Case Scenario 3

high intensity of industry rivalry - over 1500 individual roaster serving - high threat of new entrants, low power their local region in italy , of suppliers- Lavazza is supplier, high Coffee chain are major buyerCompetition is characterised power of buyers, many alternative, it enable product to attract higher customer power is high it How does the business strategic option fit with trends in external environment that are influencing future industry profitability (Porter's five force model) by constant launch of new switching cost is low, high power of marhain enable product to attract blends and flavour, high substitutes, high intensity of industry higher marhain quality packagin and rivalry udner low growth environment , expensive market campaigns it enable product to attract higher marhain How does the business strategic option fit in the competitive to the company but could change competitor relationship positioned relative to competitors? it will give a competitive advantage environment? How will it change how theorganisation is If the business strategic option means entering an industry that the organisation is not already in, what impact will it have on competition and market share? How does the business strategic option change the factors of competition in the indusry? 2.59 How does the business strategic option fit with industry key success factors? 2.61 How does the business strategic option fit with developments in global markets? How does the business strategic option change the industry value chain? Shorten the value chain without the existence of broker- because the asia pacific hug can source green coffee locally in stead of through broker, current is the strategy internally Second bigges player in US market in office segement to be the leader in the espresso coffee sector consistent? Objective is How does the business strategic option fit with the organisation's strategy? How ill the business strategic optionare managed through strategic alliance the activies contribute to achieving the strategy?greenfield from Acquisition Acquisition Acquisition How does the business strategic option meet stakeholder requirement? Profitability will be squeezed as they have to comply complicated accounting reporting and the need to invest in high cost plant and equipment What impact will the business strategic option meet stakeholder requirements? What impacts will the business strategic option have on organisational revenue and costs? the manufacturing plant and acqusition Capital required to build What impacts will the business strategic option have on organisational 's current products and services? How does the business strategic option fit with organisation's current portfolio of products, services or market in development? yes What impact will the business people know have on the organisation's reputation and/or brand in the market? more strategic option What will happen if the organisation does not implement the businessscale loss of competitive advantage - economic of strategic option? Are there any reputation By implenentingwithnew business through strategic alliance, risk to company are minimised. Key risks wouldno technology failure risks associated the the prodcut strategic yes option? no be no is the strategy feasible()? r the cost-benefit projection for the business strategic option robust? yes What capabilities are requiredto Q1.1 answerthe business but selection process doesstrategic alliance and raw material origination and sourcing is insufficient. They need build up or acquired by new company refer to implement and p.3.43 strategic option and for the organisation have them? Can cababilities that the Broker organisation doesnt have be easily sourced elsewhere to implement the business strategic option? Do current staff have theyes to implement the business strategic option? skill Has the org done sometihingexcept strategicparticular business strategic option in the past and was it successful? yes similar to this alliance Can the organisation access the capital profit to implement the business strategic option? from retained required What government or other support would the organization required to implement the business strategic option? Has the organisation got -the capacity to service additional demand that the strategic business option is projected or create? What are the key risks inherent in implementing the business strategic option and how can they be minimised or managed? refer to Q3.3 annswer What will be the impact - the organisation if the worst-case scenariio of implementing the business strategic option is realised? on Has the orgaisation got the capability and mainly will need to be acquired New capabilities resources to implement the business strategic option in a timely way?

Refer to Module 4 Case Scenario 3 R there some key decision points to be considered in implementation of the business strategic option that mean investment and other risks can be minimised/managed? Who owns the IP associated witth business strategic option and does the organisation have freedom to operate with it? does the strategy create or maintain a basis of competitive advantage? Pls refer to A case scenario 2 What will the business strategic option deliver to the organisation in term of imporve profitabillity due to removal of retailer margins by selling deirec to consumer beomce fully interegrated industry compeitior, may benefits? What is it about the business mover advantage forwill be valued by customers? first strategic option that new product What is it about the business strategic option that will be yes if not apply for the patient , it is difficult for competitors to copy? What is it about the businessto market option that will make the organisation superior to what competitors are supermarket able strategic product directoly to consumer through outlet rather than rely on major offering? What will the business strategic option deliver that is rare or unusual? what is it about the business strategic otpion that will makes it appropriate for this organisation, and not another to implement it? Does the organisation have any unique competitive advantage inmanufacturing plant built toprocesses, people skills The global patent if they have and other its operations, systems and product the product. Intergration into own manufacturing process 4 Make the recommendation to key decision makers of which strategic options to adopt, demonstrating the alignment of the options to the business strategy and provide information on the benefits, risks and key steps in im refer to blue book question 5.6 and p.5.25 who will be involved and when what resources are needed key risks and how they will managed key milestones to demonstrate that implementation is goinf according to plan how much it will cost to do the implications of doing nothing

sion strategy

t into the report of parent company reflect any exposure to such risk. E.g.inital fund from parent company and senior staff salary sent from parent company

ertainty to the production costs.

y operating in office coffee servuice business

can be used

s with experience on acquisition

ment - difference in economic, political and legal system, culture attitude and exthics across different market

ring new technology

ve advantage it will give the organisation.

y operating in office coffee servuice business

e of the characterist of life cycle om for everyone. It is wsie decision to acquire the business in a largest scale in company history petitve market, stable political , legal with strict accounting reporting, environmental- bulidng facilites to community welcome the business, sociodemographic as central in people social and business life al and business life also matched with the option to extend the oversea market in office

l enable a competitve addvantage over lower cost production

hrough broker, current competitors could become competitor for green bean

and equipment

company

sks and key steps in implementing the options.

Refer to Module 5 Case Scenario 3 1 Evaluate each of the strategic options, such as different product and market option on the basis of appropriate criteria, having regard for effective mgt of the organisation's portfolio Related diversification. Market Penetration Acquriting an italian company (export) Market Development Aquriting Bulgararia largest chain of coffee shop

Launch of new capsule coffee maker in US market Building High tech through strategic alliance USA is the world's larges market by coffee comsumption Strongth growth for capsules double in 5 years to 2008, and Exisitng channel from allaiance can be used. Oyster throught strategic alliance but have new technology break through not mentioned in licensing technolgoy, no experience on strategic allowance People and time and money Too many big projects in 2010 and 2011 no sure enough people to work on it All have infrasture except for the prject in India, which is a developing country Transition risk e.g. Technology shift, process obsolete , 3 acquistition in a year enough man power handle? , Project risk e.g. failed on strategic alliance due not careless building and planning, Specific risk for maket development - difference in economic, political and legal system, culture attitude and exthics across different market a mean of entry to an unfamiliar market a mean of accelerating learning of new technology to share research and development cost of ne product to share marketing cost or distribution channels High growth in asia-pacific regsion

Size and value of the market Growth Distribution access value proposition

7% 62% x 50% = 31% Limited High growth of caf chain

7%

Market is easily accessed through 200 Distribution is well established in Exisitng channel by acquiring outlet its own caf outlet in India exisitng system can be used Pearls Solid experience and expertie in Building High tech from 4 Lavazza factories Pearls Similar with exisiing capabilies with experience on acquisition Pearls Similar with exisiing capabilies with experience on acquisition

Capabilities Resources Capacity Service

Risk

Specific risk for maket development difference in economic, political and Brand risk e.h. brand collapse, legal system, culture attitude and brand erosion exthics across different market

Specific risk for maket development - difference in economic, political and legal system, culture attitude and exthics across different market

Benefit

Faster and more efficient way of entering oversea market Increase market share Obtain brand recognition and good will short term value e.g. cash benefit through tax concession, disposal of asset or immidiate cost saving long term strategic value-enhanced efficiency greater economices of scale, specialisation of products acquiring new technology acquiring new technology

Case Scenario 3 tight control over operatings for better global strategic coordination better protection for intellectual property right then other mode of entry 2 What r the risks assessed for eah of strategic options? Scenario planning should be undertaken in order to quantify and compare the variation in their potential outcomes risk refer to Question 1 Add up all the cost associated with an initiative , then add all the benefit and so able to determine the benefit are greater than the cost of individual initiative Evaluate each of the strategic options in terms of their consistency with the organsation's external and internal environments, the feasibility of successfully undertaking the option and the competitive advantage it will give the 3 organisation. Q5.5 Related diversification. Market Penetration Market Development Launch of new capsule coffee maker in US market Building High tech through strategic alliance is the strategy consistent with the external environment? How does the business strategic option fit with the industry life cycle Maturity - customer become more knowledgable and demanding in USA office segment Shake out- The competition Maturity - in this stage the orginisation become more intense, the focus is on efficiency , Building a company need to keep dominate Asia pacific hub is an evidence the industry through takeover Maturity -customer become more knowledgable and demanding in coffee chain in Europe Acquriting an italian company (export) Aquriting Bulgararia largest chain of coffee shop

Refer to Module 5

How does the business strategic option fit with trends in external environemtn that are influencing future industry growth (temple)

Yes for new product to satify the demanding customer '-

Yes , This can source green coffee locally and minimise shipping cost

Leader in italy can further enhanced

Yes this option can extent it market with it quality product to fullfill the need

-advance technological , USD economic bad but welcome investment under poor economic , competitve market, stable political , legal with strict accounting reporting, environmental - good relation with community by sustainability project in 3 growing communities in south ameria. The prjstc included construction of drying and processing plant, sociodemographic as central in people social and business life

-advance technological and transportationt simplified shipment of good, , competitve tea to coffee market, stable political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

-advance technological , , competitve market, stable political , same strict accounting reporting, environmental, sociodemographic as central in people social and business life

-advance technological , , competitve market, stable political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

How does the business strategic developing the vending business in office is option support emerging trends in the matched with the trend on increasing out of home industry? consumption

Increasing market fragmenetion in all over the word, and changin drinking habit from tea to coffe in asia also is consistent the market penentration option in India

Increaseing market fragmention also casued the internal brand The option also support the coffee company become valuable. trend of roliferation in caf Acquriting an italian company chain with internal brand is a matched option

Refer to Module 5

Case Scenario 3

How does the business strategic option fit with emerging markets in the industry?

It will enable a competitve addvantage over lower cost production

It will enable a competitve addvantage It will enable a competitve over lower cost production from large addvantage over lower cost scale of production production

It will enable a competitve addvantage over lower cost production

How does the business strategic option fit with trends in external environment that are influencing future industry profitability (Porter's five force model)

high intensity of industry rivalry over 1500 individual roaster serving - high threat of new entrants, low power of their local region in italy , Competition suppliers- Lavazza is supplier, high power of is characterised by constant launch of it enable product to attract higher buyers, many alternative, switching cost is low, new blends and flavour, high quality marhain high power of substitutes, high intensity of industry packagin and expensive market rivalry udner low growth environment , campaigns it enable product to attract higher marhain

Coffee chain are major buyercustomer power is high it enable product to attract higher marhain

How does the business strategic option fit in the competitive environment? How will it change how theorganisation is positioned relative to competitors? - it will give a competitive advantage to the company but could change competitor relationship If the business strategic option means entering an industry that the organisation is not already in, what impact will it have on competition and market share? How does the business strategic option change the factors of competition in the indusry? 2.59 How does the business strategic option fit with industry key success factors? 2.61 How does the business strategic option fit with developments in global markets? How does the business strategic option change the industry value chain? -Shorten the value chain without the existence of broker- because the asia pacific hug can source green coffee locally in stead of through broker, current competitors could become competitor for green bean is the strategy internally consistent? Second bigges player in US market in office segement Objective is to be the leader in the espresso coffee sector How does the business strategic option fit with the organisation's strategy? How ill the business strategic option contribute to achieving the strategy? the activies are managed through strategic alliance from greenfield Acquisition Acquisition

How does the business strategic option meet stakeholder requirement? -Profitability will be squeezed as they have to comply complicated accounting reporting and the need to invest in high cost plant and equipment What impact will the business strategic option meet stakeholder requirements? What impacts will the business strategic option have on organisational revenue and costs? Capital required to build the manufacturing plant and acqusition What impacts will the business strategic option have on organisational 's current products and services? How does the business strategic option fit with organisation's current portfolio of products, services or market in development? Yes What impact will the business strategic option have on the organisation's reputation and/or brand in the market? more people know What will happen if the organisation does not implement the business strategic option? loss of competitive advantage - economic of scale Are there any reputation risks associated with the business strategic option? By implenenting the new prodcut through strategic alliance, risk to company are minimised. Key risks would be technology failure yes no no is the strategy feasible()? r the cost-benefit projection for the business strategic option robust? Yes What capabilities are required to implement the business strategic option and does the organisation have them?

Refer to Module 5 Case Scenario 3 -refer to Q1.1 answer and p.3.43 but selection process for strategic alliance and raw material origination and sourcing is insufficient. They need build up or acquired by new company Can cababilities that the organisation doesnt have be easily sourced elsewhere to implement the business strategic option? Broker Do current staff have the skill to implement the business strategic option? Yes Has the org done sometihing similar to this particular business strategic option in the past and was it successful? Can the organisation access the capital required to implement the business strategic option? yes except strategic alliance from retained profit What government or other support would the organization required to implement the business strategic option? Has the organisation got the capacity to service additional demand that the strategic business option is projected or create? What are the key risks inherent in implementing the business strategic option and how can they be minimised or managed? refer to Q3.3 annswer What will be the impact on the organisation if the worst-case scenariio of implementing the business strategic option is realised? Has the orgaisation got the capability and resources to implement the business strategic option in a timely way? New capabilities mainly will need to be acquired R there some key decision points to be considered in implementation of the business strategic option that mean investment and other risks can be minimised/managed? Who owns the IP associated witth business strategic option and does the organisation have freedom to operate with it? does the strategy create or maintain a basis of competitive advantage? Pls refer to A case scenario 2 What will the business strategic option deliver to the organisation in term of benefits? -beomce fully interegrated industry compeitior, may imporve profitabillity due to removal of retailer margins by selling deirec to consumer What is it about the business strategic option that will be valued by customers? first mover advantage for new product What is it about the business strategic option that will be difficult for competitors to copy? if not apply for the patient , it is yes What is it about the business strategic option that will make the organisation superior to what competitors are offering? -able to market product directoly to consumer through outlet rather than rely on major supermarket What will the business strategic option deliver that is rare or unusual? what is it about the business strategic otpion that will makes it appropriate for this organisation, and not another to implement it? Does the organisation have any unique competitive advantage in its operations, systems and processes, people skills -The global patent if they have and other manufacturing plant built to product the product. Intergration into own manufacturing process Make the recommendation to key decision makers of which strategic options to adopt, demonstrating the alignment of the options to the business strategy and provide information on the benefits, 4 risks and key steps in implementing the options. refer to blue book question 5.6 and p.5.25 who will be involved and when what resources are needed key risks and how they will managed key milestones to demonstrate that implementation is goinf according to plan how much it will cost to do the implications of doing nothing

acquiring argentinean company operating in office coffee servuice business 33%

Exisitng channel by acquiring can be used Pearls Similar with exisiing capabilies with experience on acquisition

Specific risk for maket development - difference in economic, political and legal system, culture attitude and exthics across different market

acquiring new technology

titive advantage it will give the

acquiring argentinean company operating in office coffee servuice business

Growth- high growth rate is one of the characterist of life cycle

At this stage there is enough room for everyone. It is wsie decision to acquire the business in a largest scale in company history -advance technological , , competitve market, stable political , legal with strict accounting reporting, environmental- bulidng facilites to community welcome the business, sociodemographic as central in people social and business life Trend of invlove coffee in social and business life also matched with the option to extend the oversea market in office

