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Running Head: ROTHAERMEL EXERCISE 2
Rothaermel Exercise 2
Angel Guereca
Liberty University
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ROTHAERMEL EXERCISE 2
ROTHAERMEL EXERCISE 2
Chapter 6 Rothaermel Text
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Discussion Question 6.1
There are two different approaches to generic business strategy; differentiation and cost
leadership (Rothaermel, 2017). Differentiation is just what the name applies, providing the
market something that is unique by differing from the competitors. This allows those companies
to charge a higher rate or price due to the uniqueness. Cost-Leadership is the providing a similar
product, but at a lower price than the competitors. When I think of products that fit the Cost-
Leadership I think of store brand names that are in Walmart, Costco, and other big chain stores.
The generic business strategy can be applied to any firm looking to compete in a bigger market.
Focused strategies look to compete in a smaller market but charge premium prices.
Having a focused strategy both Cost-Leadership and Differentiaion allows a organization to get
behind an idea and push that out to the consumers with a more narrow market. Organizations
like Procter and Gamble have such a wide scope of responsibility utilize the focused Cost-
leadership. Procter and Gamble they provide many of the same products as store brands, but
charge a bit more. Other the other hand, focused Differentiation provides a unique product in a
narrow market.
Drawbacks for a broad generic business strategy is the understanding the broader competitive
scope. More companies in the market mean less profit. Companies need to decide what business
strategy will fit the company and its goals. If an organization knows they what to provide
something unique and have a narrow market they need a focused differentiation.
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Discussion Question 6.3
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ROTHAERMEL EXERCISE 2
A firm using a cost leadership would focus on providing the best value compared to its
competitors. There value chain primary activities would be supply chaing management,
operations, distribution, marketing & sales. With the company trying to provide the lowest price
available the supply chain would be the most efficient. Operations and distribution would be the
the larger than most with a huge market footprint. Marketing & sales would be very well in tune
to get the products in the consumers hands. There support activities would be firm infrastructure,
processes, research and development. These activities would help with the large footprint to
guarantee the competitive pricing in the market.
A corporation using a differentiation strategy would focus on making products unique in
their market. There value chain primary activities would be operations, distribution, marketing
and sales, and after-sales service. With this company being unique they would focus on their
operations of these different products. Distribution would be a key piece to make sure they cater
to the correct consumer. Also, marketing and sales would be to highlight the uniqueness of the
product. Typically you see a better customer service support for unique expensive products,
which keeps that market satisfied with what it delivers. Support activities would be research and
development, information systems, and accounting & finance. They corporation would need to
research the latest in its market and develop a product different than the competitors.
Information systems would need to be state of the art to remain ahead in research &
development. Accounting & finance would also need to be quite unique and established to fund
their effort to be unique.
A firm providing value innovation, or blue ocean, strategy would be focusing on
providing unique products at a low cost. Their primary focus would be supply chain
management, operations, distribution, marketing and sales, and after-sales service. This
company dabbles in both markets and looks to perfect all aspects to be more affordable while
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being different. The support activities would also be all complete with research and
development, information systems, human resources, accounting and finance, and firm
infrastructure. The book uses the example of Trader Joes compared to Whole Foods. While
Trader Joes isn’t as big as Whole Foods they provide a more affordable shopping experience
while having very unique local products to choose from. From experience, stepping in a Trader
Joes they have the best products and seem as they would maximize on the support activities to
continue to offer these amazing deals.
Chapter 7 Rothaermel Text
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Discussion Question 7.1
The wireless headphones industry introduction was around 2004 using bluetooth technology to
play music on headphones. The introduction was made after we already had bluetooth
headphones for phone calls, but we couldn’t play music from most phones. The movement for
wireless headphones took awhile to catch on. Once big name brands started to create their own
version of the wireless headphones they industry started to grown. Wireless speakers and
headphones are in most households now from Amazon Echo, Google Home, and Apple
HomePod. The wireless trend has exploded and technology keeps advancing into the shakeout
stage. Most of the speaker qualities are at the best it will get and consumers are picking a select
few from the market. In the maturity stage the companies whose wireless headphones have not
caught consumers attention will begin to disappear. Once everyone has a pair of wireless
headphone the sales of the instursty begin to decline and demand falls.
