~corporate culture and leadership~

بسم الله الرحمن الرحيم

Assalamualaikum and salam sejahtera to readers. Without I realize, it’s getting nearer towards the end of my study. I just need to do another 2 entry regarding this S.M subject. For this entry, I’m gonna write about corporate culture and leadership:keys to good strategy execution.

What is corporate culture actually?? Corporate culture refers to the shared values, ingrained attitudes, core beliefs and company traditions that determine norms of behaviour, accepted work practice, and styles of operating. Company cultures vary widely in strength and influence. Some cultures are strong n have a big impact on a company’s practices and behavioural norms while other maybe weak and comparatively little influence on company operations.

There are healthy and unhealthy cultures that give effects on the strategy execution. Strong and healthy cultures will aid to a good strategy execution which are high-performance cultures and adaptive cultures. While the unhealthy cultures will impede a good strategy execution which are change-resistant cultures, politicized cultures, insular, inwardly focused cultures, unethical and greed-driven cultures, substantive cultures and symbolic culture.

Is that picture say the right thing? I realize that leaders are responsible for creating and driving the culture, but every employee builds culture every day. From the CEO to the receptionist, everyone affects the “20 square feet” around them through their attitude and behavior. The way every employee manages their 20 square feet of the culture and strategy is largely what determines the success of an organization. Building a culture that supports the strategy and drives performance is a journey that the company has to go through, not just an event. It really really really requires commitment & discipline over time and across the organization.

So, if before u enter any organization to work, its better if u check the background of the company first, how is their culture, how the workers attitude, is the company project good or bad culture  their surroundings.. after u have done all that, than u make ur choice and may ur choice is the right one for u k..i think that’s all for this entry. Wassalam~

~MAY ALLAH BLESS US ALL TODAY AND ALWAYS~

~corporate strategy:DIVERSIFICATION~

بسم الله الرحمن الرحيم

Salam to whom might be reading this entry right now..of course la if I’m writing in English, the topic would be on darling strategic management.hehe..today I’ll review on corporate strategy: diversification n the multibusiness company. But in a Q&A format..correct answers given under but try to answer first before u look at the answers given ok..have fun answering dear all.

1. The task of crafting corporate strategy for a diversified company encompasses is:

A. picking the new industries to enter and deciding on the means of entry.

B. initiating actions to boost the combined performance of the businesses the firm entered.

C. pursuing opportunities to leverage cross-business value chain relationships and strategic fits into competitive advantage.

D. establishing investment priorities and steering corporate resources into the most attractive business units.

E. All of these.

2. Diversification becomes a relevant strategic option when a company:

A. spots opportunities to expand into industries whose technologies and products complement its present business.

B. can leverage existing competencies and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.

C. has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits

D. can open up new avenues for reducing costs by diversifying into closely related businesses

E. All of these.

3. The three tests for judging whether a particular diversification move can create value for shareholders are

A. the attractiveness test, the profitability test, and the shareholder value test.

B. the strategic fit test, the competitive advantage test, and the return on investment test.

C. the resource fit test, the profitability test, and the shareholder value test.

D. the attractiveness test, the cost-of-entry test, and the better-off test.

E. the shareholder value test, the cost-of-entry test, and the profitability test.

4. The cost-of-entry test for evaluating whether diversification into a particular industry is likely to build shareholder value involves:

A. determining whether a newly entered business presents opportunities to cost-efficiently transfer competitively valuable skills or technology from one business to another.

B. determining whether the cost to enter the target industry will strain the company’s credit rating.

C. considering whether a company’s costs to enter the target industry are low enough to allow for good profits or so high that potential profits would be eroded.

D. determining whether the cost to enter the target industry will raise or lower the company’s total profits.

E. determining whether the cost a company incurs to enter the target industry will raise or lower production costs.

5. The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves:

A. assessing whether the diversification move will make the company better off because it will produce a greater number of core competencies.

B. assessing whether the diversification move will make the company better off by improving its balance sheet strength and credit rating.