It will enable a competitve addvantage over lower cost production and efficieny production production process- stable supplier It will enable a competitve addvantage over lower cost production

r green bean

Acquisition

no

Refer to Module 4 Case Scenario 3 1.1 Consider whehther the organisation has leveraged its existing capabilities to its maximum market position and market penetration. Yes Lavazza is one of the world's largest coffeee maunfacturers and leader in the Italian. To maximum its market position and increase the amount and value of business with exisintg customer in existing coffee manufacturing and coffee chain market (market penetration), following exisiting capabilties has leveraged. 1. Understanding of customers real need by serious responded to the indutry commentator comment including more conscious consumption, profliferation in caf chain and increase out of home consmption. One of the respond is to its vertical intergeration to coffee chain and expanding the coffee chain product to India Lavazza is also full use of its strong reputation for quality by named its coffee shop as Barista Crme Lavazza To maintain its leader position in italy, effective advertising such as long tv running TV advertiement Paradiso camaign and Lavaazza has been used over years There are effecive salesfore as a result og effective tranning provided to employee all about coffee and how to serve it in 44 traning centres With the experience of running franshise business since 1994, high speed of new market development can enhance its maket penetration Through infomration exchanges, shareamrkeing opportunties and growing consumer markets in ESE and Lavazza consortium also help to maximum the market penetration . One of the largest size in coffee manufacturing and efficient distribution from 4 factories in italy also contribute to its marker leader position Technical superiodrity is another exisitng capabilties. Lavazzza always take a lead in general development of indutry e.g . Coffee studies and research with charimanship of European Coffee association, European Coffee Federation and through it traning centres. e,g Luigi Lavazza Centre Continuing product innovation through the signed agreement between Lavazza and Politecnico di Torino - established university in itlay . The aim is at enhancing Lavazza's research and development activieies The ability and experience of acquired companies e.g acqusition of Ercom, an italian company with international brands in 2010 also can maiintaining its position in exiting markets 1.2 Does the article indicate any strategy regarding development of new products or expanding its markets to remain cometitive and/or to grow Related diversification. As for development new product and new market- Launch of new capsule coffee maker in US market in 2012, the company adopted related diversification. Since the capacility of making new product can be applied to the exising system, it is obiviouly related product development. It is the first time for Lazza to enter US market through strategic alliance. All of these can support that it is related diversification. As for the development of market in relation to 3 new acquistion (to italian company with international brand, Bulgararia largest chain of coffee shop and Argentinean company operating in the office service business) nad build a new high tech production plan in India, the strategy is market penetration and market development. Market Penetration 1. Acquriting an italian company can increase the amount and value of Lavazza with global customer in it export makert. This is Market Penetration in term of customer segment in gobal market 2 Building High tech, high capacity production plan in India can help Lavazza to become leader in role of manufacturer industry in customer segment. This is Market Penetration to increase the amount and value of the espresso coffee secto rwith existing customer in exisiting maketing as a hub in the region

Market Penetration

3. One of the division of Lavazza is food service . However, Aquriting Bulgararia largest chain of coffee shop is a new market for Lavazza. And therefore this is Market Development Market development under geographic segment 4. Similarily Vending coffee machine to office segment is not an new issue for Lavazza. For exmaple the office the product is Espresso Point , Maxi etc However the Market Developmen market is new in Agrentina. This is Market Development for acquiring argentinean company operating in office coffee servuice business

Refer to Module 4 Case Scenario 3 1.3 Or is it possinle that the companay is taking another approach to growth? (e.g. vertical integration)? backward integration to Broker/Agent or Grower- acquiring control over suppliers in value chain. This can give advantahe of ccertainty , quality or suply relibaility and cost control 2.1 If the organisatin is considering new product development, review the important aspects to consider, including key success factors for new product development New product - new capsule coffe maker which can make cappuccino coffee - adding feature - Risk verus reward - Timeing issues - Project type issues - Resource allocation issues 4.22 4.22 4.22 4.22

The new product is developed unter strategic alliance with Green Moutain. right capability- use cross-functional development teams with representation from key organisational divison and use outsourcing na dpartnering to -the full exploitation of knowledge sharing and preventing outflow of knowledge the company wish to retain demand precise -Intellectual property and new product development '- company need to confirm the owernship of IP which they plan t ouse. Infringe this right lead to costly litigation Building cooperative ventures required careful partner selection and planning -right context - have in place organisational support for new product developemtn as a growth strategy in aligment with overall business strategy -business leadership and org alignment - have formal system & processess for evaluating product and svc convepts to identify most promising concepts customer input- involve customer and using formal product development methodology for capturing unmet needs and converting them into product design specification 3.1 If the organisation is considering new market development, is the organisation trying to enter a new customer or geographic market, both? Geographic market- extend to internationall market USA, india and Argenital and Bulgaria customer market- exisitng market for vendor buinesss in term of grouping customer by distribution channel 3.2 Review the important consideration for new market development, including the strategic objectives for new market entry, evaluating the attractiveness of new markets, the key sucess factors for new market development and advantages and disadvantages of different modes of market entry. the strategic objectives Market size and growth of local market is limited, want to e second biggest player in US market Resources Secure accuess to critical resources , access to skilled low cost abour , and access to supplier in USA Learning learn to compete in difficult & sophisticated markets in USA market Coordination Full use of india - asia pacific center for USA region in eastern coast of the Eastern Pacific Ocean;

Refer to Module 4 Case Scenario 3 attractiveness of new markets The size and value of propsed market- USA is the laregest market in the world by coffee consumption USA italian India Bulgararia Sales growth % Strongth growth for capsules double in 5 years to 2008 USA is the world's larges market by coffee comsumption 5%

Agrentina 7% 33%

Market growth - growth in world consumption of coffeeis low at about 1.2 % per year. Consumption is static in many high income countriesall factor applied to remote environment analysis to undstand what is driving growth and confirm the attractivess in furure growth -advance technological , USD economic bad but welcome investment under poor economic , competitve market, stable political , legal with strict accounting reporting, environmental - good relation with community by sustainability project in 3 growing communities in south ameria. The prjstc included construction of drying and processing plant, sociodemographic as central in people social and business life

-advance technological , , competitve market, stable political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

-advance technological , , competitve market notvery political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

-advance technological , , competitve market, stable political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

-advance technological , , competitve market, stable political , legal with strict accounting reporting, environmental, sociodemographic as central in people social and business life

Market profitbaility- all factor applied to industry analusis to understand what is driving the profitability of industry and confirm the attractivness in future profitability - high threat of new entrants, low power of suppliers- Lavazza is supplier, high power of buyers, many alternative, switching cost is low, high power of substitutes, high intensity of industry rivalry udner low growth environment

high intensity of industry rivalry - over 1500 individual roaster serving their local region in italy , Competition is characterised Coffee chain are major buyer- customer power is high by constant launch of new blends and flavour, high quality packagin and expensive market campaigns

Growth of economy Nature of demand- GDP of countery growth- recession but it is daily necessarity Obsolescence and leapfrogging of products- yes Prices - the expenditure pattern of consumer will vary in different country based on what they view as essential, daily necessaity for USA Substitution - tea consumption drop economic and political risk- stable the key sucess factors The identiiable benefits of expanding into new market must be in line with long term strategic goals of the org org must ensure that it has sufficient cash reserve to finance the new business until it become self supporting- sot of production plan in india 20milion euros , in 2007 turnove exceeded one billion euro

Refer to Module 4 Case Scenario 3 advantages and disadvantages of different modes of market entry. Strategic alliance '=> Equity Strategic Alliances are partners that take a share, or equity, in one anothers businesses '=> Purpose a mean of entry to an unfamiliar market a mean of accelerating learning of new technology to share research and development cost of ne product to share marketing cost or distribution channels '=> Advantage improve competitive position entry to new market access to critical skill and sharing of risk or cost of major development projects increase versatility '=> Disadvanatge Building cooperative ventures required careful partner selection

Q4.5 /4.51

reduced cost through increase production enhanced purchasing and financial arrangement stronger negotiating position with suppliers, customer and regulatory agencies greater access to critical resources opportunities for large-scale marketing effors
4.52

Ensuring the full exploitation of knowledge sharing and preventing outflow of knowledge the company wish to retain demand precise Mergers and acquisitions '=> Advantage Faster and more efficient way of entering oversea market Increase market share Obtain brand recognition and good will short term value e.g. cash benefit through tax concession, disposal of asset or immidiate cost saving long term strategic value-enhanced efficiency greater economices of scale, specialisation of products acquiring new technology tight control over operatings for better global strategic coordination better protection for intellectual property right then other mode of entry high up front investment high political risk exposure significant work over time in transforming the accuired company to achieve its real potential extra effoct on action plans for intergrating 2 business take into account the intangible asset of the marging organsiation Company may focus on finanical matters and system of due diligence at the expenses of looking at the intangible assets e.g. business culture. Human capital , comopany structure
4.54

Disadvantage

Refer to Module 4 Case Scenario 3 Wholly owned sybsidiary (investing in greenfield operation) Advantage orginal image of company may be created with marketing, and customer will not have any preconcptions state of art technology and product can be developed tight control over operationg in different countriers that is necessary for engaging in global strategic coordination better protection for intellectual property right Disadvantage high up front investment , most costly method of serving foreign market. Firm do so must bear the full cost and risk of setting up overseas operation

Low speed of entry high political risk exposure 3.3 Cconsider the accounting challenges that moving into new products ot markets are likely to bring Accounting issue in global stratgey (account challenge) Foreign exchange risk '=> Market expansion into new geographic areas without presence in those countires

4.38

exchange risk can be from both customer and supplier side of business and must be considered as part ofr business expansion strategy Entering a new international market by establishing wholly owened enterprise finanical statement for foreign operation will reflect minimal exchange risk.. But the process of consolidating these report into the report of parent company reflect any exposure to such risk. E.g.inital fund from parent company and senior staff salary sent from parent company Product diversification the introduction of exchange risk to the costing of a product can create complication in that it introduces an aspect of uncertainty to the production costs. => add significatntly to the cost of producion due not only to fluctuations in exchange rate but also increase need for specialised staff to account for such transaction '=> Preparing multiple sets of accounts create multiple set of account for different operating entities or in different jurisdiction additional complex if there are related entities with different year ends. '=> Incompatible IT systems
4.40

may have cost to combine 2 IT system if acquiring an existing operating in a new market 4.41 cost of installing and establishing the account package at new location which can run across all entities. Otherwise mamually input is necessary if pa data integrity issue '=> '=> Varing bsuiness conduct standards Taxation of revenue Varation on taxation rate and complicance requirement add to the complexity of accounting function Collection, reporting and purch of consumption taxs and states duties add further level of complexity '=> Transfer price
4.43 4.44

4.42 Regulation from differn country add cost to operation including the need to have qualified staff to establish any required framework and monitor reg

we attempt to set transfer price that maximise profit in lower taxing country. However, countries impose significant fine and4.45 penalties for breah in th

Revised 69/118

Approches to strategy

You should now reading 1.1 " Mission, vision and values" while reading this consider the rational and processual approaches to strategy. Which of these approaches do u think would be more relevant in helping you explain and evaluate and Coca-Cola company's strategy? Identify and describe the strategy process in the organisation. To what extent is the process set out above used in this organisation, and to what extent and in which ways does it differ? Draw on your own experience or observation of management to describe an example of strategic stretch or thinking, and an example of strategic planning or analysis. What are the distinguishing aspects that define these examples as stretch on the one hand and planning on the other? How does the organistion's functional-level strategy for the finance or marketing area contribute to its business level strategy? To what extent is this department's strategy consistent with the business level strategy and, if relevant, corporate level strategy? Think of an effective and an ineffective leader in the organisaion. Describe the traits and behaviours of these two leaders and to what extent they explain how well they perform in their roles To what extent do you agree with the statemetn that leaders are born and cannot be trained? Draw on your experiences of leaders (whether yourself or others) to justify your position How important do you think leadership is to organisational success? When might leadership be less relevant? Describe the organisation in which you work in terms of its position on the profit-social responsibility continuum. Assess your own position on the continuum. What is the match between your position and that of the organisation, and what are the implications of any mismatch for you, and for the organisation? What do the story Reading 1.1 say about strategy and leadership. In your reflection, consider the rational, processual, evolutionary and systemic approaches to strategy described above Using the information of the global music industry value chain provided, draw a representation of the traditional value chain for the global music industry. 1. Review data given in Table 2.3 and answer the Qs that follow: - Which segments have grown fastest over the period 1999-2008 and 2003-08 which segments have grown the least or even declined over these periods? 2. Undertake same analysis for sales of different types of music format: - Which formats have grown fastest over the period 1999-2008 and 2003-08? - which formats have grown the least or even declined over these periods? In each case, why do u think this has happened?

Q1.1

strategy process

Q1.2

Strategic fit and stretch

Q1.3

level of strategy

Q1.4

leadership

Q1.5

leader leadership

Q1.6

Q1.7

social responsibility

Q1.8

strategy and leadership

Reading 1.2

Value chain

Q2.1

Segments of US music industry

Q2.2

Life cycle of US music industry Technology and the global music industry

From reading 2.1, what is your conclusion about the industry life cycke stage of the global music industry, and why? What r the key technological issue that have affected the growth of global music industry to date? What are the technological issues that will affect the future growth of the industry?

Q2.3

Q2.4

Economic and the global What r the key economic issues that have affected the growth of global music industry to date? What are the economic issues that will affect the music industry future growth of the industry?

Q2.5

Market factor and the global music industry

Review and analyse data given in above tables. In particular examine following: - Country difference between trade and retail value - are there differences between countries - Is there any relationshop between the country GDP per capita and proportion of internet users? - Is there a relationship between the decline in total sales value from the previous year and how sales of the diff music formats are split for individual countries ? What r the key market issues that have affected the growth of global music industry to date? What are the market issues that will affect the future growth of the industry? What r the key political issues that have affected the growth of global music industry to date? What are the political issues that will affect the future growth of the industry? What r the key legal issues that have affected the growth of global music industry to date? What are the key legal issues that will affect the future growth of the industry?

Q2.6

Political factor and the global music industry

Q2.7

legal factor and the global music industry

Q2.8

environmental factor and What r the key environmental issues that have affected the growth of global music industry to date? What are the key environmental issues that the global music industry will affect the future growth of the industry?

Q2.9

Societal factor and the global music industry

What r the key societal issues that have affected the growth of global music industry to date? What are the key societal issues that will affect the future growth of the industry?

Q2.10

Societal factor and the global music industry

What r the key societal issues that have affected the growth of global music industry to date? What are the key societal issues that will affect the future growth of the industry?

Q2.10 Revised 70/118

remote environment and What r the major issues you think will influence the furture growth of global music industry? Consider all the issue together, is the industry the global music industry likely to be a high , average or low-growth industry in the future? What r the implications for an org within this industry? analysing the industry and threat of new entrants in global music industry analysing the industry and supplier power in global music industry

Q2.11

How would you describe the threat of new entrant to global music industry?

Q2.12

How would you describe supplier power to global music industry?

Q2.13

analysing the industry and buyer power in global music industry

How would you describe buyer power to global music industry?

Q2.14

analysing the industry and substitutes in global How would you describe substitutes in global music industry? music industry

Q2.15

analysing the industry and industry rivalry in global music industry

How would you describe industry rivalry in global music industry?

Q2.16

5 forces model for global future profitability? What external evidence is there to support your analysis or conlusion? What gaps did u discover in your understanding of music industry

Is the future profitability of global music industry expected to be average, above average or below average? What r the key driving forces of that
Q2.17

industry? What r the implication for the future of organisations in this industry?

Customer market segmentation in global music industry

What segments the customers into different types in global music industry? What do they primarily use the industry product or service for ? What do u think are the key elements used to determine purchase?

Q2.18

Basic of competition for What is the basic of competition for global music industry? Summarise your answer on a work sheet global music industry

Q2.19

Competitor analysis

Summarise the strengths and weaknesses of wach competitor

Q2.20

Competitor analysis and Who r the main competitors in global music industry? To what extent do they appear to fit into strategic groups as described? What is the key strategic group basis for competition, based on what distinguishes the strategic groups from each other?

Q2.21

strataegy terminology() Corporate strategy and Virgin Group of companies

Which of the terms listed above does your organisation use to identify its business strategy? If your organisation uses more than one term how do the terms relate to each other? Use this infomration to identify the links between the different business unit and assess the nature and level of relatedness of Virgin's business operations. Use the information given in the case study to explain why the Macquarie Bank and GB Railways exited the business and sold their shares to Serco (one of the orginal stakeholders). Identifying key stakeholders * Who are the key stakeholders in your organisation? * What do they seek to receive from the organisation? - reaching sales levels to achieve bonus - ability to network with other CEOs' - prestige * How well is the organisation delivering against their expectations? * Is there any evidence of strategy change due to pressure exerted by key stakeholders? What does this show?

Q3.1

Q3.2

stakeholders

Q3.3

stakeholders

Q3.4

Revised 71/118

5 question of business strategy

What are the 5Qs of business strategy for your organisation? Can you find the answers to them? Where did you find the answers? If you can't find the answers, why do you think that might be so? Use this infomration to indentify how the pursuit of growth led to Fannie Mae's dowfall. Compare what your organisation is actually doing with the 5Qs of strategy which you anlaysed earlier in Q3.5: * To what extent are they the same? Why? * To what extnet are they different? Why? * How has the process developed over time?

