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ASSESSMENT 2 Part B BRIEF

Subject Code and Title MGT604/MGMT6011 Strategic Management

Assessment Stakeholder Meeting Simulation and White Paper

PART B: Final Submission

Individual/Group Individual

Length Up to 2,000 words

Learning Outcomes b) Critically evaluate different strategy formulation processes utilised by organisations and evaluate their relevance to particular organisational contexts

c) Develop and plan the implementation of a selected strategy for different organisational levels including for change management processes

Submission By 11.55pm AEST/AEDT Friday of Module 4.2 (Week 8)

Weighting 30%

Total Marks 30 marks

Context:

The assessment of this subject supports students in developing their skills and knowledge in

topics that include environmental assessment, problem diagnosis, strategy development,

and cultural and ethical contexts. Stakeholder meetings are a critical element in strategic

management. This assessment task provides experience and immersive understanding of

the complex interactions involved in the development of strategic choices, and the need to

take an integrative approach to problem solving. The increasing pace of technological

change and the increased impact of social media provides many challenges for businesses

attempting to navigate towards growth and increased profitability. Rapid cycle times for

new products can lead to decisions being made that are not always in the best interests of

the long-term survival of the firm. Disruptions to the everyday course of business come

from anywhere and need to be responded to often in short time frames.

Introduction

Assessment 2 Part B continues from scenario in Part A. In Part B, a disruption is introduced

which necessitates re-consideration of the white paper done in Part A of the Assessment.

Here is a recap of the scenario.

Scenario Recap

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Pro-Go Pty Ltd is a privately-owned manufacturer of small, high-quality action cameras based in Geelong, Victoria. Founded in 2004 it has enjoyed continuous year-on-year growth until the last financial year. Pro-Go has a track record of innovation, and technology that provides excellent quality results in a small package able to operate with small batteries for extended periods of time. The video files these cameras produce are known for having superior colour, and operate effectively in lower lighting conditions than competitor’s cameras. They are also marketed on the basis of their extreme ruggedness, and reliability. Much of the technology used in its devices has been patented by Pro-Go and is not currently available to other manufacturers.

The Pro-Go management team has recognised that the ability to capture videos is now a feature of

most phones. It suggests to them that the future of the stand-alone camera may be limited. Pro-Go’s

CEO has requested the executive team meet independently to develop a strategy to guide the

company over the next five years.

Instructions:

Please watch the below video Announcement from the CEO of Pro-Go Pty Ltd.

DISRUPTION

A number of Pro-Go cameras have burst into flames without an explanation being found. In addition,

the company’s largest customer – a major retail chain throughout China – exercised their right, under

our sales agreement, to cancel their contract with us. Sales have halved in the last 24 hours and

immediate action must be taken.

The stakeholder meetings must discuss this disruption and develop a modified strategic plan/white

paper. Please return to your groups immediately to discuss these events and adjust your strategic

approach accordingly.

Your 2000 word, individual, White paper should be structured as follows:

• Executive Summary - Summarise the entire report – for example, don’t tell the reader that

the report discusses the external/internal environment, summarise the points the report

• Table of Contents - Make it look good. Include page numbers and ensure the layout looks

balanced on the page.

• Introduction - Provide background and context to the report. Tell the reader what has

• Aim - State in a single sentence what this report is seeking to achieve.

• Discussion - Cover the content you wish to address.

• Conclusion - Restate the aim and sum up the discussion to demonstrate to the reader that

• Recommendations - What are the next steps? What is required to progress into the future?

• References - Please ensure you use the correct APA referencing style throughout.

Re-convene the (emergency) stakeholder meetings to address these concerns raised and Develop a modifiedstrategic plan/white paper reflecting the impact of the proposed strategy on the particular part of de business(operations area in my case as I am playing the Operations Director roll) after the disruption and should becompleted to the professional standar that would be required if the below scenario were real. Include strategy concepts and apply a strategy framework(s) to analyse and justify why you believe it is the beststrategy option. Discuss the implications specifically relating to your part of the business, and what challengesthese might represent. Refer to the learning resources provided.

makes about the external/internal environment. (200 words)

happened in the past that has led to this report being needed (200 words)

the aim has been satisfied. There should be no new content in the conclusion. (200 words)

Evaluate/justify your recommendations? (600 words)

