BUILDING AN ORGANIZATION CAPABLE OF GOOD STRATEGY EXECUTION : PEOPLE, CAPABILITIES AND STRUCTURE

Now, let's continue another chapter.....

Strategy- Supportive Resources and Capabilities

   1) Staffing the organization

   2) Acquiring, Development and Strengthening Key Resources and Capabilities

Strategy- Supportive Organizational Structure

 1) Structuring the organization and work effort

Centralized - retained by top management

Decentralized - delegated to lower-level managers and employees

Simple structure -  handles all major decision and oversees all operation with staffs.

Functional structure  - organized into functional departments. eg: department marketing, department operations, department sales.

Matrix structure - two or more organization forms.

Multidivisional structure - decentralized structure consisting of a set operating divisions.

CORPORATE STRATEGY : DIVERSIFICATION AND THE MULTIBUSINESS COMPANY

Assalamualaikum w.b.t....

What I understand from this chapter, corporate strategy means start diversify more than one industry.

Strategies Diversification Option have four which is :

   1) Sticking closely with the existing business lineup and pursuing opportunities presented by these businesses.

 eg : Affin Bank acquire Hwang-DBS, financial can be strong.

2) Broadening the current scope of diversification by entering additional industries.

eg : Tabung Haji not only manage people who want to make pilgrimage, but Tabung Haji have invest plantation and property.

3) Divesting some businesses and retrenching to a narrower collection of diversified businesses with better overall performance prospects.

4) Restructuring the entire firm by divesting some businesses and acquiring others to put a whole new face on the firm's business line up.

Three test before enter into industry

1. The Attractiveness Test : profits and return on investment as good or not.

                                                        Business focused- new entrance,supplier and other                                                   five forces

                                               conclusion - industry attractiveness

     2. The cost of Entry Test : cost overcoming entry barriers so great or reduce the potential for profitability.

    3. The Better-Off : synergy ( 1+1=3) - more than, not making only. It provides the best     company.

Intrapreneurship - everybody in company can create any idea to provide product.

Economic of Scale - the units price of goods little, produced many.

Economic of Scope - produce the same number with the low price.

TUTORIAL ACTIVITY : CASE STUDY - The Digital Age : Shall I Tag Along

Before mid semester break, we had given second case study. The first case study was Robin Hood. Before entered the tutorial class, we must read first and do the SWOT Analysis. In the tutorial class, we had learned how to "marry" the Strength, Weaknesses, Opportunity and Threat as known as TOWS Matrix. 

this is our TOWS Matrix

For me, to marry SO,ST,WO and WT very easy after do SWOT Analysis but to give "name" for the babies are very difficult. huhu~

Strengthening a Company's Competitive Position : Strategic Moves, Timing and Scope of Operations

After done the questions from miss ummi, i will continue the next chapter.. 

wow !!daebak~ hehe

Sometimes a company's best strategic option is seize the initiative, go on the attack and launch a strategic offensive to improve its market position.

I also learned how to choose the basis for competitive attack : -

•   attack competitor weakness
•   counter-response (price war)

This is example of principle offensive strategy options :

Air Asia is example of offer an equity good or better value product at a lower price as a cost-based advantage to attack competitors.

Microsoft is example of leapfrog competitors by being first to market with next generation product.

Adroid is example of adopt and improve on the good ideas of any other firms.

This is terms in this chapter I had learned :

1) Blue-Ocean Strategy  --- inventing new industry segments

2) horizontal scope --- within its focal market

3) vertical scope --- internal activities that make up an industry's entire value chain                                          system

4) SPAC --- new company using cash from Initial Public Offering (IPO)

Question - Generic Competitive Strategies

Now, let's continue  ^_^

Air Asia                                             Facebook
Proton                                               Nike
Tesco                                                IKEA
Avon                                                 Porche
Bonia                                                Al-Ikhsan
Coca-Cola                                         Rolls-Royce
Mydin                                               Malaysia Airlines
Google                                              Old Town Kopitiam
JW Marriott                                       Perodua
Giant                                                 Kamdar
Kia Motors                                        Toyota
Digi                                                   Maxis
Subway                                             Victoria's Secret
Louis Vuitton                                     Honda
KFC                                                 McDonalds

The questions are :

1)  place each firm you know in one of the four categories of generic business strategies and explain your choices.
        a) broad cost-leadership
        b) focused cost-leadership
        c) broad differentiation
        d) focused differentiation

2)  what are some common features for firms you have placed within each category?


I answered what I understand from this topic... 

1) 
     a) broad cost-leadership : KFC and McDonald
                                        - everyone can go because the price is affordable for everyone


     b) focused cost-leadership : Mydin and Kamdar
                                                   - company gives the low price but their target market is                                                        narrow who want to buy thing in bulk

     c) broad differentiation : IKEA
                                              - even IKEA is luxury item but the price is suitable to                                                             customer to buy it

     d) focused differentiation : Louis Vuitton and JW Marriott
                                                  - this brand focused on high class people because it quiet                                                      expensive.

         

The Five Generic Competitive Strategies : Which one to employ?

Assalamulaikum w.b.t.

hye !! There were been a long time I haven't updating my blog. I had a calm environment to update blog. Now, I have free time to update blog about previous chapter. hee~

In this chapter 5, I had learned the five generic competitive strategies.Why do strategy differ? First, is the firm's target market broad or narrow? Second, is the competitive advantage linked to low costs or product differentiation?

The Five Generic Competitive Strategies are :

   1) low cost provider   ----   sold the product to customer with the low cost

   2) broad differentiation ---- have a unique factors that rivals didn't have

   3) focused low cost  ---- give low price, target market is narrow

   4) focused differentiation ---- make a niche or segment of customer

   5) best cost provider ---- combination of all other strategies above.


miss ummi also explained about cost driver. Cost driver means a factor that has a strong influence on a company costs. The keys to driving down company costs are :

   - economic scale
   - learning and experience
   - capacity utilization  
   - supply chain efficiencies
   - input costs
   - production technology and design
   - communication systems and information technology
   - bargaining power
   - outsourcing or vertical integration


Before ended the class, miss ummi give the exercise and answers the exercise in this blog. 

EVALUATING A COMPANY'S RESOURCES, CAPABILITIES AND COMPETITIVENESS

Assalamualaikum w.b.t.


Now, in this chapter we had discuss about techniques for evaluating a company's internal situation, including its collection of resources and capabilities and the activities it perform along the value chain. 


Competitive Assets --> are the firm's resources and capabilities.

             Resources : include tangible and intangible.
                                tangible include physical resources like assets.
                                intangible include knowledge, skills,brands


              Capabilities : how you utilize the resources.


For sustainable competitive advantage must used VRIN Test that is Valuable, Rare, Inimitable and Non-substitutable.


Social Complexity --> company culture, interpersonal relationship among managers, trust-based relations with customers or suppliers.

Causal Ambiguity --> rivals do not know from other sources that create competitive company