C. assessing whether the diversification move will make the company better off by spreading shareholder risks across a greater number of businesses and industries.

D. evaluating whether the diversification move will produce a 1 + 1 = 3 outcome such that the company’s different businesses perform better together than apart and the whole ends up being greater than the sum of the parts.

E. assessing whether the diversification move will benefit shareholders due to gains in earnings per share and faster stock price appreciation.

6. Acquisition of an existing business is an attractive strategy option for entering a promising new industry because it is:

A. an effective way to hurdle entry barriers, is usually quicker than trying to launch a brand-new start-up operation, and allows the acquirer to move directly to the task of building a strong position in the target industry.

B. less expensive than launching a new start-up operation, thus passing the cost-of-entry test.

C. is a less risky way of passing the attractiveness test.

D. is more likely to result in passing the shareholder value test, the profitability test, and the better-off test.

E. offers the prospect of gaining an immediate competitive advantage in the new industry thus ensure that the diversification move will pass the competitive advantage test for building shareholder value.

7. Which one of the following is not a factor that makes it appealing to diversify into a new industry by forming an internal start-up subsidiary to enter and compete in the target industry?

A. When internal entry is cheaper than entry via acquisition.

B. When a company possesses the skills and resources to overcome entry barriers and there is ample time to launch the business and compete effectively.

C. When adding new production capacity will not adversely impact the supply demand balance in the industry by creating oversupply conditions.

D. When the industry is growing rapidly and the target industry is comprised of several relatively large and well-established firms.

E. When incumbent firms are likely to be slow or ineffective in combating a new entrant’s efforts to crack the market.

8. A joint venture is an attractive way for a company to enter a new industry when:

A. the pool of attractive acquisition candidates in the target industry is relatively small.

B. it needs better access to economies of scope in order to be cost-competitive.

C. the industry is growing slowly and adding too much capacity too soon could create oversupply conditions.

D. the firm has no prior experience with diversification and the industry is on the verge of explosive growth.

E. the opportunity is too risky or complex for a company to pursue alone, a company lacks some important resources or competencies and needs a partner to supply them, and/or a company needs a local partner in order to enter a desirable business in a foreign country.

9. Which of the following is an important appeal of a related diversification strategy?

A. Related diversification is an effective way of capturing valuable financial fit benefits.

B. Related diversification offers more competitive advantage potential than does unrelated diversification.

C. Related diversification offers significant opportunities to strongly differentiate a company’s product offerings from those of rivals.

D. Related diversification is more likely to pass the cost-of-entry test and the capital gains test than unrelated diversification.

E. Related diversification is typically more profitable than unrelated diversification, which is a major factor in helping related diversification pass the attractiveness test.

10. Strategic fit between two or more businesses exists when one or more activities comprising their respective value chains present opportunities

A. to transfer expertise or technology or capabilities from one business to another.

B. for cross-business use of a common brand name.

C. to lower costs by combining the performance of the related value chain activities of different businesses.

D. for cross-business collaboration to build valuable new resource strengths and competitive capabilities.

E. All of these.

11. What makes related diversification an attractive strategy is:

A. the ability to broaden the company’s product line.

B. the opportunity to convert cross-business strategic fits into competitive advantages over business rivals whose operations don’t offer comparable strategic fit benefits.

C. the potential for improving the stability of the company’s financial performance.

D. the ability to serve a broader spectrum of buyer needs.

E. the added capability it provides in overcoming the barriers to entering foreign markets.

12. Economies of scope:

A. are cost reductions that flow from operating in multiple related businesses.

B. arise only from strategic fit relationships in the production portions of the value chains of sister businesses.

C. are more associated with unrelated diversification than related diversification.

D. are present whenever diversification satisfies the attractiveness test and the cost-of-entry test.

E. arise mainly from strategic fit relationships in the distribution portions of the value chains of unrelated businesses.

13. A strategy of diversifying into unrelated businesses:

A. is aimed at achieving good financial fit (whereas related diversification aims at good strategic fit).

B. is the best way for a company to pass the attractiveness test in choosing which types of businesses industries to enter.

