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2/1/2018 Week 4 Learning Activities - BMGT 495 6380 Strategic Management (2182)
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Week 4 LA 1 Danielle Hardy posted Jan 31, 2018 4:42 PM Subscribe
Macure Pharma implements the generic cost leadership strategy for operating. The cost leadership strategy for Macure Pharma focuses on promoting unique blends of chemicals and personalized service for their customers. The specialization that the company offers allow them to charge their premium prices for specific products and services. Customers are loyal to the company by establishing long term contracts. Their strategy focuses on employing the best scientist, sales personnel, and analysts that are capable of collaborating together in order to create the services and products that customers expect and value. To date, Macure Pharma has established a sustainable strategy (Strategic Management, 2014) (Macure Pharma, n.d.). In order to maintain their position in the market, they are continuously exhibiting disruptive innovation. Markets and technology are continuously changes, which requires Macure Pharma to challenge the competition and traditional approaches. Research and development investments allow them to formulate new and creative solutions to the increasing number of economic and environmental issues that the world faces (Strategic Management, 2014).
References:
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Last post 8 hours ago by Patricia Quinones
Week 4 LA 2 Danielle Hardy posted Jan 31, 2018 4:43 PM Subscribe
I used the Internal-External Matrix because it shows Macure Pharma’s position in the market currently and what the company can do to improve that position (Zkjadoon, 2016).
IE MATRIX
After completing the matrix, Macure Pharma landed in the VI region, which represents harvest and digest. This means that the company should continue their
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operations with the strategy they have been currently implementing (Zkjadoon, 2016).
The inputs that were used for the IFE were the strengths and weaknesses of the company. Their strengths include the idea that they are trusted by the public, they have a strong network of distributors, and they participate in cooperation with international partners. Their weaknesses include the fact that they do not have a large product portfolio, they are smaller than competing companies, and their investments in research and development are limited. This resulted in an IFE score of 2.10 (Macure Pharma, n.d.).
The inputs that were used for the EFE were Macure Pharma’s opportunities and threats, to complete the SWOT analysis. Opportunities included the development in a new niche market, increasing efficiency in manufacturing, technological improvements, acquisition of a supplier as a subsidiary of the company, and increasing public awareness of global health. Threats posed to Macure Pharma included changes in healthcare regulations, increased taxes on pharmaceuticals and businesses, the availability of new products in the market, changes in the public views, and global competition if they enter the market (Macure Pharma, n.d.).
References:
Macure Pharma (n.d.). “About us.” Retrieved from http://www.macurepharma.com/about
Zkjadoon (2016). “How to prepare the internal external matrix.” Retrieved from http://www.businessstudynotes.com/finance/strategic-managment/how- to-prepare-the-internal-external-matrix/
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Week 4 Learning Activity 2 - BELTRE Euriviades Beltre posted Jan 31, 2018 1:24 PM Subscribe
General Electric (G.E.) – North American windmill/turbine
The IFE Total Weighted Scores (G.E.)
The EFE Total
Weighted Scores
3.05
Strong
3.0 to 4.0
Average
2.0 to 2.99
Weak
1.0 to 1.99
High
3.0 to 4.0
1 2 3
Medium
2.0 to 2.99
4
5 6
Low
1.0 to 1.99
7 8 9
There are many reasons why I chose the IE matrix for the case presented. One of the reasons is that of having the matrix being more detailed and making an appropriate analysis of the organization in question. The other reason for choosing the matrix is that, despite it being detailed, it is easy to compute and represent the data from the organization. GE’s Re-power program offers customers an affordable way to upgrade aging turbines (G.E., 2017). General electric has some strategic focus in the long-term investment strategy as the alternative strategy to do the business. The possible alternative strategies are sustainable living, increasing product management, active portfolio management, focusing on innovation and enhancing the investment in emerging market and e- commerce.
