Week 23

   Week 23 (12/21/2013)

1)      In your own words and using referenced quotes describe what is meant by the term “strategic leadership".

 Strategic leadership is the  process of using well considered tactics to communicate a vision for an organization or one of its parts. Strategic leadership typically manages, motivates and persuades staff to share that same vision, and can be an important tool for implementing change or creating organizational structure within a business.
Strategic leadership is the process of managing, motivating and persuading the employees to communicate the same vision, which could be important tool for creating an organizational structure within a business. It is a process of implementing well defined strategies to share a vision for an organization. This style of leadership is dynamic by nature and requires a high level of commitment and work involvement (Lynch, 2009).

2) Identify two interesting similarities and two differences between the 5 Elements of Successful and Effective Strategic Leadership model and the Transcendent Leadership model.

The similarities between the 5 elements of successful and effective strategic leadership model and the Transcendent leadership model are as follow:

Ø  The model helps in gain sustainable competitive advantage by emphasizing on the environment change.

Ø  The models build an effective relationship with the stakeholders within the company as well as outside the organization by providing benefits.( www.nata.aero)

 The differences between the 5 elements of successful and effective strategic leadership model and the Transcendent leadership model are as follow:

Ø  The transcendent leadership emphasizes on leadership for organization benefits as well as self leadership that involves transcending own desire to help others while the five elements of successful and effective strategic leadership model only emphasizes on the leadership for the organization profit by motivating the employees. 

Ø  The strategic leadership focuses on human resources to develop the relationship in the organization where as transcendent leadership focuses rules and regulation.( www.leadershipreview)

3. How would you describe Jeff Bezos strategic leadership style?

Is there evidence that he demonstrate all the elements of strategic leadership from the two models? Which elements are strongly evident in the case and which less so?

(Think about all five elements of the Lynch model and all three elements of the transcendent leadership model)

In his interview with Harvard Business Review Mr.Bezos said that he gives interview so that customers will get chance to understand and know more about them, their operations and purposes. In this way they develop and communicate their organizational purpose. They keep their customers’ and employees’ choice as their main priority and hire people who understands the customers’ needs and preferences. In this way they manage human resource and organizational resources. They have set ethical standards by not burdening their customers with higher prices though after the survey they know that they have to increase their price. They did meaningful things like Kindle, Amazon web services etc. They are also clear about how and what they advertise and does not cover up their shortcomings. They believe to create a customer loyalty by satisfying them which automatically maximize the free cash flow over the long term. In this way they define and deliver their stakeholders. They have sustained competitive advantage over time by doing best for their customer and securing in a position for a long run.( www.integralleadershipreview)

Hence, all the above mentioned points clearly prove that he has demonstrated all the characteristics of Lynch Model but he has not demonstrated transcendent model as they are more focused on human resource than leadership for others, self and the organization.

References:

n.d.). Retrieved from www.nata.aero: http://www.nata.aero/data/files/safety%201st%20documents/etoolkit/safety%201st%20etoolkit%20april2013.pdf

(n.d.). Retrieved from www.leadershipreview.org: http://www.leadershipreview.org/2006spring/Article3.pdf

(n.d.). Retrieved from www.integralleadershipreview.com: http://integralleadershipreview.com/1928-transcendent-leadership-pathway-to-global-sustainability/

week 22

Week 22

1.      What is your understanding on the Balanced Score Card approach? How useful is it for the Companies?

The Balanced Scorecard enables organizations to bridge the gap between strategy and actions engage a broader range of users in organizational planning, reflects the most important aspects of the business, and respond immediately to progress, feedback and changing business conditions. The Balanced Scorecard can be a great help used as a strategic tool, a management methodology or / and a measurement system.( www.hbr.org)

2. Identify and list the 20 important KPIs of Balanced Score Card.

The 20 important KPI's of Balanced Score Card are:

·             Return on capital

·             Economic value added

·             Sales growth

·             Cost reduction

·             Customer satisfaction

·             Customer retention

·             Acquisition of new customers

·             Manufacturing Cost

·             Job turnover

·             Product quality

·             Stock turnover and inventory management

·             New product development record

·             R&D core competencies

·             Employee retention

·             Employee profitability 

·             Salary competitive ratio

·             Customer profitability

·             Customer turnover ratio

·             Human capital added value

·             Leaver attitude score

3. Present your thoughts and understanding on the article “The Strategic Management process’’

The article elaborates the need for strategic change in the Ford motors company. As Ford motor was making huge loss and the market share were been taken by Nissan and Toyota, the management team initiated a strategic decision to terminate 20,000 employees.