A minimum five (5) academic (books & peer-reviewed journal articles) & two (2) other sources(newspaper article, trade publications, websites, etc.) must be used. These should be referencedin the APA style, both in-text and in a reference list.

consider the following disruption announced

(900 words)

http://www.kaltura.com/tiny/cg0tg

MGT604_Assessment 2B Brief Page 5 of 6

Learning Rubric: MGT604 Assessment 2 Part B Stakeholder Meeting Simulation Final Submission

Assessment Attributes

Fail (Unacceptable) 0-49%

Pass (Functional) 50-64%

Credit (Proficient) 65-74%

Distinction (Advanced) 75 -84%

High Distinction (Exceptional) 85-100%

Research and

comprehension:

30%

Content does not adequately demonstrate a postgraduate standard of detail and thought

Content somewhat superficial or with some gaps in understanding

Good coverage of the topic with clearly articulated explanation of the topic. Reasonable fit between theory and practice

Thorough coverage of the topic. Good application of theory. Good use of credible sources

Demonstrates a comprehensive understanding; insightful discussion; excellent and relevant application of theory. Multiple and credible references used

Analysis and

synthesis:

30%

Reader cannot understand the foundations of the topics from the information provided. Poor logic. No evidence provided to support arguments. Disruptive event not adequately considered

Basic intent covered; analysis and arguments could be more convincing with some evidence provided. Disruptive event considered but with little insight

Reader understands the arguments presented through focused analysis and evidence. Disruptive event considered with appropriate level of detail

Reader has a good sense of the analysis and evidence which is well discussed in argument. Insights are drawn from synthesised information. Disruptive event considered in considerable detail consistent with all internal interrelationships

Readers’ understanding of the analysis and arguments is clear; logical and well organised; detailed and insightful analysis; structured arguments; synthesis and understanding of links between issues. Disruptive event considered and integrated into revised strategy with elegance and insight

Writing mechanics:

15%

Layout is confusing; logic, flow and use of language difficult to

Layout is adequate with acceptable logic flow and use of language. Some

Overall presentation is easy to digest; language succinct and well chosen;

Good presentation content and language; easy to read and draw

Overall style, use of language, figures and tables encourages

MGT604_Assessment 2B Brief Page 6 of 6

follow; numerous spelling and grammatical errors

misspellings and grammatical errors

less than four spelling and grammatical errors

conclusions; no more than two spelling and grammatical errors

comprehension; creative and engaging report

Reflection and

conclusions:

25%

Little reflection evident; unclear conclusions. Little consideration of the disruptive event.

Poor reflections and generic or somewhat irrelevant conclusions. Some consideration of the disruptive event

Good reflections highlighting key aspects; relevant conclusions which are a mix of generic and specific conclusions. Appropriate consideration of the disruptive event

Rich reflections drawing from good research, analysis and synthesis. Relevant and specific conclusions. Well detailed consideration of the disruptive event

Insightful conclusions drawing well from the discussion and evidence; creative and insightful reflection with relevance to the topic. Excellent, insightful and detailed consideration of the disruptive event

STAKEHOLDER MEETING SIMULATION AND WHITE PAPER

PRELIMINARY OUTLINE

PART A

STRATEGIC MANAGEMENT

Torrens University

INTRODUCTION

Pro-Go is an Australian company which produces high-quality mainstream cameras mostly for

athletes and thrill seekers market. Its cameras are well known for having an excellent quality video,

superior colour and extreme ruggedness in a small package. However, due to the nature of the

market and increased competition, there is a limited growth opportunity for the company nowadays

(Henderson, 1989). Additionally, the casual purchases of cameras have become less attractive

because of the smartphone heyday, so consumers are using more the smartphone cameras for

capturing, saving and sharing their memories as users can easily edit and share footage on social

media platforms. Another factor that can be considered as a threat is the scarcely availability of

cheaper options in the market which cannot be addressed through price slashed strategy because it

will affect negatively the company´s shares. In order to overcome this, an attempt to attract new

audience and launch new products will be the strategy to increase sales and keep Pro-Go in race.

AIM

This report suggests a strategic plan for Pro-Go to ensure future success keeping the company on

track for a long term. This strategy combines its reliable technology into an enterprise software

offer.