C. discounts the importance of strategic fit benefits and instead focuses on building and managing a group of businesses capable of delivering good financial performance irrespective of the industries these businesses are in.

D. concentrates on diversifying into businesses where a company can leverage use of a well-known brand name in ways that create added value for shareholders.

E. generally offers more competitive advantage potential than related diversification.

14. With an unrelated diversification strategy, the types of companies that make particularly acquisition targets are:

A. struggling companies with good turnaround potential, undervalued companies that can be acquired at a bargain price, and companies that have bright growth prospects but are short on investment capital.

B. companies offering the biggest potential to reduce labor costs.

C. cash cow businesses with excellent financial fit.

D. companies that are market leaders in their respective industries.

E. companies that are employing the same basic type of competitive strategy as the parent corporation’s existing businesses.

15. The procedure for evaluating the pluses and minuses of a diversified company’s strategy includes

A. assessing the attractiveness of the industries the company has diversified into.

B. assessing the competitive strength of each business the company has diversified into to see which ones are the strongest/weakest contenders in their respective industries.

C. ranking the performance prospects of the various businesses from best to worst and determining the priorities for resource allocation.

D. checking the competitive advantage potential of cross-business strategic fits and also checking whether the firm’s resources fit the needs of its present business lineup.

E. All of these.

16. Assessments of how a diversified company’s subsidiaries compare in competitive strength should be based on such factors as:

A. vulnerability to seasonal and cyclical downturns, vulnerability to driving forces, and vulnerability to fluctuating interest rates and exchange rates.

B. relative market share, ability to match or beat rivals on key product attributes, brand image and reputation, costs relative to competitors, and ability to benefit from strategic fits with sister businesses.

C. the appeal of its strategy, relative number of competitive capabilities, the number of products in each businesses product line, which businesses have the highest/lowest market shares, and which businesses earn the highest/lowest profits before taxes.

D. the ability to hurdle barriers to entry, value chain attractiveness, and business risk.

E. cost reduction potential, customer satisfaction potential, and comparisons of annual cash flows from operations.

17. Checking a diversified firm’s business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of:

A. whether the parent’s company’s competitive advantages are being deployed to maximum advantage in each of its business units.

B. whether the competitive strategies employed in each business act to reinforce the competitive power of the strategies employed in the company’s other businesses.

C. whether the competitive strategies in each business possess good strategic fit with the parent company’s corporate strategy.

D. the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another.

E. how compatible the competitive strategies of the various sister businesses are and whether these strategies are properly aimed at achieving the same kind of competitive advantage.

18. A “cash cow” type of business:

A. generates unusually high profits and returns on equity investment.

B. is so profitable that it has no long-term debt.

C. generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for financing new acquisitions, investing in cash hog businesses, and/or paying dividends.

D. is a business with such a strong competitive advantage that it generates big profits, big returns on investment, and big cash surpluses after dividends are paid.

E. has good strategic fit with a cash hog business.

19. Corporate strategy options for diversified companies include

A. broadening the company’s business scope by making new acquisitions in new industries.

B. divesting weak-performing businesses and retrenching to a narrower base of business operations.

C. restructuring the company’s business lineup with a combination of divestitures and new acquisitions to put a whole new face on the company’s business makeup.

D. pursuing growth opportunities within the existing business lineup.

E. All of these.

20.Corporate restructuring strategies:

A. involve making radical changes in a diversified company’s business lineup, divesting some businesses and acquiring new ones so as to put a new face on the company’s business lineup.

B. entails reducing the scope of diversification to a smaller number of businesses.

C. entail selling off marginal businesses to free up resources for redeployment to the remaining businesses.

D. focus on crafting initiatives to restore a diversified company’s money-losing businesses to profitability.

E. focus on broadening the scope of diversification to include a larger number of businesses and boost the company’s growth and profitability.