Q3.5

Unsustainable business grwoth - Fannie Mae

Q3.6

comparing planned and actual strategy

Q3.7

5Qs of business strategy Use the folloing information to answer the 5Qs of business strategy for a large Australian insurance company

Q3.8

Balance scorecard- Myer Use BSC to assess the performance of Myer Ltd as considered through various perspectives of the balance scorecard. How will u describe the Ltd overall performance of Myer Ltd based on this assessment?

Q3.9

strategic capabilities

Assessing strategic capabilities * What do you beliveve are the strategic capabilities in your organisation? Ensure that anything you include meets the three tests in the text. * Are the strategic acapabilities you have identified static or dynamic? - Is it valuable to customers? - Is it better than the capabilities of most competitors? - Is it difficult to imitate or replicate? Based on key success factor identified earlier (having links with supplier, having an extensive distribution network and having a cost effective distribution network) for the Australian pharmaceutical and toiletry wholesaling industry, assess whether Platinum Pharmaceuticals has strategic capabilities in these key success factors.

Q3.11

strategic capabilities Platinum Pharmaceuticals

Q3.12

Consider your own organisation and the information available to you: * Measure the financial performance of the organisation over the last 3 years measuring and assessing * Also measure the customer/market performance, internal efficiency and long-term growth and development organisational * Assess each of these areas separately - how well has the organisation been doing over these 3 years? performance * What difficulties did you have in measuring performance? Why? * What difficulties did you have in assessing performance? Why? *
Extended SWOT analysis industry environment

Q3.13

Respond to questions , which includes a summary of Jetstar's strength, wekness, opportunities and threats. Is the business strategy of Chasseur Chickens consistent with various industry environment elements?

Q3.14

industry rivals - business Based on the framework provided in figure 4.5 p4.06 assess the performance of Chasseur Chickens relative to its competitors in the industry strategy gaps Product and market martix Vertical integration New market development Account issue in global strategy

Justify how you would classify - using baking soda in personal care product fot bath, body and teeth - selling baking soda products in plastic shaker dispenser - acquiring the Spinbrush battery-operated toothbrush business from Procter & Gamble - Selling swimming pool pH maintenance tablets through pool-care outlets For each of the stahes of supply chain (Crude oil exploration, drilling, tansportation, refining, sale of petrol), what capabilities do u think the organisation needs to have in place to operate successfully? Considerations for international expansion, consider some general question you should ask of mgt if they are considering an international expansion Identify and discuss some of the ways in which accounting issues can affect the potential success of a strategy and international expansion

Q4.1

Q4.2 Q4.3

Q4.4

Strategic alliance

Why do organisations form strategic alliances How is a new business development managed in your organisation? - are there specific business unit for riskier ventures and project? - Do u know and understand how new business ideas are presented and considered in your organisation? -R there separate functions for new product development and new market development? if so, why do you think this it is the case?

Q4.5

New business development

Q5.1

Company product and service porfolio

Think about potential projects that you or your organisation are or may be involved in . - How would u map them using framework given in Figure 5.3 ? - How well r they spread across the quadrants? -What r some of the options available to the organsiation to improve projects?

Q5.2

Identifying and managing risks

Based on information provided in Reading 5.1 and risk categories of Figure 5.4: - identify the risks HSBC may face in pursuing this strategy and - provide some suggestions as to how HSBC could manage the risks you identify.

Q5.3

Revised 72/118

Identify cost and benefit

Again consider Reading 5.1 about HSBC's plan. Based on the reading. Identify the costs and benefits to HSBC in pursuing this strategy. Consider whether the costs and benefits identified can be quantified and what information would be required to do so Evaluation bsuiness strategic option for a paper manufacturing and trading organisation. Based on the information given in Case Study 5.1 consider thebusiness strategic option of using the new technology presented in the case. -How would you classify this option based on Ansoff product market model and on the basis of your classification, what are the key risk? ( refer to modeule 4 if necessary to recise this model) -How would u evaluate this strategic option for Paper Co. using Rumelt's model (i.e. external consistency, international consistency, feasibility and sustainable compettive advantage)? Consider org with which u are familiar and describe the political activity within this orgamisation and the influence these dynamics have on the operation of its strategy

Q5.4

Evaluation bsuiness strategic

Q5.5

Challenage of implementing strategy

Q6.1

Challenage of implementing strategy

Describe 3 or 4 causes of resitance to strategy process in an organisation with which you are familiar. What impact are these factors having on the process and how might they be overcome? How might this resistance have been avoided? Refer to Reading 6.1 for suggestion on how to overcome resitance

Q6.2

Challenage of implementing strategy

In relation to an organisation with which you are familiar, consider which of the above challenges to strategy implementation are most evident. Describe thses challenges and then rank them from strongest to weakest in repsect of how much they impeded the omplementation of strategy.

Q6.3

implementing strategy

Use the eight S to evaluate an organisation you are familiar with. Which of the Ss had the most impact on strategy implementation? What was the nature of this impact on the performance of this organisation?

Q6.4

Performance management

Describe the potential benefits for an organisation that decided to employ the BSC

Q6.5

Managin across culture

Hofstede's study found five dimensions along which nations differ. Using rhe scores procided for India and Austrlia, explain the potential issues as an Australian manager count face when managing employees in India Describe the techniques used to resolve the cultural clash between German and american workers in the Mercedes-Benz example above. The traditional view is that an organisation's goals and strategies are the sole determinant of structure, based on the assumptions that an organisation is goal-drive, rational and environment is a given. This has been labelled the strategy imperative wherein environmental factors and organisational capabilities are assessed, and on the basis of that assessment an organisation's structure is determined

Q6.6

Managin across culture

Q6.7

Managin across culture

Q6.8

Organisation design

consider the structure of an organisation with whch u are familiar. Evaluate the extent to which this structures suppors and or hinders the organisation's current performance. What changes to the structure would you suggest in repsect of any hindrances you have identified?

Q6.9

politics

An important and somewhat controversial issue to consider is the nature and effect of political activity in organisations. This issue is particularly relevant to the task of implementing strategy which as discussed above, is heavily influenced by the dunamics of power and politics.

Q6.10

Consequence of chaning List and describe the consequences of changing and flattening organisational structures. What are the possible negative impacts on leadership? and flattening strategic leadership The importantce of leadership in change management The importantce of leadership in change management

Q6.11

Consider several leaders from your current or previous work environment and classify them based on the five levels presented above. Briefly discuss the reasons for this classification. The need to create and communicate a vision is heavily debated. Discuss why you agree or disagree that vision is a necessary compnent for stratgeic success Consider why a leader would prefer that things fall apart after they have left the organisation, in order to be perceived as great. Apply your understanding of this problem to training new employees. a. Woolworths in Australia has a business that competes in high-volume, low-margin industry of supermarket retailing. Their business is presently performing well and senior management describe their current tasks as finding small opportunities for improvement in the way thing are done. i. Consider what style of change management is appropriate in these circumstance ii What would be the effect of an attempt at organisational transformation where only finetung was required? b Classify your current or previous work environment in term of: 1 the change mgt styke currently pursued and ii the effectiveness of the match between this style and the organisation's requirement In case of David Jones given in Example 6.8, what was the leadership role of senior management who executed the strategy

Q6.12

Q6.13

Q6.14

Transformational leadership

Q6.15

The role of leaders in strategic analysis The role of leaders in strategic analysis

Q6.16

Summarise the role of leaders durign the strategic analysis stages

Q6.17

73/119 Module 6 - Leadering and implementing strategy Module 6 Revised

The challenges of implementing strategy 6.6 Transformating strategic thinking into action - disconnection between strategic planning and implementation Lack of commitment In excluding low level manager from involvementin making strategy there is less chance of their commitment to implementation process Lack of communication In charge of implementation are not invovled in the strategic analysis and formaulation. Some strategies may be conceived without sufficient regard Manager are too preoccupied with day to day runnion of operation to become involved in strategic planning process. Lack of coordination or alignment between an organisation's atrategt and its function units process and systems 6.8 lack of model to guide the implementation effort, resulting in uncoordinated and conflict decision and actions Inadequate infomration-sharing and unclear lines of responsibility and accountability unsupportive power structure Paralysis by analysis too much focus on analysis and formulation at eh expense of conisdering the way in which resources are allocated and the way in which operational decision are made. Politics and resistance 6.10 Politics -2 set of foces may act in the process. 1. national foces of openness , communication. 2. political forces with internal rivalry, empire protection calling for retention of information. Conflict between 2 approaved may result in politically acceptable elements ending up in the explict strategyand sensitive element forming an invisible plan containing implicit strategy Resistance - Strategic inertia- today's strategic capability based on established process and ways of operating may resilt in a rigif adhereence to norms and rountine that lose touch with changing competitive landscape -Limiited implementation focus- only part of sub system, not all sub system -Group inertia- group norm and roles -Power realtionship -rearrangement of resources allocation and budget as part of implementation process may be pereceived as a threat to the expertise and power base in exisitng organisational structure -Habit and security -Economic factor- individual may be concerned that the implementation prgram will undermine their position at work, make their skills and experience redundant -Selective information processing. We interoret and shape our world through our perception. Information about an implementation program that threatens which world has a tendency to be filtered out. Environmental uncertainty Strategic planning for implementation provide a forum for strategic thinking a means to communicate and coordinate strategy throughout the organisation and a vehicle for implementation of strategy The role of CPAs in strategic implementation 7-S model of implementation => Used as a framework for implementation, 1 Strategy A coherent( articulate) set of actions aimed at gaining a sustainable( hold) advantage over competition, improving positions vis--vis customers, or allocating resources 2 Structure The organisation chart and accompanying( ) baggage() that show who reports to whom and how tasks are both divided up and integrated 3 Systems The processes and flows that show how an organisation gets things done from day to day 4 Style Tangible evidence of what management considers important by the way it collectively spends time and attention and uses symbolic behaviour. It is not what management says is important; it is the way management behaves. 5 Staff The people in an organisation. Here it is very useful to think not about individucal personalities but about corporate demographics 6 Shared values The value that go beyond, but might well include, simple goal statements in determining corporate destiny( fortune). To fit the concept, these values must be shared by most people in an organisation 7 Skills A derivative() of the rest. Skills are those capabilities that are possessed by an organisation as a whole as opposed to the people in it. 8-th S model strategic performance and recsources Performance management Effective Performance management require leader: => Know what strategic goals thy want to achieve => express these goals in practical measurable terms => understand their current position in relation to these goals => appreciate the resource implication of achieving these goals => the goals and required actin plan are well communicated and key employee are accountable for their achievement CPAS have kepy role to link strategy to business operation through finanical and now financial measure and goals 6.18 6.11

6.16/B task 3

6.20

6.20

74/119 Module 6 Balance scorecard 6.21 => assess past performance and provides measures that drive future performance => Top down approach with 4 processes 1 Translating the vision 2 communicating and linking 3 business planning 4 feedback and learning => 4 perspectives to capture the cause of growth, improved performance 1 Customer perspective - meet and exceed customer needs in areas of time, quality performance and svc and cost 2 Internal processss perspective - measure of internal process and perfmance that deliver customer expectation. E.g. quality standard, employee skill, productivty level 3 Learning and growth perspective- measure the and manage human information and organisation capital (intangible assets ) with its strategy 4 Financial perspective - state how improvement to their process and quality of the product will improve market share and increase profit. Reward system 6.22 => reaching an agreement on strategic perfomrance objective, scheduling responsibility and deadline for achieving them and recognising their achievement through pay and incentives for performance => refelect it desired values and belief. => changing link between employee performance and reward is effective mechanism for encouraging new value and behaviour required in implementation of strategy Information system 6.23 => the system need to gather and report strategy-critical information and to track key perofrmance and measures over times Cullture issue => Inter-gorup conflicts within organisation => Ineffective communication => Consensus on change => Consensus on criteria for measuring results => culture once established need to be maintained and at times changed * Step for aliging culture with strategy include role modelling and coaching * Selecting people for ky position is important step in mgt of culture. Implementer must determine coere mgt term they need to executed the strategy successfully and find right people to fill in each role. Culture change can be accelerated if leader recuit ad select new member according to the criteria that fit the organisation's strategic direction and new culture

Managing across culture -Hofstede's cultural dimensions High Low 6.28 => Power distance - degree of equity enjoygreater recognition usa Indai Brazil social degree e.g. e.g. => Individualism vs Collectivism - individual benefit or group benefit High Low -Braziland USA - e.g. India => Masculinity vs Feminiitu - achievement of task and quality of life Materialism Indai, USA Caring for other Brazil => Uncertainty avoidance- degree of open to change and new idea Comfortable new idea e.g. Inda , USA Accept with rule Brazil => Long term vs short term orientation Long Long term goal rewardreward, strong work ethic term- china long term Organisational design 6.34 => to create an ogranisational structure that enables strategic goals to be met Structure comprise the methods that an organisation used to divide and cordinate its labour into distinct tasks and position, setting out levels, and roles, responsibilities and reporting => lines. => range of factor determine the optimal structure -Organisation's strategy is a primary consideration -environement in which the organisation operates Is critical -technology used by organisation is also relevant -size - organisation reaches a certain size it is focred to decentralise, as control from top become difficult -people and culture of organisation must also be considered => Types of organisation structures 3 main conponents of all organisational structures 6.36 -> complexity the degree of differentiation, horizontally and vertically, between jobs and units. The more complex the organisation, the greater the dificulaties of communication, coordination and contro; -> -> formalisation the degree to which jobs in an organisation are standardised centralisation the degree to which authority to make decisions are concentrated in an individual Centralisation versus decentralisation - Centralisation or decentralisation depends on industry, environment and technology Centralisation desicision-making authority a the top control narrow spans of control layer hierarchical -> 6.37 Decentralisation to lower levels Wide spans of control flat 6.37

=>

Corporation become more decentralisation because of IT development outsourcing non-critical activities -> outsider perform better or more cost effectively -> advantage of outsourcing concentrate on value-chain activities where can build strategic capabilities and competitive advantage decrease internal bureaucracies and flaatten the -> Successful ex - Nike concentrating on design, marketing and distribution to retailers mechanistic hierarchical control sutiable for successful firm in stable environment organic self-regulation sutiable for successful firm in changing environment

6.38

6.38

75/119 Module 6 The politics of strategy implementation => Politics: Power in action -> 2 sets of forces 1. rational forces of openness, communication and self-analysis 2. political forces - internal rivalry and emprie protecting => The influence of organisational politics on the implementation process => Is political activity functional or dysfunctional? => Managing conflict -> More objective and relevant information -> develop a range of alternatives to strengthen the debate -> injecting() some humour() - excitement of competition and pressure rather than stress and worry -> -> balance power structure resolve issues without forcing consensus 6.39

6.40

The nature of strategic leadership => Daft 1999 - strategic leadership - encompassing() the vision, mission, strategy and structure of an organisation the leadership role of initiating() and overseeing this process and provides tools to enable effective performance => => => => The importance of leadership traditional viewpoint - leadership is critical for success opposing view - other factors affect the successful Organisational levels of leadership business strategy developed by CEO and board of directors functional strategy developed by department head or functional head Character and leadership focus on motivating and inspiring people A hierarchy of leadership - Jim Collins all 5 levels relate to levels of competent leadership Level 1 Highly capable individual who makes a contribution to the orgainisation Level 2 Contributing team member who works with others and achieves objectives Level 3 Competent manager capable of organising people, time and other resources to achieve objectives Level 4 Level 5 Effective leader who can pursue a vision, encourage and stimulate a group to commit to, and pursue high standards. An executive who builds lasting greatness courageous and fierce() folloing them through in face of adversity describe the difference between level 5 and low level -mirrow and window concept

6.41

=> Importance of leadership in change management Change management matrix Scale of changes Level of complexity of change Scale / Complexity Low Low Market penetration -Limited bsuiness change: increased sales & promotion activity for current products in current markets High Product development -some business change: New product launch (e.g. line extension for current product range in current High Market development -some business change: New market launch (e.g. international expansion) Diversification '-major business change: (e.g. acquisition of an overseas business unit)

6.43

6.43

=> higher the scale of change of complexity , the stronger is the leadership required for the implementation process. Achieving strategic success => Kotter 1995 - 8 key successful strategic requirement 1. Establishing a sense of urgency 2. Forming a powerful guiding coalition 3. Creating a vision 4. Communicating the vision 5. Empowering() others to act, and eliminating obstacles 6. Planning for and creating short-term wins 7. Consolidating improvements and producing still more change 8. Institutionalising() new approaches Strategic leadership style => Leadership styles Strategic leadership styles and the organisational life cycle

6.44

6.46

76/119 Module 6 Stage Style Start up Risktaker Growth Maturity Caretaker Shake-out Surgeon Decline Undertake

Rothschild 1993 - 4 styles of strategic leadership 1. risktakers 2. caretakers 3. surgeons 4. undertakers Transformational leadership => Dunphy and Stace 1993 - 4 styles of change management 1. Fine tuning 2. Incremental adjustment 3. Modular() transformation 4.

