Hondas Apparent Strategy Deliberate Or Emergent Business Essay

Strategy is defined as a unified, comprehensive and integrated plan designed to ensure that the basic objectives of the organization are achieved. [1]  Strategies can be intended or emergent because it is more than what a company plans to do and what it actually does since there might rise accidental actions which would need changes.

The entry of Honda motorcycles into American market was intended because they established an American subsidiary which was located in Los Angeles, where there was a growing population and a climate suitable for motorcyclists. [2] 

Their initial plan to sell the 250cc and 350cc into American market was deliberate as they thought that in American Market everything was big and Luxurious. [3] 

Honda followed the deliberate strategy of developing the market region by region and market penetration from selling the motorcycles for under $250 in retail compared with $1000-$1500 for its competitors.

Then unforeseen happened when running errands with the 50cc cubs, which attracted of Sears Roebuck, Honda had to switch into selling the 50cc which was an emergent strategy as well as using an undergraduate advertising major at UCLA assignment which became an ad campaign for Honda which was “You meet the nicest people on a Honda” which helped to remove bad publicity for motorcyclists.

This shows that Honda was successful in USA because they used both deliberate and emergent strategies in its entry as they were able to learn their miscalculations and react to the unexpected.

LAURA ASHLEY’S STAKEHOLDERS MAPPING

A Stakeholder is anybody who is affected by a project. They can be internal or external.

They are crucial to the success of the organization. Neglect them and they will actively work against you, manage them well and they will actively promote you and your project [4] 

In Laura Ashley’s case the stake holders are grouped into power/interest matrix s follows;

Group A- Minimal Effort

This group includes Analysts (Interior experts, Fashion critics) retired CEO’s and Government, these pose no threat due to lack of both interest and power. Laura Ashley may require little or no effort to be focused on them. [5] 

Group B­­- Keep Informed

This category includes Laura Ashley’s customers, employees and Designers. These have a high interest, have little power to impose control therefore they can be maintained through the management of information to keep them informed of company activities.

Group C- Keep Satisfied

This group includes other shareholders of Laura Ashley’s, suppliers, competitors and Franchisers, these may not know the degree of effect they have over the company and therefore must be kept satisfied. However, they may emerge moving to group D.

Group D – Key Players

This group includes the founders (Laura Ashley, her husband Bernard), MUI (Malayan United Industries chaired by Dr Khoo Kay Peng), current CEO plus the rescue team as well as Directors.

These are key players as they are both powerful and highly interested in the strategies of the organization, therefore the company must try to satisfy this group first. [6] 

REASONS WHY ORGANISATIONS FIND IT HARD TO IMPLEMENT BALANCED SCORE CARD IN PRACTICE

The Balanced scorecard of Kaplan and Norton is a strategic approach and performance management system that enables organizations to translate a company’s vision and strategy into implementation, working from four perspectives which are financial perspective, Customer perspective, Business process perspective and Learning and growth perspective. [7] 

Many organizations find it hard to implement it into practice as for the reasons below,

One of the greatest fear is the resistance from some employees who do not see the big picture they may perceive its use as an implication that have somehow underperformed in the past and some may see as additional work. [8] 

The nature of the business may change overtime which will require the balanced scorecard to be upgraded as well, without this the company’s ability to evaluate employees might fail. [9] 

Also the Balanced score card does not give ideas to improve the performance of the company as it requires one to analyze the facts and come up with an evaluation and strategy plan. As it cannot solve all the problems of the company it must be combined with a well defined strategy to see its potential benefits.

And Lastly because of its high initial cost and time spent to develop employees, it may look like the company is not maximizing wealth because in short term it is not possible to make much money and shareholders might feel that the Balanced score card plan wastes money.

SWOT ANALYSIS OF FIAT BETWEEN THE YEARS 2004-2008

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a project /business venture. It involves specifying their objectives and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. [10] 

Below is the SWOT analysis between years 2004 and 2008 [11] 

STRENGTHS

2004

2008

Well known Brand with a historical value

A Brand with a historical Value

Variety of wide car models

Small stylish fuel efficiency car models

WEAKNESSES

Leaders who did not understand the market dynamics

Limited resources

Ageing or unappealing car models

Failed to perform well in Chinese market

OPPORTUNITIES

Introduction of new model the Panda

Divorce with GM with a $2 Billion cheque

Growth in car manufacturing markets

Joint venture with Tata and Chery to expand the market

THREATS

Financial crisis net debt had risen

Major innovation competition from Rival

Competition from Rivals

EU regulations especially on Carbon Dioxide emissions

CONCLUSION

Fiat’s position in a global market in 2008 was very good compared to 2004.Apart from a Brand with historical value, the company managed to clear the debt and the bad Partnerships with GM .It was able to employ young, creative designers for its R&D team which helped to compete with the other small models in the European market such as Citroen, Renault. And since the company was in good financial position it was able to expand the market by partnership with Tata in India as well as Chery.

INDUSTRY ANALYSIS FRAMEWORK FOR UK SUPERMARKET CHAINS PROFITABILITY

Michael Porter’s Industry analysis is a framework used to analyze industry attractiveness (profitability). It draws upon Industrial Organization economics to derive five forces that determine the competitive intensity and attractiveness of a market. [12] 

By five forces analysis the UK Supermarkets profitability is affected as per below

Threat of New entrants is moderate due to its barriers to entry, all UK groups are public owned, apart from their high initial costs, the barriers imposed by the existing supermarkets to new entrants might be difficult to compete.