The article, “The Strategic Management process” explains the process involved on strategic management. (www.leg.u-bourgogne)

Likewise, the strategic objectives and goals are set to various departments for the achievement of the organization’s mission. The organization’s mission is divided into different parts in order to make sure that each department contributes in fulfilment of the organization’s goals.

This article has shown the 7 steps of strategic management which are mentioned below:

Step 1: Defining Current Business

This step of strategic management process precisely defines vision and direction of the business as well as answers what business the firm should be in and the strengths and weakness, threats and weakness of the company.

Step 2: Perform Internal and External Audit

In this stage SWOT analysis is conducted which determines the company’s strengths, weaknesses, opportunities and threats.

Step 3: Formulating New Business and Statements

In this step new vision and mission are generated by analyzing the situation of the business and also determines what and where new business should sell along with the competitor difference.

Step 4: Translate the Mission into Strategic Goals

In this step missions are changed into strategic goals.

Step 5: Formulate Strategies to Achieve Strategic Goals

In this stage clear and concise strategies are made.

Step 6: Implement the Strategy

In this step strategies are converted into action and results. Even management functions are drawn and applied in this stage.( www.sujo.com.au)

Step 7: Evaluate Performance

This is the last stage which evaluates the performance by implying strategic control.

Reference:

(n.d.). Retrieved from www.hbr.org: http://hbr.org/1993/09/putting-the-balanced-scorecard-to-work/ar/1

(n.d.). Retrieved from www.leg.u-bourgogne.fr: http://leg.u-bourgogne.fr/wp/1080902.pdf

(n.d.). Retrieved from www.sujo.com.au: http://www.sujo.com.au/_docs/We-B00280.pdf

Week 21

Week 21 (12/11/2013)

1. What are the benefits and drawbacks of taking an "emergent" approach to strategy making? 

Emergent strategy is a set of actions, or behavior, consistent over time, "a realized pattern [that] was not expressly intended" in the original planning of strategy. When a deliberate strategy is realized, the result matches the intended course of action. An emergent strategy develops when an organization takes a series of actions that with time turn into a consistent pattern of behavior, regardless of specific intentions. "Deliberate strategies provide the organization with a sense of purposeful direction." Emergent strategy implies that an organization is learning what works in practice. Mixing the deliberate and the emergent strategies in some way will help the organization to control its course while encouraging the learning process. "Organizations ...[may] pursue ... umbrella strategies: the broad outlines are deliberate while the details are allowed to emerge within them" (Mintzberg, 1994, p. 23-25; Hax & Majluf, 1996, p. 17).

Benefits of Emergent Strategy:

Emergent strategy is comprised of innovative and creative ideas. Each individuals of the organization can give their ideas and opinions so informal communication exists so the organization have chance to access more beneficial ideas and suggestions. It helps the individuals of the organization to share their visions and values without which they will not be able to cooperate with each other.It leads the business to facilitate market by providing their wants rather than facilitating the market with what the owner thinks the market wants. It use approaches that are more practical in nature in order to solve the problems so new strategies could be formed.