6.47

Corporate transformation - larger the scale of change, leader will be required to force the change through organisation in order for strategic success as strong resistance to the change may exist and employees may not wish to move from their current roles and responsibilities to those required for the future. 6.49

The role of leaders in strategic thinking - Key leadership function is to craft () and implement a strategy in or der to translate a vision into reality - Strategic thinking means taking the time to consider the big and important issues over and above the urgent day-to-day tasks and problems. => Balancing stability and change Zakon and Lochridge - Balance model 1. Creation - flexibility 2. Growth - provide suitable returns 3. Efficiency / advantage - ensure stability and control larger firm - benefit of scale - inflexibility small firm - flexible - difficult to maintain control of process The role of leaders in strategic analysis strategic thinking come from intuitive feeling, identification of key external and internal factors that impact on an organisation is essential => External analysis - required to ensure a consistent and disciplined apprach to external analysis that is based on sound reasoning - courage is essential to challenge long held assumptions and belief that are no longer accurate Key external stakeholders => Internal analysis Key internal stakeholder The role of leaders in setting direction => Visionary() leadership 4 key roles of a visionary leader 1. setting the right direction 2. acting as change agent 3. communicating as spokesperson 4. coaching() others along the way The role of leaders in strategy formulation and selection => to ensure there is a shared vision about the strategic goals and to determine who will be involved in the implementation process and what tasks they will perform => Use 7-s for testing whether a proposed strategy will achieven its aim 7-S Structure Strategy System Staff Skill Style Shared value => Risk assessment How many alternatives have been considered, and why have any been excluded? How conservative are the estimates made in each proposed alternative? Has the impace of competitor reactions been considered and included in the proposals? Have significant obstacles been identified and methods for dealing with them outlined? The role of leaders in implementing strategy => Development of new policies and budgets that guide action and reallocate resources to area of importance. => The importance of strategic leadership - Kotter 1995 establish a sense of urgency communication the vision empower others to act make new approaches ingrained() in the organisation => Sense of urgency - require effective communication of the gaps in the present strategy => Communicating the vision and strategy current situation - what currently works - problem or futer problem (identifying the need for change)

6.50

6.51

6.52

6.53

6.55

6.56

6.57

77/119 Module 6 recommended change - outline and benefit - risks and problems Following question with employee and give them time to change 1. Have people been given the opportunity to express their feelings in an open and protected manner 2. Have concerns raised formally or informally been acknowledge and discussed 3. Has there been recognition of what was achieved in the past while making or celebrating that change towards the new direction has been embraced 4. Have the requirements and expectations of the new direction been clearly explained and understood to avoid unnecessary fear and disruption? => Overcoming resistance and cementing() change in an organisation Tichy and Devanna 1990 - some reasons for resistance to change 1. Technical reasons 2. Political reasons 3. Cultural reasons => Surfacing and dealing with resistance 1 Kotter's general recommendations a. use education and communication b. use participation / development c. use facilitation / support d. use negotiation / agreement use manipulation / coercion() e -

6.58

6.58

78/118 Module 5 Evaluation criteria => Strategic opions is evaluated based on following criteria => Size and value- size of market and how much of marjet can the org can expect to capture and ower what time frame => Growth- what is the expected growth and what is driving that growth refer to module 2 => Distribution access- can existing distribution channels be used or will the option required new distribution channels => value proposition- How does the option fit in the organisation's portfolio of product and customer view needs to be examined => Portfolio mgt is too to optimise resources allocation, project selection, strategy => Portfolio mgt is dynmaic decision process wherebu a list of actuve new product project project is constantly update and revised. => Useful visual appraoch to present a portfolio project Probability of technical success/ Reward (NPV) Pearls Bread and butter Potential star projects with Small no brainer project- high likeihood of high likeihood of success and success but low reward. Include many fixes expected a yield a high extenstions, modification and updates to reward products Oyster White elephants Long-shot projects with a high expected pay-off but low Low probability of technical success and low likelihood of technical reward- often difficult to kiss these projects, success. However, technical but they will send you broke breakthrough pave the way for solid pay-offs => Capabilities - does the org have capabilities to impement the option such skills people, , acquiring organisation => Resources - when and what the resources are need , any special equipment specific to option? => Capacity - similar to resources , criterion may look at whethert there r enough people and access to equipment to implement the option => Service - does the organisation have infrasture in place that => Risks- What are the risks? R these diferet from organisation current risk? Risk assessment => Consider a range of alternatives => Be conservative 1 easy to come up with attractive-sounding proposal may be hidden practical traps() -> Hubbard - long-term successful organisations tended to consider the downside of proposals seek independent risk assessment find ways to spread the risk either amoung partners or by making the decision over time. -> before decision making - few questions should be asked What can go wrong with this project? What is the worst outcome that can occcur? => Types of risk : many risk when decide to implement a significant new and strategic inititative Project risk e.g. failed on strategic alliance due not careless building and planning Cusomter risk e.g overreliance on few customers Transition risk e.g. Technology shift, process obsolete , 3 acquistition in a year enough man power handle? Competitor risk e.g. globalization Brand risk e.h. brand collapse, brand erosion Industry risk e.g. supplier power increase , industry margin sqeeze Stagnation risk e.g. recession Specific risk for maket development - difference in economic, political and legal system, culture attitude and exthics across different market => country risk assessment conssiting of preliniary survey by visit by senior executive combined with political , social, economic and market analysis => 5-step risk assessment 1 Identify risks 2 Quantify the risk - cost and benefit analysis - Add up all the cost associated with an initiative , then Add all the benefit and so able to determine the benefit are greater than the cost of individual initiative 3 Develop risk mitigation action plans 4 Identify the potential upside 5 Adjust capital decision Revised 5.5

5.5

5.8

5.11

5.12

5.16

5.14/Q5.4

79/118 Evaluating strategic option => Module 5 5.19

Rumelt's criteria for evaluating stategy - offer a strategic franwork to compare and prioritise strategic options that look beyond what is currently known -> is the strategy consistent with the external environment? How does the business strategic option fit with the industry life cycle How does the business strategic option fit with trends in external environemtn that are influencing future industry growth (temple) How does the business strategic option support emerging trends in the industry? How does the business strategic option fit with emerging markets in the industry? How does the business strategic option fit with trends in external environment that are influencing future industry profitability (Porter's five force model)

How does the business strategic option fit in the competitive environment? How will it change how theorganisation is positioned relative to competitors? If the business strategic option means entering an industry that the organisation is not already in, what impact will it have on competition and market share? How does the business strategic option change the factors of competition in the indusry? How does the business strategic option fit with industry key success factors? How does the business strategic option fit with developments in global markets? How does the business strategic option change the industry value chain? -> is the strategy internally consistent? How does the business strategic option fit with the organisation's strategy? How ill the business strategic option contribute to achieving the strategy? How does the business strategic option meet stakeholder requirement? What impact will the business strategic option meet stakeholder requirements? What impacts will the business strategic option have on organisational revenue and costs? What impacts will the business strategic option have on organisational 's current products and services? How does the business strategic option fit with organisation's current portfolio of products, services or market in development? What impact will the business strategic option have on the organisation's reputation and/or brand in the market? What will happen if the organisation does not implement the business strategic option? Are there any reputation risks associated with the business strategic option? -> is the strategy feasible()? r the cost-benefit projection for the business strategic option robust? What capabilities are required to implement the business strategic option and does the organisation have them? Can cababilities that the organisation doesnt have be easily sourced elsewhere to implement the business strategic option? Do current staff have the skill to implement the business strategic option? Has the org done sometihing similar to this particular business strategic option in the past and was it successful? Can the organisation access the capital required to implement the business strategic option? What government or other support would the organization required to implement the business strategic option? Has the organisation got the capacity to service additional demand that the strategic business option is projected or create? What are the key risks inherent in implementing the business strategic option and how can they be minimised or managed? What will be the impact on the organisation if the worst-case scenariio of implementing the business strategic option is realised? Has the orgaisation got the capability and resources to implement the business strategic option in a timely way? R there some key decision points to be considered in implementation of the business strategic option that mean investment and other risks can be minimised/managed? Who owns the IP associated witth business strategic option and does the organisation have freedom to operate with it? -> does the strategy create or maintain a basis of competitive advantage? What will the business strategic option deliver to the organisation in term of benefits? What is it about the business strategic option that will be valued by customers? What is it about the business strategic option that will be difficult for competitors to copy? What is it about the business strategic option that will make the organisation superior to what competitors are offering? What will the business strategic option deliver that is rare or unusual? what is it about the business strategic otpion that will makes it appropriate for this organisation, and not another to implement it? Does the organisation have any unique competitive advantage in its operations, systems and processes, people skills Making recommendation to key decision makers who will be involved and when what resources are needed key risks and how they will managed key milestones to demonstrate that implementation is goinf according to plan how much it will cost to do the implications of doing nothing

5.19

5.21

5.25

80/118 Module 5 => Rational decision-making -> Harsanyi - criteria of rational decisions are conscious(), explicit() and deliberate() are internally consistent and logical are fully informed aim at achieving the end goal allow for independent means and ends involve choice between alternative ends and alternative means, choices which aim to maximise the end results achieved assume a causal relationship between the means taken and the end results achieved -> Davis & Devinney - rational decision-making model 1 clarify the goal 2 define and structure the problem 3 identify criteria against which alternative solutions will be evaluated 4 determine the weights to be assigned to each criterion 5 analyse the situation 6 generate alternative courses of action 7 evaluate each alternative against the criteria, using the weighting system 8 choose the alternative with the highest score

81/118

Ansoff product-market matrix '=> for identification and assessment of strategic option '=> 2 dimension: product focused and market focused, Ansoff model of growth and diversification options '=> 1st step identify it current position and concentrate on existing product and maket and leverage the capabilities '=> If unable to increase market share from existing product and market , using rational appoach to strategy: Product development and Market development '=> movie new product and market that r related or unrelated to current business at the same time Market/Product Existing markets Existing Product Market penetration - existing products in existing markets -increase frequent usage -increase the quantity of product used -find new applocation for current users -attract new customer to gain market share of existing customer segment Market development existing products into new markets (some risk) -Target new customer segment in same geographic -expanding geographically New product Product development - new products into existing markets -add product features and refinement -expanding product line -developing new generation product -developing new product Diversification - new product to new market (greater risk) -counter seasonal diversification -counter-cyclical diversification -where limited industry prospect in org's existing and related product market This can either related or unrelated to current activities

Revised 4.5

4.7 /4.9

New Market

4.11/4.14

solutions, not products or services solution strategy - meet total customer needs organisation views its products or service as a commodity vertical integration backward integration - acquiring control over suppliers or develop new supply operations forward integration - gain control over customers or develop new customer outlets and distribution operations New product development '=> Critial factor that udnerlie successful product development Product advantage Execution Company environment variables Opportunity variables '=> Typical cause of failure Developing wrong product or service (market rearch is an integal compenent of the process Inadequate planning and control Schedule delays Performance issues '=> The ability to learn faster than your competitor may be the only sustainable competitive advantahe - Arie De Geus New product and development will be a strategic capability of the organisation '=> Key setps of a generic new product and development process 1 Generating and capturing ideas 5 Commercialisation 2 Screening ideas 6 Launch 3 Product development 7 Service 4 Test market '=> Linking new product development project to strategy -project need to be assessed fro their consistency with business strategy and spending breadown must reflect strategic priorities '=> Key consideration to achieve balanced portfolio - Risk verus reward - Timeing issues - Project type issues - Resource allocation issues '=> Intellectual property and new product development - company need to confirm the owernship of IP which they plan t ouse. Infringe this right lead to costly litigation -counterfiet product cost a lot of money. Org cannot fully exploit financial reward from the resource invested in product development Key success factors for new product development '=> right context - have in place organisational support for new product developemtn as a growth strategy in aligment with overall business strategy '=> business leadership and org alignment - have formal system & processess for evaluating product and svc convepts to identify most promising concepts '=> customer input- involve customer and using formal product development methodology for capturing unmet needs and converting them into product design specification '=> right capability- use cross-functional development teams with representation from key organisational divison and use outsourcing na dpartnering to New market development '=> Cabilities for developing new market '=> Cusomter market - aggregates of consumer group with similar need Group be distrbution channel e.g. retailer or customer '=> Geographic markets- extending operation to new market either domestically or internationally Strategic reason include market-related factor efficiency-seeking factor resource-related factor quality of business environment '=> Objective of market entry Market size and growth of local market is limited Resources Secure accuess to critical resources , access to skilled low cost abour , and access to supplier Learning undstand state of art technology, close to best practice, learn to compete in difficult & sophisticated markets Coordination set up base for global or reginal development '=> Market attractiveness -Selecting attractive new market requires research The size and value of propsed market Market growth - all factor applied to remote environment analysis to undstand what is driving growth and confirm the attractivess in furure growth Market profitbaility- all factor applied to industry analusis to understand what is driving the profitability of industry and confirm the attractivness in future profitability Growth of economy Nature of demand- GDP of countery growth Obsolescence and leapfrogging of products Prices - the expenditure pattern of consumer will vary in different country based on what they view as essential Substitution economic and political risk -work out effective entry stratgey selection of market scale of entry entry objectives timing of entry mode of entry '=> Key success factory for new market development The identiiable benefits of expanding into new market must be in line with long term strategic goals of the org org must ensure that it has sufficient cash reserve to finance the new business until it become self supporting

4.16 4.17

4.19

4.19

4.19 4.22 4.20

4.21 4.22

4.23 4.24 4.25

4.25 4.26 4.26

4.28

4.30

4.34 4.31 4.31 4.31 4.32 4.35

4.37

82/118

org should perform both internal and external analyses extra condition for internationalisation that affect basic strategy location specific advantage of oversea market must provide requisite motivation for ompany to invest there company must have strategic competencies to counteract the disadvantage of relative unfamiliarity with foreign markets company must have organisational capabilities so as to get better returns from leveraging its strategic strengths internally rather than through external mechanism such as contracts and licence => success will depend on the effectiveness of their international business strategies. Accounting issue in global stratgey (account challenge) '=> Foreign exchange risk Market expansion into new geographic areas without presence in those countires exchange risk can be from both customer and supplier side of business and must be considered as part ofr business expansion strategy Entering a new international market by establishing wholly owened enterprise finanical statement for foreign operation will reflect minimal exchange risk.. But the process of consolidating these report into the report of parent company reflect any exposure to such risk. E.g.inital fund from parent company and senior staff salary sent from parent company Product diversification the introduction of exchange risk to the costing of a product can create complication in that it introduces an aspect of uncertainty to the production costs. => add significatntly to the cost of producion due not only to fluctuations in exchange rate but also increase need for specialised staff to account for such transaction '=> Preparing multiple sets of accounts create multiple set of account for different operating entities or in different jurisdiction additional complex if there are related entities with different year ends. '=> Incompatible IT systems may have cost to combine 2 IT system if acquiring an existing operating in a new market cost of installing and establishing the account package at new location which can run across all entities. Otherwise mamually input is necessary if parent and other related entitiy account package is different data integrity issue '=> Varing bsuiness conduct standards Regulation from differn country add cost to operation including the need to have qualified staff to establish any required framework and monitor regularoty compliance. '=> Taxation of revenue Varation on taxation rate and complicance requirement add to the complexity of accounting function Collection, reporting and purch of consumption taxs and states duties add further level of complexity '=> Transfer price we attempt to set transfer price that maximise profit in lower taxing country. However, countries impose significant fine and penalties for breah in this area Common modes of entry into new geographic market Ownership None or limited control Full or absolute control Joint venture with minority, equal or non-absolute Wholly owned subsidiary by position greenfield investment Fully or dominant acquistion join Consortium partner venture with absolute majority above 66% arm's-length arrangement Regioal headquarters Distributor Marketing subsidiary Licensing Procurement office Agent Representative office Representative Technical observatory Franschisee Correspondent Q4.5 /4.51

