Journal Entry (Week 27)

Questions: 

1. In your own words and using referenced quotes explain why strategy theories developed in the last 10 years tend to be quite different from those developed in the 1960's 

2.You attend a job interview for an entry level managerial position and mention that you completed a 30 week strategy module. Your interviewer seems interested and explains that this job role would enable you to become involved in the strategy making process. In 200 to 300 words explain to your interviewer how the module has helped to prepare you for a strategy role. 

The one truth in this universe is “Nothing is constant”, so applies for business process, theories and trends. We find that the adaptability of business to its environment brings in the need for new strategic theories. In the last 10 years we notice certain change in the way business function which differ greatly from the 1960’s.

                              

Some of the major changes in business environment then and now are: 

Before	Now
Stable environment	Dynamic environment (Technological advancement, globalization)
Not much competitor	Rigorous competition
Inflexible labor market	Many graduates, few jobs
Monopoly in many markets	Competition driven market-Fierce new entrants
Focus of quantity(Mass production)	Focus on quality and quantity
Financial gain meant business success	Shareholder value, customer satisfaction and public/environment responsibility
Seller power (Businesses king)	Buyer power (Customer king)

 These are some of the few reasons why the strategy theories have had to adapt to the new needs of the present environment. 

McGraw-Hill, 2000

Sitting for my Interview: 

Facing my interviewer

Strategy is not a new concept for me. I have been studying this module since my A-level (HSEB+2). However, every encounter with this subject broadens my horizon forcing me to think from a different/ new perspective every time. I have had to go deeper and deeper into the strategic management process, analyzing many case studies that came across. I see that I have developed. Having a perspective mind has become a habit. I think working in your organization and aiding in the strategy making process would definitely allow me to apply what I have explored till date. I know I’m capable. I believe that working in your company will be mutually beneficial for us. 

I have become accustomed to the tools like SWOT, porter’s 5 forces, PESTLE analysis. Introduction of practicals/tutorials in the module strategy choices and Impact has helped me understand the practicability of the courses. Therefore, I believe these 30 weeks of strategic venture has me equipped with the knowledge and skills that I can use in your organization. 

I would be much delighted if you gave me that chance.

Thank you Sir.

References:
McGraw-Hill, 2000 [Online] Available at: http://www.csupomona.edu/~wcweber/301/301slide/ch02301/img004.gif [Accessed on: 1st May, 2013]

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

Journal Entry- Week 23

Questions

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

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

“Strategic leadership is the ability to shape the organization's decisions and deliver high value over time, not only personally but also by inspiring and managing others in the organization”- Lynch, R (2009)

OR

“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.”- Business dictionary

Therefore to my understanding, Strategic leadership can be defined as the capability of a manager to interpret the strategic vision of the organization and thus make his subordinates acquire that vision. Strategic leader make organizational decisions that are responsible for value creation. They persuade employees, create cultures, allocate resources and work even under ambiguous scenario to give the best result possible and meet the organizational vision.

There are two Models for strategic leadership. They are:

 

Lynch's 5 elements of strategic leadership model

Transcendent Leadership model

Similarities and Differences:

Similarities	Differences
v  Both models assess the changing environment and focus on how competitive advantage can be gained in long run.	v Transcendent leadership style involves transcending own ego and desire to help followers while 5 elements of strategic leader focus on motivating and nurturing the employees.
v An organization needs to address its stakeholder’s needs. Both the models focus on it.	v Transcendent leader focus on infrastructure, rules, structure while the other focuses on people, relationships etc.

References: 

Crossan, M., Vera, D and Nanjad, L. (2008) Transcendent Leadership: strategic leadership in dynamic environments, The Leadership Quarterly, Volume 19, Issue 5, October 2008, Pages 569-581

Lynch, R (2009) 5th Ed. Strategic Management, FT Prentice Hall, pg599

Strategic leadership. Business dictionary. [Online] Available at: http://www.businessdictionary.com/definition/strategic-leadership.html [Accessed on: 24 April, 2013]

Journal Entry (Week 21)- Honda Case study

Questions:

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

2. Did Honda’s entry strategy demonstrate the characteristics of logical incremental-ism? (slide 12 will be helpful) 

Emergent strategy:

A set of certain consistent actions that form an unintended pattern which was not initially anticipated or intended in the initial planning phase. Although unintended, adopting an emergent strategy might help a business adapt more flexibly to the practicalities of changing market conditions. – Business dictionary

For example, adopting a social website to market product may be a part of comprehensive marketing program but if it becomes a massive success then it becomes an emergent strategy. 

