Strategy Term Project

Starbucks.

The goal of the strategy term project is to give you practical experience with the elements of strategic management. The strategy term project comprises 12 modules—one module per chapter. Each assignment requires data collection about, and analysis of, the firm you select for this study, and relating that research to the concepts discussed in each chapter.

The paper should have at least 12 full paragraphs, one for each module.

The length of the paper should be at least 12 full paragraphs in length; not including cover page and references.

Module 1: Initial Firm Selection and Review

1. Provide a brief history of the company.

2. List the top management of the firm and note what experience and leadership skills the execu- tives bring to the firm. If it is a larger conglomer- ate, list both the corporate and business managers.

3. What is the principal business model of the firm? (How does the firm make most of its profits?)

4. Search for a vision, mission statement, and state- ment of values for your chosen firm. Note that not all organizations publish these statements, so you may need to make inferences from the avail- able information. Relevant information is often available at the firm’s website (though it may take some searching) or is contained in its annual reports. You may also interview a manager of the firm or contact investor relations. You may also be able to compare the official statement with the business press coverage of the firm.

Module 2: The Strategic Management Process

1. Identify the major goals of the company. What are its short-term versus long-term goals? What resources must the firm acquire to achieve its long-term goals?

2. Trace any changes in strategy that you can iden- tify over time. Try to determine whether the stra- tegic changes of your selected firm are a result of intended strategies, emergent strategies, or some combination of both.

Module 3: External Analysis

1. Are any changes taking place in the macroenviron- ment that might have a positive or negative impact on the industry in which your company is based? Apply the PESTEL framework to identify which factors may be the most important in your indus- try. What will be the effect on your industry?

2. Apply the five forces model to your industry. What does this model tell you about the nature of competition in the industry?

3. Identify any strategic groups that might exist in the industry. How does the intensity of competi- tion differ across the strategic groups you have identified?

4. How dynamic is the industry in which your company is based? Is there evidence that industry structure is reshaping competition or has done so in the recent past?

Module 4: Internal Analysis

1. A good place to start with an internal firm analy- sis is to catalog the assets a firm has. List the firm’s tangible assets. Then make a separate list of its intangible assets.

2. Now extend beyond the asset base and use the VRIO framework to identify the competitive posi- tion held by your firm. Which, if any, of these resources are helpful in sustaining the firm’s competitive advantage?

3. Identify the core competencies that are at the heart of the firm’s competitive advantage. (Remember, a firm will have only one, or at most a few, core competencies, by definition.)

4. Perform a SWOT analysis for your firm. Remem- ber that strengths and weaknesses (S, W) are internal to the firm, and opportunities and threats (O, T) are external. Prioritize the strategic actions that you would recommend to your firm. Refer to the Implications for Strategic Leaders section on how to conduct a SWOT analysis and pro- vide recommendations building from strategic alternatives.

Module 5: Competitive Advantage Perspectives

1. Based on information in the annual reports or published on the firm’s website, summarize what the firm views as the reasons for its successes (either past or expected in the future). Search for both quantitative and qualitative success factors provided in the report.

2. Does the firm seem most focused on account- ing profitability, shareholder value creation, or economic value creation? Give quotes or information from these sources to support your view.

3. Many firms are now including annual corporate social responsibility (CSR) reports on their web- sites. See whether your firm does so. If it does not, are there other indications of a triple-bottom-line approach, including social and ecological elements, in the firm’s strategies?

Module 6: Business Strategy

1. Does your selected business have differentiated products or services? If so, what is the basis for this differentiation from the competition?

2. Does your firm have a cost-leadership posi- tion in this business? If so, can you identify which cost drivers it uses effectively to hold this position?

3. What is your firm’s approach to the market? If it segments the market, identify the scope of com- petition it is using.

4. Using the answers to the preceding questions, identify which generic business strategies your firm is employing. Is the firm leveraging the appropriate value and cost drivers for the business strategy you identified? Explain why or why not.

5. As noted in the chapter, each business strategy is context-dependent. What do you see as positives and negatives with the selected business strategy of your firm in its competitive situation?

6. What suggestions do you have to improve the firm’s business strategy and strategic position?

7. Create a strategy canvas for your firm. Set on the hori- zontal axis an appropriate selection of the value curve items and on the vertical axis, set the other industry segments (such as strategic groups) for comparison.

Module 7: Innovation Strategy

1.Where does your firm position itself on the industry life cycle? What are the strategic implications?

2. What is the firm’s innovation strategy? Does it rely on incremental or radical innovations? Disruptive or architectural? What are the competitive implications of the firm’s innovation strategies?

