Learning Diary

Learning Diary Week 1 : What is Strategy? This Learning Diary would comprise of all the subjects, points, reviews which have been covered during the lecture. It also takes focus into examples and questions which had arisen during these lectures. In the first lecture we developed basic understanding about strategy and strategic management. In the class slide strategy was defined as “strategy is the means by which individuals or organizations achieve their objectives” (Grant, 2008) but besides these points careful planning and the implication of the actions which would be taken should also be considered. It was also discussed upon that the strategic decisions may be Complex, Have some Uncertainty, Rely on networks, etc. Hence I would like to conclude that strategic choices and decisions are something which have to be given a lot of thought to before being implemented in the organization as it may affect the whole dynamics of the organization. In the class we also discussed few of the examples which may be considered as Strategic. Few of the examples that came up had a deep insight of strategic decisions but the rest were not strategic as they did not have any deep insight or implication in the long run.

We also learned about classifying strategy into various spheres as Corporate Strategy, Business strategy and Functional Strategy. Corporate Strategy may be defined in reference of industries and how they want to compete with a plan. For example, Iridium statellite phones before coming into market were way ahead of their time but by the time they were launched they were failing due to launch of mobile phones. So iridium instead of moving to mobile phones tried to create a niche market and moved into military communications. In business strategy an organization plans that how will it compete within its own industry. Functional Strategy would apply within the organization so it can gain some edge from its competitors. A very good example of this being the new versions of “Windows OS” that are coming up to compete with “Apple’s OS”. In the lecture we learnt that how can an organization describe its strategy either by using concepts like “ Mission, Vision, Goals, Objectives, etc” but it is very necessary to understand that all these terms apply to various hierarchical levels of an organization and they all may be different to each other but lead to a same goal or path. For instance Vision may apply to the organizations top managers only and may be defined by them but it would not imply or motivate the workers or labours. For them we would need a goal or an objective. Hence these terms have a meaning of their own and without a proper understanding if wrongly used can create problems within the organization.

This Diagram From the class slide helps up understand that all the aspects which we have discussed above are inter-related to each other and may affect the overall outcome and should be given due attention in their own respect. A Very good method that was covered in the class was “ The Strategy Lenses” (Johnson, Scholes and Whittington,2007) which helps us examine any strategy on three various levels:1) Strategy as Design 2) Strategy as Experience 3) Strategy as Ideas These techniques are very helpful and provide us insight into challenges that are faced in managing the complexity of strategy. Furthermore on studying the textbook a very good example that was mentioned to describe strategy was the merger between AOL and Times Warner. This was a very good example and all the aspects which made this merger a strategic one were discussed in detail in the textbook giving me a proper and a thorough understanding about Strategic Decisions and what factors should be given consideration, what are the dynamics?, how are few factors inter-related and how may they affect each other, etc.

Furthermore, the case study of the week is to identify the mission, vision, plan and strategies (corporate, business and functional) between Google and Nissan organization.

What do the articles tell us about

Google

Nissan

the company’s : Mission?

To be the most leading creativity, innovation and strategy company in the world

Reach annual global sales of 4.2 million units by the end of fiscal year 2007;

Vision / strategic intent?

To Provide data to its customers with ease and hassles.

Motivating people to compete

Strategies ?

Process driven approach, strives to try new things which makes the ahead of their competitors.

Alliance with Renault and joint venture with Dong Feng

Plans?

Experiment to “emergence”

Nissan Revival Plan; NISSAN 180, NISSAN Value Up

Business model?

Turn anything that customer see on the computer screen into advertising supported media which is seen by millions of people accessing internet thus spreading the brand name.

Geographic expansion, they have substantial growth in China, Thailand and ASEAN countries and Middle East. Now, they also were turning new opportunity on Africa, Russia, India and Pakistan.

Corporate strategy?

Diversification by extending to Google News, Google Earth

Geographically expansion, by expand into new potential market

Business strategy?

Both top down and bottom up perspective, to create an ideas for internal markets

Sourcing parts and services from Leading Competitive Countries and increasing attention on the

maintain an operating profit margin at the top level among global automakers; maintain a minimum 20% return on invested capital.

manufacture and sale of light-duty trucks globally, with emphasis on Japan, China and Europe Functional strategies?

Perspectiv e of strategy?

Attract the talent computer science brain into the organisation

Attract talent engineers and invest heavily on technical training program to Global Executive Training activities

Hence during the first lectured I learned about What is strategy and what makes few decisions strategic, what consideration and aspects should be studied before taking any strategic decision, etc.