DISCUSSION

In order to develop a strategy to lead the company over the next five years all the team conducted

several meetings to discuss every single strategy proposed for each department. The meetings were

carrying on through WhatsApp videos and chats were senior finance manager, operations manager,

union official and General manager took part. (see team log in Appendix 1)

By offering discounts on new products and developing lower price products the company can

encourage upgrade sales. In order to continue its growing, Pro-Go must take advantage of brand

recognition which still resonate within consumers and market. However, as the operations manager

of this company, the awareness of one of the company weakness such as cost production according

to IFE matrix analysis (See table 1. Pro-Go key internal factors) give us the evidence to refuse the

proposition of release new products as it will increase expenses not only considering production

but also research and development. Therefore, the idea to penetrate new markets through

developed software and services able to generate data for businesses could be viable to consolidate

brand loyalty as well as new incomes in the future.

Table 1. Pro-Go key internal factors

The company should launch a subscription-based software service to administer digital footage

recorded from Pro-Go body cameras which could propose an innovative revenue stream for the

company. Furthermore, this would build up shareholder value. Through this, Pro-Go could lead a

new retail segment.

By combining the existing technology and a new software, the footage could be analyzed directly

from its cameras to generate insights that can be useful for retail businesses. This service model is

focused on retailers which like to convert data from their operations to analyze customers behavior

through human observation and lead business improvements (Baird & Parasnis, 2011). To

contextualize this needs, dissatisfied costumers drive costly problems and most of them will never

come back as unhappy consumers do not usually complain; so the company losses the opportunity

of making improvements (Liedtka, 2000). Sentiment analysis and emotional state could be

detected through the analysis of facial expression so this would improve consumer´s understanding

as a result of their emotional response (Hutter, Hautz, Dennhardt, & Füller, 2013).

Due to Software development and data analysis are not capabilities for the company, Pro-go should

partner or acquire other companies with these core competencies; this in fact, will diversify the

Pro-Go revenues.

To conclude, as the current Pro-Go market has been insufficient, the company could expand its

market and include not only athletes and retailers, but also the public service sector and sports

training industry to enhance training processes. In order to increase revenues and diversify its

portfolio, the expansion into new markets will be essential for the company.

REFERENCES

Baird, C., and Parasnis, G. (2011). “From Social Media to Social Customer Relationship

Management.” Strategy & Leadership, 39(5):30–37

Dobbs, M. (2014). Guidelines for applying Porter's ve forces framework: a set of industry analysis

templates. Competitiveness Review, 2 4 (1), 32-45.

Henderson, B. D. (1989). The origin of strategy. Harvard Business Review, 67(6), 139-143.

Hutter, K., Hautz, J., Dennhardt, S., & Füller, J. (2013). The impact of user interactions in social

media on brand awareness and purchase intention: the case of MINI on Facebook. Journal

of Product & Brand Management, 22(5/6), 342-351

Liedtka, J. (2000). In defence of strategy as design. California Management Review, 42(3), 8-30.

4/3/2020 Laureate International Universities

https://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_83326_1&content_id=_8593997_1&mode=reset 1/8

MODULE 4MODULE 4

Strategy Formulation

4.1: The building blocks

Introduction:

Business level strategy requires an understanding of the �t between the

external environment, and the �rm itself in order to achieve the �rm’s

strategic goals. Both the environment in which the business operates and

the �rm itself demonstrate complex dynamics, and establishing and

maintaining a �t between the two is di�cult. Unless the business is

continually addressing both the needs of the market and its own resources

and capabilities it risks becoming misaligned – something that could

potentially jeopardise its long-term survival. For the �rm to be able to make

informed decisions it needs to understand with great clarity both the unmet

needs of its target market, and the way it goes about solving the problems

for (and therefore meeting the needs of) that market. Value is created at the

interface between the customer and the �rm, and the e�ciency with which

this happens is dictated by many other related factors. Approaches to

organisational learning, brand and market development, organisational

complexity, and the ability of the �rm to respond in a �exible, appropriate

manner all contribute to the quality of the execution of the value

proposition.

Perhaps most importantly it should be recognised that all strategy

formulation is an ongoing and dynamic process that seeks to impose order



over chaos, and generally turn the uncertain into the certain. As such, it

represents something of a gamble. There are no single correct approaches

to strategy formulation, and there are no guaranteed outcomes. It’s not

uncommon for technological innovation or new business models to

fundamentally shift market dynamics, and these are often di�cult to

identify in advance. The impact of Uber on the taxi industry around the

world is an example. An expectation that a single right answer can be

derived through following particular processes or practices is incorrect and

can lead to often erroneous, full expectations of success.