4.38

4.40

4.41

4.42 4.43 4.44 4.45 4.46

Intensity of investment

High

Los

Strategic alliance '=> Equity Strategic Alliances are partners that take a share, or equity, in one anothers businesses a mean of entry to an unfamiliar market '=> Purpose a mean of accelerating learning of new technology to share research and development cost of ne product to share marketing cost or distribution channels improve competitive position reduced cost through increase production '=> Advantage entry to new market enhanced purchasing and financial arrangement stronger negotiating position access to critical skill and sharing of risk or with suppliers, customer and cost of major development projects regulatory agencies increase versatility greater access to critical resources opportunities for large-scale marketing effors '=> Disadvanatge Building cooperative ventures required careful partner selection Ensuring the full exploitation of knowledge sharing and preventing outflow of knowledge the company wish to retain demand precise Mergers and acquisitions Consolidation Diversification '=> Value Global reach Option Vertical integration Faster and more efficient way of entering oversea market '=> Advantage Increase market share Obtain brand recognition and good will short term value e.g. cash benefit through tax concession, disposal of asset or immidiate cost saving long term strategic value-enhanced efficiency greater economices of scale, specialisation of products acquiring new technology tight control over operatings for better global strategic coordination better protection for intellectual property right then other mode of entry Disadvantage high up front investment high political risk exposure significant work over time in transforming the accuired company to achieve its real potential extra effoct on action plans for intergrating 2 business take into account the intangible asset of the marging organsiation Company may focus on finanical matters and system of due diligence at the expenses of looking at the intangible assets e.g. business culture. Human capital , Wholly owned sybsidiary (investing in greenfield operation) Advantage orginal image of company may be created with marketing, and customer will not have any preconcptions state of art technology and product can be developed tight control over operationg in different countriers that is necessary for engaging in global strategic coordination better protection for intellectual property right Disadvantage high up front investment , most costly method of serving foreign market. Firm do so must bear the full cost and risk of setting up overseas operation Low speed of entry high political risk exposure Adv and disadv Exporting Licensing Franchising Joint Venture

4.52

4.53

4.54

4.6

Strategy represents long term purpose and desired positioning of the org as compared w its competitor => Corporate strategy => Business strategy => Operational strategy Key stakeholders and strategy => The business strategy come from the stakeholders. => Which individual or group can influence the organisation's business stretegy? => What do key stakeholders want to get from their involvement? - Key stakeholders and their expectations: CEO Dominant shareholder Key customer Local government R & D manager short-term profits, prestige(), growth, personal power over a large empire

83/118

3.5

3.8

dividends, consistent, reliable growth, no surprises favourable buying terms, personal relationship, early information about new products, personal incentives jobs, tax revenue innovative and supportive environment, freedom to carry out own initiatives

=> How consistent are key stakeholder attitudes and values with those of the organisation? - consistent - reached between the key stakeholder and the organisation over strategic issues - inconsistent - conflict between the key stakeholder and the organisation over strategic issues => change in key stakeholders may also herald(...) significant future changes in expectations. Identifying the existing business strategy: The five questions approach => The five questions (5Qs) approach to business strategy analysis 1. Does the organisation plan to grow? -> large organisation plant to grow because of the key stakeholders' expectation -> government not seek growth - such as police force, unemployment department -> family company limit growth to maintain personal control -> growth too far will concern with consolidating or downsizing in near future -> 2 kinds measurement of growth - sales growth - profitable growth 2. What products and services does it plan to produce? 3. What customer and geographic markets does it plan to service? 4. What generic strategy does it plan to follow to position itself uniquely against competitors? a do something different from competitors b do something better than competitors do it -> Porter - generic strategy - differentiation- blue ocean strategy, value disiplines, flexibility, effective execution - low cost - focus 5. What desired() position in the industry does it plan to hold in the future? => Clear and fuzzy() strategy -> winning organisations have a clear and fuzzy strategy -> good reasons for fuzzy strategy actively seeking incremental opportunities for growth incremental opportunities arise that require organisations to adapt their strategies -> fuzziness should be at the edges, not at the centre of strategy Other issues in developing business or corporate strategy => Values and strategy 3.12

3.19 3.23 3.22 3.26

3.27

-> ->

84/118 culture and values may need to change to support the strategy failure to align value with the strategy adds greater complexity() to the successful implementation of the planned business strategy 3.29

=>

Innovation and learning as keys to changing strategy over time -> innovation and learning are critical capabilities for this continual improvement -> Kim and Mauborgne - innovative organisations did not accept industry conditions as unchangeable did not focus on what competitiors did sought mass markets, not segments sought the set of resources and capabilities required to best deliver value to customer thought in terms of total solutions for customers, not traditional products and services -> Senge - concept of the learning organisation Actual strategy is different from planned strategy actual strategy may not be the same as planed strategy -> Clear strategy - involving the key stakeholders in strategy development and convincing them and the organisation that the planned strategy which is developed is actually an effective strategy Fuzzy strategy - allowing for some flexibility at the margin when unplanned, but valuable opportunities emerge which are consistent with the general direction of the planned strategy

3.30 3.30

=>

->

Be flexible in implementation - accepting that unexpected problems will occur as the organisaion tries to implement its plan, rather than attempting() to force through the rigid() planned strategy when it is not feasible or appropriate planned strategy needs to be flexible and opportunistic within a defined set of areas, but not so totally flexible and opportunistic that it simply goes with the flow 3.32 3.32

Measuring organisational performance => The shareholder view -> concentration on shareholder return - shareholder value or value-based management approach -> concept of shareholder value based on market values rather than accounting measures, so the management concern the usefulness of conventional accounting methods as strategic performance -> not easy to measure the shareholder value because of : - What time period should shareholder value be measured? - Whether or not the sharemarket is rational? - What about organisations which are not listed? - What about organisations which don't have shareholders? The shakeholder view -> complex measurement issues which involve: - What measures are appropriate for each stakeholders group? - How does the organisation balance performance between these measures? - What does the organisation do when there is conflict between measures? -> balance scorecard Financial perspective - financial * shareholder return - customer * cash flow - internal process * major customer profitability - innovation and learning * profit forecast reliability * sales backlog Learning and growth perspective * % revenue from new services * rate of improvement index * staff attitude survey Internal process perspective * hours with customers on new work * revenue per employee * returns, ROA ROS

3.33

=>

3.34

3.37

Learning and growth perspective * % revenue from new services * rate of improvement index * staff attitude survey * no. of employee suggestions

Internal process perspective * hours with customers on new work * revenue per employee * returns, ROA ROS * safety incident index * order-delivery cycle Customer perspective * relative pricing index * customer ranking survey * customer satisfaction index * market share

85/118

3.38

-> =>

The new world: The triple bottom line approach to performance - concern on their environment and their communities (social performance) Summary 3.36

Comparing performance measures => Standards of comparison -> performance needs to be compared with something else - at one point of time against comparative standards - over periods of time using trend analysis => Benchmarking -> compare organisational performance, one or more specific activities, system or process, against other org Getting the information -> financial information -> customer information -> internal process measures -> learning and growth measures

3.36 3.36 3.36

=>

Strategic capabilities => Capabilities are defined as the processes, systems or organisational routines which the organisation uses to coordinate its resources for productive use -> resources can be tangible and intangible assets -> resources provide a competitive advantage => SWOT analysis Internal - Strengths and weakness External - Opportunity and threats => strategic value - capabilities have to be superior to competitors -> creating superior value for customers -> creating competitve advantage => when these capabilities meet 3 crucial test - termed as strategic capabilities 1. Is it valuable to customers? 2. Is it better than the capabilities of most competitors? 3. Is it difficult to imitate or replicate? => capabilities are built up over time, based on experience within the organisation. => strategic capabilities are long term or durable and competitors wish to copy in simple way to the existing position => Identifying strategic capabilities several approaches to search for strategic capabilities -> functions and resources analysis process and system analysis -

3.41

3.40

3.40

3.41

3.42 3.42

3.42 3.43

->

example of strategic capabilities

86/118

3.44

Measuring the performance of strategic capabilities => Different between strategic capabilities and strength high quality, at the same time competitor also high that can only be identified as strength, not strategic -> capabilities quality better than most competitors, difficult to imitate or replicate not only be identified as strength -> but also strategic capabilities => Internal self-perception -> quick and low-cost method to seek information from within the organisation -> strongly, positively and biased => Intra-industry comparisons -> done by industries consultants -> related to market share, cost structures, key costs and customer satisfaction the information can tell how it is performating compared with competitiors, but without reason why that -> performance difference exists => Bechmarking -> specific activities, systems or processes - compare with the best in class => Cost drivers and activity-based costing -> cost drivers can identify value chain or set of activities => Competitor information => Summary -> identifying the strategic capabilities provides the essence of competitive advantage from its internal activities -> strategic capabilities are difficult to measure and difficult to be certain that they are actually better than competitors

better than the capabilities of most competitors

valuable to customers

3.49

3.36

Gap Analysis 3.49 => Process of analysing remote industry and market environments and asseeeing orgainsiational performance against stated strategy that performance gap and opportunities for future are revealed => at business level => Reflect inconsistences between 2 elements => External environment Current business strategy Internal environment

External consistency 1. Remote environment gaps 2. Industry environment gaps 3. Industry compeitors' gaps =>

internal consistency 1. Capability gaps 2. Organisational perfomrance gaps 3. key stakeholder gaps

1 st step understanding drivers of performance and agreeing what the gap are inside an orga and then identify opetion to plug the gap Assessing overall performance -> strategic performance interested in long-term performance at least three years Summary -> assessing organisational performance is critical to undestand the successful of organisation -> establishing specific measure and gain useful information to compare each measure and integrate whole are all necessary if strategic performance assessment is to be usefully carried out.

=> =>

3.52

Business strategic options => Extending SWOT analysis to develop option

3.53

Opportunities-O

Strength - S S/O options Use org strength to take advantage of opp S/T options Use strengths to aviod threats

Threats-T

87/118 Weaknesses-W W/O option Develop options that address weakness to take adv of opp. W/T options Develop defenive strategies that address weakness and threats to theorg

CPAs and internal environment analysis chart of resource-based capabilities or systems-based capabilities - Figure 3.3 -> Identifying and analysing corporate strategy: => 4 questions appoach to the corporate strategy 1. Does the corporation want to grow? 2. What is the 'vision' of the corporation that holds the businesses together? 3. Are the businesses related to each other? If so, what is the basis of this relatedness? If not, why are the businesses held within the one corporation? 2 basic ways in the organisations may seem to be related product-market relatedness capability relatedness product-market fit is not an effective way to consider relatedness, capabilities as the underlyint source of relatedness might be more appropriate 4. What position does the corporation plan to achieve in the future? trend to focus on profitability and size as measures of positioning => => So how can a business strategy be stated? Corporate strategy and public sector organisations -> government runs a lot of activities but nothing to do with each other. From static() to dynamic capabilities building capabilities - current capabilities being developed and which will result in the development of future -> capabilities -> learning has potentially lead the decision changed and result in new actions that can develop new capabilities -> Leonard - 5 major classes of activities to build and sustain innovation in an organisation integrating() problem-solving across different cognitive() and functional barriers Christensen implementing new methodologies and process tools experimenting and prototyping() importing and absorbing technical knowledge from outsider learning from the market with practise and right process, organisations can develop a strategic capability in strategic thinking

=>

->

-> ->

Chaney Wesfarmers has similar capability in strategic analysis Hubbard - 4 elements in successful organisations with dynamic capability of strategic thinking effective execution ability to get organisational alignment of activities, systems and group ability to adapt rapidly being externally focussed -

Revised Analysing the external environment => whether the industry is expected -> to grow in the future or not - and the causes of that expected growth -> future profitability - and causes of that profitability => Three reasons for difficult part of strategic analysis 1. Breadth() of the anlaysis required 2. difficulties in sourcing reliable data to analyse 3. uncertain and ambiguous() signals provided by the environment, thus making interpretation difficult 4. 5. the factor that shaped the industry's growth, profitability or competitiveness to date not have the same impact on the industry's future state aspect which the organisation cannot control 2.6 2.6 2.7 2.4

88/118

2.5

Defining the industry => industry define as a group of organisations or business units producing close substitutes => 2 definition of industry 1. narrow - easy to analysis but more likely to miss the new trend 2. wide - difficult to analysis but minimise the risk of missing new trend => Value chain is that new value is created at each stage of the chain Industry segmentation - based on the characteristics of product or serive to provide following data to analyse => -> segment definition -> an explanation of data -> total segment size -> average amount growth rate for past five year => Product and service segmentation - what the industry offers Market segmentation - who the industry offer it to => Life cycle position of industry helps to formulating organisation stratgegy 1 Start-up stage- many different vision and approcaches to industry in term of product type , feature and 2 Growth stage - estblished and grows rapidly 3 Maturity - reduce towards more normal rates 4 Shake-out - growth and profitabliity are flat or in slight decline 5 Decline or renewal - growth and profitability are in clear decline => The important issue is to be consistent() throughout the analysis => 2 categories environment 1. remote environment - (outsider-industry) with general influences 2. industry environment - factor in indusry affect its profitabliity and its competitive position Case - Module 7 Part A - Chickens Pty Ltd External environment Define industry Industry environment: new entrants suppliers buyers substitutes industry rivalry history government buyers' buyers suppliers' suppliers life cycle markets competitors strategic groups customers

2.9 2.13

2.14 2.17 2.17

2.19 2.19

Remote environment technological economic market political legal environmental 'sociodemographic

Remote environment analysis What are the major tends affecting the growth of the industry in the future? Will this industry grow faster or slower than average industry growth rates? How far into the future should we look? It should be consistent. Usually around 3 years, some are 10-12 years such as education, biotech, pharmaceutical products. Anyway should be long term What is average growth? most industry grows is a combination of - population growth - price inflation

2.20

89/118

=>

expected future rate of growth is important in indicating the size of the future opportunity that exists in the industry fast - provides opportunities for many organisations to do well -> negative growth - only occur for one organisation at the expense of another -> conducted at the industry level, not at the organisation level Temples models identify key drivers of historical and future growth How this factor contributed to shaping the industry to its current state -> Will this change in the future and if so, what impact will factor have on industry growth in the future? -> Remote environment trends (Temples) technological -> changing technologies can make existing companies in an industry obsolete() if they do not adapt in time and appropriatly e.g. micropocessors and telecommunication, internet and transport economic -> which affect an industry that include changes in gross domestic product (GDP), inflation rates, unemployment levels, interest rates, exchange rates, taxation rates and wage rates -> -> Market examined on a number of different level, overlapped with concepts of customer segmentation political are affected by political influence and governement legistration and change result from change in economy or in social and cultural shift legal Environment factors (sustainaility()) orginsation do not want to incur extra cost because they have diff view of the important of sustainability or they operate under diff regulation socio/cultural and demographic() most industry growth is a combination of population growth and price inflation

=> =>

2.22 2.21

=>

2.21 2.22

2.24 2.26 2.29

-> ->

2.30 2.33

->

2.34

=>

Summarising the remote environment analysis significant (+) or (-) will impact on the growth of the industry -> all the major factors are (+), expected to grow faster than average ->

2.36

Industry analysis What are the factors within the industry which determine the profitability of the industry? Based on these forces, what is the current and expected future profitability of the industry? How are the forces changing, and how are they expected to change over time? => Porter's five forces model for industry analysis Industry profitability will be high if five force are low => threat of new entrants -> Entry barriers Industriry size capital requirements economies of scale switching costs product differentiation access to distribution channesl Intellual property government policy power of suppliers -> dominated by few co. but sell to many customers product or service is unique and switching costs are high substitutes not readily available suppliers are able to forward integrate purchasing industry only buy a small % of supplier's output

2.40

2.40 2.42 2.42

2.44

90/118
-> power of buyers buyer purchase a large proportion of the seller's product buyer has potential to backward integrate many alternative suppliers few costs of changing suppliers product or service is a high % of the buyer's cost product or service is easily substituted power of substitutes the more substitutes the buyers have, the higher the buyer bargaining power direct or substitute which fulfils the same need for the buyer intensity of industry rivalry number of competitors capacity rate of industry growth exit barriers amount of fixed costs
Buy of er

->

->

1. New Entrants Entry Barriers Economies of scale Product differentiation Capital requirements Switching costs Access to distribution Government policy

