week 5 reply
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Week5reply.pdf
2/9/2018 Week 5 Learning Activities - BMGT 495 6380 Strategic Management (2182)
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The QSPM Matrix shows a relative attractiveness of the market penetration strategy, providing objective basic for future unit-specific strategies that could potentially lead the corporation to success. This optimal strategy would be adequate for the corporate’s future activities for these reasons:
1. Industry expansion reflects the attractiveness an industry and the discovered potentialities in it. By acquiring new customers using the existing services, CMA CGM may increase its sales growth in its existing markets to gain a higher market share.
2. In emerging markets, gaining new market shares from existing services can secure a competitive advantage such as brand power which can be reliable, to some extent, for sustaining that competitive advantage and reach new growth rates to increase profits and facilitate corporate expansion.
3. The market penetration strategy may also help the corporation better understand its competitive environment. Because the corporation will be aiming at the existing markets using existing products, the strategy will also have a focus on the competititors to determine their number and their level of competitiveness. Answers to these interrogations will influence how aggressive the corporation needs to be face to the competition.
References:
Week 5 Readings and Audio.
CMA CGM Official website: https://www.cma-cgm.com/the-group/about- us/presentation
Week 5 -LA 2- Alternatives… (14.4 KB)
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Week 5 - LA 1 - ADiaw Alioune Diaw posted Feb 9, 2018 3:32 AM Subscribe
Learning Activity 1:
CMA CGM evolves in the container shipping industry. Last week’s analysis defined that the corporation highly follows a differentiation strategy as its generic
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business strategy basing its source of competitive advantage in uniqueness of their delivered services which facilitates targeting a broad market for their scope of operations; as stated in their visions and values. This program has given the organization access to international markets with access to new customers, especially in Africa and Asia, lowered transportation and delivery costs and diversified the Business Risk. Only 6% of its employees are working with the corporation in its home country, France. (cma-cmg.com)
Thus, to maintain its posture as the third worldwide leading shipping group and an economic player, the corporation may need to implement corporate-level strategies to achieve and sustain the main differentiation strategy. The following may be considered:
Product development or the creation of new services to attract new customers in the existing market. This strategy especially can be effective in the almost saturated industry and with future expansions forecasted. Market development. CMA CMG may propose their existing services to new markets. This will increase the potentiality to reach new geographic areas (for instance, have access to more African and Asian commercial ports), together with an expansion of the shipping routes and a lowering of shipping costs in the long run. Market penetration. The expansion of the container shipping industry will most likely encourage this concentration strategy as it increases chances of fast losing organization’s competitive advantage. To gain additional market share, the corporation may advertise its existing services or mission statement to gain new customers, either new to the market or existing that were the competition’s customers. Horizontal integration. Another strategy that CMA CGM could implement is the acquisition or merger of/with new businesses. This method will ultimately lower costs of services by achieving greater economies of scale. (The Saylor Foundation, 2014). Another example of horizontal integration would be alliances which tighten competition around members of the alliance, gives access to new shipping routes (distribution channels) and serve to block new entry to markets, together making the industry more profitableless
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Learning Activity#2 Caitlyn Gordon posted Feb 7, 2018 6:47 PM Subscribe
*** QSPM is attach**
The QSPM is an effective tool to understand which strategy, where it be at a business or corporate level, is the best fit for the organization at the present ("Quantitative Strategic Planning Matrix (QSPM)", n.d.). It compares and contrasts multiple strategies with weighted scores that pertain to that corporation. The total sum of attractiveness score, calculated from weighted scores from IFE matrix and EFE matrix and their corresponding AS (attractiveness score) are numerical proof of which strategy is better or worse for company. The enormous size of GSK pharmaceuticals has a high risk to not make effective decisions for the entire corporation. Using the QSPM as one the many tools to make a decision for the corporation ensures the company remains objective in making the company's goals.
From the QSPM above for GlaxoSmithKline , you can immediately tell that product development is the best corporate level strategy for the company. Product development strategy for GSK means expanding its current products in their consumer healthcare and pharmaceutical lines. Currently, GSK has the potential to expand its consumer healthcare lines with its tooth hygiene products. The hygiene line is is gaining strength globally. It was ranked number one for oral health specialist in fifty markets ("Quick Facts", 2017). This notoriety brings brand recognition which will allow for profitable product development.
Quick Facts. (2017). Gsk.com. Retrieved 7 February 2018, from https://www.gsk.com/media/3646/gsk-quick-facts.pdf
Quantitative Strategic Planning Matrix (QSPM). MBA Tutorials. Retrieved 7 February less
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Last post yesterday at 12:40 PM by Caitlyn Gordon
Learning Activity#1 Caitlyn Gordon posted Feb 7, 2018 6:43 PM Subscribe
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GlaxoSmithKline LLC, GSK,. is using its brand recognition and high market share to focus on product differentiation. The product differentiation for GSK are vaccines, pharmaceuticals (prescriptions), and consumer healthcare. To take that generic strategy a step forward, the company needs to hone in on few different strategies:
Corporate level Strategy:
1. Market Penetration- expand the market in the United States and East Asia 2. Market Development - bring the European consumer healthcare products to the US market 3. Product Development 4. Related Diversification -economies of scope
The suggested corporate level strategies will advance the generic strategy of increasing brand recognition and differentiation. GSK needs to explore different possibilities with social media and advertising in their US and Asia market. GSK’s main market is in the UK and it is slowing pushing its way into the US and Asia. The competition in both market, especially the US market is fierce. The company needs to gain brand recognition through strong marketing campaigns of its current products ( Strategic Management, 2014, Leading Strategically, p.138).
Through this market penetration, there needs be market development. American’s are always looking for new products and or effective products to instantly fix their issue. GSK has number of products that are not allowed in the United States for various reasons such as, patents not being accepted, stricter pharmaceutical regulations, and various government legalities. These should not be a reason to not have these products offered in the US or other markets. GSK should start working with the governments of specific countries and start offering these products to gain more market share. It could potentially bring a number of new consumers to GSK. Now with that being said, there needs to set of financial benchmarks or mile-marker to ensure that there is fair amount of money being spent on getting those products into the market (Morello, n.d.).
Consumers are always looking for new and better forms of their prescription (pharmaceuticals), vaccine, and development. GSK needs to improve on their product development with diversification. It is slowly building its consumer healthcare sector, especially in the US. The sector, as whole, brought in 7.2 billion British pounds in 2016 ("Quick Facts", 2017). It needs to start increasing its vaccine and pharmaceutical products for the US and Asia market. Pharmaceutical industry itself is a very unknown industry to the average consumers. GSK could use their growing consumer healthcare market share in the US and create affordable and high quality forms of medicine and consumer healthcare products for the US and Asia market. This is related diversification, bringing new products to the existing base of consumers( Strategic Management, 2014, Leading Strategically, p 257). Consumers are more willing to purchase from companies that they know and trust from not just one product. If the consumer knows the company is successful and reputable with on product, they are more inclined to purchase another product from them.
Resources:
Morello, R. What is Marketing Strategy Development?. Smallbusiness.chron.com. Retrieved 7 February 2018, from http://smallbusiness.chron.com/marketing-strategy-development-58521.html
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Quick Facts. (2017). Gsk.com. Retrieved 7 February 2018, fromhttps://www.gsk.com/media/3646/gsk- quick-facts.pdf
Strategic Management. (2014). Leading strategically. Washington, D.C.: The Saylor Foundation. Pages 241/257
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Last post yesterday at 12:30 PM by Jared Ubben
LA 1 Cassandra Caster posted Feb 8, 2018 2:29 PM Subscribe
The company that I have been using in past discussions is Bergey Wind Power. Bergey Wind Power is a company that specializes in small wind turbines for homes, farms and small businesses (Bergey, n.d.). In last week’s discussion, I determined that the generic strategy that Bergey should continue to focus is differentiation. The essence of a differentiation strategy is separating the product of a company from its’ competitors. One corporate-level strategy that Bergey could pursue is a diversification strategy. The diversification strategy will allow Bergey to branch off and enter other markets to gain new business. Bergey could look towards creating a business friendly model for larger corporations, or models that can be used with neighborhood smaller-businesses. This will allow Bergey to compete with some of their larger competitors.
Other strategies that Bergey could pursue are concentration strategies. Concentration strategies will allow Bergey to be able to better compete in the wind industry. In using a concentration strategy, Bergey can use product development, market penetration and market development as part of its’ efforts to excel within the industry (Strategic Management, 2014). In order to expand their customer base and increase brand loyalty, Bergey can focus on increasing the demand for wind turbines while creating a plan for market and product development.
References
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LA 2 Cassandra Caster posted Feb 8, 2018 2:28 PM Subscribe
In the chart below, I have compared my four strategies: market development, diversification, product development and market penetration. The strategy that earned the highest attractiveness score was market penetration. Bergey already contains the best warranty in the wind turbine industry. As they continue to improve and develop their wind turbines, Bergey will continue to win over customers and penetrate the market deeper and hold a higher value of market share. As wind energy continues to develop, customers will start looking at turbines and companies that have a great reputation.
Market Development
Diversification Product Development
Market Penetration
Factors Weight A.S Total A.S
A.S Total A.S A.S Total A.S A.S Total A.S
O- Increased Awareness for Environment
0.20 4 0.80 3 0.60 4 0.80 4 0.80
O- Tax Credits
0.15 4 0.60 2 0.30 1 0.15 3 0.45
O- EPA Limits on Power Plants
0.15 3 0.45 2 0.30 1 0.15 1 0.15
O- Potential Market Growth for Farmers
0.05 3 0.15 4 0.20 4 0.20 2 0.10
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O- Government’s willingness to turn to wind energy
0.15 2 0.30 3 0.45 2 0.30 4 0.60
T- Increasing shipping costs
0.10 2 0.20 2 0.20 2 0.20 3 0.30
T- Availability and amount of advertising for solar power
0.15 1 0.15 2 0.30 2 0.30 3 0.45
T-More Competition
0.05 3 0.15 4 0.20 4 0.20 4 0.20
S-“Wind School”
0.10 2 0.20 1 0.10 1 0.10 3 0.30
S- International Projects
0.15 3 0.45 4 0.60 2 0.30 4 0.60
S- Variety of products
0.15 3 0.45 4 0.60 4 0.60 3 0.45
S – Longest warranty in industry
0.30 4 1.20 4 1.20 4 1.20 3 0.90
W-Certified d l d dless
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LA #2 Danielle Hardy posted Feb 8, 2018 6:58 PM Subscribe
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LA #1 Danielle Hardy posted Feb 8, 2018 6:55 PM Subscribe
1. Macure Pharma could use the disruptive innovation strategy to outperform their competitors. This strategy would require the company to create a new process for formulating their specialty blends of pharmaceuticals. This would allow them to manufacture their products cheaper, while still selling at their premium costs, will increase their profit margin (Strategic Management, 2014).
2. Alternately, Macure Pharma could implement the Blue Ocean strategy and create a new segment in the pharmaceutical market. This would require them to use their research and development capabilities to manufacture a new drug that the public is not aware that they need. Demands will rise, along with profits (Strategic Management, 2014).
3. A third option would be to create a strategic alliance with, or acquire as a subsidiary, another pharmaceutical manufacturer in the market. An acquisition would be more beneficial for the company’s generic strategy. Macure Pharma
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Learning Activity 2 Darren Carroll Darren Carroll posted Feb 8, 2018 9:17 PM Subscribe
Note: Last week an error was discovered in the scores of the EFE and IFE thus throwing off the IE matrix. After learning of the errors, reevaluations and calculations were made to correct these errors. Some weights might vary from the former incorrect IE matrix.