Business Model Canvas

A key element of strategy formulation is the understanding of how the

�rm's business model enables the �rm to assert its competitive advantage.

The business model may be considered the means by which the value

added transformation happens to the input of production. Central here is

the consideration of what the outputs of that production process look like

and the extent to which they address the unmet needs of the target market.

The Business Model Canvas is a tool that provides a high level outline view

of ‘moving parts’ of a business and enables comparisons to be made in the

way value is created. It is a very valuable tool for establishing the di�erences

between di�erent �rms that might be operating in the same industry, and

for identifying opportunities for altering a business model to better adapt to

changing times.

Business Model innovation

There is an ever present risk that a �rm will develop a strategic agenda

based on what it sees as its own core capabilities potentially imposing

solutions on the market. While this appears sound from a distance, closer

examination will reveal that �rms following this approach can potentially

end up with products that are “solutions in search of a problem”. In other

words, just because a company is good at something doesn’t mean there’s a

market for their product or service. Many is the company that has

foundered through lack of customer focus. An alternative approach might

involve the market dictating the direction the �rm takes. In this case, the



�rm follows the changing needs of the market, but in doing so always being

subject to the boundaries of market expectation. This prevents the �rm

from creating new segments, or delivering truly innovative solutions to the

market. The potential to fall victim to disruption through such an approach

is high. So should the �rm lead, or follow? Leading the market enables the

�rm to anticipate needs that customers may not currently have. While �rst

mover advantage is often overstated, there is something to be said for

creating uncontested market space through the development and

marketing of new categories of product and service. An alternative is for

organisations to orient themselves towards following closely the changing

needs of their target markets. This might be considered an outsider-in

approach where strategy is dictated by the response to market trends,

rather than being dedicated to creating market trends.

Deliberative or Responsive?

One important consideration in strategy formulation is whether to adopt a

deliberative process, or to allow strategy formulation to emerge and evolve

when and as needed. The deliberative process is one that takes place as

part of the ongoing planning of the �rm's resources. Many organisations

have an annual strategy planning and review process. Usually the process

seeks input from sta� at all levels in the business, and has some sort of

review and prioritisation process that enables ideas that are considered

worthy to be implemented over the coming period. Decisions in relation to

the ongoing strategy of the �rm may typically be categorised into short-

term, medium-term, and long-term. Short-term strategies may involve what

was known as low hanging fruit. These are quick wins, simple to implement

and with immediate payback. By contrast medium-term strategies generally

require more resources, more planning, and the results are more tied to

successful implementation. While short-term strategies typically revolve

around improving operational e�ciencies, medium-term strategies are

more likely to involve accessing new markets, or generating new products.

Long-term initiatives are those that require signi�cant planning and often

involve the organisation shifting its strategic direction. Longer term



strategies may often involve signi�cant reorientation of the resources within

the �rm, or repositioning of the �rm within its market.

The problem with deliberative strategy formulation processes is that the

market doesn't change in a predictable orderly fashion. Competitive

pressures don't evolve on a cyclical basis. A strategy formulation process

that operates on �xed annual cycles may be too in�exible to enable the �rm

to capitalise on opportunities as they arise. For this reason, some �rms

prefer to be more reactive in this strategy formulation. Typically smaller

�rms use this approach. The �atness of the management structure enable

small �rms to be more nimble in their approach, and generally their

commitment to �xed resources is less than that of larger �rms. Smaller

�rms typically also have fewer stakeholders that need to be convinced of

the wisdom of the decisions being made. Smaller, more agile �rms running

reactive strategy formulation approaches can represent a signi�cant threat

to larger income and organisations. Larger organisations with �xed strategy

formulation timelines require a greater commitment to resources, which

makes them potentially unable to follow their nimble competitors often

conceding market share along the way.