2. Buyers Determinates of Buyer Power buy large volume potential to backward integrate many alternative suppliers few swithching costs high % of buyer's cots seasily substitute

Bar

ga

ng ini

Pow

er

5. Industry Competitors Rivalry Determinants Industry growth % No. of competitiors

Threat

of New Entran

ts

3. Suppliers Determinants of Supplier Power Differentiation of inputs Switching costs of suppliers and firms in the industry Presence of substitute inputs Supplier concentration Importance of volume to supplier Cost relative to total purchases in the industry

sti of Sub Threat

4. Substitutes Determinants of Substitution Threat

tutes

Amount of fixed cost Capacity Exit barriers

Relative price performance of substitutes Switching costs Buyer propensity() to substitute industry rivalry's element =>

Su ppl

ier

Impact of inputs on cost or differentiation Threat of forward integration relative to threat of backward integration by firms in the industry 2.51

Drawing conclusions about industry profitability 5 forces are rated high, industry profitability should be very low 5 forces are rated low, industry profitability should be very high desirable level on industry profitability as being a combination of return covering the risk-free real return for the country in which operations exist (0-5%)+ return for expected inflation(2-5%) + return for the risk involved in the industry(2-8) Extending Porter's five forces analysis: Eight forces analysis the role of government buyers' buyers suppliers' suppliers New entrants Government

=>

2.53

Supplier's supplier

Suppliers

Industry rivalry

Buyers

Buyers' buyers

Substitutes

91/118
Understanding the industry life cycle 2.17

Single manager Management by intuition ()

Functional delegation Management by conflict hope

Financial orientation Management by financial planning

Marketing orientation Management by ROI, marketing

Strategic management Industry anlaysis, competitive

Strategic management

Organisational renewal

Organisation size

ISSUE: How to make it happen

ISSUE: How to grow

ISSUE: How to control

ISSUE: How to mange markets,

ISSUE: How to manage industry

ISSUE:

How to avoid decline

Time

Start-up

Growth

Control

Maturity

Shakeout

Decline

Industry life cycle

92/118
From industry to market analysis => Market defined as a group of consumers with similar needs => Understanding competitiors: Competitor analysis Basic of competition question Demand - What drives demand for the products and servies of the industry? Choice - What drives price, product performance and supply availability? Price - How is the price determined in the industry? Costs - What are the main driver of cost in the industry? Current and potential risks - What r the current and potential risks? => Understanding customers -> Who are the key customers or customer types? -> What they use the product for? -> What its key benefits and buying features are to them? => Industry key success factors -> Strong brand name -> Efficient selling and distribution networks -> Effective brand support, marketing and strong merchandising -> Processing efficiency -> Product quality -> Understanding customer -> Product differentiation and innovation -> Product distribution and awareness => Effective strategic analysis not only of the position of your own organisation, but also of each of your key competitors. -> -> -> -> -> -> -> -> What is its business strategy? Who are its key stakeholdes? What is their commitment to the organisation What are their values? What is its current position in terms of market share, financial performance, operating efficiency and long-term growth and development? What is its satifiaction with its current industry position? What plans does it have to change either the scope or nature of its operations? What is its operating position in terms of its current volume compared with its maximum capacity, its breadth of product range and its relative cost structure? 2.55

2.59

2.56 Q2.18

2.61

2.62

=>

-> What are its capabilities? -> What gaps exist between its current strategy and its actual capabilities and performance? -> What assumptions does it hold about the industry and about itself? Competitive positioning: Strategic groups -> similar strategy in a similar product- market classification become a strategic groups

2.66

=> =>

Strategy provide a set of tecnique and tools for leading, managing, coordinating and making decision in times of complexity and change. The concept of leadership is then explained from a strategy perspective, and the strategic management process is outlined in relation to the positioning of an organisation in its marketplace and external environment

1.3

93/118

The origins and importance of strategy => from Greek word " strategos" - has military() origins => Military nature of strategy language -> increasing market penetration() -> pursuing growth aggressively -> competing in the war for talent() -> out-competing rivals() => importance of strategy because of the condition -> changes in the nature of ownership - owner separated from running of large corporation -> changing and globalising market conditions - growth of multinational corporation -> new organisational structures - because of global and technological. Decentralised Leadership defined => develop a strategic vision for the future of the organisation => motive people to share in this vision in order to make it a reality => distinction between leadership and management -> Bass - leadership implies followship whereas management implies subordinateship -> Mullins leadership process of influence and persuasion() and not just the exercise of power and authority -> Kaatz and Kahn - leadership entail both power and influence - power to change people's behaviour and influence to change their perference.

1.5

1.6

The role of accountant in strategy development => The accountant's role in organisational strategy implentation -> aliging orgainisation structure with org's business strategy -> re-allocation of resources and budget to facilitate and fund the organisation's strategic option -> development of key performance measure to monitor the org's performance against its strategy

1.7

=> The accountant as a strategic business driver => Value creation in respect of financing -> relates to the cash generating and capital-raising abilities of org. The global context of business => Globalisation refer to int'l companies with physial operation in many countries that are integrate through finance, production, marketing and sales activities => Drivers of globalisation - is an attractive proposition for large companies due to convergence of range of competitive, technological, social and political forces - Lasserre , Gunter & Van der Hoeven => Challenges of globalisation - competition, distribution, macroeconomic , socioeconomic, financial, legal, physial , political , sociocultural, labour globalisaiton risk (i.e. economic and social risk)

1.8 1.9 1.9

1.10

1.12

competition, distribution, macroeconomic , socioeconomic, financial, legal, physial , political , sociocultural, labour globalisaiton risk (i.e. economic and social risk) => Benefits of globalisation - cost benefits , timing benefits, learning benefits, arbitrage benefits Approches to strategy => The rational approach -> characterise - linear() and mechanistic() model -> conception and execution - discrete(), sequential() activities -> Steps - establishment of clear strategic objectives - analysis of an organisation's strategic situation - strategic options are generated - implementation of the chosen strategic option -> example - Michael Porter's five forces model -> emphasises the role of leaders and managers in creating and driving strategy and change -> external focus -> the managers are in control -> rational control and systematic analysis => The processual approach -> defines organisations as political arenas, in which individuals with shared interests and goals form into coalitions -> occurred in an incremental(), inconsistent() and ad hoc() manner -> internal focus -> processual approach qualifies that the control is limited and constrained -> distinct between rational approach - the view of formulation and implementation is inextricably() entangled() -> creativity, adaptation() and intuition() => Other perspectives on strategy -> Evolutionary - further than the processual approach - environment will select organisaitons for either success or failure -> Systemic - related to the processual approach - builds on the importance of culture and politics -> Fuzzy strategy() => Summary of rational and processual approaches Strategic dimensions Rational Processual action - occurred in an plan - linear and mechanistic incremental(), characteris model inconsistent() and ad hoc() manner Contributing Economics, military() Political science, social psychology disciplines principles Explicit() and Strategy concept Implicit() and emergent() deliberate() A singular (managerial) reality, Organisation Multiple coalitions(), political unified(), coherent Environment Knowable and definable Imperfect, vague(), complex Strategy process Nature of strategic change Separate, sequential, linear, topdown Planned, orderly, analytical, external focus cause-effect Entangled(), pattern in a stream of actions, top-down, bottom-up Fragmented(), incremental, ad hoc, intuitive, internal focus, imperfect

94/118
1.15

1.17

1.18

1.20

1.21

1.22 1.20

Change strategists Goals of strategic change

Formulated by top managers, implemented by employees Optimise performance

Lower-level managers and employees more involved Satisfice, accommodate() various stakeholders strategy as incremental and ad-hoc, a view developed from observing straategy in action. Strategies emerge, rather than being planned logically and sequentially, with formulation and implementation seen as closely integrated process

95/118

Role of leadership

provides a mechanical appraoch that separate conception and execution, moves from objectivesetting to analysis and on to developing, selecting and finally implementing options

The strategy process => Organisational mission and vision -> developing and communicating a compelling() mission and strategic vision, leaders can infuse an organisation's members with a sense of purpose and a persuasive() rationale for the company's future direction => Understanding the organisation environment -> Business environment : 1. Macro or remote environment 2. industry environment Macro - force of change that are likely to affect the structure of industry Typical change driver across many industries homogenisation of customer needs development of global supply, distribution and comm channels drive to gain competitive advantage deregulation of trade policies and escalating global competition => Analysing strategic position -> SWOT analysis => Formulation and implementation of strategy -> Value creation Strategic thinking and analysis => Strategic thinking - creativity rather than formal planning => both concepts of creativity and planning need to be operationalised in tandem() with each other => balance between creativity and planning to reduce the risk of chaos() => Conceptualisation require understanding of 2 dynamics 1 interration and alignment of people and funcion within org 2 relationship between org and its environment- degree to which org is meeting or exceeding the need of its external stakeholders

1.22 1.23

1.23

1.24

1.9 1.25

1.26

Strategic planning Strategic planning process - provide framework and criteria for making operational decision, implenenting => these decision and monitoring and evaluating implementation => Strategic planning should reinforce its Strategic thinking provide answer to 3 basic question 1 What r we doing? (define organisational purpose) 2 What is the gap between where we are now and where we want to go? (External and internal environment analyses)

1.26 1.26

3 How do we get there (Formulating and implementing strategy) => distinction between strategic thinking and strategic planning Strategic fit and stretch - figure 1.3 (stretch that is leveraging resources to position the organisation for future competitive advantage) => Strategy equation => 1.27 1.28 1.28

1 An alignment or fit of an organisation's strategy with its parts 2 A fit between org and its environment

96/118

97/118
Levels of strategy => Corporate strategy pertain to that of the company and its business overall -> establish a diversified portfolio of business -> boost() the combined performance of the businesses and improve competitive position -> capture() and use the synergy() among the businesses to improve competitive advantage -> effectively allocate corporate resources, prioritising growth businesses within the portfolio => Business strategy => Functional strategy -> level of department or functional activity within business Strategic leadership => Approaches to leadership styles -> Traits () - leader are born psychological() characteristics - consistent behaviours or actions that describe a leader's style Behavioural styles - leader can be trained - 2 common behavioural styles employee orientation and task orientation -> Situational approaches - consider contingent factors -> Transformational() and transctional() approaches - leader provide individualised() consideration, intellectual() stimulation() and possess charisma(/) => The importance of strategic leadership ? -> strong leadership is required for organisations to survive and adapt in competitive and turbulent() environments -> structural factors and constraints (organisation and environment) act as significant determinants of leadership -> leadership can be viewed as being a captive() of the organisation, with their substantive decisions limited to its norms, policies and practices -> key leadership variables are task and people Leadership and ethics => The classical view of ethics -> Milton Friedman - primary obligation of managers is to provide a return on investment to the owners social responsibility and morality has no place in the job description of leaders and managers => The socioeconomic view of ethics responsibility goes beyond the profit imperative to include protecting and improving society's welfare leader should ensure their organisation complies not only with the law but also with morality of society -> 1.30

1.31 1.31

1.32 1.33

1.33

1.34 1.34

1.34

1.36 1.38

- social responsibility - internal and external aspects - Figures 1.4 => The ethical responsibilities of leaders

Table 3 1995 1996 1997 Australian pharmaceutical and toiletry wholesaling revenue ($ billion) Ethical drugs 3.11 3.63 4.04 TPC products 2.07 2.04 2.00 OTC drugs 1.73 1.74 1.66 Total revenue 6.91 7.42 7.70 Growth rate % Ethical drugs TPC products OTC drugs Total revenue Share of total industry revenue % Ethical drugs TPC products OTC drugs Total revenue Table 2: 1998 4.61 1.96 1.59 8.15 1999 5.30 2.09 1.68 9.07 2000 6.89 2.20 1.93 11.02 2001 7.48 2.22 1.99 11.68 2002 8.16 2.24 2.06 12.46 2003 8.71 2.21 2.08 13.00 2004 9.32 2.16 2.03 13.51

17% -2% 1% 7%

11% -2% -5% 4%

14% -2% -4% 6%

15% 7% 5% 11%

30% 6% 15% 22%

9% 1% 3% 6%

9% 1% 4% 7%

7% -2% 1% 4%

7% -2% -3% 4%

45% 30% 25% 100%

49% 28% 24% 100%

53% 26% 21% 100%

56% 24% 19% 100%

59% 23% 18% 100%

63% 20% 17% 100%

64% 19% 17% 100%

66% 18% 16% 100%

67% 17% 16% 100%

69% 16% 15% 100%

Ethical drugs TPC products OTC drugs Total revenue Table 2:

Australian pharmaceutical and toiletry wholesaling revenue per capita ($) 1995 1996 1997 1998 1999 $ $ $ $ $ 160 185 204 230 262 107 104 101 98 103 89 89 84 79 83 356 378 389 407 448 Growth rate 1995 $

2000 $ 337 108 94 539

2001 $ 362 107 96 565

2002 $ 391 108 99 598

2003 $ 413 105 99 617

2004 $ 438 102 95 635

Ethical drugs TPC products OTC drugs Total revenue

1996 $ 15.63% -2.80% 0.00% 6.18%

1997 $ 10.27% -2.88% -5.62% 2.91%

1998 $ 12.75% -2.97% -5.95% 4.63%

1999 $ 13.91% 5.10% 5.06% 10.07%

2000 $ 28.63% 4.85% 13.25% 20.31%

2001 $ 7.42% -0.93% 2.13% 4.82%

2002 $ 8.01% 0.93% 3.13% 5.84%

2003 $ 5.63% -2.78% 0.00% 3.18%

2004 $ 6.05% -2.86% -4.04% 2.92%

Table H

PIA Lane Delta Platinum Others Total revenue

Australian pharmaceutical and toiletry wholesaling revenue ($ billion) 2000 2001 2002 2003 2004 $ $ $ $ $ 2.800 2.975 3.150 3.300 3.463 2.950 3.050 3.150 3.250 3.051 2.500 2.650 2.775 2.875 2.965 0.120 0.622 2.769 3.007 3.387 3.451 3.407 11.019 11.682 12.462 12.996 13.508 Australian pharmaceutical and toiletry wholesaling market share 25.41% 25.47% 25.28% 25.39% 26.77% 26.11% 25.28% 25.01% 22.69% 22.68% 22.27% 22.12% 0.00% 0.00% 0.00% 0.92% 25.13% 25.74% 27.18% 26.55% 100.00% 100.00% 100.00% 100.00%

PIA Lane Delta Platinum Others Total revenue Summary of performance

25.64% 22.59% 21.95% 4.60% 25.22% 100.00%

2000 $ 2001 $ 2002 $ 2003 $ Sales ($ billion) - Australian pharmaceutical and toiletry wholesaling industry only PIA 2.800 2.975 3.150 3.300 Lane 2.950 3.050 3.150 3.250 Delta 2.500 2.650 2.775 2.875 Platinum 0.120 Gross margin % Industry average Key competitor average Platinum Profit before interest and tax % Industry average Key competitor average Platinum

2004 $ 3.463 3.051 2.965 0.622

17.3% 15.3% n/a

17.0% 15.0% n/a

12.7% 10.7% n/a

12.3% 10.3% 10.0%

12.2% 10.2% 10.0%

1.6% 1.5% n/a

1.4% 1.3% n/a

1.3% 1.2% n/a

1.1% 1.0% 1.7%

1.0% 0.9% 1.7%

Table 6 Industry profitability - Australian pharmaceutical and toiletry wholesaling 2000 2001 2002 Gross margin % 17.0% 12.7% 12.5% Change in GP % -25.3% -1.6% Profit before interest and tax % Profit before interest and tax % growth Table 7 2000 2001 Australian pharmaceutical and toiletry wholesaling revenue ($ billion) Ethical drugs 6.89 7.48 TPC products 2.20 2.22 OTC drugs 1.93 1.99 Total revenue 11.02 11.68 Average gross margins Ethical drugs 15.0% 10.0% TPC products 25.0% 24.0% OTC drugs 15.0% 10.0% Total revenue 17.0% 12.7% Gross margin ($ billion) Ethical drugs 1.03 0.75 TPC products 0.55 0.53 OTC drugs 0.29 0.20 Total gross profit 1.87 1.48 Ratio of total gross margin Ethical drugs 55% 51% TPC products 29% 36% OTC drugs 15% 13% Total gross profit 100% 100% 2002 8.16 2.24 2.06 12.46 10.0% 24.0% 10.0% 12.5% 0.82 0.54 0.21 1.56 52% 35% 13% 100% 1.6% 1.4% -12.5% 1.3% -7.1%

