Example Case Studies for Questions of Business Strategies

To what extent was Honda’s apparent strategy deliberate and/or emergent?

Strategy is the direction and scope of an Organization over the long term which achieves advantage for the organization through its configuration of resources within a changing environment and to fulfill stakeholder expectations. Deliberate Strategy is planned before hand i.e. foreseen and this are termed as being proactive. Emergent Strategy arises at the point of need and this is termed as being reactive.

Extents to which Honda’s apparent strategy were Deliberate are:

The advertisements to remove the bad publicity of those who used the motorcycle and called themselves ‘Satan’s slaves’

By entering the market region by region

They targeted specific community climate conducive like the Los Angeles where there was a large 2nd and 3rd generation Japanese.

The penetration pricing strategy $250 versus $1,000 – $1,500

They promoted bigger engines 250cc and 350cc

They established a subsidiary instead of distributors.

Extents to which Honda’s apparent strategy was Emergent:

They airlifted the machine to Japan

Errands using 50cc super clubs.

The university student’s project that was used to remove the bad publicity.

Outlets for small 50cc motorcycles sporting good stores.

Conclusion:

Honda seemed to use both strategies i.e. emergent and deliberate but in this case it seemed more emergent supported by the 3president of American Honda “In truth, we had not a strategy other than the idea of seeing if we could sell something in the United States.”

Reference:

According to Johnson & Scholes www.tutor2u.net/business/strategy/what_is_strategy.htm

www.oppapers.com/essays/The-Honda-Effect/353454

Greenwich Case Study 1: The Honda Effect.

CASE STUDY NO.2 LAURA ASHLEY

Q1. Map Laura Ashley’s stakeholders using a power/interest matrix.

1Stakeholder is any individual or an organization that has a stake (interest) in the success of a business. They directly or indirectly influence decision making in an organization. These can be categorized into internal and external stakeholders.

Examples of stakeholders in Laura Ashley’s are:

Internal

C.E.O’s

Founder (Beatrix Potter & Marjorie Scardino)

Customers

Rescue team

Board of Directors

MUI (Largest shareholder) Malayan United Industries

Management

External

Competitors

Franchisee

2The Power/Interest Matrix describes the context within which a strategy might be pursued by classifying stakeholders in relationship to the power they hold and the extent to which they are likely to show interest in supporting or opposing particular strategy.

Power/Interest Matrix (Gardner et al (1986)

3

H Level of Interest L

L

power

H

Minimal Efforts

Mark & Spencer, analyst

Keep informed

Management, C.E.O, other shareholders, competitors, Franchisee

Keep satisfied

Customers, employees

Key players

MUI, Founder, Rescue team, Board of Directors

Group A stakeholders requires minimal effort and monitoring; have low interest and low power.

Group B stakeholders should be kept informed

– They can be important to influence the more powerful stakeholder; their interest is high but low power.

Group C stakeholders should be kept satisfied

– They are powerful but their level of interest is low.

Group D stakeholders are the key players

– They are both powerful and highly interested in the strategies of the organization.

Reference:

Power/Interest Matrix (Gardner et al (1986)

www.12manage.com/methods_stakeholder_mapping.html,

www.oppapers.com/subjects/power-interest-matrix-stakeholders

www.answers.com/topic/laura-ashley

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CASE STUDY 3: APPLYING A BALANCE SCORECARD

Q1. Why do you think Organizations often find the Balance Scorecard difficult to implement in practice?

1Balance Scorecard is a framework for setting and monitoring business performance or a tool used to measure a firm’s activities in relation to its vision along with its strategies. It provides managers with a complete knowledge of the business performance.

Balance Scorecard was coined by Kaplan and Norton (1993).

Characteristics of a Balance Scorecard:

Customer concerns

– These include time (Lead time, time to quote etc), quality, performance, service and cost.

Internal measures

– These should be based on the business processes that have greatest impact on customer satisfaction.

Financial measures

– These are traditional measures such as turnover, costs, profitability and return on capital employed.

Learning and growth: innovation and staff development – innovation can be measured by change in value through time.