Firms can choose to grow in a number of di�erent ways. Often when

organic growth opportunities become less attractive �rm may consider

acquiring another �rm. This raises a number of questions and

opportunities. The �rst of these is should the �rm stay in the industry in

which it is currently active, or diversify its risk into other industries? This is

called horizontal integration, and there are strong arguments for and

against this approach. By integrating within the industry, the �rm acquires

competitors thereby consolidating its market position. When diversifying

outside the industry, the �rm makes investments in industries that may or

may not be related. The �rm can also make the decision to integrate

vertically. In this case, the �rm either purchases a customer, or a supplier.

Diversi�cation inside or outside the industry may seem super�cially

attractive, but either approach may lead to market distortions and

suboptimal outcomes.



Essential Resources:

There is no set text for this subject – instead we embrace a mixture of

foundational literature, and contemporary peer-reviewed sources to build

up a picture of the context from which modern strategy practice has

emerged, along with an understanding of contemporary best practice.

Baden-Fuller, C., & Hae�iger, S. (2013). Business models and

technological innovation. Long range planning, 46(6), 419-

426.

A contemporary view of business models and considerations that

need to be taken into account when integrating technological

innovation.

McGrath, R. G. (2010). Business models: A discovery driven

approach. Long range planning, 43(2-3), 247-261.

The business model concept o�ers strategists a fresh way to

consider their options in uncertain, fast-moving and unpredictable

environments. In contrast to conventional assumptions, recognising

that more new business models are both feasible and actionable than

ever before is creating unprecedented opportunities for today’s

organisations.

Osterwalder, A., & Pigneur, Y. (2010). Business model

generation: a handbook for visionaries, game changers, and

challengers. John Wiley & Sons.

Easy to read and straightforward. A classic text explaining in detail the

Business Model Canvas with many tips for its implementation.

https://laureate-au.blackboard.com/bbcswebdav/xid-15431724_1





Bene�eld, G. (2014). Business Model Canvas in 5 minutes.

YouTube. Retrieved from https://www.youtube.com/watch?

v=_4MHqyf4Vw0&feature=youtu.be

This video provides a brief overview of the nine parts of the Business

Model Canvas and should be used as a means of clarifying your

understanding. It includes a practical example demonstrating the

strength of this tool.

tutor2u (2017) Business Growth Strategy - Horizontal and

Vertical Integration. YouTube. Retrieved from

https://youtu.be/uOO4ClVUrkw

The concepts of horizontal and vertical integration help to explain and

categorise the strategic rationale for external growth options such as

takeovers and mergers. This short video explains what is meant by

horizontal and vertical integration and provides some examples.

Learning Activities:

Learning activities are not part of summative/graded assessment; however

they are designed to prepare you for incremental graded assessment and

expand your learning. These activities encourage a community learning

experience between peers, and provide opportunities for facilitators to o�er

formative feedback, throughout a module, to the student cohort.

Learning Activity 4.1 : Business model canvas

Develop a business model canvas for Amazon and one for

the Ford Motor Company. Consider the di�erences between

the two. What does this imply about

a. The ability of each company to respond to changes in themarket?

https://www.youtube.com/watch?v=_4MHqyf4Vw0&feature=youtu.be

https://youtu.be/uOO4ClVUrkw



b. The level of �exibility with which each might be able to solvecustomer problems?

Please place your answers to the above questions on the module 4

discussion forum. The recommended word count is 300 - 400 words.

You may like to use images and diagrams. You are also welcome to

include factors that may not be explicitly stated but which you believe

�t within the context of the subject and are worthy of inclusion.

To participate in the Discussion Forum, click here to scroll to the

bottom of this page then click on the "Module 4 - Discussion

Forum" link.

Learning Activity 4.2: Suppliers

Buying your suppliers is a way of guaranteeing price stability

and improving the co-ordination of your value chain. But

does it make sense? Consider the ways in which purchasing a supplier

represents a form of market failure, and consider the ine�ciencies

that might arise as a result.








Forum" link.