However, Emergent strategy too has its own pros and cons. Some of them are listed below: 

Pros

• Unforeseen benefit: Let us take the example of the case study of Honda. The two Honda executives were out selling bikes of 250cc and 350cc to American markets. However, once it started selling its 50cc bike with a tag “ You meet the nicest people on HONDA”, it became an instant Hit. It had not foreseen that its 50cc light bike would have made HONDA more successful in America. 
•  It encourages the use of informal communication networks increasing innovation and creative thinking 
• It allows organizations to experiment and develop logical solutions to problems that are otherwise not expected in the long term plan. 
• Changes are implemented by project teams and task forces. 
•  Encouragement of informal communication networks within organizations to improve the flow of ideas and encourage innovative thinking 
• The use of temporary structures such as task forces and project teams to implement change

Cons: 

• Without a blueprint (a long term strategy), an organization is bound to stray in this competitive world of today. Emergent strategy is not enough in itself. A company needs a fixed plan to move towards its goal. Emergent strategy however can be used as a measure to curb hindrances and identify opportunities on the path that would otherwise not be efficiently tackled. 
• Some companies are not well capable of planning for emergent strategies and therefore damage may be done to its organizational structure. 

Case study 

1)  Was Honda’s entry strategy in the US more deliberate or emergent? 

Honda’s strategy was more of Emergent strategy. According to the interview taken of the two Honda executive, which seems more realistic and accurate, they stepped toward success one move at a time. From entering into the market, to unsuccessful year in macho bike, to selling 50cc light bike to decent American had not been a journey mapped out but something that happened one after the another as in the emergent strategy. 

2) Which of the accounts seems more accurate and why? Why do you think the two accounts differ so much? 

I believe that the interview section demonstrated more of the real encounters that Honda experienced. The two encounters differ so much because the first one is probably a perspective story of a journalist however the second one is a interview session with the two Honda executives that LIVED the moments and created the HONDA journey into AMERICA. 

3) Did Honda’s entry strategy demonstrate the characteristics of ‘logical incrementalism’? 

Yes, I believe Honda’s struggle story demonstrates the characteristics of Logical incremental. As demonstrated by the Honda executives, they had to keep in view their financial limit, scan for potential opportunities (test their 50cc light bike in a country where people ride macho bikes). 

4) Do you think Honda would have been more or less successful if they had adopted a more formalized strategic planning approach to the launch? 

I believe it is essential for organizations to have a long term plan mapped out according to their vision and objectives. However, they should also be flexible at times to bend and experiment with the opportunity at hand. 

Therefore, I believe only following a formalized strategic plan would not have given Honda the success that it reached at that time.

References:

Emergent strategy. business dictionary [Online] Available at: http://www.businessdictionary.com/definition/emergent-strategy.html [Accessed on: 17 April 2013]

Honda. [Online] Available at: http://avih.github.io/images-specific/honda_c50-2_ad.jpg [Accessed on: 16 April, 2013]

Pascale, R. (1984) „Perspectives on Strategy: The Real Story Behind Honda's Success‟, California Management Review , Vol. XXVI, No. 3, Spring 1984

Rumelt, R. (1996) „The Honda Effect: Revisited‟, California Management Review , Vol. 38, No. 4, Summer, pp103-111

Journal Entry- Week 20 (City Center)

Journal Entry (Week 18)- HP

Questions:

How can using the Change Kaleidoscope and Force-field analysis help an organization to deliver its intended strategy? 
Attach the change kaleidoscope of HP.


Change kaleidoscope helps to identify the important context in designing change. The structure helps to monitor and see through change process that is sensitive to situation. It helps to ask specific questions about an organization and hence promotes judgment that is essential to identify the important details about the organizational context. Hence, the organization can constantly monitor the change under implementation. This in turn will help the transition process more smooth and controllable.

Force field determines the various forces that may act against the planned change. This technique helps to determine alternative solutions to work against the forces and towards the desired change. An organization can thus identify solutions that are targeted towards achieving the intended strategy.

Thus in this way, an organization is able to deliver its intended strategy using the change kaleidoscope and force-field analysis.

 

Fig: Change Kaleidoscope of HP 

References:

Ashlee Vance and Aaron Ricadela, Business Week: Can Meg Whitman Reverse Hewlett-Packard's Free Fall? Available at: http://www.businessweek.com/articles/2013-01-10/can-meg-whitman-reverse-hewlett-packards-free-fall [Accessed on:2 March,2013]


James Bandler & Doris Burke, Fortune Magazine: How Hewlett-Packard lost its way. Available at: http://tech.fortune.cnn.com/2012/05/08/500-hp-apotheker/ [Accessed on: 2 March,2013]

Journal Entry (Week 17)

Questions:

1. Can you think of an organisation 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)?

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?)