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References:
G.E. (2016, May 23). GE imagination at work. GE Expands Onshore Wind Portfolio with North American Version of New 3.4 MW Wind Turbines. Retrieved from http://www.genewsroom.com/press-releases/ge-expands-onshore-wind- portfolio-north-american-version-new-34-mw-wind-turbines
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Last post yesterday at 2:55 PM by Sanh Tran
Week 4 Learning Activity 1 - BELTRE Euriviades Beltre posted Jan 31, 2018 12:54 PM Subscribe
Porters Generic Strategies
G.E. strategies likely go with Porter's strategies which mainly on the cost of the product and the differentiation of the product in different ways. With the sole aim of achieving profit, these strategies help G.E. to face the competitors in terms of price, operate in specific markets, gaining advantage of the product and finally making the most out of it.
Cost leadership strategy
The company can use this strategy and it will be more beneficial for the company initially as the price of the products are a bit higher than other brands and so if the price of G.E are reduced, then there is a great opportunity for the company to reach more customers and they can permanently turn loyal to them. As the global economic situation is currently unhealthy, this may even attract more customers if G.E. wind turbines bring down the prices of its products to face the competitors who offer the similar type of products at a lower price than its competitor. To withstand the competition from the companies' inferior in quality, the company needs to think about this strategy.
Differentiation strategy
The differentiation strategy would well fit G.E. windmill or turbines to improve the market base as it has lot of advantages with technology. As G.E. is already making use of the e-commerce and the customers can design their own products, the product management team can do a lot of research with the innovation and
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release them into the market. Since the company is being identified as a brand that is associated with a segment and very specifically to electricity, it can use this as an added advantage in trying to be different in targeting people who are in need.
Focus Strategy
When G.E. thinks of implementing the focus strategy, it can start focusing on different segments apart from energy as the infrastructure is available with the company. It needs to add up some more facilities and try to focus on the entire segment suitable for all customers. There are certain negative effects for this strategy as it is a time taking process for the company to start its operations by focusing on a different market segment and customers. In the long run, the new focus area may be over looked by the company due to poor performance and the company will lose lot of money, time and more importantly, the profits may come down and the cost will go up.
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Last post yesterday at 2:45 PM by Sanh Tran
LA 2 - Mark Szymanek Mark Szymanek posted Jan 30, 2018 3:20 PM Subscribe
GlaxoSmithKline (GSK) – UK based pharmaceutical company. IE Matrix.
The IFE Total Weighted Scores 3.35
The EFE Total
Weighted Scores
Strong
3.0 to 4.0
Average
2.0 to 2.99
Weak
1.0 to 1.99
High
3.0 to 4.0
I II III
Medium GSK – IV V VI
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2.7 2.0 to 2.99
Low
1.0 to 1.99
VII VIII IX
By taking into consideration the IFE and EFE matrixes from week 3, GSK’s position in the industry and the strategy the company should follow become clear. The BCG Growth-Share Matrix leaves a lot to be desired. As NetMBA (n.d.) states the BCG overlooks many factors that are important to profitability. Using the IE Matrix allows a deeper understanding using multiple factors from both the external and internal environment of GSK rather than just market share and market growth.
According to the IE Matrix GSK falls into the IV cell and should follow the grow & build strategy (Zkjadoon, 2016). GSK is positioned to be aggressive in the pharmaceutical market. The grow & build strategy involves market penetration & development and product development (Velásquez, 2016). On the strength of GSK’s large research & development budget new products can be developed and new markets opened. New vaccines and drugs can cure/help untold millions of people desperate for treatment. GSK is positioned internally and externally to reap the profits of doing so.
The generic strategy GSK followed was differentiation. The corporate strategy should be a blue ocean strategy. Instead of competing against all the generic drug manufacturers or against the already popular offerings from Beyer, Merck, or AstraZeneca. A blue ocean strategy creates a new market instead of competing in an existing one (Strategic Management, Supporting Business-Level Strategy, 2014, p.187). GSK can create cures for diseases that have plagued humans throughout history. Cancer, Alzheimer’s, and Malaria are just a few of the leading killers and culprits of a reduction in quality of life. There are many diseases and viruses that are currently incurable, or medication only slightly prolongs life. GSK can develop and market brand new drugs to the world. At the same time avoid direct competition with its fiercest rivals.