QSPM - Orion Pharma
Key Factors Horizontal Integration
Forward Vert. Integration
Back Vert Integration
Internal Strengths Weight AS TAS AS TAS AS TA
Global Company 0.2 4 0.8 3 0.6 1 0.
Multiple Market Segments 0.2 4 0.8 3 0.6 1 0.
Market Leader 0.2 - - -
Internal Weakness
Complacency 0.2 2 0.4 1 0.2 3 0.6
Limited Distribution 0.11 - - -
Visionary Leadership 0.09 2 0.18 1 0.09 3 0.2
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1
External Opportunities
Underdeveloped Markets 0.1 4 0.4 3 0.3 1 0.
Generics 0.1 4 0.4 2 0.2 3 0.
Economic Development 0.1 4 0.4 3 0.3 1 0.
Partnerships 0.15 3 0.45 2 0.3 1 0.1
Distribution Channels 0.1 3 0.3 4 0.4 1 0.
External Threats
Government Regulations 0.09 - - -
Partners in other markets 0.08 3 0.24 4 0.32 1 0.0
Expiring Patents 0.09 3 0.27 4 0.36 2 0.1
New entrants in generics 0.1 4 0.4 3 0.3 2 0.
Litigation and law suits 0.09 - - -
1
Total 5.04 3.97 2.4
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The Quantitative Strategic Planning Matrix (QSPM) is a tool used to assist organizations in determining which strategy a company should focus on to best achieve a desired direction of the organization. (David, David & David, 2009, The quantitative strategic planning matrix (QSPM) applied to a retail computer store, p. 42)
David (et al., 2009, The quantitative strategic planning matrix (QSPM) applied to a retail computer store, pp. 48-51) lists the steps to properly utilize the matrix as:
1. The matrix consists of key factors from the EFE, IFE, SWOT and IE, along with the weights used in the referenced matrix. They should be listed in the key factors and weight columns respectfully.
2. An Attractiveness Score (AS), 1 – 4 with 1 being the lowest and 4 being the highest, is given to each key factor. All strategies are scored row by row, not repeating the score. If one item is deemed as having no effect on the strategy and not scored, then the same row in all strategies be not graded or dashed out.
3. The product of the weighted key factor and the AS becomes the Total Attractiveness Score (TAS).
4. A TAS of the key factors for each strategy will be made and placed at the bottom of the matrix. The highest sum indicates which strategy should be the most attractive over other strategies.
The QSPM for Orion Pharma indicates the Horizontal Integration is the most attractive as indicated by the higher TAS. Horizontal Integration simply means to acquire or merge with other companies in the same market. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 245)
Horizontal integration for Orion Pharma can be easily achieved in two areas of the market in which it has already proven to be a leader in; the animal health and generics. Orion welcomes the creation of meaningful partnerships that improves research and development, because such partnerships help keep cost low and increased revenues. This is an enabler of Orion’s strategy of cost leadership. Through partnerships Orion can identify organizations that might benefit from a merger, in particularly smaller organizations that cannot bear the cost of research and development.
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Orion’s global presence should create opportunities to merge with smaller companies that can lend to Orion entering underdeveloped markets, increasing sales in generics and finding new distribution channels for all its products. Additionally, through mergers, Orion can eliminate competitors and new entrants to the generic market. Likewise, in the animal health market, Orion can establish brand presence and social responsibility, which goes a long way in today’s market place. Why social responsibility, simply because Orion can establish a trust with pet owners as well. It is good to know that pharmaceutical companies not only value human life but animal life as well.
Learning Activity 1 Darren Carroll Darren Carroll posted Feb 8, 2018 9:11 PM Subscribe
Orion Pharma is positioned well in a vary of segments in the North European pharmaceutical market. This did not happen by accident, but through good leadership. Some of the accomplishments of the company are:
A very lucrative generic market; Animal health and wellbeing products (Orion, n.d. a, Organisation, para. 3) Provided of contract manufacturing; Suppliers of active ingredients (Orion, n.d. b, Products and services) Encourage partnerships (Orion, n.d. c, Partnering, para. 3)
Such a stance as this creates possibilities and corporate level strategies for growth and brand awareness. Among the various possibilities of strategies, a few rises to the top as being a best choice to help the company growth in the industry and brand. They are:
Horizontal integration Forward vertical integration Backward vertical integration
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Related Diversification
Horizontal integration is simply a merger or acquisition of another company in the same market space. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 245) The areas that present the best opportunity for this is in the animal health and partnerships. Orion can help build brand through acquisition of smaller, possibly distressed animal pharmaceutical manufactures. Visibility of the brand increases and hopefully market share. And through the open partnerships Orion could pick and choose a company that would best serve as an extension of their own efforts for merger. If Orion should expand across the market, the company could set the prices at the mark best suited for them and others would have to match them.
Forward vertical integration occurs when a company takes on the buyer’s position in the value chain. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 254) The possibilities of such a direction would be in distribution channels. Currently, Orion does not own any form of distribution channels: regional distributors or pharmaceutical retail stores. A market penetration such as this could possibly cause a loss of sales to smaller companies opening gateways for horizontal integration.
Backward vertical integration is when a company plays the part of the supplier. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 254) This should not be very hard, because Orion is a manufacture of pharmaceuticals and supplier of active in ingredients. The backward vertical integration should be focused on the value chain beyond the company’s capabilities in the raw material areas. If such integration should occur, Orion could foreseeability own the entire value chain, from raw materials to consumer. What a boost in brand and market take domination as the company could set the price points controlling the industry.
Related diversification is when a company moves into a market that has close ties to the current market. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 256) Orion can use this diversification strategy to enter into the animal wellness and insurance market. A move such as this would be pointed at building the brand and increasing profits to allow lower price levels in areas such
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as generics. Using or recommending their own products will help the company grow and could mean increased profits.
Orion is well position in the industry with the potential to gain market share through various corporate level strategies if so desired. All of the strategies would lend to increased revenues from competitors and other buyers, while Orion can feasibly reduce cost on the larger more lucrative products, applying pressure to competitors.
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Week 5 - LA2 - Stevens Donna Stevens posted Feb 8, 2018 9:45 PM Subscribe
General Electric: Quantitative Strategic Planning Matrix (QSPM)
Below outlines the Quantitative Strategic Planning Matrix (QSPM) developed for General Electric.
Key Internal Factors Market
Development
Market
Penetration
Forward Vertical
Integration Acquisition
Internal Strength Weight AS TAS AS TAS AS TAS AS TAS
1. Ample wind conditions
.05 - 0 - 0 - 0 - 0
2. Investor confidence .05 3 .15 2 .10 1 .05 4 .20
3. Funding .10 2 .20 2 .20 1 .10 4 .40
4. Brand recognition .15 3 .45 4 .60 3 .45 3 .45
5. Product portfolio .15 2 .30 3 .45 4 .60 4 .60
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Internal Weakness
1. Construction permit wait times
.15 - 0 - 0 - 0 - 0
2. High investment costs
.10 2 .20 1 .10 - 0 4 .40
3. Landscape/environmental impact
.10 1 .10 1 .10 - 0 - 0
4. Threat to animals in the region (e.g. fauna)
.10 1 .10 1 .10 - 0 - 0
5. R&D pipeline .05 2 .10 2 .10 2 .10 3 .15
1.0
External Opportunities
1. Wind .05 - 0 - 0 - 0 - 0
2. Implementing digital technology (specifically)
.20 2 .40 1 .20 1 .20 1 .20
3. Improved turbine designs
.10 3 .30 2 .20 2 .20 3 .30
4. Available land/location resources
.05 - 0 - 0 - 0 - 0
5. Available technology to support improvements and efficiency (all other)
.10 3 .30 2 .20 1 .1 - 0
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External Threats
1. Policy/Regulations .10 1 .10 1 .10 1 .10 1 .10
2. Environmental Community Opposition
.10 - 0 - 0 - 0 - 0
3. Connectivity issues to power grid
.10 - 0 - 0 - 0 - 0
4. Development of smaller wind turbines
.10 2 .20 1 .10 - 0 - 0
5. Animals (e.g. birds) .10 - 0 - 0 - 0 - 0
1.0 2.9 2.55 1.9 2.8
Key factors and their associated weighted scores from the IFE and EFE matrices were entered into the QSPM. An attractive score (AS) was assigned to each factor. A score of 1 to 4 was given, with 4 being the most important. (MBA Tutorials, n.d., para. 3). Dashes indicate no importance to the particular factor. The total attractive score (TAS) was calculated by multiplying the weight by the AS. The grand totals for each TAS is shown in the bottom row of the QSPM. The highest weighted scores was for market development, at a TAS of 2.9. Acquisition was second at 2.8, followed by market penetration and forward vertical integration, at 2.55 and 1.9 respectively. Therefore, market development was selected as the optimal strategy.
Within the market development strategy, brand recognition (a strength), was one of the highest weighted scores, at .45. External opportunities, such as implementing digital technology (TAS .40), improved turbine design (TAS .30), and making use of technology to improve efficiency (TAS .30), each align with product development that can improve the company’s profitability. The acquisition strategy, which came in a close second to the market development
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strategy, heavily relies on key strengths, particularly financial strengths as depicted by TAS between .20 and .60.
When an industry, such as the wind turbine industry, is dominated by a few global companies, there is less opportunity for companies to gain competitive advantage through economy of scale based on its brand alone. (Hansen & Nohria, 2004, para. 2). As a multinational corporation, GE can take advantage of a market development strategy, by having its various business units collaborate in an effort to increase capabilities Companies will fare well when they are able to developless
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Week 5 - LA1 - Stevens Donna Stevens posted Feb 8, 2018 9:44 PM Subscribe
General Electric: Corporate-Level Strategy
A focused differentiation generic business-level strategy was selected for General Electric’s (GE) wind turbine business unit. Businesses that use this type of strategy provide products and services to a narrow market. (Strategic Management, 2014 p. 159). The market is considered narrow because customers are specific to residential, commercial, and industrial. (Aghajani, Shayanfar, Shayeghi, 2015, p.308).
Corporate-level strategies
Market penetration, a concentration strategy, is selected for GE. With this strategy, GE will attempt to increase their market share with their existing wind turbine products. (Strategic Management, 2014 p. 241, para. 2). GE currently offers a full suite of wind turbines (GE, n.d. -a). Market development, described as marketing existing products in new markets, is a useful strategy for GE, because it will allow the company to save money on the research and development (R&D) of new products. (Strategic Management, 2014 p. 242, para. 1). Cost savings can go toward improving existing products, such as making select existing wind turbines more efficient. Forward vertical integration is depicted as a company becoming the retailer. (Strategic Management, 2014 p. 254, para. 2). Using this strategy, GE will be able to make a higher profit by selling their wind turbines themselves, versus having a retailer sell the company’s
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products. Another business-level strategy is horizontal integration, specifically acquisitions, which depicts a company that purchases another company. (Strategic Management, 2014 p. 245, para. 1) GE can acquire smaller, yet relatively successful wind turbine businesses in order to corner the market share. By acquiring other businesses, GE brand recognition can continue to benefit to the company.
