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business
essentials of strategic management
Questions and Answers of
Essentials Of Strategic Management
=+ LO5. Gain an understanding of the concepts of corporate social responsibility, corporate citizenship, and corporate sustainability and how
=+ LO4. Become familiar with how companies that operate in countries with different cultures and ethical norms ensure a consistent commitment to business ethics.
=+ LO3. Gain an understanding of the costs of business ethics failures.
=+ LO2. Recognize conditions that give rise to unethical business strategies and behavior.
=+Understand why the standards of ethical behavior in business are no different from the ethical standards and norms of the larger society and culture in which a company operates.
=+ 3. Assuming your company has the option to diversify into other products or businesses of your choosing, would you prefer to pursue a strategy of related or unrelated diversifi cation? Why?
=+indicate what kinds of strategic fi t benefi ts could be captured with these resource strengths?
=+List as many resource strengths as you think are transferable to other businesses and also
=+products/businesses, what specifi c resources does your company have that would make it attractive to diversify into related businesses?
=+ 2. Irrespective of whether your company has the option to diversify into other
=+If the diversifi cation opportunities are related, what precisely are the strategic fi t relationships that are available for capture?
=+1. If your company can diversify into multiple products/businesses, are the diversifi cation opportunities best characterized as related or unrelated? Explain.
=+these strategic fi t opportunities, if any, more within each of the fi ve business groupings or do they (also?) cut across the fi ve business groupings?Explain.
=+c. Do you see any strategic fi t opportunities in GE’s business lineup? Are
=+b. Is GE more accurately categorized as a dominant business enterprise or a broadly diversifi ed conglomerate or something else?
=+a. Is G E’s di versifi ed business lineup best characterized as unrelated diversifi -cation or a combination of related and unrelated diversifi cation?
=+stations, and theme parks—revenues of $17.0 billion in 2008.
=+(CNBC, MSNBC, Bravo, Sci-Fi Channel, Sleuth, USA Network), Universal Pictures, Universal Studios Home Entertainment, various television production operations, several special interest Internet
=+ • NBC Universal: Owns and operates the NBC television network, a Spanishlanguage network (Telemundo), several news and entertainment networks
=+electric power generation equipment, power transformers, high-voltage breakers, distribution transformers and breakers, capacitors, relays, regulators, substation equipment, metering
=+ • Energy Infrastructure: Gas turbines for marine and industrial applications,
=+systems—revenues of $11.7 billion in 2008.
=+ • Consumer & Industrial: Consumer appliances and electrical equipment;industrial automation hardware and software, controls, sensors, and security
=+and passenger locomotives, medical imaging and information technologies, medical diagnostics, patient monitoring systems, disease research, drug discovery and biopharmaceuticals—revenues of
=+ • Technology Infrastructure: Jet engines for military and civil aircraft, freight
=+fi nancing programs and fi nancial services provided to corporations, retailers, and consumers in 35 countries)—revenues of $67.0 billion in 2008.
=+ • Capital Finance: Commercial and consumer fi nance (loans, operating leases,
=+ 3. General Electric recently organized its broadly diversifi ed lineup of products and services into the following business groups:
=+If need be, visit the company’s Web site (www.lancastercolony.com) to obtain additional information about its business lineup and strategy.
=+ • Glassware, plastic ware, coffee urns, and matting products marketed to the food-service and lodging industry
=+ • Candle-lite brand candles marketed to retailers and private-label customers chains
=+Inn Maid noodles; New York and Mamma Bella garlic breads; Reames egg noodles; Sister Schubert’s rolls; and Romanoff caviar
=+dressings; T. Marzetti and Chatham Village croutons; Jack Daniels mustards;
=+Lancaster Colony’s business lineup• Specialty food products: Cardini, Marzetti, Girard’s, and Pheiffer salad
=+Colony shown on the next page and see if you can confi rm why it is pursuing an unrelated diversifi cation strategy.
=+ 2. The de fi ning characteristic of unrelated diversifi cation is few competitively valuable cross-business relationships. Peruse the business group listings for Lancaster
=+ • Prescription d rugs• Prosthetic an d o ther me dical d evices• Surgical an d h ospital p roducts• Accuvue c ontact l enses
=+ • Women’s health and personal care products (Stayfree, Carefree, Sure &Natural)• Neutrogena an d Aveeno s kin c are p roducts• Nonprescription drugs (Tylenol, Motrin, Pepcid AC, Mylanta,
=+ • La Ro che–Posay an d V ichy L aboratories d ermocosmetics Johnson & J ohnson• Baby products (powder, shampoo, oil, lotion)• Band-Aids an d o ther fi rst-aid products
=+ • Redken, Matrix, L’Oréal Professional, and Kerastase Paris professional hair care and skin care products• Ralph L auren an d G iorgio Armani f ragrances• Biotherm s kincare p roducts
=+ • Maybelline, Lancôme, Helena Rubenstein, Kiehl’s, Garner, and Shu Uemura cosmetics• L’Oréal and Soft Sheen/Carson hair care products
=+technology transfer, (2) combining related value chain activities to achieve lower costs, and/or (3) leveraging use of a well-respected brand name.Outback Steakhous e• Outback S teakhouse•
=+you should consider whether there are cross-business opportunities for (1) skills/
=+1. See if you can identify the value chain relationships which make the businesses of the following companies related in competitively relevant ways. In particular,
=+ LO5. Become familiar with a company’s main corporate strategy options after it has diversifi ed.
