Running head: SMITH ROTHAERMEL EXERCISE 2
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Smith - Rothaermel
Betty Jean Smith
BUSI690
Dr. Jonathan Wilson
February 4, 2017
Running head: SMITH ROTHAERMEL EXERCISE 2
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Chapter 6
Discussion Question
6.1 Generic business strategies consist of two types and that is differentiation and cost
leadership. An example of the differentiation strategy is the Apple cell phones because their
phones are higher because of the value they offer their customers. A consumer can do more
with an Apple cell phone verses a metro pcs phone. While, Metro PCS offers their consumer
an entire package for less giving their consumer the same value of service when it comes to
unlimited calls and internet. Metro PCS represents the cost leadership because they deliver
their services and product that is lower than Apple Inc. The drawbacks of these two
organizations is that they must stay focused on their generic strategy and not try to intertwine
other strategies. When they are not focused, it will allow others to come in and offer what
they are offering and corner their market. This can be see with T-Mobile cellular service,
they changed their position of their generic business strategy to offer what Metro PCS is
offering with their unlimited plans. Now T-Mobile is forced to join forces with another
cellular organization. Another risk is innovation, because technology is always changing it
is necessary for businesses to be in tuned with what their market demand is now upon to be
delivered to them. T-Mobile is using the focused cost leadership, while Metro is using just
the cost leadership. T-Mobile does not have a clear picture of the strategy that they would
like to use.
6.3 A organization can remain at the top of their market as a cost leader just as long as their
economic value is more that their competitors. This is true for Metro PCS, as it relates to their
customers having access to a package that is less costly than that of their competitors because
they offer it a one low price bundled together depending on what the customers are wanting.
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This has led them to be able to gain a competitive advantaged, allowing their consumers to be
able to save money on quality services.
Unlike Metro PCS lower prices, Apple tends to be higher for their services and or goods
because their consumers feel that the services and products offered are better than their
competitors. Apple has their own features built into their products such as being able to see
when someone has read a message that you have sent them. Consumers do not mind paying a
higher price because they feel that they are getting a service or product that will perform better
for them. Apple uses these special features as their value drivers to manipulate their services.
On the other hand, Sprint is able to use value innovation business-level strategy to
maintain their sustainability with this said competitive market. Sprint has now begun to offer the
same services as Metro PCS and Apple at one low price. Sprint is able to produce quality
services at one low market price. They could lower their price and no longer charge their
customer for going over their minutes and giga bites.
Chapter 7
Discussion Questions
Industries just as humans have a life cycle. Their life cycle is made up of five stages;
“introduction, growth, shakeout, maturity and decline” (p. 217). Each stage will be different in
the way the firm / industry will grow and they must ensure that they are up to speed on what is
necessary to sustain their stage within their life cycle. So is true with the Cable Television.
Cable Television was introduced in 1948 by John Walson (The Cable Center, 2016). In 1972 the
growth of cable came the Home Box Office of cable today we know it as HBO. HBO cable
provider was known as Time Inc that later became Time Warner Cable. Now there are over 170
cable channels and about four major players within the cable industry. The shakeout stage led
Time Warner Cable to die out and allow its competitors such as Comcast & Direct TV. Cable
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television’s maturity stage offers low prices for packages such as phone, internet and television.
They have to keep their prices reasonable lower their competitors, because they are now at a
decline because of Netflix, Hulu and the Fire Stick. These services offer movies and shows at an
extremely low price, however the cable television value is their features to record, rewind, along
with the capability of looking at television in real time.
Apple is a firm that has had a high impact in innovation. Apple has used all four innovative
types. They started with the incremental innovation of the telephone to improve the way two-
way communication works. Radical breakthroughs of their I-Phone, their watch phones are
both disruptive and architectural. Apple has not only released new technology, but they
continue to venture out into the communication world, from computers to phones. When
incrementing their new phones and computers because of their level of technology they now
have to leave up to their products. Because they put out one stage of their product and offer the
same product years later but with better values added to their features it is imperative that they
get it right because of their radical types that their consumers are expecting (Biersdorfer, 2017).
The good things are the Apple is perceptive to their consumers and will work fast to correct any
flaws to maintain their disruptive innovation style.
7.4 The LifeStraw has created value with incremental innovation that low-technology
creating value to all in need of clean drinking water. This straw as invented by Vestergaard, “a
family owned global health company dedicated to improving the health of vulnerable people,
most of whom live in developing countries” (Vestergaard, 2016). This product is sold at a low
price of $19.99 for any individual to buy to ensure that their water is safe to drink. This product
has allowed many countries to increase the health of its citizens. This family company took a
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product and made it a low cost by combining the straw and filter to allow everyone the access
that they so rightfully deserve. This low-technology innovation would have aided Flint
Michigan in their water problems instead of allowing their community to drink contaminated
water. This product should be kept in every home in America and hopefully this will prevent
what happened in Flint from every happening again.
Chapter 8
Discussion Question
8.1 Walmart used a corporate strategy of diversification when their corporation decided to
integrate grocery stores into several of their locations, creating the “supercenter”. Walmart has
made a strategic decision that will allot their shareholders an increase at every level of their
business. They determined that they should also compete with their local grocery stores, as a
corporation this was genius because food is a necessity for everyone. Their managers actually
answered the question to what is it that people want / need more than clothes. Walmart increased
their profits at a lower cost to their consumers in comparison to that of their competitors. They
increased their market power and reduced their risk of going out of business. The truth is most
individuals would rather spend their last dollar on something to eat than something to wear and
offering both will allow their stakeholders to weight their opportunity.
Chapter 9
Discussion Question
9.1
STRATEGIC ALLIANCES
BENEFITS
DOWNSIZES
Non-Equity (Explicit Knowledge)
1. Supply Agreements
2. Distribution Agreements
1. Flexibility
2. Easy to Initiate
3. Easy to Terminate
1. Potentially Temporary
2. Create Weak Ties
(Alliance Partners)
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3. Licensing Agreements
creating a
3. Lack of Trust
4. Lack of Commitment
Equity
1. Stronger Ties (Alliance
Partners) – creats
2. Trust
3. Offer New Technology
4. Easy to Merge
5. Test Corporation First
1. Investment Amount
2. Lack of Flexibility
3. Partnership Speed
4. Speed in Revenues
Joint Ventures
1. Strong Ties
(Partnership Alliances)
creating
2. Trust & Commitment
1. Significant Investments
2. Long Negotiations
3. Undoing the JV
(expense in cost)
4. Opportunistic Behavior
(from knowledge
shared)
5. Sharing Rewards
Chapter 10
Discussion Question
10.3 This video was interesting to say the least. I at least thought that we were globalized at
least by eighty-five percent. After looking at this video and what was presented in his data points
concerning globalization it is amazing that we are not even more than twenty percent in our cross
borders. Information, people and capital flows are not as they seem, with GDP export it is
because the counting is not accurate (the same product is being doubled and triple counted when
it is shipped to other countries to acquire other parts). I agree with Professor Pankaj Ghemawat
assessment that the world is at most semi-globalized and that we need to be careful not to fall
victim to “globaloney”. I analyzed what he said about Facebook and counted my friends from
other countries and it was at five percent. Knowledge is power and we need to know that there is
room to further our globalization to leave a footprint that is more humane.
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it&version=latest&contentPlacement=9&pgtype=collection&_r=0
The Cable Center (2016). 2005 – Honorees. Retrieved from http://cablecenter.org/2005-
honorees/john-walson.html
Vestergaard. (2016). About Us. Retrieved from http://www.vestergaard.com/about-us