2Limitations of a Balance Scorecard:

Requires great care when selecting the measures

– Following recent Shell’s crisis concerning the overstatement of its reserves, there was suspicion that the inclusion of reserves in the balance scorecard was partly to blame.

It can have a bad impact on the business if measures are wrongly selected.

It seems to be more theoretical than practical

– ‘Most companies are having significant difficulty taking BSC from concept to reality’.

It’s expensive and time consuming.

There are no standards for which ones, the number of measures required to make it effective.

Resistance to change

– There was a lot of resistance to the academic concept.

Reference:

en.wikipedia.org/wiki/Balanced_scorecard – Nov 2010, www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx

Case Study 3 – Applying Balance Scorecard.

CASE STUDY 4: FIAT: REBIRTH OF A CAR MAKER

1The difference between year 2004 and 2008 is illustrated as follows in the below SWOT analysis table.

SWOT – Stands for Strength, weakness, opportunity and Threats.

2This is an analysis that that sets out to focus on the Strengths, Weaknesses, Opportunities and Threats facing a business at a given time.

Strengths and Weaknesses are the internal element while the external elements are the Opportunities and threats.

2004

STRENGTHS

Fiat was a well known Brand before its drop so it was easy to revive and market the brand.

Fiat had a wide variety of car models e.g. Grande Punto, Alfa.

There was experienced workforce who had been long in the Company.

WEAKNESSES

There was poor management structure, was tall and hence bureaucracy within the organization.

There were ugly and unstylish cars in the portfolio.

The group’s net debt had risen and cash was flowing out in an alarming rate.

OPPORTUNITIES

They could introduce new model e.g. Panda

THREATS

The competition from Rivals i.e. other car manufacturers.

2008

STRENGTHS

Technology was good, use of computers and computerized systems.

Stylish cars and fuel efficient cars.

They were the market leaders in Brazilian market.

WEAKNESSES

They had limited resources.

Poor performance in China

OPPORTUNITIES

The terminable contracts e.g. for the G.M

The Joint venture with TATA & SAIC

THREATS

Competition from Peugeot, Citroen and Volkswagen.

The new European Rule on Carbon Dioxide emission.

2008 performance was much better from compared to the year 2004 because there was room for improvement on the Weaknesses.

Reference:

Greenwich case study on Fiat; Rebirth of a car maker

www.wikipedia.org/wiki/SWOT_analysis, www.marketingteacher.com/lesson-store/lesson-swot.html

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CASE STUDY 5: THE PROFITABILITY OF UK RETAILERS

Q1. Are British Supermarkets more profitable than their European and US Supermarkets?

1Profitability is productivity of the Company when Total Revenue less Total Cost gives a positive figure. Therefore Profit = TR – TC

2The following are circumstances which convince that British Supermarkets are more profitable than the European and US.

As illustrated in the case, The Profit margins on sales in Britain rose steadily over the decades until the early 1990’s and have rose steadily over the decades and have consistently been above those for Continental and US operators.

The U.K. margins are the result of massive buying power exerted by the Supermarkets groups and also the use of Oligopoly power to impose on consumers a higher-than-normal price level and hence the increase in demand.

The other reason is the British firms tend to be more centralized than some continental competitors which help in reducing costs. Labor costs are also lower in the UK both because of lower social costs borne by employers and because in Britain the proportion of part time labor in supermarkets is higher than elsewhere.

However on the other hand, the costs of buying sites and building superstores are considerably higher than in other countries; not all costs favor the British.

The study of the years 1988-93 showed an average ROCE, whereby six British Companies were rated lowest with 16% compared to the rest of the European and U.S. companies.

Conclusion:

All in all the British Supermarkets seems to be profitable than the European and the U.S.

Reference:

www.oppapers.com/essays/Profitability-Of-Uk-Retailers

Greenwich case study 5 : The Profitability of U.K. Retailers.

STUDY CASE 6: THE NOVOTEL VALUE CHAIN

Q1. What are Novotel’s competitive advantages?

1Competitive advantage is a Company’s ability to perform in one or more ways that competitors cannot or will not match/copy.

2It is a means by which a business seeks to create and sustain a superior performance over its rivals/competitors.