=+ LO4. Gain command of the analytical tools for evaluating a company’s diversifi cation strategy.
=+ LO3. Become aware of the merits and risks of corporate strategies keyed to unrelated diversifi cation.
=+produce cross-business strategic fi ts capable of delivering competitive advantage.
=+ LO2. Gain an understanding of how related diversifi cation strategies can
=+strategy to take geographic differences in import tariffs or import duties into account?
=+ 5. To what extent, if any, have you and your co-managers adapted your company’s
=+strategy to take shifting exchange rates into account? In other words, have you undertaken any actions to try to minimize the impact of adverse shifts in exchange r ates?
=+ 4. To what extent, if any, have you and your co-managers adapted your company’s
=+ 3. Which one of the following best describes the strategic approach your company is taking in try to compete successfully?• Think l ocal, ac t l ocal• Think g lobal, ac t l ocal• Think g
=+ 2. Which of the strategies for competing in foreign markets is your company employing?
=+ 1. Is the international market arena in which your company competes characterized by multicountry competition or global competition? Explain why.
=+an international or global market arena. If your company competes only in a single country, then skip the questions in this section.
=+The questions below are for simulation participants whose companies operate in
=+herogroup.com/alliance.htmand prepare a two-page report that outlines the group’s successful use of international strategic alliances
=+segments and annual revenues of $3.2 billion in fi scal 2006. Many of the corporation’s business units have utilized strategic alliances with foreign partners to compete in new product and
=+3. The Hero Group is among the 10 largest corporations in India with 20 business
=+strategy or a global strategy seem to have more appeal? Why?
=+d. If your company’s product is apparel and footwear, would a multicountry
=+sense to pursue a multicountry strategy or a global strategy? Why?
=+c. If your company’s product is large home appliances such as washing machines, ranges, ovens, and refrigerators, would it seem to make more
=+multicountry strategy seem to be more advisable than a global strategy?Why?
=+b. If your company’s product is dry soup mixes and canned soups, would a
=+a. If your company’s product is mobile phones, do you think it would make better strategic sense to employ a multicountry strategy or a global strategy?Why?
=+the issues you face is whether to employ a multicountry strategy or a global strategy.
=+2. Assume you are in charge of developing the strategy for a multinational company selling products in some 50 different countries around the world. One of
=+it seem the company has avoided developing production facilities outside the United States?
=+at www.harley-davidson.com related to its international operations. Why does
=+1. Harley-Davidson has chosen to compete in various country markets in Europe and Asia using an export strategy. Read the sections of its latest annual report
=+ LO5. Gain an understanding of the unique characteristics of competing in emerging markets.
=+ LO4. Understand how multinational companies go about building competitive advantage in foreign markets.
=+ LO3. Gain familiarity with the strategic options for entering and competing in foreign markets.
=+ LO2. Learn how and why differing market conditions across countries infl uence a company’s strategy choices in international markets.
=+Do any of these fi rst-mover options hold competitive advantage potential?
=+4. What options for being a fi rst-mover does your company have?
=+ what do you see as the pros and cons of outsourcing?
=+3. Is your company able to engage in outsourcing?
=+ 2. Is yo ur c ompany v ertically i ntegrated? E xplain.
=+If so, which rival companies would you like to acquire or merge with?
=+1. Does your company have the option to merge with or acquire other companies?
=+with fi rms with specialized services. In addition, describe what value chain activities the companies have chosen to outsource. Do any of these outsourcing agreements seem likely to threaten any
=+companies in different industries that have entered into outsourcing agreements
=+ 3. Go to www.google.com and do a search on “outsourcing.” Identify at least two
=+ What are the benefi ts and liabilities of Bridgestone’s vertical integration strategy?
=+ What segments of the industry value chain has the company chosen to perform?
=+Information and Data Library links. To what extent is the company vertically integrated?
=+ 2. Go to www.bridgstone.co.jp/english/info and review information about Bridgestone Corporation’s Tire and Raw Materials operations under the Corporate
=+resource strengths and competitive capabilities?
=+database, perform a search on “acquisition strategy.” Identify at least two companies in different industries that are using acquisitions to strengthen their market positions. How have these
=+1. Using your university library’s subscription to Lexis-Nexis, EBSCO, or a similar
=+ •Are there influential competitors in a position to delay or derail the efforts of a first-mover?
=+Will buyers encounter high switching costs?
=+ •Will buyers need to learn new skills or adopt new behaviors?
=+ • Is new infrastructure required before buyer demand can surge?
=+•Does market take-off depend on the development of complementary products or services that currently are not available?
=+ LO7. Recognize when being a fi rst-mover or a fast-follower or a late-mover can lead to competitive advantage.
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