LECTURER Week 5 (8/10/2013)

Chapter 5: The Five Generic Competitive Strategies: Which One To Employ?

          Low-Cost Provider

A company must do a better job than rivals of cost-effectively managing value chain activities or it must find innovative ways to eliminate cost-producing activities. Low-cost provider strategies work particularly well when the products of rival sellers are virtually identical or very weakly differentiated and supplies are readily available from eager sellers. Air Asia is among one of company that use low-cost provider strategy. How Air Asia could manage to offer the cheaper airfares? It is because Air Asia not provided with luggage, potter and a passenger cannot choose seat. Air Asia has reduced the cost to pay for workers with provides the online check in and booking.

          Broad Differentiation

Seek to produce a competitive edge by incorporating attributes and features that set a company product or service offering apart from rivals in ways that buyers consider valuable and worth paying for. Successful differentiation allows a firm to command a premium price for its product, increase unit sales and gain buyer loyalty to its brand. For example, Apple’s company is a one that uses a broad differentiation strategy by targeting a range of customers from sophisticated power users to in experienced new users. The firm differentiates is on exceptional design, consistent quality, and outstanding customer service. Apple’s goal is to provide customers with the best personal computing and experience.

          Best-Cost Provider

Combine a strategic emphasis on low cost with a strategic emphasis on more than minimal quality, service, features, or performance. The aim is to create competitive advantage by giving buyers more value for the money. It is an approach that entails matching close rivals on key quality, service, features, performance attributes and beating them on the costs of incorporating such attributes into the product or service. A best-cost provider strategy works best in markets where buyer diversity makes product differentiation the norm and where many buyers are also sensitive to price and value.

         Focused Low-Cost And Focused Differentiation

A focus strategy delivers competitive advantage either by achieving lower costs than rivals in serving buyers comprising the target market niche or by developing specialized ability to offer niche buyers an appealingly differentiated offering than meets their needs better than rival brands. A focused strategy based on either low cost or differentiation becomes increasingly attractive when the target market is big enough to be profitable and offers good growth potential.

Deciding which generic strategy to employ is perhaps the most important strategic commitment a company makes. It tends to drive the rest of the strategic actions a company decides to undertake and it sets the whole tone for the pursuit of a competitive advantage over rivals.

LECTURER Week 4 (1/10/2013)

Chapter 4: Evaluating a Company Resources, Capabilities and Competitiveness.

In this chapter we discuss the techniques of evaluating a company’s internal situation. There are six key questions to consider in analysis and evaluating resources, capabilities and competitive strength:

    1)   How well is the firm’s present strategy working?

The best indicators of how well a company’s strategy is working are whether the company is achieving its stated financial and strategic objectives and whether the company is an above-average industry performer. The stronger a company's current overall performance, the less likely the need for radical strategy changes and the weaker a company's performance or the faster the changes in its external situation which can be gleaned from industry and competitive analysis. In Malaysia, the currently product that become the market leader is such as Colgate, Maggie, Shell, Nestle and so forth.

    2)   What are the firm’s competitively important resources and capabilities?

A company’s business model and strategy must be well-matched to its collection of resources and capabilities. An attempt by management to create and deliver customer value in a manner that depends on resources or capabilities that are deficient and cannot be readily acquired is unwise and positions the company for failure. A company’s competitive approach requires a tight fit with a company’s internal situation and is strengthened when it exploits resources that are competitively valuable, rare, hard to copy, and not easily trumped by rivals’ equivalent substitute resources. In fact, many companies pursue resource-based strategies that attempt to exploit company resources in a manner that offers value to customers in ways rivals are unable to match.

     3)   What are the company's resource strengths and weaknesses, and its able to seize market opportunities and nullify external threats?

A SWOT analysis provides an overview of a firms situation and is an essential component of crafting a strategy tightly matched to the company's situation. The two most important parts of SWOT analysis are drawing conclusions about the company's overall situation and acting on those conclusions to better match with the company's strategy. A company's resource strengths, competencies, and competitive capabilities are strategically relevant because they are the most logical and appealing building blocks for strategy and the resource weaknesses are important because they may represent weakness that need correction. External opportunities and threats come into play because a good strategy necessarily aims at capturing a company's most attractive opportunities and at defending against threats to its well-being.

     4)   Are the company's prices and costs competitive?

One telling sign of whether a company's situation is strong or precarious is whether its prices and costs are competitive with those of industry rivals. Value chain analysis and benchmarking are essential tools in determining whether the company is performing particular functions and activities cost-effectively, learning whether its costs are in line with competitors, and deciding which internal activities and business processes need to be improvement. Value chain analysis teaches that how competently a company manages its value chain activities relative to rivals is a key to building a competitive advantage based on either better competencies and competitive capabilities or lower costs than rivals. The example company who use the concept of value chain is Dell. The component of Dell comes from all around the world because they seek supply from the country who can supply with lowest price.

     5)   Is the firm competitively stronger or weaker than key rivals?

How the company matches up against key rivals on industry key success factors and other chief determinants of competitive success and why the company has a competitive advantage or disadvantage. These indicate where a company is competitively strong and weak, and provide insight into the company's ability to defend or enhance its market position. When a company has important competitive strengths in areas where one or more rivals are weak, it makes sense to consider offensive moves to exploit rivals competitive weaknesses. When a company has important competitive weaknesses in areas where one or more rivals are strong, it makes sense to consider to moves to reduce the weakness.

    6)   What strategic issues and problems merit front-burner managerial attention?