Drawbacks of Emergent Strategy:

Emergent strategy cannot be planned for long term as once it fails immediately other strategy needs to be developed. The amount of risk involved is high in this strategy because business requires different strategies in different stages and no one can be sure whether the implemented strategy will be a successful one or failure. New businesses with narrow margins cannot be cannot conduct this strategy because there is a chance of failure and it will be difficult for new businesses to recover the loss. Emergent strategies are not pre planned instead it is known through mistakes and experiences which might or might not occur in future.(www. csrc.lse.ac.uk)

2. Did Honda Entry strategy demonstrate the characteristics of ‘logical incrementalism’?

Without any doubt Honda Entry strategy proves the characteristics of “Logical incrementalism”. Some points to support my answer are given below:

Ø   Only four percent of Japanese motorcycle production used to be exported in 1960. However, the small Japanese motorcycles were produced in large volumes in their domestic market and helped them in cost reduction in mass production of the motorcycles.

Ø  Honda established an American subsidiary in 1959 as “American Honda Motor Company”. This was the time when group of people like “Hell Angels”, and “Satan’s Slaves” were only to use the motorcycle and gave it a bad image. Honda’s marketing strategy targeted the general public who had never before given a second thought to a motorcycle.

Ø   With its best features like, three-speed transmission, an automatic clutch and five horsepower, Honda started its push in the American market with the smallest, lightweight motorcycle. At this time Honda was probably superior to other competitors in productivity.

Ø   Honda also developed the policy of spreading itself in American market region by region. They started on the West Coast and moved eastward over a period of four-five years. In 1961, with the support of 125 distributors and with the expense of $150,000, Honda advertised their product with a theme named “You Meet the Nicest People on a Honda”. This was an attempt to shift the rowdy motorcyclist to decent family riders.

Ø  With their experiments and exposure over a period of time, American Honda’s sales went from $500,000 in 1960 to $77 million in 1965. Starting from virtually nothing in 1960, Honda had gain a leading success in selling lightweight motorcycles by 1966.

    

Fig: Honda       

In my opinion I do not think that Honda would have been successful if they had adopted a more formalized strategic planning approach to the launch. If they had adopted formalized strategic plan then they would have to suffer a lot because if everything was supposed to happen according to the plan then while their image was hampered due to leakage and failure then they would have given up and moved out of the US market. If they had planned the strategy then they would have made plan for some certain years and would carry out that plan until the end of the period despite of all the high cost factors. Even in case of sales if they had planned to sell certain numbers of bike then they would have to suffer the loss since there were problems in their designs and functioning and people would not purchase it but they would have already manufactured their products in large amount. They would have destroyed their brand image due to their technical failures and could not even introduce other products under their brand name. They took risk and adapted according to the market situation and customer expectations which made them successful not the formalized strategic planning approach.( www.honda.com)

. 

References:

n.d.). Retrieved from csrc.lse.ac.uk: http://csrc.lse.ac.uk/asp/aspecis/20040158.pdf

(n.d.). Retrieved from www.honda.com: http://www.honda.com/

sbaweb.wayne.edu. (n.d.). Retrieved from http://sbaweb.wayne.edu/~absel/bkl/vol23/23ak.pdf

week 20

week 18

1.      How can using the Change Kaleidoscope and Force-field analysis help an organisation to deliver its intended strategy?

The change kaleidoscope is a diagnostic framework. It can be particularly useful in a context sensitive change process, which one can argue is the case in this management project.

The kaleidoscope contains an outer ring concerned with the organisational strategic context. There is a middle ring that has the features of the change context. Finally there is an inner ring which contains the design choices that can be made. 

The change contextual features are aspects of the organisation to do with its culture, competences and current situation. These are all issues that need consideration before selecting the change approach. Below you find a short theoretical description of each one of them (from Balogun & Hailey, Exploring strategic change).
• Time: How much time does the organisation have to achieve this change? Is it in a short term crisis or is it concerned with long-term strategic development? Are stakeholders, such as the stockmarket, expecting short term results from the change?

Force Field Analysis is a general tool for systematically analyzing the

factors found in complex problems. It frames problems in terms of factors or

pressures that support the status quo (restraining forces) and those pressures

that support change in the desired direction (driving forces). A factor can be

people, resources, attitudes, traditions, regulations, values, needs, desires, etc.