ANSWERS: EEDCE ADEBE BACAE BCCEA

MAY ALLAH BLESS US ALL TODAY AND ALWAYZ

sharing session tyme~~

بسم الله الرحمن الرحيم

Salam to all..2 days in a row I have been posting bout strategic management n it must be boring right. Still, today I will post bout S.M but it is not bout the chapter I learnt in the lecture but it is bout the sharing session with the O-SHIMA RESTAURANT’s owner, Puan Asnidar Hanim last 2 weeks.

O-Shima Restaurant is a Japanese-concept restaurant opened by Puan Hanim and her husband last 2 years. During the session, she have told us a lot bout her experience to start-up her business, the challenges, the difficulties n lot more..n don’t be surprised if I say that she is actually not a “business people” but an engineer..to me, its quite surprising bcoz it take a lot of courage to build up a business without any foundation or basic knowledge in business. Even me that take business course don’t have that courage yet…maybe later…hehe

As the sharing session past, my heart force me to go to her restaurant someday. I wanna try the food!!hungry!!my stomach have been “orchestrating” since I look at the picture of the food served there..n of course its halal ok..no worries, just go n eat..huhuhu..ok, let’s look at d pic.. confirm u all drooling la …hehe..wassalam~ 

Picture credit to:hazwansamian.blogspot.com

go go INTERNATIONALE!!

 بسم الله الرحمن الرحيم

Asslamualaikum and gud day to all.. its me cik tkah again.. jus yesterday I post about S.M subject n today I will post bout it again unfortunately. ..so, what can I do, I have delayed it bout 3 weeks, by hook or by crook or by anything I need to finish it as fast as my hand can type..hehe

Last entry we have peel (kupas) on how to strengthen the company’s position right..ok, continuing from that, today I wanna share on the topic of strategies for competing in international market.. Once we have a business and the business have expands locally, of coz we have the desire to go worldwide and generates more profit. But to do that we need strategies or the business will suffer more lost.

Why companies decide to enter foreign market?

1) gain access to new customer

2) achieve lower cost through economics of scale, experience and increased purchasing 

3) exploits more on its core competencies

4)gain access to resources n capabilities located in foreign market

5)spread its business risk across a wider market base

To set strategies to compete internationally is a lot lot lot harder than locally. Why?

1) Different countries have different home-country advantages in different industries. The company can use the Porter’s Diamond of national Competitive Advantage to identify the major factors that contribute to the competitive advantage of certain countries.(its Porter’s again..always him..why ha??is there no other person that n develop S.M framework like him?..kekeke) ok don’t mind that.

2) existence of location-based advantages to perform different value chain xtvt in different parts of the world

3) varying of political and economic risk in different countries

4) company face the risk of adverse shifts in exchange rates when operating in foreign countries

5) differences in buyer’s taste and preferences in different countries make it’s hard to customize and standardize the products and services

What are the strategic options to enter and compete in the international market?

v  Export strategies-maintain a national production-base and export goods to foreign markets

v  Licensing Strategies-license foreign firms to produce and distribute the company’s abroad. Works well for manufacturers n owners of proprietary technology

v  Franchising Strategies-best to be employed by services and retailing enterprise

v  Foreign subsidiary strategies-Establish a subsidiary in a foreign market via acquisition or internal development

v  Alliances n Joint Venture Strategies- rely on strategic alliances or j.v with the foreign com. bcoz they understand well the buying habits, customer preferences, distribution channel relationships n so on in that particular country.

What are the 3 main strategic approaches to compete internationally?

1) Multidomestic Strategy- Think Local, Act Local

2) Global Strategy- Think Global, Act Global

3) Transnational Strategy a.k.a Glocalization- Think Global, Act Local.

Ok, it is a brief explanation from me. If there are any further inquiries, kindly refer to the Crafting and Executing Strategy: The Quest for Competitive Advantage (Concepts and Cases) copyright by McGraw Hill Education…keke..wassalam~

MAY ALLAH BLESS US ALL TODAY AND ALWAYS

chapter 6~company,POWER UPPP!!

السلام عليكم ورحمة الله وبركاته

Salam sayyidul ayyam to all readers.. I think it is quite a while I did not post anything n it is ofcos la bcoz of my laziness meter is rising up until 100%..hehe..