Bargaining Power of Suppliers is Low because supermarkets have introduced their own label brands which can negotiate low prices in sourcing supplies, this makes suppliers fear that if not the chain will obtain supplies from other manufacturers.

Bargaining Power of Buyers is also low as the UK supermarkets have a disciplined approach to price setting and all of the products sold in supermarkets are branded with the intention of consistent quality. [13] 

Threat of substitutes is low because supermarkets have an advantage of economies of scale. The amount it pays suppliers, per-item, is a lot less than the corner shop. A corner shop can only buy a small volume of goods, at greater expense and hence high switching costs to customer.

Level of Rivalry between the supermarkets is moderate as the market is disciplined because of the agreed price setting which stops them destroying each other in a profit war. This makes the industry attractive [14] 

NOVOTEL’S COMPETITIVE ADVANTAGES

A Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry. Achieving competitive advantage strengthens and positions a business better within the business environment. [15] 

Novotel is a mid-scale hotel brand within the Accor group in 60 countries, [16] 

Novotel’s competitive advantages over its rivals includes the mentioned below

Innovation

Novotels showed creativity in maintaining universal quality standards, from the layout of their hotels to the hospitality provided, the standards were measured by introduction of the system to monitor, which was based on well understood routines and shared values developed and reinforced through induction and training programmes. [17] 

Multiskilling and Flexible working patterns

Through multiskilling Novotel develop staff as a team able to perform specific service level for each hotel task such that they could work anywhere in the Novotel international network with transferable skills. This multiskilling lead to flexible working pattern as it helps to smooth the need for certain types of staff during peak bottleneck of day or evenings that is Reception and front house activities may be carried out by same staff as serve in restaurant at peak meal times or any other activities at other times of the day. This helps to reduce core staff levels and a more resourceful workforce. [18] 

Partnership Programme

Novotel has a depeening supplier relationship (Noteworthy) which is a supplier partnership programmes linked with purchasing and learning efficiencies which helps to achieve both scope and scale economies.

HOW VIRGIN GROUP AS A CORPORATE PARENT ADDS VALUE

Corporate Parent means level of management which is above that of the business units and therefore without direct interaction with buyers or competitors.

Virgin group as a parent company adds value to its business units by providing them with the below shared core values

Virgin brand name

Virgin name is the most important asset that the group has, its means that the group is a virgin in every market it enters and since it’s the consumer’s champion, it helps the business units to overcome the barriers to entry. [19] 

Management style

Managers are given leeway to use their initiatives in their business units.

Employees are actively involved in finding ways to add value to their customers by motivating them to commit by stock options, bonuses and profit sharing. This flexibility encourages innovation and promotes the values of shared ownership and responsibility. [20] 

Joint Venture

Virgin group uses partnerships in its expansion, in most of its joint ventures the group provided the brand name where as partners provided the majority of the capital.

Each business unit is ring fenced so that lenders of one company have no rights over the assets of another. This provides flexibility and limited risks.

Innovation

The group has the ability to select its future business units, Branson as true entrepreneur is innovative. This value is shared by all senior managers, the ability to innovate and differentiate, their collective thoughts and ideas are applied directly into the businesses

EASY GROUP’S GROWTH STRATEGIS IN TERMS OF ANSOFF MATRIX

Ansoff Matrix is a tool that helps businesses decide their product and market growth

It suggests that a business’s attempts to grow depend on whether it markets new or existing product in a new or existing market. [21] 

Easy Group is a UK based company with operations across Europe

EASY GROUP’S ANSOFF MATRIX

Existing Product New

Market

Market Penetration

Easy jet- Low cost Airline-existing product in existing Market

Product Development

Easy Car-Low cost car rental-new product in existing market

Market Development

Easy jet- increased flight routes-existing product in a new market

Diversification

Easy internet café, easy money.

New Existing

Increasing Risk

Market Penetration

Easy Group increased market share through Easy Jet, the Europe’s first-low cost, no frills point to point airline which encourages business travelers to regularly use it due to its low fare [22] 

Market Development

Easy group seeks growth by selling existing product into a new market through Easy jet by increasing the number of flight routes, within 5 years it was able to cover 27 routes in Europe

Product Development

Easy group was able to introduce a new product in existing market through Easy car, a low cost car rental service which target travelers by being located near the airports as well as targeting urban dwellers by located at city centers across Europe

Diversification

New products for new markets, Easy group did this by introducing new ventures such as Easy Internet café and later on the financial service Easy money.

MANTERO SETA SPA ENTRY INTO CHINESE MARKET

Mantero Seta Spa was an Italian textile group leading the silk area in the design, production and distribution of fabrics and accessories in the mid 2000s. [23] 

Due to decline of textile industry the company decided to consider entering Chinese market

I would recommend Mantero seta spa to enter the Chinese market because,

China has a large population and the fashion market which is not matured and due to its stable economic growth the demand for the satisfaction of higher level needs is high. This will help the company to reach a larger target market and a chance to take advantage of globalization. [24] 

Chinese have displayed a desire to buy things that could make them stand out from others in a confident and even ostentatious display of wealth, they especially look for established brands marketed by foreign companies. This means large prospect customers, large demands and large productions which will give the company a large choice of creativity and change.

China’s agreement with World Trade Organization (WTO) opened the door to foreign companies with new legislation to attract investors which means low barriers to entry and China’s accountability to a system based on western rules if they play unfairly.

And lastly availability of the low labour cost, raw materials, internal transport, energy and communication. For example average labour cost is 1.5 Euros per hour in China while in Europe is 13 Euros. This will give the company high profits and sales return.