As a tool for managing change, Force Field Analysis helps identify those

factors that must be addressed and monitored if change is to be successful. (www.literacy.kent.edu)

 (www.jiscinfonet.ac.uk)

References:

(n.d.). Retrieved from www.managementsupport.blogspot.com: http://managementsupport.blogspot.com/2006/05/change-kaleidoscope.html

(n.d.). Retrieved from www.literacy.kent.edu: http://literacy.kent.edu/eureka/strategies/force_field_analysis.pdf

(n.d.). Retrieved from www.jiscinfonet.ac.uk: www.jiscinfonet.ac.uk

week 17

1. Can you think of an organization that has implemented a ‘high risk strategy’ that has resulted in success (why was it high risk at the time and why was it a success – was it good luck or good judgement)?

In my view Samsung is the company which has implemented a ‘high risk strategy’. Until 2000 AD the full attention of Samsung was in the home appliance segment. But from 2000 AD Samsung entered into the cell phone segment. In that time Nokia was the market leader and Motorola, Sony Ericsson were the competitors’. So, Samsung couldn’t do well in the starting time. From mid 2000 the era of smart phone came to market and it was the turning point for Samsung. Its sales reached up to 50 million in one quarter only. Now Samsung is the number one mobile market of United States of America. In global scenario Samsung shares 35% of mobile market.  (www.samsung.com)

At first when they entered in the mobile phone market it was very risky as they were not related to that business. But their long sight vision and correct strategy made this business segment massive revenue generator. (www.telegraph.co.uk)

2. Now, do the same for an organization who embarked on a high risk strategy that resulted in some sort of failure (why was it high risk and why did it fail – bad luck or poor judgment?)

I think Sony has faced a huge loss from the implementation of high risk strategy. From late 90’s to 2000 AD Sony was the leader of the gaming segment in market with its electrifying gaming device Playstation1 and Playstation 2. Company generated huge revenue from this two products. But after that company came with Playstation 3 with many excellent features. Bluetooth, Wi-Fi, high graphic, flash drive ports etc were the features of the Playstation 3. But because of their high risk strategy and making the price of product very high made the product a failure in market. The price of Playstation 3 was marked $600+tax which was way expensive than Playstation 1 & 2. So, their wrong strategy of pricing and wrong strategy of positioning of product made them to taste the failure. (www.us.playstation.com)

References:

(n.d.). Retrieved from www.samsung.com: http://www.samsung.com/us/aboutsamsung/

(n.d.). Retrieved from www.telegraph.co.uk: http://www.telegraph.co.uk/finance/2830214/High-risk-strategy-can-bring-right-results.html

(n.d.). Retrieved from www.us.playstation.com: http://us.playstation.com/ps3/playstation-move/product-information/

week 16

Week 16 (11/17/2013)

1.   In your own words and using referenced quotes describe the difference between organic growth, merger & acquisition and strategic alliance.

Organic growth:

The growth rate that a company can achieve by increasing output and enhancing sales. This excludes any profits or growth acquired from takeovers, acquisitions or mergers. Takeovers, acquisitions and mergers do not bring about profits generated within the company, and are therefore not considered organic. (www.investopedia.com)

Merger and Acquisition:

Mergers and acquisitions (M&A) is the area of corporate finances, management and strategy dealing with purchasing and/or joining with other companies. In a merger, two organizations join forces to become a new business, usually with a new name. Because the companies involved are typically of similar size and stature, the term "merger of equals" is sometimes used.

In an acquisition, on the other hand, one business buys a second and generally smaller company which may be absorbed into the parent organization or run as a subsidiary. A company under consideration by another organization for a merger or acquisition is sometimes referred to as the target. (whatis.techtarget.com)

Strategic Alliance:

Agreement for cooperation among two or more independent firms to work together toward common objectives. Unlike in a joint venture, firms in a strategic alliance do not form a new entity to further their aims but collaborate while remaining apart and distinct. (www.businessdictionary.com)

    2.      Give an example of a company that has grown through a) organic growth, b) merger or acquisition and c) strategic alliance

Organic Growth:

This BBC news article flags up that Jury’s has secured additional finance to support their expansion programme. These are challenging times for the UK hotel industry as recession has affected room occupancy rates from business and household customers. But Jury’s Inn has instigated an ambitious programme of new hotels - a strategy of internal or organic growth. urys said it would look at new developments in key markets such as London. It has already opened five new hotels across the UK this year.