Apple wasn’t the company it was now. Years ago it had series of flops. Many of its inventions were major disasters. It was in the brink of bankruptcy. It took 30 years of innovative flaws to get its products right. Its great strategy to keep innovating may have proved risky but then once it hit the target there was no turning back. Apple has since been producing great products like I-phone, i-pod, i-pad, mac that have been customers favorite picks. I believe it has all to do with good judgment of apple backed by some portion of luck.

Sony’s Minidisk was a device that surpassed its predecessor CD’s. It could have been a transition point between Cd’s and Mp3’s. However, Sony Minidisk arrived in the market around the time when the trend of CD’s began to fade. Sony Mini Disk proved a failure.  Sony is a powerful company always demonstrating its eagerness to innovate. It believes in doing its own way rather than waiting for blueprints from others and following them. Therefore, there strategy is a high risk strategy. The Minidisk could have been a success but then their poor judgment of the innovative market resulted in failure of their Minidisk.

References:

Apple history timeline. <online> Available at: http://applemuseum.bott.org/sections/history.html [Accessed on: 26th March,2013]

11 famous Sony products ranked from worst failure to biggest success. <online> Available at: http://www.11points.com/Web-Tech/11_Famous_Sony_Products,_Ranked_From_Worst_Failure_to_Biggest_Success [Accessed on: 25th March, 2013]

30 pivotal moments in Apple's history <Online> Available at: http://www.macworld.com/article/1050112/30moments.html [Accessed on:26th March,2013]

Journal entry (Week 16)- Development Methods

Questions

1. In your own words and using referenced quotes describe the difference between organic growth, merger & acquisition and strategic alliance.
2. Give an example of a company that has grown through a) organic growth, b) merger or acquisition and c) strategic alliance
3. Briefly discuss the merger between Britvic and AG Barr. What advice would you give to the new Board?

Organic growth

Expansion of a firm's operations from its own (internally generated) resources,without resorting to borrowing or acquition of other firms.- Business dictionary

In other words, Organic growth represents the true growth of a company i.e. it shows how well the organization has managed its internal resources to increase profit. It also represents the effectiveness of the manager and the management team.

Example: General electrics.

Merger

The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. - Investopedia

In other words, merger happens when two companies become a single new company.In mergers, the firms are usually of same size. The newly formed company has new stocks.

Example:Sony and Ericsson, HP and Compaq

Acquisition

A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both.- Investopedia

In other words, Acquisition happens when a company takes over another and becomes the new owner of that company. In acquition, the company that is taken over still exist as an independent legal company but is controlled by the company that acquired it.

Example: News Corp.'s acquire Dow Jones, SPSS acquition by IBM

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.- Business dictionary

In other words, Strategic alliance happpen when two companies decide to share resources when working on a mutually beneficiary project. Each company still maintain their autonomy. Strategic alliance helps the companies to expand into new markets, gain competitive advantage.

Example: A apparel manufacturer may form strategic alliance with apparel retailer to ensure consistent quality

Merger Between Britvic and AG Barr

The deal between Britvic and barr is structured as acquisition with Barr owing 37% of share.

With the two giant companies of UK merging together to form AG Barr and Britvic, there'll be only one company in competition with them i.e. Coke.

Positive and Benefits:

• This deal will result in annual cost saving of 23 per cent of combined operating profit which seems a great deal.
• It will help both the companies fight competition with companies like COKE
• Barr will also be linked to Pepsi through Britvic which is pepsi's bottler.
• Barr has the management expertise that Britvic lacks 
• There will be more cash flow to cover Britvic’s £600m of net debt.

Negatives and potential risks:

• The French may not accept Barr drinks
• Competition commission and anti-trust authority are concerned that  the merger it will give them pricing advantage in the market as there will be only 2 major players.

Reference:

Acquisition, Investopedia. Available at: http://www.investopedia.com/terms/a/acquisition.asp#ixzz2NZwqvaLT [Accessed on: 14 March, 2013]

Merger, Investopedia. Available at: http://www.investopedia.com/terms/m/merger.asp#ixzz2NZvymUv5 [Accessed on 14 March, 2013]

Organic growth, Business dictionary. Available at: http://www.businessdictionary.com/definition/organic-growth.html#ixzz2NZuCZrqd [Accessed on: 14 March, 2013]

Strategic Alliance, Business dictionary. Available at: http://www.businessdictionary.com/definition/strategic-alliance.html#ixzz2NZxnKRb2 [Accessed on: 14 march, 2013]