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LA 2 Doriane Pierre posted Feb 8, 2018 9:37 PM Subscribe
Strategic Alternatives
Key Internal Factor Market Sustainability Market Alternatives
Internal Strengths Weight AS TAS AS TAS
Low energy consumption .20 4 .08 3 .6
Ballast Water Treatment .10 3 .3 3 .3
Handling natural resources responsibly
.12 3 .36 2 .24
Evaluation of company's stand point
.18 4 .72 3 .54
Always improving .18 4 .72 3 .54
Internal Weaknesses
High debt burden .010 1 .01 1 .010
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Unionized workforce may result in work Stoppages or slowdowns
.10 2 .02 1 .10
Falling rates .012 2 .024 1 .012
Decline in revenue .050 2 .1 1 .050
High competitive costs .048 1 .048 1 .048
1.00 2.38
Key External Factors
Opportunities
1. Technical improvements in Ship and marine
.21 4 .84 4 .84
2. Increase in demand
.016 3 .048 3 .048
3. Economic globalization/scale
.011 2 .22 3 .033
4. Bigger vessels with growth
.18 4 .72 3 .54
5. Increase shipments
.10 3 .3 3 .3
Threats
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1. Supply/demand imbalance
.010 1 .01 2 .02
2. Container trafficking
.13 3 .39 4 .52
3. Intense competition
.20 4 .8 3 .6
4. Environmental regulations
.143 2 .286 1 .143
1.00 3.85
Total Sum of Attractiveness Score
6.23 5.48
The QSPM sum of attractiveness scores of 6.23 versus 5.48 indicates that Hamburg Sud will sustain in the market.
These weights: were from the IFE and EFE matrices. Please review my previous week's discussion to see calculations.
Attractiveness Scores(AS): show the attractiveness importance of each factor to their alternative strategy on a scale of 1 to 4 with 1 being least attractive and 4 being most attractive.
Total Attractiveness Scores: is weight X AS
Total Sum of Attractiveness Score: is the addition of all attractiveness scores in each strategy column of the QSPM.
Looking ahead, it is believed that superior sustainability performance could become one of the differentiating and value-adding factors in an industry where companies historically have struggled with presenting a unique value proposition beyond cost competitiveness. The sustainability strategy is important because:
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The industry transports more than one-third of the value of global trade
Provides more than 4.2 million jobs
And represents a huge social and environmental footprint (Peder & Pruzan, 2010, 3) H h ill h h i i i fless
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LA 1 Doriane Pierre posted Feb 8, 2018 9:33 PM Subscribe
As an internationally operating company, Hamburg chooses sustainability as its main strategy and an indispensable component of each of its activities. The corporate strategies used were:
1. Compliance 2. The use of reefer containers 3. The focus on environmental protection with a greener shipping industry 4. Fair competition 5. Privacy 6. Low energy consumption
Reasons and explanation of each alternative strategy:
The company's goal is to safeguard the quality and environmental compatibility of its services and to ensure their continuous improvement (Graumann, 2016, P18). Therefore, it is imperative that the company stays in compliance to sustain.
Long-term corporate success can only be achieved if the relevant legislation complies at all times. The company respects all laws on the national and international level. It also ensures that corruption is combatted, and visioned a maritime industry free of corruption. (PP-26-27)
The competitors are there to help drive new developments and improve performance. Therefore, Hamburg strives to fair competition in order to go forward.
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Hamburg Sud safeguards employees, customers, partners, and supplier's information to attain the sustainability strategy. To do so, the company complies with all legal requirements, implemented an information security management system in Germany which includes guidelines for data privacy and security.
Hamburg Sud is one of the top five providers of refrigerated containers shipments. The company not only transport dry but also refrigerated containers.
Hamburg Sud goal is to reduce fuel and energy consumption while increasing efficiency. As a result, the environment dividends will be paid and the company will see an enhanced cost-effectiveness. The company energy consumption for electricity and heating for 2014>2015 was recorded at 7.2 %( Graumann, 2016, p40).
Besides what has mentioned above, the company also protect endangered species and stabilizes trim with ballast water treatment system in all 41 ships in the reporting period 2015.
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Week 5 Learning Activity 2 - beltre Euriviades Beltre posted Feb 8, 2018 11:43 AM Subscribe
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. As it makes progress toward concluding the monetization of its utility wind technology, the company will be re-aligning its leadership to focus its future on delivering business solutions for a range of distributed energy customers. Increasing demand for small wind turbines owing to numerous environmental benefits coupled with the economic reimbursements is predicted to provide an impetus to the industry over the forecast period. The need to adopt renewable energy is on the rise owing to a pressing need to control the carbon footprint which demands convenient electricity generation option.
Reference:
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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 windless
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Week 5 Learning Activity 1 - beltre Euriviades Beltre posted Feb 8, 2018 11:01 AM Subscribe
G.E. Corporate-level strategies
Culture and Values
GE’s strategy really does focus on culture and values. The company wants to focus on the people, great people, and shape the company culture. His goal to strengthen GE’s global presence and create a more collaborative culture. They believe a company starts with culture. They want their people to improve every day. They want to move, power, and cure the world. It’s important that investors see they choices that they make so they create more value over time.
Leadership
The company has five-initiatives strategies: technical leadership, services, customer focused, globalization, and growth platforms. These five initiatives are important, and it has worked for their company and has proven that this is how the company has been growing over the years. It beings with a small platform, focusing the business model on growth initiatives, and focusing on their financials and putting that towards growing the company as well. This makes their lost investments as minimal as possible.
Globalization
GE is proposing to sell its windmill and turbines divisions to strengthen their global presence. The CEO’s goal was to become better than the rest. Being the number one competitor was important.
Company Threats
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Human Resource could be one important threat to the company. GE is a big company and with the size and the big amount of people, there could be a lot of HR problems. The company focuses on culture and globalization. So, when they make certain decisions, they could be offending someone which could cause unhappiness to investors.
References:
GE ( d ) GE R bl E Wi d T bi O i R i dless
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Week 5 LA1 - Jared Ubben Jared Ubben posted Feb 6, 2018 8:21 PM Subscribe
Company: GE Wind Turbines
Generic business-level strategy: Differentiation
The products in the wind turbine industry are all relativity the same. Because of this, each company must use a business model “that is at least somewhat unique” (Strategic Management, 2014, Leading Strategically, p. 138) to retain or acquire customers. GE must use a generic strategy that sets their products apart from the rest.
Using the differentiation strategy and producing tidal wind turbines that can be used in oceans, GE is separating themselves apart from their competition. There is a small number of suppliers and buyers in the industry and by offering the tidal wind turbines it allows countries or cities that are located near large bodies of water to use their one-of-a-kind products and generate more power as opposed to the landlocked wind turbines.
Requirement 2:
1. Market Development - “Market development involves taking existing products and trying to sell them within new markets” (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 242). Using this strategy, GE can enter smaller markets as it has reached a pinnacle of selling its large wind turbines to governmental agencies, states and cities. If GE wishes to continue to reach as
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many customers as possible, it can move to selling a smaller version of its turbines to neighborhoods where it would generate enough power to be used by so many square miles of residents. This ties in to the differentiation strategy in that entering markets that GE’s competitors aren’t in will set GE apart creating differentiation and it will build GE’s brand name.
2. Product Development - “Product development involves creating new products to serve existing markets” (Strategic Management, 2014, Selecting Corporate- Level Strategies, p. 243). GE creates new turbines year after year and include a total of 9 turbines in its lineup for customers to choose from. GE should keep expanding its offering to include smaller turbines for smaller individual customer/corporations to buy. An example would be a smaller turbine that would power a cardboard manufacturing plant in order for the plant to save money on their energy use.
3. Horizontal Integration: Mergers and Acquisitions - “Rather than rely on their own efforts, some firms try to expand their presence in an industry by acquiring or merging with one of their rivals” (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 245). IF GE were to merge with a smaller competitor it would be able to acquire the majority of its customers and at the same eliminating the competition.
Differentiation involves having something to offer that your competitors don’t. By eliminating smaller competitors, GE can reduce the intensity of rivalry (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 245) and focus more of its attention to differentiating from its larger competitors.
4. Strategic Alliances - “In a strategic alliance, firms work together cooperatively, but no new organization is formed. The firm and its local partner or partners share decision making authority, control of the operation, and any profits that the relationship creates” (Strategic Management, 2014, Competing in International Markets, p. 233). By creating a strategic alliance, GE can use the power of its reputation in multiple countries. The alliance will involve keeping GE’s mission and vision statements along with its values and utilizing the country’s resources and knowledge of the foreign market and terrain. “Joint ventures and strategic alliances are especially attractive when a firm believes that working closely with locals will provide it important knowledge about local conditions, facilitate
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Week 5 LA2 - Jared Ubben Jared Ubben posted Feb 6, 2018 8:22 PM Subscribe
Requirement 1:
Market Development Strategic Alliances Product Development Horizontal Integration
Requirement 2:
See attached QSPM graph for my computations.
Results:
Market Development - 5.95
Strategic Alliances - 5.32
Product Development - 5.265
Horizontal Integration - 5.145
Requirement 3:
Based on the QSPM, the results for the four strategies are below:
Market Development - 5.95
Strategic Alliances - 5.32
Product Development - 5.265
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Horizontal Integration - 5.145
According to the QSPM, the optimal strategy for GE Wind Turbines to move forward with is Market Development. This strategy involves “taking existing products and trying to sell them within new markets” (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 242). Currently, large companies like Amazon and Microsoft along with governmental organizations are the main markets GE is selling their wind turbines in.
Keeping up with the larger markets as well as moving into smaller markets can improve GE’s profits and strength in the industry. To interest smaller markets, smaller turbines would need to be manufactured to fit the needs of these new markets. That being said, there will need to be a crossover of product development and market development that will supply the new markets. It won’t be as cut-and-dry as simply selling GE’s current products in different markets. The products will need to fit the demand the new market creates.
GE already has the technology to produce the large-scale turbines. Now, it would be a simple restructuring that the company would undergo to add a new division for smaller turbines and to properly market a smaller turbine to smaller markets.
The smaller market that neighborhood/community gardens has produced would allow GE to start producing smaller versions of its current models to fit a smaller- scaled market. This would open new markets and create more value for the company. With GE already producing green energy products and the desire of more and more people/companies wanting to go green, this is a great opportunity for GE to extend its product line and service new markets.
Entering new markets is optimal for GE’s success as the current market will become saturated with more companies as the clean energy sector grows. This will force companies like GE to lower prices as more companies in the industry will create competitive pricing. Being the first in the industry to provide small- scaled turbines will create differentiation for GE. Using its brand power, GE can enter a new market to provide new products to new customers that is critical for its long-term success.