New hotels have opened in Sheffield, Watford, Exeter, Swindon and Derby. Another hotel is due to open in Aberdeen later this year, with more to follow next year in Portsmouth, Glasgow, Newcastle and Bradford. A new hotel in Prague is due to open in September 2009. Jury’s Inn has traditionally placed itself in the affordable business hotel market segment (www.tutor2u.net)

Merger and acquisition:

Sprint and Nextel Communications
In August 2005, Sprint acquired a majority stake in Nextel Communications in a $35 billion stock purchase. The two combined to become the third largest telecommunications provider, behind AT&T (NYSE:T) and Verizon (NYSE:VZ). Prior to the merger, Sprint catered to the traditional consumer market, providing long-distance and local phone connections and wireless offerings. Nextel had a strong following from businesses, infrastructure employees and the transportation and logistics markets, primarily due to the press-and-talk features of its phones. By gaining access to each other's customer bases, both companies hoped to grow by cross-selling their product and service offerings

Strategic Alliance:

Many mobile brands including Samsung have created a strategic alliance with Google for the purpose of android operating system.

    3.      Briefly discuss the merger between Britvic and AG Barr. What advice would you give to the new Board?

The combination of these two companies explains that they went for the process of merger as the management from both companies will be there for future operation. This process of merger and acquisition is very profitable for the both company as they will save 35 million pound yearly and will generate 23 percent of combined operating profit.

Some advices to the new board are:

§  They should bring new sovereign brand in the market.

§  They should come up with planned, creative way of endorsing product.

§  They should maintain the effective and prompt communication with board members.

§  They should give extensive importance on research and development.

Case study

1) Evaluate the case for the merger

                         I.            What are the positives and benefits? What should work well?

Some positives and benefits of mergers are:

§  Annual cost savings of £35 million

§  Operating profit of 23 percent

§  Relationship with Pepsi

§  Chance to sell drinks to Britvic's customers

§  After valuation Britvic's share price might increase

With formation of new company they can emerge as a new competitor to other soft drink producing companies.

                        II.        What are the negatives and potential risks? What problems might occur?

·                     Barr and Britvic have their own management styles and corporate culture that have been in practice for years. Merging these firms also means merging their cultures, values and way or working which may result to some sort of conflicts in the future. In addition to this, Britvic having the debt of £600 million may not be preferred by the executives and top management of Barr to take any kind of the strategic decision on their own without the evaluation and approval of Barr. This too may cause some sort of management problem and conflicts regarding the decision making authority.

·                     The shareholders of Barr who were earning high return on investments may not be earning the same amount after merging which may lead to their dissatisfaction. 

·                     The downsizing of the companies in terms of employees is another negative aspect of the merge of these companies because though having lesser number of employees may be beneficial to the company, settling down the issues related to the employees who will be fired can be very costly in terms of both monetary aspects and the company image.

III.    What advice would you give the newly formed Board?

Some advices to the new board are:

§  They should bring new sovereign brand in the market.

§  They should come up with planned, creative way of endorsing product.

§  They should maintain the effective and prompt communication with board members.

§  They should give extensive importance on research and development.

References:

(n.d.). Retrieved from www.investopedia.com: http://www.investopedia.com/terms/o/organicgrowth.asp

(n.d.). Retrieved from whatis.techtarget.com: http://whatis.techtarget.com/definition/mergers-and-acquisitions-MA

(n.d.). Retrieved from www.businessdictionary.com: http://www.businessdictionary.com/definition/strategic-alliance.html

(n.d.). Retrieved from www.tutor2u.net: http://www.tutor2u.net/blog/index.php/economics/comments/jurys-inn-an-example-of-organic-growth