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References
NetMBA (n.d.). The BCG Growth-Share Matrix. Retrieved from
http://www.netmba.com/strategy/matrix/bcg/
Strategic Management. (2014). Supporting Business-Level Strategy. Washington, D.C.: The
Saylor Foundation. p.187.
Velásquez, J. (2016, May 5). The IE Matrix. Retrieved from less
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LA 1 - Mark Szymanek Mark Szymanek posted Jan 30, 2018 3:19 PM Subscribe
GlaxoSmithKline (GSK) – UK based pharmaceutical company. Differentiation Strategy.
To some extent all the major pharmaceutical companies use a differentiation strategy. Differentiation involves convincing customers to pay a premium for goods (drugs/vaccines in this case) by providing unique/desirable features (Strategic Management, Selecting Business-Level Strategies, 2014, p.149). The main purpose of every pharmaceutical company is to provide a product that cures or inhibits whatever ailment is inflicting the customer. Differentiation is in which ailments to target with research and development and what target demographics are going to be served by the new drug. R&D plays a big role in the success of GSK. New drugs protected by patents differentiate the company from its competitors. The multiple generic drug manufactures cannot compete with GSK in the differentiation strategy. GSK following this strategy narrows down the competition to a few companies with large R&D budgets.
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There are multiple other ways to differentiate GSK from other pharmaceutical companies. One being the actual delivery of the drug into the human body. Is it convenient to take? Is the customer having to get painful shots to get the medication to be effective? Does the customer have to take four separate doses at specified times or can GSK make a once a day pill taken orally to fulfill a customer’s needs? Other options in the industry include side effects. Everyone has heard the lengthy list of side effects rattled off during a commercial. For a patient needing to take a certain medication, they may be plagued by a side effect. GSK could come up with an offering with the same benefits as Beyer or Merck, but with a minimal unwanted secondary reaction.
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Last post 3 hours ago by Mark Szymanek
Week 4 Learning Activity 2 Mercidieu Delva posted Jan 30, 2018 7:49 PM Subscribe
Norther Power System – European-Electric Power Systems. IE Matrix.
The IFE Total Weighted Scores 4.40
The EFE Total
Weighted Scores
3.40
Strong
3.40 to 3.80
Average
3.20 to 3.60
Weak
1.00 to 2.00
High
3.20 to 4.00
2 1 1
Medium
2.00 to 2.99
IE – 6 5 4
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Low
2.00 to 3.99
6 7 8
In week 3 the EFE matrix calculation for my analysis was 3.40, suggesting Norther power system did not have a strong ability to react to external factors. The IFE matrix calculation in week three for my analysis was 4.40, suggesting Norther Power System is strong internally. (Maxpedia, 2015)
The IFE and EFE lines on Norther Power System IE matrix meet in the middle, indicating the grow and build strategy is appropriate. Market penetration and product development, should be focuses. (Maxpedia, 2015) While Norther Power System is a well-established brand and has experienced global growth, if they do not continue to evaluate their current strategies, they might not be able to effectively penetrate the millennial market, or create products relevant to this new market. Over the period from 1950 to the early 2000's, the distribution of the output of various sources of electric power changed. In 1950, about two-thirds of the electricity came from thermal (steam-generating) sources and about one- third from hydroelectric sources. In the early 2000's, conventional thermal sources (coal, oil, and gas) still produced about two-thirds of the power, but hydropower had declined to about 15 percent. Geothermal, solar, wind, and wood and waste biomass sources produce relatively small amounts of electric power. Meanwhile, nuclear power generates about 16 percent of the world total. Toward the end of the 20th century the production of nuclear power slowed in some countries, such as the U.S., in response to concerns about safety. he expectation of reduced rates through competition also led to deregulation moves in the U.S. Pressure to deregulate the U.S. electric power industry started building in the 1970s, when firms in energy-intensive industries began turning to cogeneration (generating their own power) and demanded access to the wholesale power market to sell their excess power. With the passage of the Public Utility Regulatory Policies Act of 1978, utilities were required to purchase electricity from cogenerators and independent power producers at rates that reflected the costs the utilities would have incurred to generate the power themselves. The Energy Policy Act of 1992 established a new category of electricity producer, the wholesale generator; required utilities to provide transmission access to third-