The last question defines about Strategic “How to” Issues and Strategic “Should We” Issues. Zeroing in on the strategic issues a company faces and compiling a list of problems and roadblocks creates a strategic agenda of problems that merit prompt managerial attention. It involves using the results of both industry and competitive analysis and company situation analysis to identify a "worry list" of issues to be resolved for the company to be financially and competitively successful in the years ahead. The purpose is to identify the specific issues or problems that management needs to address. Actual deciding on a strategy and what specific actions to take is what comes after the list of strategic issues and problems that merit front-burner management attention is developed.

LECTURER WEEK 3 (24/9/2013)

Chapter 3: Evaluating A Company’s External Environment. 

We get a lot of new information. In this chapter, I know about PESTEL analysis. PESTEL is a company’s external environments that influence the organisational. It is used to describe an analysis that is used for determining the opportunities and risks of global expansion. PESTEL issues often differ domestically and even more so internationally. As a company who looks to leverage the advantages that the democratisation of technology, information and finance, and grow beyond the national borders that previously confined them, it is imperative that they consider a PESTEL analysis that provides a strong framework to set the stage to develop specific tactics to mitigate the risks involved in executing their vision in unfamiliar environments.

PESTEL analysis focuses on the six principal components which consist of:

Political factors

We can see how far government intervention on the system of economic. The government intervention include in matters like tax policy, fiscal policy, labour law, tariffs, the political stability and trade restrictions. These include goods and services which the government wants to provide or to be provided or do not want of both. Moreover, governments have great influence on the health, education, and infrastructure of a nation.

Economic conditions

Include the economic growth, interest rates, exchange rates and the inflation rate, unemployment rate and etc. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firms cost of capital and how far a business grows and expands. Exchange rates can affect the costs of exporting goods and the supply and price of imported goods in an economy.

Sociocultural forces

Include the cultural aspects, societal values, attitudes and also include demographic factors such as the population growth rate and age distribution. Sociocultural forces vary by locale and change over time. For example, a population may imply a smaller and less-willing workforce can cause a increasing the cost of labour. Furthermore, companies may change various management strategies to adapt to these social trends such as recruiting older workers.

Technological Factors

A technological aspects such as R&D activity, automation, technology incentives and the rate of technological change and also government control over the Internet that have the potential for wide-ranging effects on society. Technological change can encourage the birth of new industries such as based on nanotechnology and furthermore, technological shifts also can affect costs, quality, and lead to innovation.

Environmental forces

This include ecological and environmental aspects such as weather, climate, and climate change, which may affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer. They may have an indirect but substantial effect on other industries such as transportation and utilities.

Legal and regulatory factors

These include the regulations and laws include discrimination law, consumer law, employment law, and health and safety law and so on. These factors can affect how a company operates, the costs and the demand for their products. Others, such as minimum wage legislation, affect certain types of industries (low-wage, labour-intensive industries) more than others.

In tutorial class, we were asked by the tutor who is the new giant economy? We state various answers such as United States, Hong Kong, United Kingdom, Switzerland and other. Actually the new giant economy was called:

Brazil

Russia

India

China
Korea

Assalmualaikum, oh no!!. i'm really sorry. i made a wrong, before this i post at the wrong place(site). Erm..I think I'm too late to share at this blog what i have learn for strategic management... So i like to start back from my first lecturer.

First lecture (10/09/13)

Today is the first day I start the class for this semester. The class started at 8am. Wow… it’s in early morning, I’m very excited. This class is for subject Strategic Management. Miss Ummi Salwa bt Ahmad Bustamam as our lecturer is very active. She doesn’t like to just stay in front of us and we just to hear her. So, she likes to go around in the class and ask various questions. As usual for the first lecture, a lecturer will brief to the entire student about course outline, assessment, final exam, book that will use and an introduction about the subject. Miss Ummi informs that our class tutor would be conducted by Puan Siti Nurul Huda Nordin.

Miss Ummi explain that this subject will be 60% for Continuous Assessment and the final exam is 40%. Continuous Assessment would consist of Teamwork assignment, Individual assignment, Participation (tutorial + case study), online forum, online quiz, Peer-review and Presentation. Miss Ummi encourages us to read more article and news about business from any source like the star, news strait time and others. She also wants us to read about politics, socials and etc. 

Before she ended the class for today, she ask us to form ten groups and a group consist of 15 people. And then she orders us to build tower from newspaper and the newspaper is provide by her. What we have to do is to build the tall tower based on our own material and creativity. We were free to use any kind of material such as stapler, glue, tape and so on. All of us were given 10 minutes to finish the tower and the evaluation was to find both the highest and the strongest tower. The tower that our group build is the last second tower that fall because our tower not strong enough. After that, she ask us what the conclusion what we have for that activities. For my own view, we had to have plan strategy before to do something. This will give us the efficient plans.

Second lecture (17/09/13)

This week, Miss Ummi covers for two topics which is the nature of strategic management and the business vision and mission for the lecturer.

First, the nature of strategic management is about the introduction of strategic management. Strategic management can be describing as the art and science of formulating, implementing and evaluating cross-functional. The example of cross-functional is human resource department, financial department, EPS and others. The different between strategic management and planning is planning only about strategy formulation not include implementing and evaluating cross-functional.

Secondly, the business vision and mission. A vision statement should answer the fundamental question, ‘’what do we want to become?’’. Vision is also can be said as our own objective that we want to achieve. Meanwhile, mission is synonymous with the question ‘’what is our business?’’ and it is as the tools that assist get the vision. There are many names for mission such as a statement of philosophy and others.

Anyway, in tutorial class, we discuss more detail about our vision and mission to USIM. My vision come o USIM is to finish my study and separate what I learn to society. So, for my mission to achieve that vision is I should gain as much as possible a knowledge and collect more experiences. For get a lot of knowledge and experience, I have to attend a various programs that can help to increase my knowledge for something new. OH, so interesting! (^_^)