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Business Strategy - 4MBS650
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4MBS650 Business Strategy Examination
Open book, based on a case : What’s Wrong With The Company Strategy? » can bring in ANY written/printed material» can NOT bring in PC, PDA, mobile phone» careful preparation => concise set of notes» NO SUPPLEMENTARY RESEARCH
Case available for collection from U/G office
What will be in the exam?
FOUR questions in 2¼ hours (each question worth 25 marks)
Questions may relate to anything covered in the module but you will need to draw definite conclusions / recommendations
It is STRONGLY recommended that you use the worksheets for the cases studied in the seminars as the templates for structuring your analysis of the case /examination preparation.
You should
Spend time fully analysing the case Bring a concise set of notes containing
your analysis into the exam
Key to Case Analysis
I keep six honest serving men
(They taught me all I knew)
Their names are What and Why and When;
And How and Where and Who.
(By Rudyard Kipling)
The best answers show mature judgement
Focus on a few key RELEVANT points and develop them IN DEPTH
Use theory as basis of precise analysis» But don’t regurgitate it without applying it
Consider trade-offs, risks etc JUSTIFY your views / decisions Introduce ideas not mentioned in the case
» Analysis as basis for independent thought Clear conclusions we might disagree with! Questions may require you to combine the results
of several analytical tools to form CONCLUSIONS
Key Elements Evaluating External Environment
» Driving Forces» KSF» Industry Attractiveness
Internal Analysis» Core Competencies» Value Chain
Competitive stance / Strategic approach» Generic Strategies» Sustainability and strategic issues» Diversification
Strategy Implementation» Culture and Leadership» Building Organisation
What is the purpose of a Business Strategy?
Business Strategy is concerned with improving the competitive position of a company in its business environment
NOW FUTURE
Strategy
Put simply
Profit = Revenue – Costs Increase profit by increasing revenue
» Have more attractive product offering than competitors
» Predicting / identifying customer needs» Satisfying these needs – new product, new
delivery mechanism, new delivery channel, responding to other concerns (e.g. environment etc)
» Entering new markets Increase profit by decreasing costs
» Improving efficiency and effectiveness
What makes a winning strategy?
Fit» With environment» Between strategy, resources and architecture
Distinctiveness» In competitive stance» In value chain (=> low cost and/or superior
products) Sustainability
» Enduring distinctiveness (reputation, know-how)» Means of sustaining fit and distinctiveness as
environment changes
Key Questions?
How will the industry / industries in which it operates change over the next few years?
What impact will this have on the attractiveness of the industries?
Will there be any growth? If so where? What are the opportunities and threats?
Key Questions Regarding theIndustry and Competitive
Environment
What are the industry’s dominant economic traits?
How strong are competitive forces?
What forces are driving change in the industry?
What market positions do rivals occupy? What moves will they make next?
What are the key factors for competitive success?
How attractive is the industry from a profit perspective?
IndustryWhat are the industry’s dominant economic traits?
How strong are competitive forces?
What forces are driving change in the industry?
Analyse Industry using
•PEST
•Porter’s 5 Forces
•Industry Life Cycle
Key Questions Regarding theIndustry and Competitive
Environment
What market positions do rivals occupy? What moves will they make next?
Analyse Market / Competitive Environment by using
•Porter’s Five Forces
•Competitor Intelligence
•Strategic Grids
Combine results to get
What are the key factors for competitive success?
How attractive is the industry from a profit perspective?
Questions
How can the co maintain / retain profit growth?
How can it keep its shareholders happy? How can the co. exploit opportunities and
limit the impact of threats? Internal Strengths and Weakness
» Current Strategic approach / Strategy (Does this need to change?)
» Other Considerations
1. How well is the company’spresent strategy working?
2. What are the company’s resourcestrengths and weaknesses and itsexternal opportunities and threats?- SWOT
3. Are the company’s prices andcosts competitive?
4. Is the company competitively strongeror weaker than key rivals? – Competitive Strengths Assessment
5. What strategic issues meriturgent managerial attention?
Company Situation Analysis:
The Key Questions
The Five Generic Competitive Strategies
A Company’s Menu of Strategy Options
Other Considerations
Expanding Markets
Fitting strategies to particular situations
Diversification
Corporate
Culture and
Leadership
Key Questions
What would you advice Co’s management to do?