week 14

     1.      In your own words and using referenced quotes describe the difference between ‘business unit level’ strategy and ‘corporate level’ strategy?

‘Business Unit level’ Strategy:

Organization which makes their own decision on its way to maintaining, creating and via its competitive benefits is referred as business unit level strategies. Once identifying the organization product line, competition and market situation, then a business owner can easily recognize where the competitive advantage lies. For example: A gourment candy company finds that they cannot compete in price in market because they know bigger companies usually benefit from economies of scale which maintain cost low. As a substitute the small business would prefer a differentiation strategy, highlighting quality ingredients, freshness or other attribute to add value to their customer. So, business strategy will distress the small company’s functional decisions such as selection of its distribution and promotion channels.

‘Corporate Level’ Strategy:

As we know when organizations recognize opportunities outside its company, it might ponder diversification. When additional business turn into the part of the industry, the small business owner must consider ‘corporate level’ strategy. The umbrella company must contribute different things to be effective such as their efficiency, competitive advantage and profitability of each business unit. One of the gourmet candy makers may choose to enter into the business of dried fruit as per example the corporate decision is said to be sound if only the parent organization can extend and develop a competitive advantage like economies of scale, integrated procurement and management, mass production or cost reduction over their business. For example: The founder may verify that mail order candy distribution scheme is rightly fitted for the dried fruit business and that consumer survey as well as research indicates existing customer will purchase items for the both companies. Furthermore company may able to negotiate volume discount for raisins, dried cherries or cranberries which products will used in both business.

 We recognize that there is equal important to the company whether it is corporate level strategy   or business unit level. Workers are utilized effectively and efficiently by the firm but they should be utilizing differently according to their skills, abilities, knowledge, specialization areas and others. Business level strategies is used in order to solve definite problems on the other hand corporate level strategies is used in order to solve when the stuff is regarding to wider problem.

 In addition corporate unit strategies is long term strategies which should not be changed commonly whereas business level strategy is short term strategy which is changing according to change is markets and consumer preferences.

 Furthermore, a corporate level strategy is complex in nature which requires more time, effort, cost, etc and it impacts more in organization than business level strategies.

 2. Discuss the corporate parenting style of Virgin group.

Introduction of Virgin Group:

The virgin group is the collection of individually run British companies with the virgin brand beneath the control and leadership of English celebrity business tycoon Sir Richard Branson. The key business areas are lifestyle and music, leisure, holydays, wellness, entertainment, travel, among others. It employs more than 50000 people and global branded revenues in 34 nations were approximately 13 billion (in pounds).

Source: : https//www.Virgin.svg.png%3Bhttp%253A%252F%252Fen.wikipedia.org%252Fwiki%252FVirgin_Group%3B200%3B178

Virgin’s Corporate Parenting Style:

Virgin group was first and most obvious distinctive resource is the Richard Branson and the virgin people that make up the organization. Charismatic style leadership is followed by Richard Branson which is a synonymous and entrepreneurial style is apositive feature that others organizations are unable to replicate or imitate and it is his personality that is synonymous with the virgin brand which makes the company unique in nature. Likewise, the virgin group catches the attention of the virgin people in their branding and reputation who are only a definite type together with Branson; the virgin inhabitants form the human capital that is distinctive to virgin which is unattainable for other firms to copy.

Source:

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Virgin brand is familiar by the 96% of the UK consumers and is linked amongst consumers with innovation, fun, trust and success. Virgin has been able to continue the virgin personality across multiple businesses in a way that hardly any other companies have, and the popularity of the virgin brand generate unique brand equity that is not easy for competitors to replicate or imitate.

The virgin culture which is related to people who make up the firm, that has been build over decades and that distinguish the work environment within virgin group from other organizations. It is the ethnicity that is not looking for clones that is like a family and is one that necessitates employees to have the virgin style. These unique attributes in attendance in virgin workers set together to create a typical corporate culture that only the virgin group maintains to have.

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Corporate parenting style involves non-related diversification at the individual business unit level in virgin group. For the moment, synergies are created from hierarchical relationships and the communication of the corporate head office with individual production unit. Unique cultures of virgin also permit to breaks into new markets and execute its project very effectively. Decentralized in organizational structure adds value in decision making also to prevent breakdown in communication individual business units pursuing their own strategies in an uncoordinated.