2003 12.3% -1.6% 1.1% -15.4%

2004 12.2% -0.8% 1.0% -9.1%

2003 8.71 2.21 2.08 13.00 10.0% 23.5% 10.0% 12.3% 0.87 0.52 0.21 1.60 54% 32% 13% 100%

2004 9.32 2.16 2.03 13.51 10.0% 23.5% 10.0% 12.2% 0.93 0.51 0.20 1.64 57% 31% 12% 100%

Manufacturers Wholesalers Pharmaceutical Ethical OTC Others TPC Total @ Retail price % on retail price Market segmentation Ethical OTC TPC 8.473 1.842 1.964 12.279 73.3% 9.321 2.026 2.161 13.508 7.3%

Retailer 7.809 2.006 2.085 11.9 14.876 18% 83.8% 99.0% 96.5%

Wholesalers to Hospitals Online 1.5 0.012 0.02 0.076 0.108 0.15 0% 0.1% 1.0% 3.5%

1.5 1.725 1% 16.1%

13.508 16.751 100%

Task 1 Summarise the strategic position of Chasseur Chickens a. What type of organisation is Chasseur Chickens? Chasseur Chicken is a family-owned, private Austrian company. It was founded in 1951 by Charlie Chasseur and has been run by his grandson, Bob Brown since 1984 when Charlie died b. What industry does Chasseur compete in? Chasseur is the third largest company in the Australian chicken meat production and processing industry. Core activities cover breeding, hatching, farming, production, processing and distribution, having backward integrated over the last decade What are the key issues that will affect future indsutry growth? What is their likely impact? How is c. future growth for the industry assessed? Future growth for the overall industry is assessed as low-medium - Social - Demongraphic - Cultural - Economic - Political - Legal - Technical What are the key issues that will affect industry profitability? What is their likely impact? How do d. you assess the future profitability for the industry? Based on Porter's 5 forces concept that if customer bargaining power, supplier bargaining power, competitive rivalry, substitute and new entry are low, the profitability will be high. Customer bargaining power is medium Supplier bargaining power is low - vertical integrate Competitive rivalry is high - there have around 80 competitor Substitute is high - the people can choose other meats and other foods New entry are low - since it need a high volume capital and should have a economic of scale and assess the distribution What business strataegy is Chasseur supposed to have been pursuing and has this in fact been the e. case? 5 question - Does Chasseur plan to grow? - What products/ services will Chasseur provide? - In what markets will chasseur operate? - What generic strategy will Chasseur adopt? - What position in the industry does Chasseur plan to hold? What are the stretegic capabilities of Chasseur, and do these meet the strategic goals of the f. company? - Are they valued by the customer? - Are they better than the competition? - Are they difficult to replicate or imitate? Who are Chasseur's key stakeholders, what are their objective and are their objectives aligned with Chasseur's strategic goals?

How has Chasseur performed to date? Balance Scorecard - Financial perspective - Customer perspective - Internal operating efficiency perspective - Learning and growth perspective Who are Chasseur's competitors? What are their strengths and weaknesses? How is Chasseur placed compared with them?

Task 2 Summarise the key strategic issues for Chasseur Chickens - The gap between the stated strategy of being the industry's leading company and its actural position as the third largest company in 2002 - The entry of the major companies into the value added segment segment due to changing consumption trends and its higher profitability - Chasseur has no significant differentiation factor compared with its competitors Task 3 Make recommendations, including justifications, of how Chasseur Chickens should address these key strategic issues, prioritising initiatives into short, medium and long-term timeframes *Ansoff product/market matrix - Market penetration - existing markets and existing products - Market expansion - new market and existing products - New product development - existing markets and new products - Diversification - new market and new products *Rumelt's criteria for evaluating stategy - Is the strategy internally consistent? - Is the strategy consistent with the external environment? - Is the strategy feasible()? - Does the strategy create or maintain a basis of competitive advantage?

Task 1 Summarise the strategic position of Schultz Wine Limited a. What type of organisation is Schultz Wine Limited? Schultz Wines is a family-owned, listed on Australian Stock Exchange in 1992. It was founded in 1840s by Barossa Valley and has been run by a fifth generation winemaker, Frederich (Fred) Schultz. b. Schultz is the 8th wine producing companies, make only high quality premium wines for domestic and export sales. Macro environment analysis - future growth for overall industry is assessed as medium-high Nature of impact on industry growth Assessment of impact on industry growth

c.

Social factors:

1. Health concerns that red wine reduce risk of cardiovascular disease and Positive High increase overall lifespan 2. Wine consumption by regular and moderate consumption (changing role of Positive Medium women and ageing of Australia's population) Positive, domestic consumption is below other 3. Low domestic consumption per capital compared with other countries country level and, has Table 9 (p.8) opportunity to grow to these 4. Wealth and incomes increased, consumer tastes have changed. Premium wines are favoured more. P.9 Positive Medium 5. Trend of eating out and expanded wine can be consumed 6. The overall impact of social change is positive for industry growth Demographic factors 1. High level of beer consumption in Australia 2. Growth in income and rising living standards raised per capita wine consumption in Australia 3. The overall impact of demographic factors in neutral for industry growth Cultural factors: 1. Lifestyle change expanded changes, wine is a mainstream alcoholic beverage accompany meals in the home 2. Consumer preferences extend western behaviours and tastes to Asia providing an even greater market growth opportunity Economic factors 1. Strong growth in Australian economy 2. Economic cycle provided strong impetus to growth in wine demand, especially for expensive price categories 3. Low inflation and low interest rate environment in which the growth has occurred has been very beneficial for expansion of capital intensive wine 4. Average household income expected to continue rising over the long term 5. Oil prices increases, rising interest rates, high household indebtedness, volatile exchange rates and vulnerable share-market valuations 6. Global oversupply of grapes make Australian wine surplus insignificant and sales of excess production 7. Australian winemakers selling bulk, unbranded wines to world market to blend of excess grapes from a variety of geographical areas. Australia has 8. The overall impact of economic factors is positive for the industry Political factors 1. Australian government offered tax incentive to growers planting vines of premium grape varieties 2. The overall impact of political factors is negative for the industry Legal factors 1. Tightening drink driving laws slight dampening effect on consumption of wine Technical factors 1. Innovation in viticulture and wine processing technology p.3 d Key issues affect future industry profitability Porter's five forces model Threat of new entrants is medium to high 1. In a decade, number of wine companies grown from 892 to 2000 P.4 Bargaining power of Suppliers is medium to high 1. Increase in vine planting has contributed to an increase in wine stockholdings given that export sales demand has not grown at the same rate as production growth. Excess stockholding contribute to depressed wine Threat of Substitutes is medium to high 104 118

Negative Positive

Medium Medium

Positive Positive

High High

Positive Positive Positive Positive Negative Negative Negative

High High Medium Medium Medium Low Medium

Positive

Medium

Negative

Medium

Positive

Medium

Medium to high

Medium to high

1. High level of beer consumption in Australia P.7 Bargaining power of buyers is medium to high 1. Australian wine surplus insignificant and the sales of excess production. Winemakers might be tempted to solve the oversupply problem by selling bulk, unbranded wines to the world market. 2. Exports are largest distribution channel for Australian. 60 per cent of exports are shipped direct to large retailer customers, including major supermarket chains. Presence of strong branding and marketing support is critical to achieving market penetration. Australian brand no brand 3. Domestic wholesale wine merchants is the second largest distribution channel. Increasing power of supermarket chains cited by major wine companies as a reason for deteriorating performance. Retailer demands for high margins and strong promotional support have squeezed producer margins 4. Retailer demand for high margins and strong promotional support have squeezed producer margins and created a dilemma. Retailers can decide to not allocate shelf space to wine brands for dissatisfied with the trading terms.

Medium to high

Medium to high

Medium to high

Low to Medium

Low to Medium

Rivalry among existing competitors is medium to low. Australian winemaking industry is a mature industry. Economies of scale, marketing, distribution and export capabilities are becoming more critical as Medium to low local supply continues to exceed demand. The need for theses capabilities has driven much of the merger and acquisition activity. P.2 e Schultz's business strategy The five questions approach 1. Does Schultz plan to grow? Yes-Aims to expanding the distribution bases of Schultz Wines' products in both the domestic and export markets through widely recognised brands and strong distribution relationships 2.What products will Schultz provide? Stated strategy is 'Being a producer of superior premium varietal wines." 3. In what markets will Schultz operate? Expanding distribution in both the domestic and export markets 4. What generic strategy will Schultz adopt? Superior premium market with low cost by crushes grapes for other wineries to achieve production economies of scale. 5. What position in the industry does Schultz plan to hold a. Acquiring top quality grapes by developing further the strong relationships between the company and the grape growers b. Maximising returns to shareholders, conserving adequate funds to provide the necessary working capital for the continued operation and growth of the company, and using resources in an environmentally sustainable way. f Strategic capabilities of Schultz Wines, and do these meet the strategic goals of the company's Strategic capability tests 1. Are they valued by the customers? 2. Are they better than the competition? 3. Are they difficult to replicate or imitate?

Schultz Wines capability assessment 1. Fully integrated business model (only dispatch to domestically & international distributor) 2. Strong quality focus (Focus premium varietal table wines) 3. Low cost operator (Crushes grapes for other wineries to achieve costs competitive) 4. Culture and management (Loyalty, hard work, talent, patience, teamwork and recognition of other peoples' talents are the values define the company) 5. Size-economies of scale (update of production facilities to world-class standard crush 30000 tonnies of grapes per annum 6. Accredited supplier to grape growers (special relationship that in trust, loyalty and friendships) 7. Dominance of value added segment (Premium table wines with high margin) 8. Conservative, traditional family culture (Well respected family owned wine merchant and forged strong relationship with other wine merchants) 9. Focus on R&D/product development (closely with operations manager and the other teams in cellar, laboratory, maintenance and packaging department). Senior company employees hold positions in industry's peak bodies and research organisations including the AWBC. g Who are Schultz wines key stakeholders, what are their objectives and are their objectives aligned with Schultz wine strategic goals 105 118

Valued by the customers? no yes yes yes yes yes yes yes

Better than the competition no yes yes yes yes yes yes yes

yes

yes

1. Frederich Schultz, the fifth generation winemaker a. Growth and prevent Schutlz from being takeover. b. Prestige in the family company c. Personal power over a large empire 2. Contract grape growers a. Secure contract and special relationship b. Maximise profitability 3. Schutlz wine employees a. Secure employment prospects

Aligned with stragtegic goals? Yes, wants to keep growing and successfully rally small shareholder to against Allens No. may not be interested in deals with key competitors due to the need to maintain 'family' control

Yes, ensure to access widest No. may result in higher growing cost

Yes, recognitions peoples' talents and maintains loyalty, hard work, patience, teamwork

b. Constant quest for improvement distinguishes peoples's talents are the value 4. Government/AWBC a. Ensure efficient industry Yes, actively assist Australian companies to expand other market such as India

5. Wine merchants a. Strong relationshps secure prestige distribution channel Yes, an asset for access to hotel and restaurants in UK and US

Schultz wine's performance is reasonably sound and robust 1. Schultz wine's financial performance is excellent because it given success in the domestic market premium table wines with high margin. Gross margin 37.2% is higher than Industry average 34.9% and Key competitor average 2. Return on assets has declined from 8.6% (2003) and 8.2%(2004) to 8.0% (2005). However, it is still higher than Industry average 5.8%(2005) and Key competitor average 7.7%(2005). Also the ROA % declined for whole 3. Customer perspective, Schultz wine's performance has a large gap between Schultz wine's industry market share (1.6%) with Allens Group (25.6%) and Brooks Wine (22.6%) 4. Internal operating efficiency is excellent. Net margin of Schultz Wines (20.7%) is higher than Industry average (16.3%) and Key competitor average 5. The "golden grape" focus maintained by the company also chosen as the company's corporate logo. 'golden grape' have won the Australian industry's converted 'Wine marketer of the year' award several times in the last decade. 6. Overall performance can be considered mediocre. The fact that Schultz is in a relatively low market share indicates that the company has scope to grow Weaknesse s Strength Highest market share Largest wine company in the world. Cancellatio n of a large overseas order with potential takeover target Size and competitive issue Size and competitive issue No economy of scale

Competitive assessment Name - 1.Generic strategic 2. Value proposition 1. Allens group - Focus Fully integrated

2. Brooks Wine - Focus integrated with own vineyards

French-based 3. Capricorn wines - Differentiation Largest Australian table wine export in international UK, Ireland, Norway, Japan, Singapore & New Zealand liquor distributor

4. McMillan Chamber Wines - Focus Contract of export customers

Increasing on exports Owns three wineries in three diverse premium wine regions Reputation for innovative, advanced technology

5. Stefano Wines - Focus Owns three wineries in three diverse premium wine regions 6. McFarlane Wines - Differentiation Well know brands with reputation for innovative advanced technology wineries and vineyard

106 118

7. Australian Beverages - Focus Extensive portfolio of beer brands

Developed global premium wine business through acquisition

Summary of Schutlz wines current strategic position To maintain its competitive advantage, Sshultz wine should consider some possibilities: through an merger with other winemaker such as Australian 1. To diversify Beverages 2. Further opportunities for forward (The Schultz Cellar Club) or backward integration (Contracts with wine merchant partners to extended direct-toconsumer distribution), Air Australia 3. Establishment of export markets and control over distribution channel with other cournties 4. Supply contract for the suppliers 1. Bottles, corks and stelvins, capsules, labels and cartons 5. Proudction of wine varieties currently favoured by the market: Consider expand protfolio with other wines 1. Sparking wine 2. Fortified and other 6. Build strong branding and marketing relationships 7. Guaranteed supply grapes via contract growers 8. Expand market in India, a new export market

Special relationship that exists between grape growers and Schultz Wine. Trust, loyalty and friendships relationship that Schultz has access to the idest variety of the best Barossa Valley grapes available. Schultz Wines focuses on making premium varietal table wines and generally outperformed the industry overall and its competitors in Australian industry over last five years. Schultz Wines crushes grapes for other wineries. Extra activity enables the company to achieve production economies of scale and keep its cost competitive with its larger rival winemakers. Responsibilities to the community, the environment and sustainability seriously. The company was the first Australian winemaker to implemental a Hazard Analyses Critical Control Points (HACCP) plan for food safety system. This has provided strategic advantage in relation to export sales.