Ok, let’s continue with our delayed strategic management sharing session.. in the last post, I have given u all some company example dat implemented the 5 generic competitive strategies..have u read? Read it before u continue with this post, pleassssseee.. ٩(̾●̮̮̃̾•̃̾)۶ hehe So, today, lets we go go go to the other topic on how to strengthening a company’s competitive position.

Once a company have settled down on which of the 5 generic strategies that the company want to use, they need to think on what other strategic actions they need to employ to complement on its strategies and strengthening its overall strategy.

What I can summarize from Dr. Ummi’s lecture, the company need to focus on 3 aspects..The strategic moves, The timing and last the scope of operations.

First, the strategic moves. They need to learn whether they need to pursue offensive or defensive strategic moves. The company should choose which one they want to employ based on the current market situation and the opportunities that they can spot on that time. If the company has the greatest competitive advantages over the targeted rival, the company is more likely to apply the offensive strategy. But, in order to apply offensive strategy the company should know which rivals to attack. If the company challenge a rival on a ground where the rivals are stronger, the company will struggle to survive. E.g of offensive strategy is the blue-ocean strategy. While if the company go into defensive strategy mode, the company need  to take actions on how to block all the rivals attack and also by giving signals to the rivals that if they still want to battle with the company, the cost will be more than its worth. This is likely either to discourage the rivals from attack at all or divert them to attack other less threatening company.

Second, the timing. When to make strategic move is as crucial as what strategy move to make. The company can choose whether to be a first-mover or late mover in the market. Both of these options have their own advantages and disadvantages. So, the company manager needs to carefully consider the pros and cons of the two options. The timing of strategy move can be one of competitive advantage for the company.so, to all the company managers …tik tok tik tok…choose wisely ok.

Third, the scope of operations. The scope of the firm refers to the range of xtvt which the performs internally, the breadth of its product and service offerings, the extent of its geographic market presence, and its mix of business. They can choose whether they want to xpand their scope horizontally (more broadly within their focal market) or vertically (up & down the value chain system from raw materials until sale and services to the end consumer). To xpand horizontally means by doing horizontal mergers or acquisitions. To go vertically is by doing vertical integration. Vertical integration can be done by doing forward or backward integration. Contrast to vertical integration strategy, the company also can do outsourcing. In current market, outsourcing is applied by many companies. Outsourcing is when the company choose to not perform certain value chain xtvt and let the outsiders’ specialist to do it.

Apart from all the strategies above, the company also have another option which is to do strategic alliances and partnerships. Strategic alliances is an agreement between 2 separate companies to work cooperatively in a certain project. Joint venture is an example of strategic alliances.

Alhamdulillah, another chapter has finished…hehe..thats  all for this entry.wassalam~

MAY ALLAH BLESS US ALL TODAY AND ALWAYS

4/5 Generic Strategies

السلام عليكم ورحمة الله وبركاته 

Hi to allsss...I feel like it have been sooooooo long i'm not posting anything. So, while I'm in the mood today, I better hurry up and post something before my mood leave me again..hehehe(✿^‿^)...In this entry, I"m gonna give a brief examples on 4 strategies out of The Five Generic Competitive Strategies by Michael E. Porter...

Actually, I'm quite amazed with Michael E. Porter..Most of the model that I learnt in Strategic Management are made by him..How he come up with all those model ha???So genius!!!..Masya-Allah ლ(╹◡╹ლ)...Ok cik Tkah, stop thinking about him and u better continue with ur entry..