MODULE 4MODULE 4

Strategy Formulation

Topic 4.2: Interpreting and Integrating StrategicPerspectives

Introduction:

We now have an understanding of the external environment, the internal

environment of the �rm, and we have deconstructed some of the ways in

which the �rm creates value. We are now able to consider some of the key

questions that relate to the formation of competitive strategies. An

interesting issue that arises here concerns opportunities in pursuing

emerging markets. Emerging markets may represent a considerable

opportunity, but the state of infrastructure development in those markets

might well be insu�cient to enable the �rm to properly capitalise on any

investments it might make in this area. Many of the texts and journal

articles relating to emerging markets were published at a time before the

impacts of social media had been widely felt and represent older ways of

approaching the issue. Emerging economies today are in a position to

leapfrog more traditional economies in the rapid implementation of new

technologies – including telecommunications. This means that while some

social media capabilities that may have developed over a period of 10 years

in a developed economy, the same technologies may become a dominant

in�uence in emerging markets in signi�cantly less time. The extent to which

an organisation can become socially embedded in the market becomes a

key di�erentiator for its success, and a signi�cant strategic consideration.



While the Business Model Canvas was discussed in the previous topic, the

organisational structure of the �rm is an important consideration.

Organisations can today be conceptualised as collections of competencies

and practice areas, rather than rigid hierarchical structures. This leads to the

idea of the networked organisation, or the boundaryless organisation.

These organisational forms enable the �rm to respond dynamically to

changes in its external environment. It enables �rms to �exibly add and

remove resources and capabilities as required, without the need for

wholesale restructuring.

Martin (2014) has identi�ed �ve considerations to be taken into account in

the formulation of strategy. The �rst of these is an understanding of the

aspiration of the �rm. What is it the �rm is trying to achieve? This relates to

the �rm’s vision and mission. Without properly understanding the purpose

of the enterprise, any resultant strategy formulation would by de�nition the

ambiguous and lacking in impact. The second consideration concerns where

the �rm will compete. This includes physical geographies, product

categories, consumer segments, and vertical stages of production. Here the

question is as much what the �rm is not going to do, as it is what the �rm is

going to do. The next question is critical – how will the �rm win? This

involves a detailed understanding of the �rm's competitive advantage. It's

not enough just to be part of the race. The �rm must understand the basis

by which it delivers barriers to customers in a way that none of its

competitors can. Following on from this is the understanding of the

capabilities that must be in place in order to continue delivering this value.

In order to make this work – the �rm needs an understanding of the

reinforcing activities and speci�c con�gurations of resources that allow

value to be created. However, these activities by themselves are insu�cient

for ongoing value creation - management systems are required in order to

monitor and control the value creation process. The support systems

include things such as measures and methods required ensuring the

ongoing delivery of value to the customers. You will note that these �ve

choices are iterative in nature - the systems impact on the capabilities,

which in turn impact on how the �rm can win, which then impacts on where

the �rm will play, which �nally impacts on the winning aspiration. The



important thing to note here is that these are all aligned. If the capabilities

are not in line with the value proposition for the target market then the

organisation will fall short to create value. As environments change, and

consumer markets evolve, so will the elements in this chain need to evolve

also. As such, the model is not a one-shot play – it should become central to

the discussion of the ongoing evolution of the �rm.

Govindarajan (2016) has presented another approach to strategy

formulation, this time using three distinct compartments or boxes. The �rst

of these relates to the present time, while the other two relate to the future

orientation of strategy. This recognises the pragmatic imperative of having

to manage for the present whilst creating a vision for the future. In this

article, it is recognised that a greater focus on the present will blind the

organisation to future alternatives. The three-box solution requires

managers to maintain a balance across each of the three boxes. Managers

need to remember part of their role is to create the business of the future.

The three-box solution is seen as a generalisable approach that works

across industries and business types. A key learning from this approach is

the need to adequately resource the third box - to ensure that resources are

dedicated to and that these resources are preserved in activity. A �nal point

is that the company needs to be aware that the criteria for measuring

success in box 3 are very di�erent from that of box 1. Managing quarter-to-

quarter and monitoring �nancial results as a proxy for organisational

success makes sense in box 1. The same approaches do not make sense in

the broader context of creating the future. Return on investment is more

long term, and the way risk is addressed needs to be di�erent. Therefore,

management needs to take a more �exible response, one that recognises

the essential di�erences between planning and executing strategy for today,

versus doing the same for a longer-term view.








London, T., & Hart, S. L. (2004). Reinventing strategies for

emerging markets: beyond the transnational model. Journal

of international business studies, 35(5), 350-370.

These strategies include developing relationships with non-traditional

partners, co-inventing custom solutions, and building local capacity.

Together, these successful strategies suggest the importance of MNCs

developing a global capability in social embeddedness.