Key strategic issues for Schutlz wine Task 2 The key strategic issues for Schultz wine can be summarised as follows: 1. Being a producer of superior premium varietal wines Schultz wine focus on premium table wines, but maket has ever-changing tastes. Schutlz need to security of access to a wide variety of grape types and able to change production and blending processes quickly as tastes change. 2.. The gap between the stated strategy of expanding the distribution base of Schultz Wines' products in both the domestic and export markets through recognised brands and strong distribution relationships. With Allens Group; Brooks Wine and Capricorn Wines are International corporates, Schultz wines need to development of export markets is crucial and domestic market is relatively small and mature. Control over distribution channel within export markets is also crucial,. 3. Acquiring top quality grapes by developing further the strong relationships between the copany and the grape growers. Schutlz wine has no their own vineyards and they need to assruance of grape supplies via contract growers. Schutlz wine with expertise in making a range of wine types have a greater ability to switch production to wherever demand Task 3 Identifying strategic options for Schutlz Wines Using Ansoff product/Market matrix Short to medium-term recommendations 1. Market penetration-existing product into existing markets Schultz wine ability to achieve high growth through this option is limited due to the domestic market is marture. It is recommended that the key strategic of merger as follow: Australian Beverages-due to its portfolio of beer brands include the distribution of licensed wine and spirits brands, the production and distribution of 'ready-to-drink' beverages, liquor retailing and malt extraction for home brewing and the food industry, therefore, establishment of export McFarlane Wines-is an interesting option due to its position as a niche company in the industry (awarded 32 trophies and over 480 medals of well know brands). Also innovative, advanced technology in wineries and vineyards to acquiring top quality grapes. Increasing size and scale are interest

107 118

Stefano Wines-Own three wineries in three diverse premium wine regions, Stefano wines overseen by Giuseppe Stefano, who is now nearing retirement and current generation has no interest in winemaking industry. Schutlz wins may gain the interest due to its position Gallant One which had set the industry benchmark for dessert wines and draw consumer demand by strong branding McMillan Chamber wines-due to its relatively poor financial performance by the major customers cancellation of large overseas order led to discounted mcMillan wines. The company also produces sparkling wines, premium red and premium white varieties also provide an ability to switch production to a

Further option on product development - New products into ixisting markets Schultz wines would expand protfolio to Sparkling and fortified wines. For example, extensive of beer brands to development the makret for the high level of beer consumption in Australia. Market Expansion-Existing products into new markets Given the success of The Schultz Cellar Club in Domestic market, Schutlz also review of the UK and US market to a direct sales model. Good relationship with wine merchant and major supermaket coustomers results to internatinal expansion the The Schultz Cellar Club. Long-term recommendation Market expansion-Existing product into new markets Givin India has one of largest and most diverse mixes of races in the world, Australian government actively assist Australina companies invested to tender for busines in India to ensure their success. Schultz wines could investigate the opportunity for the development. Diversification-New Products into new markets Schutlz wines could be expansion into Sparkling and fortified wines into International market. For example, India, UK and US. Evaluation of Schutlz wines strategic options 1. Internal consistency Given the curretn strategic, operational fna dfunctional capabilities of Schutz, it is evident that both market penetration and product development are hightly consistent strategies. Schutlz wins' already has the key internal requirements to successfully undertake these options and, as such, the risk to the compnay of pursing these options is assessed as low. The real real issue arises from evaluationg how internally consistent are market expansion and diversification. Schutlz wines current capabilites are not so weel suited to these option, which involve the management of expand products and market portfolios. Accordingly, these options carry an increased inherent risk for the business-they require new strategic capabilities and skill set as well as changes to the existing functional strategies of Schutlz wines. However, that is not to say that these option should not be pursued. Rather, Schultz wines should undertake a detailed analysis of changes that the business would be required to make, if it were to adopt andy of these External consistency Schultz is currently the eithgty largest competitior in the Australian winemaker and does not compete in Sparkling and fortified wines industries at all. On this basis, it is clear that again the Market penetration and Product development are consistent with the external environment. Opportunity still exists for Schultz wines to create further economies of scale and grow within the current industry. It should be further noted that the key competitors will also be looking for such opportunities. Schultz wines nees to ensure that it continues to look for new opportunities in this area to stay one step ahead of Feasibility While market penetration is certainly both internally and externally consistent, how realistically it can be achieved is questionable given the strong competition that will ensure from the key competitors. Both product development and market expansion appear quite feasibnle options given Schutlz wines strong capabilities in these areas. Both these areas are also experiencing strong growth, which improves their feasiblity rating. Product development as compared with market expansion is a less risky option for Schutlz wine to undertake in the first instance. Strategic advantage creation or maintenance

108 118

Schultz wines alaready has some factors with have given rise to a stragegic advantage. The strategy of further market penetration alone will not give rise to greater strategic advantiage for Schultz; however, if it results in the achievement of a economic of scale or exapnd distribution channel and product development, then this would be of strategic advantage. Schultz wines must continue to innovate in product development and expanding export and stay one step ahead of its competitors. On this basis, Market penetration and product development may assist Schutlz in maintaining a However, to create long-term strategic advantage, Schultz really needs to look to expansion options that ensure strong growth and profitability. On this basis, expansion of exports to India will provide a good foundation upon wihich tese targets can be achieved, as will diversification in general. However, it is vital that the risk attached to such options is carefully considered by Schultz before embarking on these options. They will significantly change the underlying business model of Schutlz, increasing the level of complexity and uncertainty assoicated with revenue streams generated from new products and markets. In order to successuflly integrate such expansion into the existing business, Schutlz wines must ensure that risk management become an essential component of the business planning cycle, with contingency plans developed

109 118

Index by description 2 ways relationship - structure follows or influence by structure 3 technique to address resistance to change 4 questions approach to corporate strategy analysis 5 forces model 5 questions approach to business strategy analysis 8 forces analysis balance stability and change model best-cost or value for money generic strategies bottom up business planning Business Level business strategy analysis - 5 questions approach business strategy gaps - capabilities business strategy gaps - industry environment business strategy gaps - industry rivals business strategy gaps - key stakeholder business strategy gaps - organisational performance business strategy gaps - remote environment business strategy option Centralisation versus decentralisation Cluster organisation Competitive advantages strategy Competitor analysis Competitve positioning Corporate Level corporate strategy analysis - 4 questions approach criteria of rational decisions Definition - capabilities Definition - ethics Definition - ethics Definition - ethics Definition - Implementation - Culture Definition - industry Definition - rational approach strategy Definition - strategic leadership Definition - strategic ledership Definition - strategy Definition - strategy Definition - strategy Definition - strategy distinct between leadership and management distinct between leadership and management distinct between rational and processual approach distinct between rational and processual approach distinguishing between social responsibility and business eithics Environmental analysis Evolutionary() approach formalised gap analysis process Functional Level fuzzy strategy generic strategy Palmer & Hardy 2002 Hiebert & Klatt 2001 Porter Hubbard Zakon and Lochridge

110/118 5.22 6.29 3.11 2.15 3.03 2.21 6.16 4.20 5.13 5.19 3.03 4.06 4.05 4.05 4.08 4.08 4.04 4.09 5.23 5.21 1.04 2.29 2.30 5.18 3.11 4.27 3.16 1.26 1.26 1.26 5.07 2.04 1.06 6.04 1.20 R1.1 R1.1 R1.1 1.03 1.12 1.12 1.09 1.08 1.27 2.04 1.09 4.04 5.19 3.08 4.15

Thompson & Strickland 2002 Hubbard

Quinn et al, in Mintzberg and Quinn 1996 Johnson & Scholes 2002

Thompson & Strickland 2002 Harsanyi Nelson & Winter Ferrell and Fraedrich Oxford Companion to Philosophy Shorter Oxford English dictionary Schein 1985 Chandler Kotter Hanson Chandler DeBono Robert Burgelmann Von Clausewitz Bass Mullins Mintzberg Whittington Ferrell and Fraedrich Hubbard, Samuels, Heap and Cocks Whittington Hubbard, Pocknee and Taylor Thompson & Strickland 2002 Hubbard Porter

Index by description growth of the industry Hierarchy of leadership Hofstede - tool for diagnose national cultures how to the detriment of where to - role of leaders in setting direction Implementation - actions to link the international success Implementation - communication - technique to persuade people Implementation - Culture Implementation - managing across cultures - global market Implementation - performance management Implementation - reasons for resistance to change Implementation - reward Implementation failure - HIH Implementation process - Culture - dynamics and issues Implementation strategy - 7-S model Implementation strategy - 8 big managerial components Implementation successful - Cadbury Schweppes PLC Implementation task Innovation Jan Carlzon, CEO of Scandinavian Airline System (SAS) -Vision leader strategy - both differentiation and low cost Leadership skill Leadership skill leadership style -behavioural style leadership style -traits () leadership styles learning organisation's concept Level 5 leadership Levels of strategy Managing interpersonal conflict Military nature of strategy language mirror and window concept - level 5 leadership organisataional purpose organisational configurations ()- mechanistic and organic Organisational design - Definition performance measurement Politics - Power - Definition Processual approach strategy - pattern in a stream of decisions profitability of the industry Public sector analysis Rational approach strategy rational approach strategy - steps Rational approach strategy can not satisfy because of 3 condition rational decision-making model Remote environmental anaysis Role of leadership Rumelt's criteria for evaluating stategy situational approach social eithics solution strategy strategic capabilities Remote environment analysis Jim Collins 2001 Samson & Daft 2003 Nanus 1992 Thompson & Strickland 2002 Williams and Miller 2002 Thompson & Strickland Miller & Dess 1996 Johnson & Scholes 2002 Tichy and Devanna 1990 Brown 1995 Haigh 2003 Edgar Schein 1985 McKinsey & Co Thompson & Strickland Johnson & Scholes 2002 Kim and Mauborgne Wood Hubbard, Pocknee and Taylor Goldrick Parry Robbins Thompson and McHugh Senge Collins and Porras Esisenhardt et al. 1997 Thompson & Strickland Jim Collins 2001 Thompson and Strickland Mintzberg & Quinn 1996 Galbraith 1977 Perrow 1986 Mintzberg Industry analysis Whittington Mintzberg Davis & Devinney Katz and Kahn Rumelt Blanchard, Zigarmi and Zigarmi 1985 Ferrell and Fraedrich Foote Chaney

111/118 2.06 6.07 5.10 6.22 5.12 6.27 5.08 5.10 5.12 6.29 5.14 5.09 5.08 5.05/R5.1 5.06 5.09 5.03 3.14 1.11 4.19 1.22 1.22 1.21 1.20 6.32 3.14 6.07 1.18 5.29 1.04 6.08 1.13 5.24 5.22 3.23 5.25 1.07 2.14 2.25 1.07 1.06 1.07 4.27 2.06 1.11 4.26 6.31 1.28 4.14 3.18

Index by description strategic capabilities strategic capabilities strategic capabilities - 4 element to success strategic capabilities - 5 major classes of activities Strategic fit or stretch - leading edge of strategy strategic leadership - 4 types Strategic thinking strategy process Structure - designing to success the strategy Structures - 3 main components of all organisational Substitute for leadership successful strategic requirement - 8 key steps Systemic approach The importance of strategic leadership The importance of strategic leadership Type of organisational structure type of transformational leadership Understanding customer Understanding the organisation environment - 5 questions Value and strategy Value and strategy value disciplines as generic strategies Vitality and broadening relevance of strategy Christensen Marino Hubbard Leonard Hamel and Prahalad Rothschild 1993 Hardy and Plamer Thompson & Strickland 2002 Robbins & Barnwell 1998 Kerr & Jermier Kotter 1995 Johnson & Scholes 2002 Hall Thompson and McHugh Dunphy and Stace 1993 Thompson and Strickland Collins and Porras Hubbard Treacy and Wiersema Grant

112/118 3.18 3.20 3.18 3.18 1.17 6.33 1.16 1.13 5.16 5.17 R1.1 6.10 1.10 1.24 1.24 5.18 6.11 2.31 1.13 3.13 3.13 4.20 1.05

Index by description

113/118

Index by description

114/118

5.05/R5.1

Index by author distinct between leadership and management situational approach Implementation - reward Definition - rational approach strategy Definition - strategy strategic capabilities strategic capabilities Level 5 leadership Value and strategy rational decision-making model Definition - strategy type of transformational leadership Implementation process - Culture - dynamics and issues Managing interpersonal conflict Definition - ethics distinguishing between social responsibility and business eithics social eithics solution strategy Organisational design - Definition Leadership skill Vitality and broadening relevance of strategy Implementation failure - HIH The importance of strategic leadership Strategic fit or stretch - leading edge of strategy Definition - strategic ledership Strategic thinking criteria of rational decisions 3 technique to address resistance to change 5 questions approach to business strategy analysis business strategy analysis - 5 questions approach fuzzy strategy strategic capabilities - 4 element to success Value and strategy formalised gap analysis process leader strategy - both differentiation and low cost Environmental analysis profitability of the industry Hierarchy of leadership mirror and window concept - level 5 leadership Competitive advantages strategy Implementation - performance management Implementation successful - Cadbury Schweppes PLC Systemic approach Role of leadership Substitute for leadership Innovation Definition - strategic leadership successful strategic requirement - 8 key steps strategic capabilities - 5 major classes of activities Bass Blanchard, Zigarmi and Zigarmi 1985 Brown 1995 Chandler Chandler Chaney Christensen Collins and Porras Collins and Porras Davis & Devinney DeBono Dunphy and Stace 1993 Edgar Schein 1985 Esisenhardt et al. 1997 Ferrell and Fraedrich Ferrell and Fraedrich Ferrell and Fraedrich Foote Galbraith 1977 Goldrick Grant Haigh 2003 Hall Hamel and Prahalad Hanson Hardy and Plamer Harsanyi Hiebert & Klatt 2001 Hubbard Hubbard Hubbard Hubbard Hubbard Hubbard, Pocknee and Taylor Hubbard, Pocknee and Taylor Hubbard, Samuels, Heap and Cocks Industry analysis Jim Collins 2001 Jim Collins 2001 Johnson & Scholes 2002 Johnson & Scholes 2002 Johnson & Scholes 2002 Johnson & Scholes 2002 Katz and Kahn Kerr & Jermier Kim and Mauborgne Kotter Kotter 1995 Leonard

115/118 1.12 6.31 5.14 1.06 R1.1 3.18 3.18 6.07 3.13 4.27 R1.1 6.11 5.08 5.29 1.26 1.27 1.28 4.14 5.22 1.22 1.05 5.09 1.24 1.17 1.20 1.16 4.27 6.29 3.03 3.03 3.08 3.18 3.13 4.04 4.19 2.04 2.14 6.07 6.08 1.04 5.12 5.09 1.10 1.11 R1.1 3.14 6.04 6.10 3.18

Index by author strategic capabilities Implementation strategy - 7-S model Implementation - managing across cultures - global market distinct between rational and processual approach Processual approach strategy - pattern in a stream of decisions Rational approach strategy can not satisfy because of 3 condition organisational configurations ()- mechanistic and organic distinct between leadership and management how to the detriment of where to - role of leaders in setting direction Definition - capabilities Definition - ethics 2 ways relationship - structure follows or influence by structure Leadership skill Politics - Power - Definition 5 forces model generic strategy Cluster organisation growth of the industry leadership style -behavioural style Structures - 3 main components of all organisational Definition - strategy strategic leadership - 4 types Rumelt's criteria for evaluating stategy Hofstede - tool for diagnose national cultures Definition - Implementation - Culture learning organisation's concept Definition - ethics Implementation - Culture Implementation strategy - 8 big managerial components Military nature of strategy language Business Level Corporate Level Functional Level Implementation - actions to link the international success Structure - designing to success the strategy leadership style -traits () The importance of strategic leadership organisataional purpose Understanding the organisation environment - 5 questions Implementation - reasons for resistance to change value disciplines as generic strategies Definition - strategy distinct between rational and processual approach Evolutionary() approach Rational approach strategy Implementation - communication - technique to persuade people Jan Carlzon, CEO of Scandinavian Airline System (SAS) -Vision balance stability and change model 4 questions approach to corporate strategy analysis Marino McKinsey & Co Miller & Dess 1996 Mintzberg Mintzberg Mintzberg Mintzberg & Quinn 1996 Mullins Nanus 1992 Nelson & Winter Oxford Companion to Philosophy Palmer & Hardy 2002 Parry Perrow 1986 Porter Porter Quinn et al, in Mintzberg and Quinn 1996 Remote environment analysis Robbins Robbins & Barnwell 1998 Robert Burgelmann Rothschild 1993 Rumelt Samson & Daft 2003 Schein 1985 Senge Shorter Oxford English dictionary Thompson & Strickland Thompson & Strickland Thompson & Strickland Thompson & Strickland 2002 Thompson & Strickland 2002 Thompson & Strickland 2002 Thompson & Strickland 2002 Thompson & Strickland 2002 Thompson and McHugh Thompson and McHugh Thompson and Strickland Thompson and Strickland Tichy and Devanna 1990 Treacy and Wiersema Von Clausewitz Whittington Whittington Whittington Williams and Miller 2002 Wood Zakon and Lochridge

116/118 3.20 5.05/R5.1 5.10 1.09 1.07 1.07 5.24 1.12 6.22 3.16 1.26 5.22 1.22 5.25 2.15 4.15 5.21 2.06 1.21 5.17 R1.1 6.33 4.26 5.10 5.07 3.14 1.26 5.08 5.06 1.04 5.19 5.18 5.19 5.12 5.16 1.20 1.24 1.13 1.13 6.29 4.20 1.03 1.08 1.09 1.07 6.27 1.11 6.16 3.11

Index by author 8 forces analysis best-cost or value for money generic strategies bottom up business planning business strategy gaps - capabilities business strategy gaps - industry environment business strategy gaps - industry rivals business strategy gaps - key stakeholder business strategy gaps - organisational performance business strategy gaps - remote environment business strategy option Centralisation versus decentralisation Competitor analysis Competitve positioning corporate strategy analysis - 4 questions approach Definition - industry Implementation task leadership styles Levels of strategy performance measurement Public sector analysis rational approach strategy - steps Remote environmental anaysis strategy process Type of organisational structure Understanding customer

117/118 2.21 4.20 5.13 4.06 4.05 4.05 4.08 4.08 4.04 4.09 5.23 2.29 2.30 3.11 2.04 5.03 6.32 1.18 3.23 2.25 1.06 2.06 1.13 5.18 2.31

Index by author

118/118