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Reference:
Strategic Management. (2014). Leading strategically. Washington, D.C.: The Saylor Foundation
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Last post Wed at 12:29 PMby Patricia Quinones
Corporate Strategies
1 2 3 4
Market penetration
Market Development
Strategy
Related Diversification
Retrenchment
Opportunities Weight AS TAS AS TAS AS TAS AS TAS
Green energy is increasingly more important to consumers
12% 3 0.36 4 0.48 3 0.36 3 0.36
Patents on technology
10% 1 0.1 1 0.1 1 0.1 2 0.2
Renewable Energy Subsidies
14% 3 0.42 3 0.42 2 0.28 3 0.42
Market placement
12% 3 0.36 4 0.48 2 0.24 3 0.36
Growth of the 10% 3 0.3 3 0.3 3 0.3 3 0.3
Learning Activity 2 - Josh Medley Joshua Medley posted Feb 8, 2018 11:51 AM Subscribe
Week 5 Learning Activity 2
Acco rdin g to the QSP M Nort hern Pow er Syst ems woul d bene fit the most by adop ting the mar
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economy
Threats
Foreign Markets changing Feed in Tariffs (FIT)
12% 2 0.24 3 0.36 2 0.24 2 0.24
Large Manufacturers
8% 2 0.16 2 0.16 2 0.16 1 0.08
Declining Government subsidies
8% 1 0.08 2 0.16 1 0.08 1 0.08
New technology development
5% 1 0.05 1 0.05 1 0.05 1 0.05
Decrease in cost of solar panels
9% 1 0.09 1 0.09 1 0.09 1 0.09
Totals 100% 2.16 2.6 1.9 2.18
ket deve lopm ent strat egy. The mar ket deve lopm ent strat egy had the high est scor e over all by
almost a half a point. Retrenchment was the next best strategy due to their debt, but the positive outlook on the industry shows possible growth. Northern Power could develop a marketing plan to reach a wider segment of the American and European population to allow for brand name recognition. Many Americans do not know a lot about the wind power industry. Increase marketing could allow for increased awareness of the opportunities wind power offers. They currently do not spend a lot on marketing due to cost cutting procedures (Corporation, 2017, p. 21) Another way Northern Power could go about accomplish the market development strategy by creating sales teams in areas they have not currently reached yet (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 242). Norther Power currently has limited sales offices located in Massachusetts,Zurich, Switzerland, and Italy (Corporation, 2017, p. 8). There is opportunity in creating regional sales offices within the United states and the rest
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of Europe. The regional offices could be minimally staffed with the reach back capability at the headquarters. Another untapped possibility would be to work with a community developer that build sub-divisions and have a wind farm powered sub-division. Together they could build green communities that have minimal reliance on standard power. The cost of the wind farm would be dispersed among all the homes of the sub-division.
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Learning Activity 1 - Josh Medley Joshua Medley posted Feb 8, 2018 11:49 AM Subscribe
In week four the IE Matrix suggested that market penetration and product development would be the best course of action for Northern Power Systems. Market penetration would consist of advertising or marketing their wind turbines and service packages to reach a new segment of potential buyers (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 241). This would be one course of action for Northern Power to explore due to the fact that they have a reliable product and there are segments of the American population that they have not reached yet.
Northern Power Systems could also benefit from a market development strategy. Northern Power could accomplish this by putting sales team in areas they have not currently reached yet (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 242). Another way to do this would be to work with a community developer that builds sub-divisions and have a wind farm power the sub-division.
Northern Power could also explore related diversification. This is when a company moves into a new market that shares similar aspects (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 256). Norther Power could move into the solar panel market. This would allow their customers another renewable energy source when there is no wind to provide power.
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The last strategy Northern Power could explore is retrenchment. This is when a company decides to down size in order to save the organization (Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 265). Northern Power has taken losses and could benefit from a reduction in costs until they become profitable.
References
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Learning Activity 2 Ott Justin Ott posted Feb 8, 2018 11:02 PM Subscribe
My activity is in the word document attached.
QSPM matrix ott.docx (95.89 KB) less
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LA1 Week 5 Ott Justin Ott posted Feb 8, 2018 11:00 PM Subscribe
The company I will be using for this activity in Maersk Line, which is the world’s largest container shipping company (Why Maersk Line?, N.D.).The best generic strategic strategy for Maersk Line would be differentiation which is a strategy used to convince customers that paying more to use the company is worth the extra money due to extra benefits received for the money (Strategic Management, 2014).
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The three business unit level strategies that I chose for Maersk Line to implement in order to achieve differentiation are:
1.Make available to the customer the ability to schedule door step to door step transport thru Maersk Line.
2. Include insurance guaranteeing the delivery day of the container
3. Electronic up to date tracking of shipping container available to customer
1.Make available to the customer the ability to schedule door step to door step transport thru Maersk Line :
Currently no container shipping companies enable the customers the ability to schedule pick up and drop off of shipping containers on their website. Currently the shipper has to arrange the spot on the ship for the shipping container, and then call one company to arrange the pick up of the container from its current location to have it delivered to the port. They then have to schedule another company to pick up the container at the arrival port and deliver it to its final destination. If this could all be done in one place, it would save the customer time while giving them greater tracking ability of their shipping container.
2. Include Insurance guaranteeing the delivery day of the container:
It is a common practice in the container shipping industry to offer delivery day insurance to customers provided by outside companies at an additional cost. If Maersk Line were to use their size to get a discount rate on the insurance cost from one of these outside companies, they could offer the insurance included in the cost of the shipment while passing the additional cost onto the consumer. The inclusion of insurance would differentiate Maersk Line from the competition.
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3.Electronic up to date tracking of shipping container available to customer:
Customers of the container shipping industry are starting to require the ability to track their containers more and more during transit. Maersk Line could implement a tracking system similar to USPS to offer the consumer the ability to track the container closely. It would notify the customer when the container was received at the port, when it is loaded on the ship and then once the ship has left port. It could also daily provide the customer of an approximate location of the ship during transit. Once the ship arrives at its destination port, the container would be scanned when it is removed from the ship and when it is ready for pick up. This would allow the consumer to be able to closely monitor the container while also being able to be implemented easily into systems that Maersk Line already uses.
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Learning activity 2 Luis Vazquez posted Feb 8, 2018 10:22 PM Subscribe
Strengths Weight
AS (Attractiveness
Scores)
TAS (Total Attractiveness
Scores)
1. Good relation with employees and customer 0.3 4 1.2
2. Strong team of management 0.2 3 0.6
3. Scientific leadership 0.3 3 0.9
Weakness
1. Little diversification 0.05 1 0.05
2. Saturated market 0.05 2 0.1
3. Disruptions in technology 0.1 2 0.2
Total 1 15 3.05
The strategy that will be chosen is distinctive advantages development. It is vital to develop distinctive and effective competencies so that an edge is gained over the competition. Requirements of market may alter in a regular manner because new capabilities can be decided by the competitors to be developed. It is required to recognize the distinctive competencies through analysis in a thorough manner. The firm should be prepared to satisfy the new necessities vital for development further. Competitive advantage can be led by distinctive competencies. Strategies
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of development of business that is most efficient and effective can be determined by distinctive competencies. Sustainability of the company is brought by distinctive competencies. If certain services or products are not offered by an organization and intends to acquire sustainable advantage, then new problems can be solved instead of resolving the identical problems again and again. Learning occurs faster in comparison to other competitors when distinctive advantage is developed. New necessities can be adapted and learned in a fast manner in comparison to the competitors. The company can turn to be the authority in their field of business (Strategic Management, 2014, Business-Level Strategies).
References
Strategic Management (2014). Business-Level Strategies. Washington, D.C.: The less
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Learning activity 1 Luis Vazquez posted Feb 8, 2018 10:21 PM Subscribe
Methods or plans used by the companies to conduct in business operations various functions are represented by strategies of business-level. Strategies of business-level are used often by companies to provide the employees, managers, owners with guidelines to be followed when doing job in the business.
The three business-unit level strategies that should be selected for AstraZeneca Company are mentioned below:
Coordinate Unit Activities: A common strategy of business-level can be regarded as the coordination of all activities of the unit found in business. Activities of unit can be stopped by individual positions of job, department sections, and department. Coordination of such individuals or groups falls usually on a supervisor or a manager. It is the responsibility of the manager to bring employees and staffs on the same page and emphasize these people on attaining objectives or goals. Responsibility may be there on the supervisors or managers for resource allocation within many different activities (Strategic Management, 2014, Business-Level Strategies).
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Distinctive Advantages Development: Distinctive competitive advantages or core competencies must be developed for a successful company creation. Singular abilities or activities used by a firm to manufacture better products in comparison to another firm are represented by competitive advantages and core competencies. Instances of this strategy of business-level can consist of obtaining economic resources at reduced costs in comparison to other firms, unique services or goods that other firms have not imitated, highly effective and efficient resources of production, cost-effective chain of supply for getting the goods quickly into the hands of the consumer ("What Are the Different Types of Strategies in Business?", 2018). Human Resources Utilization: The human resources available in overall economy and company should be utilized by companies. Some human labor form is required by all firms almost to attain objectives and goals of the business. A strategy of business-level is developed by companies to makes sure that sufficient number of employees are present in the firm to manufacture a specific services or goods output. The strategy of business is responsible to make sure the right human labor type for operations of the business. An analysis is included often to determine whether there is requirement of unskilled or skilled labor to complete functions of business (Strategic Management, 2014, Business-Level Strategies).
References
What Are the Different Types of Strategies in Business?. (2018). Bizfluent. Retrieved 9 February 2018, from https://bizfluent.com/list-6603373-different- types strategies business htmlless
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LA 1 - Mark Szymanek Mark Szymanek posted Feb 7, 2018 11:59 AM Subscribe
GlaxoSmithKline (GSK) – UK based pharmaceutical company. Differentiation Strategy.
Blue Ocean Strategy – Involves creating new markets instead of competing in existing markets (Strategic Management, Supporting Business-Level Strategy,
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2014, p.187). A new market equals no competition. With no competition consumers only have one option for a product. A company is free to rake in profits and charge whatever price that consumers are willing to pay.
GlaxoSmithKline has the large budget and expansive facilities to design drugs for new markets. Being the first to create a vaccine or medication for a previously uncontrollable disease creates a market with no rivals to compete with. In the pharmaceutical industry it would be wise to not get caught up in the publicity surrounding price gauging for life saving medication that has brought the ire of governments and citizens. But a new drug or vaccine created and priced reasonably will still bring in large profits.
Footholds – This business level strategy is about claiming a small stake in a market that the company has not competed in (Strategic Management, Supporting Business-Level Strategy, 2014, p.186). Gaining a foothold, a company can slowly build up name recognition amongst customers who were originally unfamiliar with the brand. The foothold gives a point from which the company can continue to take market share away from competitors. GSK can move into fields that it did not previously compete in and go directly after its top rivals like Merck or Bayer.
Bricolage – bricolage is using available inputs to create something new (Strategic Management, Supporting Business-Level Strategy, 2014, p.187). For GSK these inputs could come from the many underexplored drugs whose development was halted or from competitor’s drugs that are now available do to expiring patents. The pharmaceutical industry is about trial and error. Using bricolage is a great way to create something new out of something readily available.
References
Strategic Management. (2014). Supporting Business-Level Strategy. Washington, D C Thless
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LA 2 - Mark Szymanek Mark Szymanek posted Feb 7, 2018 12:00 PM Subscribe
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QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM) For GlaxoSmithKline
Key Strategies Blue Ocean
Strategy Foothold Bricolage
Key Factors Weight AS TAS AS TAS AS TAS
Strengths
R & D .25 4 1 4 1 4 1
Cash Flow .30 4 1.2 4 1.2 4 1.2
Employees .05 4 0.2 3 0.15 2 0.1
Weaknesses 0
Market Share .20 3 0.6 1 0.2 4 0.8
Diversification .10 2 0.2 2 0.2 2 0.2
Name recognition
.20 2 0.4 1 0.2 2 0.4
1.0
Opportunities
Emerging Markets
.15 4 0.6 2 0.3 2 0.3
Aging Population
.05 3 0.15 4 0.2 2 0.1
Industry Collaboration
.05 3 0.15 1 0.05 2 0.1
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Technology .15 3 0.45 3 0.45 2 0.3
Industry Mergers
.10 3 0.3 3 0.3 2 0.2
Threats
Increased Competition
.15 4 0.6 1 0.15 2 0.3
Govt. Regulation
.15 1 0.15 4 0.6 1 0.15
Economic issues
.10 1 0.1 2 0.2 2 0.2
Social Change .05 1 0.05 2 0.1 2 0.1
Price Pressures .05 2 0.1 2 0.1 2 0.1
1.0
Total Sum of Attractiveness Score
6.25 5.4 5.55
The Blue Ocean strategy is critical to GlaxoSmithKline’s ability to stay ahead of the competition. The industry is fast paced. The difference in success can be which company gets government approval to begin marketing and selling its new drug first. Of GSK’s 27,889 billion pounds in sales in 2016, 4.5 billion of it was in new pharmaceutical and vaccine sales (GSK, 2017, p.01 & 245). As the older drugs lose patent protection it is important for GSK to develop new and better patented drugs. Instead of focusing on the same areas, GSK can explore new markets that are served by no known cures or vaccines.