1) Broad Cost Leadership Strategy

In my opinion Giant is one of the company that use broad cost leadership. Their target market is the middle class people and also Giant offers lower overall costs than other competitors such as Tesco, Carrefour, and Aeon Jusco. They strive to manage costs down, year after year but still offer good basic products with an economical prices and good value. They really keep align with their core concept which is 'Banyak Pilihan Harga Lebih Murah"..Apart from Mydin, my family also a regular customer of Giant..2 Thumbs up for Giant.(｡♥‿♥｡)...hehe

2) Focused Cost Leadership Strategy

IKEA that compete by following cost leadership strategies to serve narrow market niches generally target the smallest buyers in an industry (those who purchase in such small quantities as those industry-wide competitors cannot serve them at the same low cost). Global furniture retailer IKEA provide customers with “affordable solutions for better living” and they offers home furnishings that combine good design, function, and quality with low prices. IKEA does this by offering low-cost, modular furniture (assembled by customers), using self-service instead of having sales associates follow and pressure customers to buy. IKEA displays its products in room-like settings so that customer can view different combinations of furniture, eliminating the need for assistance from sales associates or decorators to visualize the setting and reducing employee costs. As for me, I never shop in IKEA but once I have my own house later, I want to buy some of IKEA products to be put in my house.. Insha Allah~

3) Focused Differentiation Strategy

Toyota Motor Corporation is one of the world‘s leading automakers, offering a full range of models, from mini vehicles to large trucks, and even new concept cars, each tailored to different price ranges. The key part of Toyota's differentiation strategy is the fact that the company was able to produce vehicles for many different market segments and price ranges. Toyota has a strong commitment to diversity. They understands that to continue to be successful in this day and age they must take further steps to diversify their company. 

4)Broad Differentiation Strategy

Aside from foot wear, the company boasts of products such as clothing, equipment, and even accessories. This creates the value that people are looking for in their sporting good needs.  People will pay the difference in price just to have the Nike Logo on their clothes and accessories.  The premium cost makes gives fans the the opportunity to feel like the superstars in all the different sports by wearing the same brand that the star wear such as Michael Jordan. Diversification is the key which creates the value that Nike wants its customers to have.The differentiation is designed to coerce customers that Nike’s shoes are not only superior but also a high fashion statement which is a necessary part of a lifestyle based on athletic or sporting interests

ok..sharing session for this entry has over..kindly wait for my new entry next week k~
till then.wassalam~~

~May ALLAH bless us all today and always~

Competitive Advantages~S.W.O.T~Value Chain

Assalamualaikum to all readers...(like I have lot of readers here..perasan..kekeke)

If u are notice, i'm writing in broken-english sentences. so, what post is it?? strategic management sharing moment tyme!!~~hehe

Ok, before this I have share on how to evaluate the external environment of a company, but now we gonna take a mini tour into the company's internal(resources, capabilities and competitiveness) environment chapter.In this post, I'm gonna touch on 3 main points which are:

1) the resources and capabilities of a company

2) SWOT analysis

3) the value chain system

ok, let's start our mini tour~~

Based on the picture, we can say that resources is the assets that is owned and controlled by the company. & what is capabilities? It is how the company utilizing or handling the resources that they have to perform their activities.The picture show us the interrelation between the resources, capabilities and how this two factors create competitive advantages.If the company have a strong resources but no competitive capabilities or if they have a strong resources but no skillful capabilities the company cannot create competitive advantages over other company. Bear in mind, Resource strengths and competitive capabilities are competitive assets ! We can use VRIN test to check the sustainable competitive advantage of a resources which are V= valuable, R=rare, I=inimitable, N=non-substitutable.

S.W.O.T analysis is widely used by company out there to assess their company competitiveness in the market. Strength of a company is the skills and services that a company offer, that others don't, while Weaknessess is the skills and services that others offer but the company don't. Opportunities refer to the chances that the market offers, and that the company can use for the benefits for the company, while Threats are the possible market dangers that can threaten the balance and goals of a company.

The value chain of a company shows the linked set of activities, functions, and business processes that it performs in the course of designing, producing, marketing, delivering, and supporting its product / service and thereby creating value for its customers. basically, value chain is consist of 2 types of xtvts which are primary xtvts (where most of the value for customers is created) and secondary xtvts (undertaken xtvts to assist the individuals or groups engaged in the primary xtvts).

E.g on Agriculture Industry value chain

I think that's all for this entry..till then guys..wassalam~

~may ALLAH bless us all today and always~