By understanding different attributes of virgin such as management style corporate structure as well as ownership we can say that this company is pursuessynergy manager corporate parenting style. Enhancing value across business unit by managing synergies across business units is done with the help of synergy manager corporate parenting style.

Everyone can simply speak that Virgin is pursuing synergy manager corporate parenting style because of enlisted reasons:

Moveable or transferable skills:

This group is transferring their skills in different organization. For example: to improve their technology by simply transferring virgin Music to virgin cinema. Virgin group add their capabilities and value by sharing knowledge, skills and technologies. Gathered skills and knowledge of one business unit is utilized in another business unit which obviously enhance in performance and outcomes.

Sharing resources and activities:

In different nations virgin offices are shared by their smaller unit of business according to geographical diversity. They also exercise similar distribution system across their business. In addition they used the same brand name for each of their products and services.

Case Study:

        1.      What type of corporate parent is Virgin (portfolio manager, synergy manager or parental developer)?

In my opinion virgin group follows synergy manager corporate parenting style. It emphases and improve as autonomous enterprises under a distinct unified brand name. Another attributes is that it also focuses on decentralized organizational structure which allows an entrepreneurial environment for managers to make decision effectively, which escape bureaucracy related with large centralized business.

        2.      How does the Virgin Group, as a corporate parent, add value to its businesses?

Really virgin companies add value to its business under their umbrella that accrues to the brand as a whole. The diverse aspect of the virgin group allows for more consumer and investor confidence. This group does not depend on the just one area or industry for its economic health and profitability. In fact investors are especially aware of the advantageous of diverse portfolio. Each company shares in those benefits in more than one way.

Virgin group different companies which form a part of the group also take advantage from economies of scale. When resources like raw materials are wanted purchase can be done in large amount that allow each business to increase revenue by reducing marginal cost. Another areas in which virgin add value to its business is their brand which is trustable by customers.

      3.      What’s the logic of portfolio? Why do you think they are in mobile telephony, travel, financial services, leisure, music, holidays and health & wellness?

The key aim of portfolio is to equilibrium the industry. Logic of portfolio helps every business to fine-tune benefits and losses. Every business is associated with their own risk, only differ is that some business have low and some have high risk. Portfolio designed for solving such risk where it be present. This will assist the sponsor to spend in different firm or companies relatively than a solo business where the risk is superior. Numerous portfolio models are accessible that obviously facilitate corporate parent to supervise their portfolio business. Examples of models are:  the directional policy matrix, Boston Consultancy Group (BCG) matrix, parenting matrix and others.

       

Furthermore, logic of portfolio is how an individual company adds value to their organization by managing     themselves within the selection and maximizing goals and objectives by satisfying the customer needs, wants and desire.

I think virgin group are in mobile telephony, financial services, travel, music leisure, holidays and health and business due to following reasons.

Þ    Brand of virgin.

Þ    Richard Branson Personal Reputation.

Þ    Virgin Contacts and Partners.

Þ    Virgin management style.

Þ    Empowerment of staff.

Þ    Virgin unrivalled networks of customers friends.

     4.      What are the main risks facing Virgin Group as a result of their strategy? How might they be reduced?

The victory of virgin group depends on corporate parenting style which is guide by Founder Richard Branson. The sustainability of virgin group competitive benefit depends on how well it maintains to retain the virgin culture and implement the strategy of decentralization in a combined branding. At least in the short run with Branson continuing to show the way the company, the tactic looks very tough and almost inescapable. In the longer run, though, Branson will have to put in place a strong progression plan and fill the corporate head office with management who are intelligent to appreciate and carry out the virgin charter. While Branson himself might be irreplaceable, he can depart his legacy by make sure that his vision is continued trough the virgin people and virgin culture. 

Virgin also has to make sure that it chooses the industries it desires to enter very carefully. A solo mistake could tarnish the virgin brand, and this might be terrible for the group as a whole association under a single brand is a double-edged weapon which can cut both ways. In addition virgin wants to continue to guarantee that the individual business unit execute in line with the superior virgin brand, and not branch off in an unrelated way.

If the virgin brand is intelligent to construct a strong leadership engine, preserve the branding coordination between its various businesses, carefully assess future business, then its corporate strategy is sound positioned to bring a bright future of the business and the virgin brand.