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Strimvelis is a stem cell gene therapy to cure ADA-SCID, an immune deficiency disorder, that became the world’s first approved gene therapy (Burke, 2016, p.11). Along with gene therapy, GSK is investing early in bioelectronics. Bioelectronics and gene therapy can revolutionize the way diseases are treated. Gene therapy has the potential to eliminate previously incurable genetic diseases. Bioelectronics has countless possibilities, one being the delivery of medicine to targeted points in the body. There is no competition from any pharmaceutical rivals. GSK can dominate an untapped market.
In 2008 Advair had $6 billion in sales, the following year the drug lost its patent protection (Iskowitz, 2008, p.9). In 2016 increased generic competition reduced Advair sales to 1.829 billion pounds (GSK, 2017, p.60). There are many generic pharmaceutical companies that can replicate normal drugs. There are very few that can copy bioelectronics or gene therapy offerings even without patent protection. Blue Ocean strategy is the best option for GSK to distance itself from not only generic manufacturers, but also major competitors like Pfizer and Bayer.
References
Burke, M. (2016, Jun 1). Gene therapy approval first. Chemistry & Industry. 2016, Vol. 80
Issue 6, p11.
http://eds.a.ebscohost.com.ezproxy.umuc.edu/eds/pdfviewer/pdfviewer? vid=0&sid=1d998e2a-4882-49c3-9d4f-ec3a7a040595%40sessionmgr4010
GSK. (2017, March 13). Annual Report 2016. p.01, 60 & 245. Retrieved from
https://annualreport.gsk.com/assets/downloads/2_GSK.AR.strategic.repo rt.V5.pdf
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Week 5 Learning Activity 2 Mercidieu Delva posted Feb 5, 2018 12:52 PM Subscribe
QSPM for Northern Power system – Quantitative Strategic Planning Matrix
STRATEGIC ALTERNATIVES
1 2
Buy New Land and Fully Renovate Newly-
Build New Stores Owned Existing Competitors
__________________________________________________________________warehouse___ ________________
Key Factors Weight AS TAS AS TAS _______
Opportunities
A strong hold on the penetrated
markets because of saturated presence
as well as the product diversity. 0.10 4 0.40 1 0.40
The dealing and performance
criteria are standardized for all the
stores and no deviations are accepted. 0.10 - -
The company is placing special
emphasis on private brands. 0.08 - -
A number of new stores have
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originated especially within the last
two years. 0.05 3 0.15 1 0.15
An excellent temptation to patronize
their stores is given in the form of free
cooking classes; which is also a part of
their promotional strategy. 0.05 2 0.10 1 0.10
Potential market development
in international markets. 0.10 2 0.20 1 0.20
Standardized procedures through-
out all stores. 0.06 - -
Start dealing in private brands 0.06 - -
Opening of new stores 0.15 - -
Threats
The company is facing a number of
competitors like Labinal Power system, Custome Cable
Bi-Lo and Piggly Wiggly. 0.08 2 0.16 1 0.16
The product price being comparatively
high allows the competitors to gain a
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competitive advantage over price. 0.08 3 0.24 2 0.48
The global increase in labor, inventory
and operational cost. 0.04 - -
Labinal Power system is expanding globally,
while custom cable is just concentrating in
the same area. 0.03 4 0.12 2 0.24
The internet penetration of the
company is not strong enough to cope
with the changing trends. 0.02 - -
Total 1.00
Strengths
Currently ranked at #. 2 on Fortune’s
World’s Most Admired Companies list 0.02 - -
Ideal locations and number of the
stores at different demographic locations
having more than hundreds stores along with 4 Sabor
stores, 3 Green Wise Stores, 11 Pix
convenience stations, 7 cooking schools
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and 11 event planning locations. 0.10 - -
The company’s revenue is calculated
up to $ 24.3 billion with a net income of
almost $1.2 billion with the labor strength
of 146,500 employees and are successfully
organized through employee stock
ownership program. 0.07 4 0.28 2 0.56
Was ranked at number 9, in 2017, on
the Forbes list all over the world Largest
Companies. 0.03 - -
The company has a positive
employee environment. 0.07 3 0.21 1 0.21
The company has its own
manufacturing units to the product
0.12 - -
Their huge numbers of locations are
concentrated in different country, according
to the population concentration. 0.08 2 0.16 1 0.16
The specialized salad networks of
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restaurants in England
by Norther Power system
0.06 2 0.12 1 0.12
The customer service provided by
the company is very organized and
responsive as well. 0.05 3 0.15 2 0.30
The company enjoys high returns
on its investments annually. 0.04 4 0.16 4 0.64
Weaknesses
The company has been involved
in litigation for certain gender
discrimination issues. 0.15 2 0.30 2 0.60
The market is limited to only
worldwide: such a good number of
stores should cover a number of country
instead of its saturation in selected country. 0.05 4 0.20 1 0.20
The company is not keeping pace
with growing information technology
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needs. 0.05 1 0.05 2 0.10
Product quality is compromised
which repels the consumers & establishes
a situation of mistrust. 0.03 3 0.09 2 0.18
Price range is not flexible & not
affordable to everyone. 0.04 3 0.12 2 0.24
Employees have to follow a
specific dress code. 0.02 - -
No variety of in store designs;
the same format is followed for
all stores. 0.02 - -
Total 1.00 3.21 5.04
Summary:
First, the qualitative strategic planning matrix (QSPM) is a tool used in determining a business strategy. It is broken up into three stages to make the most objective decision using as many facts as possible. The first step is to define key strategic factors (which are, external opportunities & threats and internal strengths and weaknesses) and annotate them. This information can be obtained from your SWOT analysis, if you’ve already done one.
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Then, in the second step, once these factors have been determined and annotated, a similar form of analysis is performed to objectively weigh the pros and cons of each strategic factor in numerical form. By assigning a weight to each key external (opportunities & threats) and internal (strengths & weakness) factor.
The third step is to examine the matrices and identify alternative strategies that the organization should consider implementing and record them in the top row. Grouping the strategies into mutually exclusive sets if possible.
Fourth, determine the attractiveness scores (AS) which indicate the relative attractiveness of each strategy within a given set of alternatives. By asking yourself the question “Does this factor affect the choice of strategies being made?” the attractiveness score is determined individually. The range for the attractiveness score is: 1 = not attractive, 2 = somewhat attractive, 3 = reasonable attractive, and 4 = highly attractive. The meaning of attractive is that the extent that one strategy, when compared to the others, enables the company to either capitalize on the strength, improve on the weakness, exploit the opportunity, or avoid the threat.
Step five is to compute the total attractiveness scores. This figure indicates the relative attractiveness of each alternative strategy, considering only the impact of
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Last post Wed at 11:46 AMby Sanh Tran
Week 5 Learning Activity 1 Mercidieu Delva posted Feb 6, 2018 9:13 PM Subscribe
Northern Power manufacturers the top-ten 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. They design their wind turbines with ought the need for a gear box, because they tend to increase downtime and regular amount of maintenance needed due to the additional moving parts.
Their strategy- They design their wind turbines with ought the need for a gear box, because they tend to increase downtime and regular amount of maintenance
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needed due to the additional moving parts (2017, p. 16). This design is so successful that they historically had licensed this technology to large wind turbine manufacturers that do not produce. 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. Norther Power has started to implement a turn-key approach to their business. This allows for differentiation due to the technical experts that are available to help customers create “energy storage, micro-grid, and grid stabilization situations
Vertical integration- Vertical Integration refers to when firms get involved in the elements of the value chain (Strategic Management. Selecting Corporate Level Strategy, Buyers in the wind turbine have a fair amount of purchasing power because they can turn to another company to purchase the same product. While it cannot be certain, a buyer would presumably stick with one company once their first purchases of wind power are mad
Merger/Acquisition- A merger or acquisition takes place when one company purchases another. Usually a larger company buys a smaller company one (Strategic Management, Supporting Business-Level Strategy, much of the profits in the wind turbine industry belong to the largest companies who hold the most patents. Altogether, there are steep barriers to entry which presents very little threat to Northern Power Systems profitability.
Research and Development has been a core component to the NPS competitive position in the market. NPS has been awards the R&D 100, AWEA Technical Achievement Award which has resulted in a broad portfolio of intellectual property, Norther Power Systems. is a tremendous strength that NPS market more aggressively to capture its competitors? Which is the longevity of their product displayed to the public where everybody I can see the truth.
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Week 5 LA 2 Patricia Quinones posted Feb 6, 2018 1:04 PM Subscribe
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Glaxo Smith Kline (GSK) is the third largest pharmaceutical company in the world. The company employs over 100,000 employees across 150 countries (GSK, 2017) The companies’ headquarters are located in London, and the US corporate office is located in Pennsylvania. GSK is constantly researching and developing new products to improve the lives of their customers and this research differentiates them from other organizations as GSK focus on chronic illness and Vaccines.
Recently the company took on the direction of a differentiation strategy. Differentiation strategy refers to companies that compete based on unique products and target a broad target market (Strategic Management, Selecting Business-Level Strategy, 2014, p 148). GSK meets these criteria due to their R & D in chronic illness and vaccines.
Below we take a look at the ) Quantitative Strategic Planning Matrix and how it relates to the company and their decision in their strategic planning. The Quantitative Strategic Planning Matrix is tool used to evaluate alternative sets of strategies(Strategic Management, Supporting Business-Level Strategy, 2014,).
Internal Strengths
WeightAs TAS As TAS AS TAS
Brand name .14 2 .28 2 .28 2 .14
Growth earnings
.12 4 .48 3 .36 3 .36
R & D .15 4 .60 4 .60 3 .45
Global presence
.11 1 .11 1 .11 1 .11
Innovation .12 3 .36 3 .36 2 .36
Internal
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Weakness
Increased prices
.08 3 .24 2 .24 2 .24
Slow market .06 1 .06 1 .06 1 .06
Legal issues .08 1 .08 1 .08 1 .06
Expiring patents
.06 3 .18 4 .24 3 .24
Needs new market
.08 4 .32 4 .32 3 .24
1.00 2 2.71 2.65 2.26
Key External Factors
Opportunities
Aging population
.11 3 .33 3 .33 3 .33
Developing countries
.09 1 .09 1 .09 1 .11
Increase in chronic disease
.07 2 .14 4 .48 3 .21
Emerging Markets
.07 2 .14 4 .28 3 .21
Increasing .12 1 .12. 3 .36 1 .12
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demand for healthcare
Strong sales and distribution
.04 2 .08 3 .24 2 .24
Threats
Political Instability
.07 1 .07 1 .07 1 .07
Medicaid .09 3 .27 2 .18 2 .14
Inflation .09 1 .09 1 .09 1 .09
Regulation .08 1 .08 1 .08 1 .08
Patents .11 4 .44 2 .22 3 .33
Risk of failure in products
.06 3 .18 4 .24 3 .18
1.00 2.03 2.72 2.11
Total Sum of Attractiveness Score
4.74 5.37 4.37
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Horizontal Integration (Merger/Acquisition )
A. As evidenced by the QSPM in the above GSK should merge/acquire a new company.
A merger/acquisition is critical to the organizations future success based on the fact that GSK consumer’s numerous products that will be coming off patent in the next ten years (GSK, 2017) Through a merger or acquiring a company GSK would gain the resources that can assist the company with innovative ideas to increase their market in areas other than vaccines and respiratory illness by developing new medications or capabilities to have their own generic pharmaceutical company where they are able to produce their own generics. In order to remain competitive replacing the upcoming patent medications with new medications on patent is pertinent in the success of GSK. A merger or acquisition could be the answer the company needs to develop these new generic medications.