Ashkenas, R. (1995). Creating the Boundaryless

Organization. Business Horizons, 42(5), 5-5.

The way we perceive companies and the processes by which

they create value has changed over time. The idea of the

‘boundaryless organisation, while no longer revolutionary, still has

profound implications for the strategic choices management must

make

Knowledge@Wharton. (2016). A three box Solution for

leading Innovation. Wharton University of Pennsylvania.

Retrieved from

http://knowledge.wharton.upenn.edu/article/govindarajan-book-the-

three-box-solution/

How to innovate and execute: Leaders already know that innovation

calls for a di�erent set of activities, skills, methods, metrics, mind-sets,

and leadership approaches. This Three Box solution give an easy to

follow framework to guide decision making in innovation

implementation. Please take the time to listen to the podcast by Vijay

Govindarajan.



http://knowledge.wharton.upenn.edu/article/govindarajan-book-the-three-box-solution/



Tuck School of Business. (2016). Summary of the three box

solution by Vijay Govindarajan. YouTube. Retrieved from

https://www.youtube.com/watch?

v=wgD2VzFqCaE&feature=youtu.be

How do you meet the performance requirements of the current

business—one that is still thriving—while dramatically reinventing it?

How do you foresee a change in your current model before a crisis

forces you to abandon it?


Learning activities are not part of summative/graded assessment; however,





Learning Activity 4.3: Strategic drift

Organisations can drift out of alignment with their

customer’s needs if they do not continue to monitor the way

they create value. Changes in consumer behaviour need to be

factored into the ongoing strategy development process.

Using Starbucks as an example, consider how both Martin’s

framework, and the Three Box Solution might have been applied to

counter the strategic drift experienced by the company over the last

decade.






https://www.youtube.com/watch?v=wgD2VzFqCaE&feature=youtu.be





Forum" link.



MODULE 3MODULE 3

Internal Environment

3.1: The mechanics of business

Introduction:

Businesses seeking to improve their market performance must align their

internal environment with the external environment in which they compete.

The capabilities of the �rm must match the requirements of the market

before a transaction can take place. Many managers focus on the external

factors without properly considering the extent to which the �rm is

equipped to address those factors. A starting point for considering the

internal environment of the �rm is the vision and mission the �rm has

adopted to guide its activities. The �rm's vision can be thought of as an

aspirational, long-term ambition. It characterises in broad terms what the

�rm is trying to achieve. Vision statements are notoriously di�cult to

construct. While they appear to be simple and straightforward, the need to

adopt a form of words that conveys meaning unambiguously makes the

task quite di�cult. The mission statement of the �rm builds on the vision

statement, and adds more detail and direction. Together the mission and

the vision provide the boundaries of the �rm's strategic activities.

All �rms achieve results through their people. Every enterprise is at its heart

a collection of individuals, aligned in their attitudes and beliefs. Increasingly,

organisations are seeing themselves as ‘values driven’. Contrast this with

organisations that use rules and guidelines to govern behaviour. A values-



based organisation is one, which engages deeply held principles and uses

these to guide its decision making. Values-based organisations tend to be

more successful than rules-based organisations because there is a greater

sense of cultural engagement and employee satisfaction, which

consequently drives customer satisfaction. Values are critical to culture, and

culture is critical to the success of the organisation. Culture might be

de�ned simply as, ‘the way we do things around here’. Coleman (2013)

identi�ed six components of corporate culture: vision; values; practices;

people; narrative; and place. These six components establish a basis for the

identity and culture of the organisation. The culture then determines the

attitudes, the beliefs and behaviours of the employees. A bad culture – one

that is not conducive to looking after the needs of the customer – cannot be

�xed easily or quickly. A strong positive culture can represent a signi�cant

market advantage.

However culture, while important, is just one aspect of an organisation. The

organisation can be seen as a collection of resources and capabilities joined

together by an operational model. The resources controlled by the �rm may

be tangible or intangible. Tangible resources include things like plant and

equipment, IT systems, retail footprint, and so on. Intangible resources are

things such as goodwill, patents, trademarks, and culture. Barney (1991)

recognised that the resources controlled by the �rm determined the nature

of the competitive advantage that some �rms enjoy. Barney determined

that for a competitive advantage to be sustainable, the resource controlled

by the �rm needed to be valuable, rare, di�cult to imitate, and able to be

operationalised in the business. Only if resources demonstrated all four of

these characteristics could be said to provide a sustainable competitive

advantage. This provides a contrasting view to Porter who considered the

dynamics of the industry to be the key determinant of success. Porter

surmised that if the industry in which the �rm competed were attractive,

then the �rm would achieve better returns than if the market was not

attractive. Attractiveness in this case was determined by the Five Forces

framework.