References:

  1.      De Wit, B and Meyer, R (editors) (2010). 4th Edition Strategy: Process, Content, Context,   Thomson International Business Press: London. Chapter 6

  2.              Dess, G, (2007) strategic management: creating competitive advantages, McGraw-Hill Australia.

         3.      Dick, Devries and Avaucourt (2000), The House that Branson built: virgin entry into the new millennium, INSEAD, Fontainebleau, France.

  4.      Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter7

Online References:

Virgin (2007 the whole story ‘virgin.com retrieved on January 21, 2007 from http/www.virgin.com/aboutvirgin/allaboutvirgin/thewholestory/default asp)

http://smallbusiness.chron.com/difference-between-corporate-strategy-business-strategy-   57411.html (assessed on 2/29/2013)

GROUP VIDEO PRESENTATION

week 10

1. In your own words and using referenced quotes describe what is meant in strategy by ‘Organizational Purpose’ and describe what is meant by Corporate Social Responsibility‘

Organizational Purpose

The ‘organizational purpose’ is the expression or sign of needs of the organizations stakeholders and their relative significance. The needs of stakeholders mostly varied and habitually conflicting. Also, wants, its purpose may perhaps also reproduce basic internal considerations, like preference of the board or organizational code with ethics. From organizational purpose vision and mission facilitates the essential foundation for making strategic choice. The mission, vision and organization purpose describe what the organization needs to be consider for the long term and short term organizational goals, objectives and success. Also describe what the organizational needs to do in order to achieve effectiveness and efficiency.

The definition of organization mission and vision has much as similar with organization’s business. It facilitates and helps to understand the markets in which organization operates and principal behavior it competes. A critical part of this process is the organization questioning its usual thought of what business it is in.

Frequently expressed “organizational Purpose” using the enlisted variables:

       1.      The target beneficiary or customers of the organizational outputs.

       2.      The ethical values and norms of the organization.

       3.      The type of citizens employed by the organization.

       4.      The scope and size of the organization.

       5.      Cost and Quality.

       6.      Structure of the organization.

       7.      Varieties of products and services produced by the organization.

       8.      The workers conditions and relationships.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility is referred as the managing of the overall impact of an organization on community or society. This comprises the through or straight impact of operation and the broad impact of the business ups and downs in value chain, from suppliers to consumers or customers. In addition it covers the voluntary contribution the company makes to the society and wider community.

Corporate Social Responsibility covers the each followings element:

     1.      Security and labour.

     2.      Human rights.

     3.      Corporate governance and Business standard.

     4.      Human disaster liberation.

     5.      Promotion of education and health.

     6.      Economic development and enterprise.

      7.      Protection of the environment.

2. Should organizations focus more on profit and shareholder satisfaction or responsibility and stakeholder satisfaction? Discuss your own thoughts but try to support your ideas with theory or examples.

I think organizations should focus both on profit and shareholder satisfaction as well as responsibility and stakeholder’s satisfaction because both terminologies are essential for organizational goals and objectives. In my opinion profit and responsibility are interlinked with each other, so I am explaining the both shareholder or stake holder perspective.

Shareholder value perspective

The shareholders values highlights profitability over responsibility and perceive organization mainly as instrument of its owners. Shareholder value proponents consider organizations achievement can be calculated by things as dividends and economic profit share price, and see stakeholder management rather than a means than as end in itself. The purpose of an organization at first is to maximize shareholders value, with what is legally permitted. By presenting market based relationships and liberal self interest between all stakeholders and the corporation, chasing maximum values for the shareholders will consequence in societal wealth being maximized.

Stakeholders value perspective

The stakeholder values highlight responsibility over profitability and perceive organization mainly as collations to hand out all parties involves. Stakeholder value supporter consider an organization achievement should be considered by the satisfaction of all the stakeholders and perceive stakeholder management as a means and end. Due to high level of trust between all parties and strongly motivating workers inside the organizations; pursuing mutual interest of all stakeholders is not only more just but also maximize societal health. 

3. Write about your experience with today‘s case study. What answers did you give to the questions? What did you think of the CEO?

 What are PepsiCo’s strategic objectives? Why does the firm exist?