B) As the aging population increases the need to develop more medications and cures for diseases and conditions associated with age increases. Merging with an organization increases both companies Research and Development program to develop new products to serve the existing market of customers (Strategic Management, Supporting Business-Level Strategy, 2014, p 243). A market of customers that most pharmaceuticals/healthcare industries view as a challenge due to the conditions associated with them such as cancer, dementia, increase in the number of falls, obesity, and diabetes (Garza, 2016 ). Developing medications
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that are easier for older populations to take and be compliant is a marketing strategy that the merger could primarily focus on.
C) Increasing demand for healthcare is increasing pharmaceutical needs for patients. Aging populations along with improving economic standings in low developing countries provides companies the opportunity to find a new market to enhance pharmaceutical production. Aging populations brings about new disease/illness that pharmaceutical companies must be prepared to tackle. Collaboration between two organizations provides the opportunity to be the first in this emerging market and therefore increasing the Research and Development for these needs and providing the medications needed to ensure longevity for patients.
The strategies above would provide GSK the differentiation strategy that the company is seeking to improve their competitive edge in the pharmaceutical industry. The company is presently holding down the middle position of the pharmacy industry and their growth over the past few years has dropped. In order to improve in the industry, the company must gain the advantage in the pharmaceutical industry and the leading option is a merger. A Horizontal integration is aimed at lowering cost while achieving great economies of scales (Strategic Management, Supporting Business-Level Strategy, 2014, p 245). Considering this strategy will provide GSK more resources in the industry while also reducing the competition.
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Last post yesterday at 2:29 PM by Mercidieu Delva
Week 5 LA 1 Patricia Quinones posted Feb 6, 2018 12:55 PM Subscribe
Glaxo Smith Kline (GSK) is the third largest pharmaceutical company in the world. The company employs over 100,000 employees across 150 countries (GSK, 2017) The company’s headquarters are located in London, and the US corporate office is located in Pennsylvania. GSK is constantly researching and developing new products to improve the lives of all patients.
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Recently the company took on the direction of a differentiation strategy. Differentiation strategy refers to companies that compete based on unique products and target a broad target market (Strategic Management, Selecting Business-Level Strategy, 2014, p 148). GSK meets these criteria due to their R & D in chronic illness and vaccines. In order to achieve the generic strategy stated above the company should consider the four corporate strategies below:
A) Blue Ocean strategy- The company is already competing with other pharmaceuticals such as J & J , Bayer, and Roche in the Pharmaceutical Industry. Through the blue ocean strategy, the company would create a new market instead of competing in the existing one (Strategic Management, Supporting Business- Level Strategy, 2014, p 187). The company focuses on pharmaceuticals to treat chronic illness such as HIV, respiratory diseases and vaccines. By branching out and developing cures for deadly disease such as Cancer, Lou Gehrig, or MLS (multiple sclerosis) the company would be stepping into a new market, without facing major competition.
B) Vertical integration- Vertical Integration refers to when firms get involved in the elements of the value chain (Strategic Management. Selecting Corporate Level Strategy, 2014 p. 249). An area that GSK could venture into would be the supply chain area. By developing their own raw materials for the products they develop could prove beneficial to the company by saving them money that the company could apply to Research and Development of new blockbuster medications.
C.) Merger/Acquisition- A merger or acquisition takes place when one company purchases another. Usually a larger company buys a smaller company one (Strategic Management, Supporting Business-Level Strategy, 2014, p 187). GSK produces a lot of brand medications and eventually the patents on these medications will expire. If the company was to purchase a smaller generic business or merge with another pharmaceutical company that maintains a generic division, the company could produce their own generics when the patents
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expired, allowing the company to continue to profit off the medications they have produced.
D) Restructuring (Divestment) refers to selling off part of a firm’s operations one (Strategic Management, Supporting Business-Level Strategy, 2014, p 266), GSK's primary revenue is in the field of Vaccines and Chronic illness medications. In the area of medications, there was little growth in the Cardiovascular, metabolic, and urology products by the company over the past year(GSK, 2017). Considering selling or reducing production in these areas could be beneficial to the company due to little market growth therefore allowing the company to focus on medications that are providing growth such as HIV and Respiratory.
Reference:
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Learning Activity 1 - Leib Rhonda Leib posted Feb 8, 2018 9:00 PM Subscribe
Hapag-Lloyd (HL) is a container shipping company serving a global market (Hapag-Lloyd, n. d., About Us, para. 1). Because the shipping container industry relies on economies of scale for profit (Rau & Spinler, 2016, p. 135), it was determined that HL should follow the generic strategy of cost leadership to gain market share. HL wants to carry as many containers per ship as it can to maximize profit. This strategy allows HL to pursue a corporate-level market penetration strategy by luring businesses away from HL’s competitors (Mastering Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 241) that may be drawn to HL’s relative high level of service at a lower price. The BCG Matrix, based on HL’s market share relative to the largest competitor, indicated that HL had a small market share in a high growth industry and may be spending more money than it is generating (Jurevicius, 2013, para. 9). HL recently ordered new state of the art refrigerated container units to accommodate growing
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demand (Wackett, 2017, p. 52), and initiated a horizontal integration strategy by acquiring United Arab Shipping Company (UASC) last year (Hapag-Lloyd, 2017, Hapag-Lloyd and UASC Completes Merger, para. 1). The acquisition helps HL be more efficient and lowers operating costs which is a necessary element of cost leadership strategy (Mastering Strategic Management, 2014, Selecting Business Level Strategies, p. 144). Opportunities exist for further acquisitions in the saturated shipping container industry. The acquisition of UASC also enabled HL to pursue a market development strategy because it opened new routes and ports for HL (Mastering Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 242). The new markets in East Africa and the Middle East may be a perfect fit for HL’s expanding refrigerated container shipping market. Another strategy that HL should consider is a backward vertical integration strategy that would allow it to take some of the bargaining power away from its suppliers (Mastering Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 253). If HL purchased the company that makes its refrigerated containers, for example, it would have control over the cost of the units, lowering its operating costs and further supporting its cost leadership strategy.
Hapag-Lloyd. (n. d.). About us. Retrieved from https://www.hapag- lloyd.com/en/about-us.html#anchor_24ae92
Hapag-Lloyd. (2017, May 24). Hapag-Lloyd and UASC completes merger. Retrieved from https://www.hapag- lloyd.com/en/press/releases/2017/05/hapag-lloyd-and-uasc-complete- merger.html
Jurevicius, O. (2013, May 1). BCG growth-share matrix. Retrieved from https://www.strategicmanagementi20nsight.com/tools/bcg-matrix- growth-share.html
Mastering Strategic Management. (2014). Selecting business level strategies. Washington, D. C., The Saylor Foundation
Mastering Strategic Management. (2014). Selecting corporate-level strategies. Washington, D. C., The Saylor Foundation
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Learning Activity 2 - Leib Rhonda Leib posted Feb 8, 2018 8:58 PM Subscribe
Strategic Alternatives
Key Internal Factors Market
Penetration Market
Development Horizontal Integration
Vertical Integration
Internal Strengths WeightAS TAS AS TAS AS TAS AS TAS
Large capacity fleet .3 4 1.2 4 1.2 2 .6 3 .9
Refrigerated cars .2 3 .6 3 .6 2 .4 1 .2
Online booking capability .1 3 .3 3 .3 3 .3 1 .1
Internal Weaknesses
Debt accumulation .1 2 .2 1 .2 1 .2 1 .2
Slow-steaming .1 3 .3 2 .2 1 .1 1 .1
Underutilized special cargo .2 2 .4 1 .2 1 .2 2 .4
1
Key External Factors
Opportunities
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Emerging economies .05 2 .1 4 .2 3 .15 2 .1
Rising freight rates/increased margins
.15 4 .6 4 .6 3 .45 3 .45
Mergers, acquisitions, alliances
.05 3 .15 3 .15 4 .2 3 .15
Demand for oil from Middle East
.1 3 .3 3 .3 3 .3 2 .2
Increased global trade .15 3 .45 4 .6 4 .6 2 .3
Threats
Competitor mergers .1 1 .1 2 .2 4 .4 3 .3
Crowded ports .1 2 .2 3 .3 3 .3 1 .1
Market overcapacity due to mega-ship increase
.1 2 .2 1 .1 4 .4 1 .1
Increased fuel costs .15 3 .45 2 .3 2 .3 3 .45
Trade embargos and protectionism
.05 2 .1 3 .15 2 .1 1 .05
1
Total Sum of Attractiveness Score
5.65 5.60 5.00 4.10
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The Quantitative Strategic Planning Matrix (QSPM) indicates that the strategy that Hapag-Lloyd (HL) should move forward with is a market penetration strategy. This strategy would require HL to gain additional market share utilizing the resources it currently holds (Mastering Strategic Management, 2014, Selecting Corporate-Level Strategies, p. 241).
HL is in a high growth market where economies of scale can lead to a competitive advantage. One of HL’s internal strengths is its fleet capacity. HL recently acquired United Arab Shipping Company as well as ordered over 7000 new refrigerated containers to expand its container capacity (Hapag-Lloyd, 2017, Investing in Growth Markets, para. 1). Increasing container capacity while lowering rates will draw buyers to HL thus increasing its market share.
Lowering rates and increasing market share through market penetration also creates a barrier to entry keeping new players from taking HL’s existing or potential market share which may give HL a competitive advantage (Mastering Strategic Management, 2014, Selecting Business-Level Strategies, p. 145).
Market penetration using HL’s current resources requires efficiency to keep costs low. HL’s new fleet not only has greater container capacity to achieve economies of scale but it is also more fuel efficient which further reduces HL’s transport cost per container (Pearce & Harvey, 1990, p. 64).
Therefore, market penetration strategy best fits with HL’s current resources and market position. Organizations that concentrate on products and distribution channels that they know well minimize risk involved in growing market share through market penetration (Pearce & Harvey, 1990, p. 67).
Hapag-Lloyd. (2017, September 15). Investing in growth markets: Hapag-Lloyd orders 7,700 new reefer containers. Retrieved from https://www.hapag- lloyd.com/en/press/releases/2017/09/investing-in-growth-markets--hapag- lloyd-orders-7-700-new-reefer.html
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Mastering Strategic Management. (2014). Selecting business-level strategies. Washington, D. C., The Saylor Foundation
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Act 2 Ronald Edhaya posted Feb 8, 2018 12:15 PM Subscribed
QSPM model
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Act 1 Ronald Edhaya posted Feb 8, 2018 12:13 PM Subscribed
From the previous analysis in week 4, EPW renewables best generic level strategy is by using the leadership cost. The strategy was aimed at giving the company a
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Week 5 Learning Activity 1 --Mayer Stephanie Mayer posted Feb 8, 2018 9:54 PM Subscribe
Based in Marseille, France, CMA CGM Group is part of the international container shipping industry (CMA CGM, n.d.a). Uncovered from week 4, the generic strategy direction for CMA CGM is differentiation. Focusing on differentiation means that CMA CGM is competing based on uniqueness rather than price to appeal to a wide audience (Strategic Management, 2014, Selecting Business-Level Strategies, p.149).