3. Are intellectual property rights important for your firm? Can you find what strategies the firm is implementing to protect its proprietary position?

4 Identify a recent innovation by your firm. What is your firm’s strategy to cross the chasm(s) to achieve mass market adoption of its innovation?

5.What attributes describe the current major customer segment for your firm? Are these changing? If so, is your firm prepared to meet these new customer demands?

6. How does your firm organize for innovation? Does it use a closed or an open innovation approach? Is its current approach working, or does it need changing? If it does need changing, in what way?

Module 8: Vertical Integration

1. Draw the vertical value chain for your firm’s industry. List the major firms in each important activity along the chain. Note that a firm’s name may appear multiple times in the value chain. This indicates some level of vertical integration by the firm. If your firm is in many different industries (e.g., GE), then choose the dominant industry or the one that intrigues you the most and use only that one for this analysis.

2. Is your firm highly vertically integrated? If yes, does it also employ taper integration?

3. Are any of the vertical value chain operations offshored? If so, list some of the pros and cons of having this part of the value chain outside the home country.

4. Use the preceding vertical value chain to identify the corporate strategy of the firm. In other words, where within the industry has the firm chosen to compete? Based on where it competes, describe what you now see as its corporate strategy.

5. In Module 2, you were asked to identify the mission and major goals for your selected company. Go back to that information now and compare the mission and goals to what you have found as the corporate strategy. Are the mission, goals, and corporate strategy in alignment? Do you see any holes or conflicts among these three elements? Can you relate the performance of the firm to this finding in any way? (If all three are consistent, is this a well-performing unit?) If there

6. is a conflict between the corporate strategy and the mission, does this lack of alignment contribute to performance problems? Why or why not?

Module 9: Strategic Alliance and M&A Strategy

1. Refer to the build-borrow-or-buy framework as a decision tree for your focal firm. Identify a strategic resource gap to study about the firm. Use the related questions to guide your thinking on the appropriate corporate strategy (build, borrow, or buy) to employ to close this gap and move the company forward.

2. Research what strategic alliances your firm has entered in the past three years. If there are

3. several of these, choose the three you identify as the most important for further analysis. Based on company press releases and business journal reports for each alliance, what do you find to be the main reason the firm entered these alliances?

4. Do you think each of the three alliances achieves the original intent and therefore is successful? Why or why not?

5. Does your firm have an identifiable alliance management organization? Can you find any evidence that this organization improves the likelihood of success for these alliances? What responsibilities does this alliance management organization have in your firm?

6. Has your firm participated in any mergers or acquisitions in the past three years? What was the nature of these actions? Did they result in a consolidation of competitors?

Module 10: Global Strategy

1. Is your company varying its product or service to adapt to differences in countries? Is the marketing approach different among the nations involved? Should it be?

2. Is your firm working internationally to access larger markets? To gain low-cost input factors? To develop new competencies? Is its approach in all three areas appropriate?

3. Which of the four global strategies is the firm using? Is this the best strategy for it to use?

4. Why or why not? (Exhibit 10.9 provides a summary of the four global strategies.)

If your firm is not now engaged internationally, answer the following questions:

5. Would your firm’s product or service need to be modified or marketed differently if it expanded beyond the home country?

6. Does your firm have the potential to access larger markets by expanding internationally? Does it have the possibility of lowering input factors with such expansion? Please explain why or why not.

7. If your firm decided to expand internationally, where does the firm reside on the integration- responsiveness framework? (Refer to Exhibit 10.7 if needed.) What does this result say about the “best” global strategy for your firm to use for international expansion?

Module 11: Organizational Design

1. What is the organizational structure of your focal firm? Would you describe it as following a traditional organizational structure or a holacracy? What key characteristics can you point to as evidence? In what way has this structure had an impact on the firm’s competitive advantage?

2. Consider your firm’s competitive position and how it has responded to shifts in the external or internal environments. What major strategic change should the firm seriously consider implementing to avoid inertia? Or if the firm is already facing inertia, what can it do to break it?

Module 12: Corporate Governance

1. Find a list of the members of the board of direc- tors for your firm. How large is the board? How many independent (non-employee) members are on the board? Are any women or minorities on the board? Is the CEO also the chair of the board?

2. Who are the largest stockholders of your firm? Is there a high degree of employee ownership of the stock?

3. In reviewing press releases and news articles about your firm over the past year, can you find examples of any actions the firm has taken that, though legal, may be ethically questionable?

4. You have now completed 12 modular assignments about your selected firm. You know a lot about its mission, strategies, competitive advantage, and organization. Is this a company you would like to work for? If you had $1,000 to invest in a firm, would you invest it in the stock of this firm? Why or why not?