Contrasting Porter’s view, Barney noted that it was still possible to have

successful businesses in unattractive industries, if the resources controlled

by the �rm satis�ed the criteria to provide sustainable competitive

advantage. It is interesting to consider that while both authors have

contributed, and to an extent de�ned, the debate the performance of

business that we observe, is often not completely explained by these two

frameworks.

This leads us to the question of what sits at the heart of the business’ ability

to di�erentiate itself, to attract a market segment and satisfy the needs of

that segment in a way that is better than its competitors – i.e., the core

competence of the �rm. Prahalad and Hammel (1999) de�ned the core

competence as a harmonised combination of multiple resources and skills

that distinguishes the �rm in the marketplace. This becomes the essence of

the company’s ability to complete. Often, the actual core competence of an

organisation is not easy to determine. To satisfy the criteria the activity must

provide superior value or bene�ts to the consumer, it must not be easily

replicated or imitated by competitors, and it should be rare – not something

easily able to be adopted by a competitor. The core competence of a �rm

might exist a long way upstream or downstream from the ultimate

customer. For example a retailer may attract customers through a diverse

range of products, but this may simply be a re�ection of a core competency

in purchasing and supply chain management. To take another example,

Apple may have a reputation for great design, but their exceptional

pro�tability is the result of a core competency related to supply chain

management.

In summary, understanding the mission and vision of the organisation, the

way this translates to values, the way this impacts on culture, and the way

the culture re�ects in the resources controlled by the �rm can lead to

strategic capabilities and core competencies that deliver superior value to

customers.








Sorensen, J. B. (2002). The strength of corporate culture and

the reliability of �rm performance. Administrative Science

Quarterly, 47(1), 70-91.

Prevailing research claims that strong corporate cultures improve �rm

performance by facilitating internal behavioral consistency. This paper

addresses an unexamined implication of this argument by analyzing

the e�ect of strong corporate cultures on the variability of �rm

performance. This relationship depends on how strong cultures a�ect

organizational learning in response to internal and external change.

Dobbs, M. (2014). Guidelines for applying Porter's �ve forces

framework: a set of industry analysis templates.

Competitiveness Review, 24(1), 32-45.

The purpose of this paper is to provide practitioners and students a

practical yet comprehensive set of templates for applying Michael

Porter's �ve forces framework for industry analysis.

Frost, J. (2014). Values based leadership. Industrial and

commercial training, 46(3), 124-129.

This article explores the power of values based leadership in

connecting colleagues and clients to an organisation and in doing so

creating sustainable business success.

Barney, J. (1991). Firm resources and sustained competitive

advantage. Journal of Management, 17(1), 99-120.







Understanding sources of sustained competitive advantage has

become a major area of research in strategic management. This

article examines the link between �rm resources and sustained

competitive advantage.

Johnson, B. (2010). Whats the di�erence between Mission

and Vision. YouTube. Retrieved from

https://youtu.be/b2MyaR0gMo0

What’s the di�erence between Mission and Vision statement? This

video compares and contrasts the two, and provides practical

examples.

Virtualstrategist. (2016). How to write a Vision Statement.

YouTube. Retrieved from https://youtu.be/7yBUBmciQBk

A practical guide to developing Vision statements.


Learning activities are not part of summative/graded assessment; however





Learning Activity 3.1: Vision Statements

Conduct a desk review on vision statements of large, well

known companies. These may be hard to �nd although

annual reports are often a good source of information. Select two

companies and critically assess the performance of the �rms against

their aspiration set out in the vision statement. Does the �rm live up

to the vision it has set for itself?

https://youtu.be/b2MyaR0gMo0

https://youtu.be/7yBUBmciQBk










Forum" link.

Learning Activity 3.2: Vision Statements continued

Identify the core competence of the two companies you

have focused on in learning activity 3.1.

How are these core competencies expressed?

What resources does the company control that enables it tosecure a sustainable competitive advantage?








Forum" link.

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