To meet the generic differentiation strategy, CMA CGM must focus on the following four corporate-level strategies: market penetration, product development, horizontal integration, and related diversification.
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Market Penetration: Market penetration involves CMA CGM to try to gain additional share of its existing markets by using existing products (Strategic Management, 2014, Selecting Corporate-Level Strategies, p.241). This strategy will rely on advertising and innovation to attract new customers. CMA CGM uses its brand and power within the industry to build on this strategy. The CMA CGM website clearly displays the importance of their unique offerings to its customers and dedication to the community. Further advertising focusing on these efforts could help to increase its customer base.
Product Development: To meet the generic strategy of product differentiation, CMA CGM should focus on product development to gain competitiveness. CMA CGM’s partnership with Infosys is expected to increase its differentiation as it will bring a more flexible and innovative edge to the industry (CMA CGM, 2017a). Additionally, bringing new technologies into its production system will help to provide better customer service and reliability to gain customer loyalty and increase brand power.
Horizontal Integration: Due to the vast number of shipping company options, companies in the industry are finding cooperation and acquisition of smaller companies to its benefit to remain in business. CMA CGM is a part of the OCEAN ALLIANCE to help expand services to increase efficiency and reliability (CMA CGM, n.d.b). The alliance and acquisition of smaller shipping companies helps to ensure the CMA CGM brand and services are spread across the globe for more customer outreach and potential for differentiation. For example, the acquisition of Mercosul Line will strengthen services in South America where the market has development potential for complementary services (CMA CGM, 2017a).
Related Diversification: CMA CGM can create even more diversification through its Serenity services which offer simpler, faster, and customized solutions to increase security of shipment transfer for businesses (CMA CGM, 2017b). At a higher cost but advantage for businesses, Serenity is claimed to be a game changer for the shipping industry, ensuring customers are notified when goods are damaged due to natural disasters, and providing compensation rather than hoping a claim is eventually approved and reimbursed (CMA CGM, 2017b). This differentiation strategy promotes customer loyalty as customers can expect to be covered in natural disasters, a rare advantage compared to most shipping industries.
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References
CMA CGM (n.d.a). About us. Retrieved from http://www.cma-cgm.com/the- group/about-us/presentation
CMA CGM (2017a) CMA CGM to acquire MERCOSUL from Maersk Line. Retrieved from http://www.cma-cgm.com/news/1653/cma-cgm-to-acquire-mercosul- from-maersk-line
CMA CGM ( d b) OCEAN ALLIANCE A h d i ff i R i d fless
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Week 5 Learning Activity 2 --Mayer Stephanie Mayer posted Feb 8, 2018 9:53 PM Subscribe
According to the weighted scores in the QSPM, CMA CGM should use the product development strategy moving forward to achieve its generic strategy of differentiation. Each score was self-selected based off the explanations of the first discussion post for this week. To increase competitive advantage for future success, CMA CGM should focus on strategies in the following order: product
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development, related diversification, market penetration, and then horizontal integration.
Ranked as number three in the industry, horizontal integration ranked last as CMA CGM already has a strong position as compared to others in the industry and experiences a low threat of new entrants. Product development involves creating new products to serve existing customers (Strategic Management, 2014, Selecting Corporate-Level Strategies, p.243). Given the high ranking of the company world-wide and its brand power, increasing customer service and increasing customized solutions for customers, will help bring CMA CGM to the top. New technologies into the production system will help to provide better customer service and reliability to gain customer loyalty and increase brand power, while increased services such as through Serenity will offer simpler, faster, and customized solutions to increase security of shipment transfer for the monetary benefit of businesses to maintain customer loyalty and recommending CMA CGM to business partners (CMA CGM, 2017).
References
CMA CGM (2017). Serenity by CMA CGM. Retrieved from https://www.cma- cgm.com/static/Communication/Attachments/CMA%20CGM%20- %20Serenity%20Brochure%202017.pdf
Strategic Management (2014) Selecting corporate level strategies Washingtonless
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tbream LA1 Tiffany Bream posted Feb 8, 2018 2:29 PM Subscribe
The company that I have chosen to research and analyze for the weekly learning activities is the international container shipping company A.P. Moller- Maersk Group.
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This company is based In Copenhagen, Denmark, and is worth roughly 40.3 billion in USD (A.P. Moller- Maersk, 2017, p. 1). Maersk is the largest container shipping company in the world today. After through research A.P. Moller- Maersk Group is best suited to use the Focused Cost Leadership strategy to stay ahead of the competition.
Focused Cost Leadership strategy is they strategy in which companies offer lower prices in among a narrow target market. To supplement this strategy the four corporate level strategies that will help A.P. Moller-Maersk to achieve the focused cost leadership strategy are; Related Diversification, Backward Vertical Integration, Horizontal Integration, and Product Development (Strategic Management, 2014, pp. 244-256).
There are companies that produce and manufacture shipping containers, A.P. Moller Maersk should use the strategy of related diversification to purchase these companies to broaden their market. This strategy would also allow the shipping mogul to employ backward vertical integration. This should involve A.P. Moller- Maersk investigating and slowly getting into the supply chain of their containers, i.e. the steal, and the manufacturing. Horizontal integration will help A.P. Moller- Maersk to be a tougher competitor by acquiring small shipping companies that center on eastern nations, as A.P. Moller-Maersk is based in Denmark. With the previously stated strategies A.P. Moller-Maersk should start to enter product development. The company has started to in small numbers already with the invent of more efficient refrigerated containers (A.P. Moller- Maersk, 2017), however they should develop more.
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tbream LA2 Tiffany Bream posted Feb 8, 2018 2:28 PM Subscribe
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LA 1 - Alternative Strategy Umekus Watts posted Feb 8, 2018 11:40 PM Subscribe
Moog Inc. (Moog) is a provider of high performance precision motion and fluid control products. It offers integrate systems for industrial automation market; apart from providing solutions for power generation applications, which allow for greater safety and precise control of guide vane positioning on wind turbines. Moog is a manufacturer of industrial machinery that seek to achieve higher productivity, premium-quality products, and maximum energy efficiency, all at less cost. A multi-billion dollar company servicing on the cutting edge of precision motion technology. (Moog, 2017).
Moog currently operates on a focused cost strategy, due to the growing competition in the wind power industry. Basing their marketing on what they consider to be higher quality and more proficient products. In order for Moog Inc. to maintain its competitive edge it should consider implementing the corporate level strategies discussed below.
Concentration strategy would be one option to consider. These strategies involve trying to compete successfully only within a single industry. There are three different concentration strategies, market penetration, market development, and product development (Management, 2014). Under this strategy Moog could market its new products that maximize wind turbine performance to complete electric and hydraulic pitch control systems. Offering more reliable solution needed by the wind turbine manufactures and operators, all while increasing their bottom line.
Horizontal Integration would be another strategy that could be utilized to increase the company strategic position. Under this strategy, rather than rely on their own efforts, the company could try to expand their presence in an industry by acquiring or merging with one of their rivals (Management, 2014). By merging with rival companies such as Honeywell and Curtiss-Wright, they could become moguls in the wind industry and become the sole provider of wind energy by driving down cost and out producing any of the remaining competitors. This
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strategy would be a risk if Moog was to decide to return to a single source business.
Backward Vertical Integration is also an option for this company. A backward vertical integration strategy involves a firm moving back along the value chain and entering a supplier’s business (Management, 2014). By creating subsidiaries that would provide key inputs to the purchases of raw material, such as steel, titanium, and nickel, they could ensure they are getting the lowest prices and are not receiving material of an inferior quality (Moog, 2017).
The diversification strategy is the final option they could apply to the business strategy. This involves entering an entirely new industry. Today, Moog motion control technology enhances performance in a variety of markets and applications ranging from commercial aircraft cockpits, to power generation turbines, Formula One racing, and medical infusion systems (Moog, 2017). With such a wide range of capability it would seem to could shift directions with their products and service and still meet the demand of any new market they decide to venture into. The name Moog carries the expectation of quality and would help the industry to compete in any relative growing market.
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LA 2- QSPM Umekus Watts posted Feb 8, 2018 11:37 PM Subscribe
A QSPM provides a framework to prioritize the strategies, it can be used for comparing strategies at any level such as corporate, business and functional. It integrates external and internal factors into the decision making process, can be developed for small and large scale profit and non-profit organizations. It is only as good as the information and matching IEF/EFE data upon which it is based (Management, 2014). The attached QSPM indicates that Moog Inc. alternative strategy should be based on an Horizontal Integration. With final attractive score of 4.90, it came in above Product development (4.65) and Backward Vertical Integration (3.30). By merging with it lead competitor it could increase it profits along with gaining a wider customer base and producing higher
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quality products. Positioning themselves to become a global supplier of wind power generation and securing the industry market (Moog, 2017).
Works Cited:
Management, S. (2014). Selecting Corporate-Level Strategies. Washington, D.C.: The Saylor Foundation.
Moog. (2017). Moog Inc. Retrieved from Welcome to Moog Careers: http://www.moog.com/content/sites/global/en/about-us.html
Key Internal Factors Product
Development Horizontal Integration
Backw Vert
Integr
Internal Strength Weight AS TAS AS TAS AS TAS
Reliable suppliers 0.20 4 0.80 3 0.60 2 0.4
High level of customer satisfaction
0.10 3 0.30 2 0.20 -
Strong brand portfolio 0.15 2 0.30 4 0.60 -
Strong cash flow 0.10 1 0.10 3 0.30 4 0.4
Internal Weakness
Limited success outside core business
0.15 - 3 0.45 -
Low investment in new technology
0.10 4 0.40 4 0.40 2 0.2
Gap in product range sold by 0.10 3 0.30 3 0.30 -
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company
Organization structure not compatible with present business
0.10 - 3 0.30 3 0.3
1.00
Key External Factors
Opportunites
New technology 0.10 4 0.40 2 0.20 3 0.3
New market 0.10 4 0.40 4 0.40 3 0.3
New environmental policies 0.15 3 0.45 2 0.30 4 0.6
Economic rise/increase 0.05 4 0.20 3 0.15 3 0.1
Threats
Increasing competition 0.10 4 0.40 1 0.10 2 0.2
Liability laws 0.10 1 0.10 2 0.20 3 0.3
New technology by competitor 0.10 4 0.40 3 0.30 -
Imitation or counterfeit parts 0.05 2 0.10 2 0.10 3 0.1
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Learning Activity #1 - Valerie Siebold Valerie Siebold posted Feb 8, 2018 12:51 PM Subscribe
Based on the results of the internal and external analysis, Grindeks would benefit the most from the focused differentiation strategy. This type of strategy involves, “offering unique features that fulfill the demands of a narrow market (Strategic Management, 2014a, Selecting Business-Level Strategies, p. 159).” One advantage of this type of strategy is being able to charge a higher price for a higher quality, and more natural, alternative to competitor’s medicine. A second advantage of this type of strategy is the gain of expertise from the in-depth research and development of the biologics medicine.
Below are four corporate-level strategies Grindeks should use to achieve the focused differentiation:
1. Product development strategy: involves, “creating new products to serve existing markets (Strategic Management, 2014b, Selecting Corporate-Level Strategies, p. 243).” This type of strategy will expand the offerings of medicine by going beyond the traditional forms. Producing higher quality forms of medicine will appeal to customers who are concerned about the chemicals they are ingesting.