As, we know each and every organization have their own mission vision and objectives. The first and key objective of the organization is to lead and capture market and become the top brand which PepsiCo follows as well. PepsiCo focus more on teenagers or young people, accordingly they are thinking and producing the products targeting the young people. Other objective is to earn and generate $30 Billion income by 2020. Therefore emergent strategy applied by the PepsiCo. They are producing and trying innovating ideas in which customers’ sense composite the finest. As we know they are concentrating Asian market after losing market in U.S.A. Understanding Asian market is large and benefit for the products like food and beverage. In addition PepsiCo is trying to increase the business portfolio and hence increase the product line.

Main aim of the PepsiCo is to lead and be top brand in food and beverage industry. Also, they are planning to provide reward as to motivate their investors as well as shareholders by inspiring their community, customers and workers. Furthermore, by undertaking fair and ethical business, PepsiCo want to be authentic and finest to their stakeholders and shareholders. PepsiCo frequently want to improve different aspects like social, economic, environmental and cultural in which they are operating in order to be more competitive by generating to be better in future.

Other objectives of PepsiCo in to provide better goods and services at affordable cost, also functions best to the customer needs, interest and desire. For example: PepsiCo need to take care in mind to produce more healthy food, snacks and beverage from previous, Hence to increase the market share by planning to gain international expansion and synergies. In addition PepsiCo wants to maintain sustainable growth and competent in distributing system empowering workers and to be responsive.

What are the possible strengths and benefits of the strategy?

Different possible strength and benefits of the PepsiCo strategy are as enlisted below:

v  Leading biggest portfolio of food and beverage.

v  Workers empowerment.

v  Providing opportunity to locals,

v  Increase in market share.

v  Business expansion in more than 200 nations.

v  Targeting different taste and preference according to nation wise.

v  Dedicated and experienced.

v  Balanced beverages portfolio.

v  High nutritious and balanced products.

v  Increasing market share by increasing the product line.

What are the possible weaknesses and disadvantages of the strategy?

Different possible weaknesses and disadvantage of the PepsiCo strategy are as enlisted   below:

v  Extreme competition from rivalry (Coca-Cola).

v   Not leading as a top (number one) brand in chosen industry.

v  Low preferences from customers.

v  High risk to PepsiCo.

v  Less smart and attractive packaging.

v  Shareholders desire and expectations may not be fulfilled.

v  Failure in a product line may lead customers to substitute to another similar product.

Do you think the organization has the right balance between profitability and responsibility?

No doubt, that the main aim of the organization is to achieve more benefits which applies in PepsiCo as well. When, PepsiCo decline of 3% Market share per annum in United States, concentrated more in Asian countries. However, PepsiCo must bear in mind of creating better and innovative products also by propelled named “GOOD FOR YOU” OR “BETTER FOR YOU” which is nutritious and quality products. It also needs to do a lot to balance between profitability and responsibility, so that organizational goals, mission, vision and objectives should be attained.

Charismatic Business leadership is followed by the PepsiCo chairman and CEO named Indra Noovi. The pettiest thing of her is to target to triple in generating revenue by 2020, targeting to establish PepsiCo a number one brand in food and beverage industry. She is a good leader because she is also careful about the responsibility towards the workers, stakeholders as well as customers.

Nevertheless, I feel that she is ignoring the older groups by only targeting the young group. As we know products is consumed by each and every age groups, so organization like PepsiCo need to target every age groups by innovating appropriate products of food and beverage for every age groups.


References:

1. CSR analysis (ISO 26’000), and CSR strategy development and definition of measures,

Spar Management AG, 2009-2010

2.Lectures in social management and CSR concepts, FHNW / Basel, ZHAW /Winterthur,

BFH / Bern ongoing, since 2003

3. Michael H. Zack, “Developing a knowledge strategy”, California Management Review, Vol.41, No.3, Spring, 1999, pp 125-145. ?

4.  Porter, M. E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors. 1 Edition. New York: The Free Press.

5. R. Nelson, “Why do firms differ and does it matter?“, Strategic Management Journal, Winter special issue, Vol. 12, 1991, pp. 61-74.

week 9

        1.      In your own words and using referenced quotes describe what is meant in strategy by the ‘Resource-Based View’?

  Ø  The resource based view declares that the organisation have better performance and competitive advantage which describe through its distinctiveness and capabilities.

Resources are the property of an organisation whereas competencies are the ways of utilizing the property to gain organisations goals effectively and efficiently.