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Discussion Question 7.2
The firm I chose is Apple. Apple has been creating breakthrough products since they have been
around. They have been disruptive in the way they continue to evolve the market. Worldwide
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everyone know what the product Apple produces. Brining simplisty to many by seamlessly
contecting all their products from cellphone to computer to headphones. They always listen to
consumer feedback and keep changing their products to meet the consumers needs.
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Discussion Question 7.4
A company I think of that was very disruptive was when Netflix was introduced. It
mailed up to a certain amount of dvds straight to your home and you had a few days to return
them. This completely caught Blockbuster off guard, because they had already matured and was
slow to react. Netflix noticed the convenience of not having to go out to select movies and
capitalized on using the internet to order the movies. Now Netflix is used gloabally creating
their own series and streaming many other well known titles.
Chapter 8 Rothaermel Text
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Discussion Question 8.1
Walmart decided to begin operating “supercenters” to introduce diversification to its
corporate strategy. As Walmart reached a mature stage they began looking at wasy to remain
competitive among others who were just entering the market. The combination of a grocery
store and a retail store allowed customers to maximize on their time and just visit one location.
It is a “one stop shop” allowing customer who do not traditionally visit become curious to see if
they could eliminate the need to go to numerous stores.
Chapter 9 Rothaermel Text
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Discussion Question 9.1
Rothaermel (2017) defines strategic alliances as, “voluntary arrangements between firms
that involve sharing of knowledge, resources, and capabilities with the intent of developing
processes, products, or services” (p. 300) There are three governing mechanism for strategice
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alliances: non-equity, equity, and joint venture. There are benefits and downsides for each and
they will be explained. Non-equity is considered the most common type of alliance and they are
commonly binded by contracts (Rothaermel, 2017). The benefits of non-equity is it is flexible
for both parties involved and easy to initiate. The agreements can be written out in the contract
for both parties to agree to. The downside is typically an organization will do a contract if there
is a lack of trust. They want to have a conract to legally have the other party comply with what
they agreed to.
Equity is a strategic alliance that requires at least one party to invest in another by taking
partial ownership in the other partner (Rothaermel, 2017). Money is involved in this mechanism
and tacit knowledge is also shared. This can be showing a partner how to do a recipe for the
bakery they invested in. The benefits of equity alliance is the mutual agreement and trust is
stronger than non equity. The downside is the agreement, however, stronger it is a lot less
flexible. It can include substantial moneys to help further the firms growth.
Joint venture is the least common of the three. Rothaermel (2017) defines it as a
standalone organization created and jointly owned by two or more parent companies. The
benefits is the strong ties between all parties and the free flow of information on the joint
venture. This allows for further expanision because of the trust being between all. The
downside is if the agreements do not work out as planned it can be a lengthy process to undo the
joint venture.
Chapter 10 Rothaermel Text
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Discussion Question 10.3
Netflix has become gloabally know for its streaming services. Orginianly it was founded in the
United States and did not enter all markets at once. It expanded in three phases looking for
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markets where the introduction would be well received. With the approach it has now expanded
to 190 countries and has reached 130 million subscribers (Brennan, 2018). They have stuck with
the three phase expanision to continue entering new foreign countries.
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References
Brennan, L. (2018, October 12). How Netflix Expanded to 190 Countries in 7 Years. Retrieved
from https://hbr.org/2018/10/how-netflix-expanded-to-190-countries-in-7-years
Rothaermel, F. T. (2017). Strategic Management (3rd ed.). New York, NY: McGraw-Hill
Education.