2. Horizontal integration strategy: involves acquiring or merging with a rival to expand its presence in an industry (Strategic Management, 2014b, Selecting Corporate-Level Strategies, p. 245). This type of strategy will lower the costs of research and development because of the knowledge obtained from competitors that are already developing these new biologic medicines. It will also lead to a more profitable industry because the rivalry will not be as intense. Finally, it will provide, “access to new distribution channels (Strategic Management, 2014b, Selecting Corporate-Level Strategies, p. 246).”
3. Transnational strategy: involves, “balancing efficiency with the need to adjust to local preferences within various countries (Strategic Management, 2014c, Competing in International Markets, p. 228).” This type of strategy will offer the same basic options for common diseases and ailments in every country. However, it will also focus on adjusting some medicines based on the needs of the local community in each market.
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4. Related diversification strategy: involves, “moving into a new industry that has important similarities with the firm’s existing industry (Strategic Management, 2014b, Selecting Corporate-Level Strategies, p. 256).” This type of strategy will lead to expansion into the organic field of medicine. More and more consumers are looking for organic solutions to support a healthier lifestyle.
References: less
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Learning Activity #2 - Valerie Siebold Valerie Siebold posted Feb 8, 2018 12:54 PM Subscribe
The QSPM Matrix is a tool that will be used to analyze the following four corporate-level strategies: Product Development, Horizontal Integration, Transnational and Related Diversification.
Below is the QSPM Matrix:
QSPM Matrix
Below are the steps used to develop the QSPM Matrix:
First, the attractiveness score (AS) is determined by examining each factor and asking the question, “Does this factor affect the choice of strategies being made?” (Quantitative Strategic Planning Matrix, n.d., para. 7). If so, then that factor is rated in a range between 1 – 4. The definition of each number is: (1) = not attractive, (2) = somewhat attractive, (3) = reasonably attractive and (4) = highly attractive.
Second, the total attractiveness score (TAS) is the product of multiplying the weights by the attractiveness score (AS) in each row (Quantitative Strategic Planning Matrix, n.d., para. 8). The TAS indicate how attractive the strategy is
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based on the specific external or internal factor. The higher the TAS, the more attractive that strategy becomes to the organization’s success.
Finally, determine the sum TAS by adding the scores in each strategy column. The strategies with the higher scores are the more attractive strategies. In this case, the strategy with the highest score is the product development strategy.
The product development strategy will create a presence in the biologics market and provide expansion in market share growth. It will also utilize the strength of the research and development team. Lastly, it will capitalize on the opportunity to expand globally.
Reference:
Quantitative strategic planning matrix (QSPM). (n.d.). Retrieved from http://www.mba-tutorials.com/strategy/230-quantitative-strategic-planning- matrix-qspm.html
QSPM Matrix.png (45.37 KB)
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Week 5 Learning Activity 2 Yudi Carmona posted Feb 8, 2018 9:31 PM Subscribe
Week 5 Learning Activity 2
The QSPM matrix is normally used in the third stage of a strategy formulation, which is known as the “decision stage” (MBA Tutorials, n.d., Quantitative Strategic Planning Matrix (QSPM), para. 2). This tool helps organizations identify and select one best strategy (MBA Tutorials, n.d., Quantitative Strategic Planning Matrix (QSPM), para. 2). For Roche, the following four alternative strategies have been identified: 1) market penetration, 2) market development, 3) product development 4), and horizontal integration. The QSPM will be used to compare and contrast the weighted scores for the whole pool of strategies, and to identify the optimal strategy for Roche. The following steps were taken to compute the QSPM and identify the best strategy:
Step 1: The information from the EFE and IFE matrix from week 3 was used to conduct this analysis.
Step 2: The weights from the EFE matrix and IFE matrix from week 3 were also used for each external and internal factor in the QSPM.
Step 3: The four selected alternative strategies (market penetration, market development, product development, and horizontal integration) were put in the
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top row of the QSPM.
Step 4: The Attractiveness Score (AS) was determined for each strategy by using a score range of 1 to 4. A dash was used to indicate when a key factor does not affect the alternative strategies (MBA Tutorials, n.d., Quantitative Strategic Planning Matrix (QSPM), para. 7).
Step 5: The Total Attractiveness Scores (TAS) was computed by multiplying the weights of each factor by the Attractiveness Score (AS) (MBA Tutorials, n.d., Quantitative Strategic Planning Matrix (QSPM), para. 8).
Step 6: The Sum Total Attractiveness Score was computed in each strategy. The Sum Total Attractiveness Scores revealed that the product development strategy is the most attractive.
The QSPM sum total attractiveness scores of 5.66 indicates that Roche should focus on the product development strategy. The product development strategy is the most critical to Roche, as it will secure the company’s future success. The EFE matrix shows that the most important external factor to Roche is “Technology innovations” as indicated by a 0.20 weight. New technologies will allow Roche to develop new drugs and therapies. It was also determined that Roche is doing pretty well taking advantage of external opportunities and avoiding the threats facing the company. The IFE matrix shows that the most important internal factor to Roche is “Biological products” as indicated by a 0.20 weight. Roche’s future success will depend on the development of biological products. Luckily for Roche, the factors “Technology innovations” and “Biological products” are a perfect combination for its product development strategy. Additionally, under the product development strategy, these two critical factors both received an Attractiveness Score of 4 and a Total Attractiveness Score of 0.80. This ultimately indicates that the product development strategy is the best choice for Roche.
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EFE – Key External Factors
Opportunities Weight Rating Weighted Score
Technology innovations
0.20 4 0.80
Increased of life expectancy
0.07 1 0.07
New treatments in oncology
0.10 3 0.30
Strategic agreements with African countries
0.15 4 0.60
References:
MBA Tutorials. (n.d.). Quantitative Strategic Planning Matrix (QSPM). Retrieved from
http://www.mba-tutorials.com/strategy/230-quantitative-strategic-planning- matrix-qspm.html
EFE (External Factor Evaluation)
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Growing environmental agenda
0.05 3 0.15
Threats
Demographic changes
0.07 3 0.21
Pressure on drug pricing
0.13 3 0.39
Increase litigation
0.09 3 0.27
Fluctuations in currency exchange rates
0.04 1 0.04
Uncertainties in the discovery, development or marketing of new products
0.10 2 0.20
Totals for EFE 1.0 (Leave this cell blank)
3.04
IFE (Internal Factor Evaluation)
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IFE – Key Internal Factors
Strengths Weight Rating Weighted Score
Highly skilled employees 0.15 3 0.45
Differentiated products and services
0.10 3 0.30
Robust portfolio 0.13 3 0.39
Biological products 0.20 4 0.80
Pipeline 0.10 4 0.40
Weaknesses
Outdated technology 0.05 2 0.10
Product replication 0.10 1 0.10
Patent expiry 0.07 2 0.14
Metabolic/cardiovascular area
0.05 1 0.05
Cost structure 0.05 2 0.10
Totals 1.0 (Leave this cell blank)
2.83
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Strategic Alternatives
Key Internal Factors Market Penetration
Market Development
Product Development
Horizonta Integratio
Internal Strengths WeightAS TAS AS TAS AS TAS AS TA
Highly skilled employees 0.15 3 0.45 3 0.45 4 0.60 2 0
Differentiated products 0.10 4 0.40 4 0.40 4 0.40 2 0
Robust portfolio 0.13 4 0.52 4 0.52 4 0.52 3 0
Biological products 0.20 3 0.60 3 0.60 4 0.80 3 0
Pipeline 0.10 1 0.10 1 0.10 4 0.40 1 0
Internal Weaknesses
Outdated technology 0.05 3 0.15 3 0.15 1 0.05 3 0
Product replication 0.10 2 0.20 1 0.10 2 0.20 2 0
Patent expiry 0.07 1 0.07 1 0.07 1 0.07 3 0
Metabolic/cardiovascular 0.05 1 0.05 2 0.10 2 0.10 2 0
Cost structure 0.05 2 0.10 1 0.05 1 0.05 2 0
1.00
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Key External Factors
Opportunities
Technology Innovations 0.20 2 0.40 3 0.60 4 0.80 3 0
Increased of life expectancy 0.07 2 0.14 3 0.21 4 0.28 3 0
New treatments in oncology 0.10 2 0.20 2 0.20 4 0.40 4 0
Strategic agreements in African countries 0.15 1 0.15 4 0.60 3 0.45 3 0
Growing environmental agenda 0.05 - - - -
Threats
Demographic changes 0.07 2 0.14 2 0.14 2 0.14 2 0
Pressure on drug pricing 0.13 2 0.26 2 0.26 1 0.13 4 0
Week 5 Learning Activity 1 Yudi Carmona posted Feb 8, 2018 9:28 PM Subscribe
Week 5 Learning Activity 1
Roche is the world’s largest biotech company and a world leader in the in vitrodiagnostics business. The company has a 120-year history of advancing the
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field of medicine and bringing novel treatment and diagnostics to patients (Roche, n.d., annual report 2016,). Roche is focus in developing breakthrough medicines and improving care across oncology, immunology, infectious diseases, ophthalmology and neuroscience (Roche, n.d., annual report 2016, p.1). Roche mainly concentrates on prescription medicines and in vitro diagnostics, rather than generics, over-the-counter medicines and medical devices (Roche, n.d., annual report 2016, p. 6). Because of this reason, it has been determined that Roche’s generic strategy is differentiation. It has also been determined that Roche’s business-level strategy is the first-mover advantage.
When selecting Roche’s corporate-level strategies, one of the main objectives was to determine if the company should remain within its present market or should it venture into new markets. Considering that Roche highly concentrates in medicine and diagnostics, it was determined the firm should continue to compete within its present market. For this reason, the following four corporate-level strategies were identified: 1) market penetration, 2) market development, 3) product development 4), and horizontal integration.
Market Penetration: As noted above, Roche is the world’s largest biotech company and a world leader in the diagnostics business. Focusing on a market penetration strategy will allow Roche to gain additional share within its existing market by taking advantage of its existing products. Through advertisement, Roche will be able to take market share away from its competitors.
Market Development: This strategy involves taking existing products to new markets (Strategic Marketing, 2014, selecting corporate-level strategies, p. 242). Another example of market development is when a firm enters new geographic areas (Strategic Marketing, 2014, selecting corporate-level strategies, p. 243). Roche should continue to concentrate in expanding its physical presence. Although Roche is already present in 6 regions of the world, the company can further expand presence within each of those regions or other parts of the world (Roche, n.d., annual report 2016, p. 2.) Sub-Saharan Africa is a region that does
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not have adequate access to medicine (Roche, n.d., annual report 2016). Roche should implement a strong Africa strategy so it can increase access of its existing and new treatments for HIV.
Product Development: This strategy deals with the development of new products for existing customers (Strategic Marketing, 2014, selecting corporate-level strategies, p. 244). Roche is recognized for its innovative approaches in medicine and diagnostics. If Roche wants to continue being a market leader in the pharmaceutical industry, it will need to continue focusing on its innovative structure. Roche can continue building innovation through research and development, strategic partnerships, its workforce, and innovative technologies (Roche, n.d., annual report 2016, p. 7).
Horizontal Integration: This strategy helps firms expand by acquiring or merging with their rivals (Strategic Marketing, 2014, selecting corporate-level strategies, p. 245). Roche is well known for its mergers and acquisitions. The company will need to continue this strategy in order to get exposure of any new medicine and diagnostics developments. Roche recently acquired Ignyta in order to expand its portfolio of oncology medicines (Roche, 2017, media release, para. 3). Future mergers and acquisitions will create opportunities for Roche in the pharmaceutical industry.
References:
Roche. (n.d.). Annual report 2016. Retrieved from less
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