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party producers; and authorized the Federal Energy Regulatory Commission toless
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Last post yesterday at 3:29 PM by Sanh Tran
Week 4 Learning Activity 1 Mercidieu Delva posted Jan 30, 2018 7:21 PM Subscribe
Northern Power Systems strengths included a variety designs and manufactures wind turbines and is headquartered in Vermont. Much of the profits in the wind turbine industry are concentrated in the ten largest firms. Vestas Wind Systems and General Electric Energy are among the two largest firms in the industry. Northern Power Systems is not among the top-twenty manufacturing firms. The larger companies are likely more diversified than Northern Power Systems. High costs associated with research and development, differentiated products, and competition to bring in new customers all contribute to the competition in the industry. Northern Power weaknesses include inconsistent customer service, marketing, and competition.
To maximize their potential Northern Power should focus on their external factors, because they scored below average on the EFE (External Factor Evaluation) matrix. Focusing on branding, marketing, and customer loyalty could help Northern Power system maintain, and even improve their leadership position.
Northern Power system has decided to return to their roots, With the continued strengthening of our balance sheet we are actively investing in platform developments and commercial resources to drive growth in our business. The products that go into wind turbines could be manufactured by many companies. Using the differentiation strategy, a business competes based on their uniqueness, rather than the price, and seeks a broad market. (Unknown, 2014, 149) Northern Power System A successful differentiation strategy depends on successful branding and advertising. (Unknown, 2014, 150) Northern Power System has unsuccessful branding in the past, but they have moved past that and returned to their origins, understanding that fresh, natural products sustained the test of time. Energy is a vast market with multiple solutions that can compete with Norther Power Systems. Substitutes to wind power can include photovoltaic energy also known as solar energy, nuclear energy, hydroelectricity, and geothermal energy, that’s what make them stronger in the market competitive.
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Normally, the companies who choose the differentiation strategy need to have a unique feature or function for its products, unique enough to let the customer willing to pay some extra price for it. Nowadays, quite a few companies are using this strategy. Because everyone wants to be different from others, using different product is one the ways. For companies, be different from the competitors is a good way to avoid facing directly to the competitor just like what we learn in the blue and red oceans strategy. For example, in the fast-food industry, Northern Power System is quite different from the others by quality and making process.
Reference:
Electric Power Systems. (2017). Funk & Wagnalls New World Encyclopedia, 1p. 1.
Unknown (2014). Introduction to Strategic Management. Chapter 5. Washington, D.C.: The Saylor Foundation. Retrieved From: https://learn.umuc.edu/d2l/le/content/199954/viewContent/8507109/View
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Week 4 LA 1 Patricia Quinones posted Jan 31, 2018 7:54 PM Subscribe
Glaxo Smith Kline is the third largest pharmaceutical company in the world. The company focuses on three global businesses: Vaccines, Pharmaceuticals, and consumer healthcare (GSK, 2017). GSK focuses on creating a strong differentiated pipeline, leading in HIV and respiratory illness, and developing their presence in specialty therapy areas, including oncology and immune-inflation (GSK, 2017).