3According to the case, the following are the Novotel’s competitive advantages:

Hospitality concept; Novotel use the layout of their hotel to lead the customer immediately to the hospitable public spaces of bar and restaurants which are always on the entry floor adjacent to reception. This means that the customers enjoy the warmth of the welcome and a sense of belonging.

Service delivery is dependent on the quality of the service encounter which is as a result of staff exchanges contributing to multi-culture which are essential to the philosophy of ‘welcome’, Staff retention which motivates them in an industry where labor turnover is high and responsiveness which ensures international mix of hotel staff to interact sympathetically with an international client mix.

Marketing; is extensive, sophisticated and linked closely to distribution system, Novotel operates between both the individual and co operate business and leisure markets.

Partnership programmes; Novotel links them with deepening relationship marketing, i.e. purchasing efficiencies are thus linked to internal and external.

Management processes; enables standardized levels to be delivered at all locations worldwide hence standardization in basic housekeeping and maintenance functions. Training of staff and the developed approach to staffing described as multi skilling.

Conclusion: The competitive advantages of Novotel are intangibles and tangible but are thus hard to be copied / matched by their rivals.

Reference:

1. www.kosmix.com/topic/Philip_Kotler – Nov. 2010

2. Hamel and Prahald (1990) Fundamentals of Strategy

www.netmba.com/strategy/value-chain – Nov 2010

3. Greenwich Case Study 6

CASE STUDY 7: THE LEVI’S PERSONAL PAIR PROPOSAL

Q3. What are the Levi’s unique resources and core competences?

1Core Competences relates to experience and skills acquired over many years that means a business does some things exceptionally well and also better than its competitors. The three conditions that define a Core competence are:

It provides cost benefits

It is hard for competitors to imitate

It can be leveraged/applied widely, to many product markets.

2The following are the Levi’s unique resources and core competence:

The Brand name ”Levi’s’ – It had acquired a Hollywood cachet, as the likes of e.g. Mariln Monro, James Dean, Marlon Brando etc. The jeans would become a political statement and an American Icon, as all jeans soon became known generically as “Levi’s”.

Mass customization – Respond to specific customer needs for flexibility and greater choice. This was achieved through the personal pair joint venture.

Technology – Through the joint venture with Custom Clothing Technology Corporation (CCTC), the potential of its technology the two companies could enter the mass customization arena. That is, they manufacture products in a “just-in-time” fashion to respond to specific customer requests.

“Social conscience” – they cared and considered the welfare of their staff, they wanted to avoid being seen as exploiting disadvantaged workers, it was a leader in providing generous salary and benefits packages to its employees.

Reference:

Hamel, G. and Prahald, C.K. 1990 “The core competence of the corporation” Harvard Business Review, May-June.

Greenwich Case Study 7 ‘The Levi’s personal pair proposal’

CASE STUDY 8: THE VIRGIN GROUP

Q2. Are there any relationships of a strategic nature between the businesses within the Virgin Group?

Strategic nature – This are Strategic Alliances which results into two or more Companies coming together for the purpose of running businesses together to make profits, this could be through Joint Ventures, Franchise, acquisitions and consolidation.

2There were relationships of strategic nature between the businesses within the Virgin Group; in 2001, Branson described the Virgin Group as ‘a branded venture capital house’ investing in a series of brands and ventures to expand them at the expense of profits. The use of partners provided flexibility and limited risk.

Joint ventures- Virgins expansion into new markets had been through a series of joint ventures whereby Virgin provided the brand and its partner provided the majority of capital.

Virgin built a business in the wireless industry by forming partnerships with existing operators to sell mobile services under the Virgin brand name.

Acquisitions – by 2003 Virgin had, with mixed results taken on one established industry after another, from British Airways to Coca-Cola and railways.

Virgin Blue, a low-cost airline established as a joint venture with an Australian Logistics Company, Patrick has also been a success.

Franchise – According to the Rail Authority’s Review in 2000, West Coast were ranked 23rd and 24th of 25 train operating franchises.

The US expansion was dependent on the partial flotation of a raft of existing businesses and the success of s joint venture with Sprint, the fourth biggest mobile telecom operator in the USA.