  The main aim of Resource Based View Strategy of an organisation is to:

1. a.  Make Familiar about conceptual basis for declare that the key human resources are basis of Competitive advantage.

      b.      Firms have the opportunity to producing human capital advantage by the means of retaining and   recruiting outstanding workers, through detain the stock of brilliant talent humans, underlying with productive potential.

          c.       Isolating Mechanisms-attributes that create duplication complicated.

         d.      Outcomes in one perspective cannot easily be translated to another if the distinctive “Critical Success Factors” are missing.

         e.       Stresses value of different interrelation between the firms human resources and others like financial, legal, physical and so on.

          f.       Human Resource managers can be respected not only for their responsibility in implementing a given competitive situation, but for their role for producing strategic capability.





      2.. How might you undertake ‘Internal Strategic Analysis’? What models would you apply and why? Where would you go to find the information you need?


To take “Internal strategic Analysis” strategists may have to consider different thinks and needs to understand pros and cons and also depend on what kind of organisation it is, which type of situation and environment is organisation facing at present. Based on these questions we need to take appropriate internal strategic analysis so that organisation will lead and survive.

I would like to take and apply Mc Kinsey 7’s model because of following reasons: 

1. It is examined and applies in various organisations and facilitates us to understand issue of team effectiveness.

2. If something within the organisation is not working properly then it helps to find out the particular part which is not functioning well and make sure such part contributes to the organisation and shares goals and values.

3. This model helps to improve the performance of the organisation.

4. It facilitates to determine how to utilized proposed strategy to the maximum extend.

5. It supports processes and departments at the time of merger or acquisition.

This theory was developed in early 1980’s and named MC Kinsey 7’s Model. Robert Waterman and Tom Peters are the developers who work as consultants in Mc Kinsey and company consulting firms.
    
      There are seven elements to identify and understand for the organisational effectiveness is:  

      There are four “soft factors” such as skills, staffs, style and shared values are more influenced by the culture and less tangible. Soft factors are difficult to describe. 
     Also, there are three “hard factors” such as structure, system and strategy are the strategy of statements: IT system and formal Processes; reporting lines and organisational charts. Hard factors are easy to identify and define.

  

       3.      Talk about your group video work. How is it going so far? Do you have a plan? What are you most worried about at the moment? What is going well?!

·         Group video work is in progress. We are five members in a team or group named Bipin Lamichane, Saurabh Sahi, Narayan Sapkota, Bicky Gauchan and Prasant Timilsina. Our organisation will be the two reputed telecommunication industry of Nepal which is NTC and NCELL.

·         We are preparing to make presentation slides with video like our juniors students of year one had done. I feel it is not an easy task to join Presentation Slides with Video in perspective of Business students as compared to IT Guys.

·         Yes we have a plan to prepare and present. We prepared to present 5 Parts of Group Videos and assign one task to each individual so that it will be easy. Part 1 Covers Introduction of Industry NCELL and NTC, Part 2 covers PESTEL analysis, part 3 covers SWOT analysis, Part 4 covers MC Kinsey 7’s Model and finally part 5 Covers recommendation and conclusion.

·         I am worried about how to make a MC Kinsey 7’s Model of telecommunication of Nepal i.e. NCELL and NTC because it is not an easy task. We need to take our research in deep to understand and familiar with 7’s model which takes a lot of time and effort.

·         I think SWOT analysis of NTC and NCELL is going well. Because we have done it and understand the entirefour element like strength, weakness, opportunity and threat of NCELL and NTC Telecommunication of Nepal.

   References:

1. Collis, D. J. & Montgomery, C. A. 1987. Corporate strategy: Resources and the scope of the firm. New York: McGraw-Hill.

2. Grant RM. (1991) . The resource-based theory of competitive advantage: implications for strategy formulation. California Management Review33(3): 114–135.

3. Grundy AN, Brown LR. 2002a. Be Your OwnStrategy Consultant — Demystifying StrategicThinking. International Thomson Publishing:London.

4. J Teece, “Economic Analysis and Strategic Management“, ? California Management Review, Vol. 26, No. 3, Spring 1984, pp 87-110; J. B Barney, “Firm Resources and Sustained Competitive Advantage“, Journal of Management, Vol. 17, 1991, pp. 99-120.

5. Johnson G, Scholes K. 1989. Exploring CorporateStrategy. Prentice Hall: Hemel Hempstead.