Based on this information and the week's readings, GSK competes in a business strategy referred to as differentiation. Firms that follow a differentiation strategy are based on uniqueness and target a broad target market. GSK has a broad portfolio of innovative and established medicines in respiratory and HIV, in which we they are global leaders (GSK, 2017). The company has made a name for themselves in respiratory disease due to the development of high quality and needed medications along with the various vaccines they produce. GSK is the largest vaccine company in the world, and with that title comes a price. Customers are expected to pay a little more for their vaccines because they are
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receiving the best product by the top vaccines producer in Pharmaceuticals (GSK, 2017)
Based on the features that GSK provides vaccine customers along with respiratory customers, it may difficult for new entrants to take customers away. In reference to inhalers if a customer is established on a particular brand and they have not had any issues with the medication, convincing them to change over to a new product or a generic equivelant could be a challenge.
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Last post 2 hours ago by Mark Szymanek
Week 4 LA 2 Patricia Quinones posted Jan 31, 2018 8:01 PM Subscribe
Glaxo Smith Kline is a company named from the merger of Glaxo Wellcome plc and Smith Kline Beecham plc. The companies share on listed on the London Stock Exchange and the New York Stock Exchange. GSK produces a wide range of prescription medicines, vaccines, and other healthcare products (GSK, 2017). The company’s products are available around the world in pharmacies, labs, and shelves of various retailers. The majority of the companies’ revenues are from vaccines and chronic diseases which limits the divisions of the company. Based on this data the brand profile would best be analyzed by the SPACE Matrix. The Strategic Position and Action Evaluation matrix or short for SPACE matrix is a strategic managing tool that focuses on strategy formulation especially as related to the competitive position of an organization (Saylor, 2014)
I choose the SPACE matrix tool because the BCG is based on financial data by brand or division. GSK financial is based on seven drug areas and I felt that the space matrix would provide more data.
Based on the data in the Space Matrix, GSK should take an aggressive strategy. The company has financial stability and financial growth due to product development. By using the internal strengths such as brand, market share and growth earnings the company can engage in more risk to gain the market
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penetration that they desire. GSK’s primary revenues are in vaccines and Respiratory/Chronic illness and the company must be aggressive in the pharmacy industry within this field. By taking an aggressive strategy in the market the company can improve their competitive advantage while keeping their differential strategy also.
Space Matrix
Internal position External strategic position
Financial FS Environment Stability
Cash flow 3 Inflation -3
Revenues 3 Barriers to Entry -2
Growth earnings 5 Competition -3
Profits 4 Expiring patents -1
Financial Strength Average
16/4=4 Environment Stability Average
-9/4=-2.25
Competitive Advantage
Industry position
Brand loyalty -2 Opportunity of Vaccines
4
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Technology Capabilities
-2 Threats of Generics 5
Market Share -2 Government programs
5
Quality Products -1 Suppliers 5
Competitive Advantage Ave
-7/4=-1.75Industry Strength (IS) Average
19/4=4.75
(+5 Best, +1 Worst) (-5 Worst, -1 Best)
Y- axis =FS + ES = 4.-2.25= 1.75
X- axis = CA + IS = -1.75+(4.75) = 3
Image
Corporate Strategy- GSK is a corporation that focuses on R & D in Vaccines and Chronic illnesses. These two areas are in demand as the aging population increases and health concerns rise due to diseases around the world. GSK took a hit last year due to changes in CEO and reduce sales due to pricing pressures( GSK, 2017). In order to regain their status in the pharmacy Industry the company must develop block buster drugs to replace those that are subject to generic competition. By focusing their R & D on Vaccines and chronic illness, the company can maintain their differential strategy by refining their financial capabilities whileimproving their net debt.
Reference:
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GSK. (2017). GSK Annual Report. Retrieved from http://eds.b.ebscohost.com.ezproxy.umuc.edu/eds/pdfviewer/pdfviewer? vid=2&sid=47b6856d-1b7b-4b9f-9f5e-7e0a39d65c85%40sessionmgr103
Saylor, T. F. (2014). Strategic Managment. Washington, D.C.: Managing Business Level Strategy
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