WEEK 2: Analysing the Environment In the second we studied about analysis of the environment. The in-class assignment before the beginning of lecture was quite good as the reviews given later on helped us to understand the principle of strategy a bit more.

In the second week we understood about the dynamics of an environment of an organization i.e. “How Managers, wether public or Private – can make sense of an uncertain world around their organization-the business environment “ (Johnsons & Scholes, 6th edition) Usually the environment is described as a Macro-environment within which the industry, strategic groups and the Organizations exist. All these levels are influenced by any event which occurs in the Macro environment, the example in the textbook which was cited was the 9/11 event and was termed as a Macro Shock because it was an event which was unexpected

or could not have been contemplated and all industries, sectors, organizations which existed in that environment were affected adversely. To understand the macro environments the onion diagram is very helpful.

Few of the techniques used to understand macro environments are mentioned below 1) PESTEL in which P stands for Political factors, E for Economic Factors, S for Sociocultural Factors, T for Technological Factors, E for Environmental factors and L for Legal factors 2) ESTEMPLE , this technique is very much similar to PESTEL but there are added columns of few more things to be considered which may gives us a broader insight. 3) SWOT analysis The case Study which was done in the class was for BP and we practiced applying ESTEMPLE on the case study to analyse it and identify as many factors as possible and categorize them. It is also to be noted that all the macro environments are subjected to some Dynamism, Complexities and Unpredictability, hence they cannot always be fully predictable. Hence these factors are always to be considered before planning for the future. A very good example which was mentioned in the “Strategy Path Finder” was named as “Ironclad Vs Canoes” it took into notice the musical instrument industry of England in the late 1800s and analysed that sometimes not adapting to changes in technology can affect the whole industrial region adversely. Hence one has to be always a step ahead of his competitors to succeed all the time though the advancement may not be something very huge or patented but sometime small factors can also make a lot of difference and affect the macro Environment.

The 5- Forces analysis is again a very helpful tool to analyse the Macro-environment and analyses the Supplies, Buyers, Substitutes and Potential Competitors it can help us to analyse

the current position of an industry in the market, what threats it is facing and how can it reduce its productions/marketing costs to make it price competitive. Also emphasises the industry to keep making advancements in its product line or technology to give it a competitive edge.

Week 3 Strategic capability This chapter focuses on the achievements that can be attained because of our present strategic capabilities and how they will help us in future. A good example mentioned in the class for competitiveness was 3M which has a very wide product range. This helps the company to be ahead of its competitors and somewhat obtain a monopoly in the particular industrial sector as it has a vast consumer base from all parts of life and has a good brand reputation. The terms like Threshold, etc should be studied from the book “ exploring corporate Strategy”

Other key points covered are:How to maintain sustainable competitive advantage :-

1) 2) 3) 4) 5) 6)

By being valuable to customers Having a very durable product which cannot be replaced in a frequent manner Product being difficult to replicate Not being substitutable Being easy to use and robust Being scarce

These points give us a brief insight on how we can have a competitive advantage in a market over our competitors by using various approaches. A good example being mentioned in the lecture was that of Lincoln Electrics which makes Arc Welding Equipments. Besides Identifying these strategic capabilities they have to be analysed so that they can be developed by a period of time and we should be able to decide that what kind of strategic capability and advantage we should go for after analysing the market, customer needs, competitors and present threats. These processes may be based on design level, management level, etc as the needs call for it.

A Very good tool for analysing our current position in the market is SWOT analysis which stands for Strength, Weaknesses, Opportunities and Threats. Though it is a useful and easy to use tool it does has some disadvantages and cannot be always useful for in-depth analysis.

Bedsides this establishing of Value is a very important concept and may prove fruitful to a firm in the long run i.e. if the brand has a very good market value the customers tend to be brand loyal and be irrespective of the prices to an extent. For eg. If someone has to buy a good watch he may choose for a brand which is established and famous for its product and durability and the cost of the watch is not an option to be considered( though it may always not be the same case)

This diagram helps us analyse the profit earning capability of a firm by taking into consideration various factors such as appropriability, sustainable competitive advantage, extent of competitive advantage.

Week 5 Strategic Groups Sbu’s are recent modification to divisional Structure, being composed of independent product market segments that are given primary market responsibility. Strategic types How can firms compete on the business level :On the basis or price, on the basis of focus , differentiation,, competitive manoeuvring Porter’s generic competitive strategies The strategy clock example of amec nuclear as focused differentiation what is better approach in the long run ? cost or diffrentitation? Cost advantage is less secure., sources of vulnerability Competitors based in the low cost countries, Currency fluctuations, etc Concept of economies of scale Competing on cost – economies of scope. Better to make different products together rather than to make them separately, saves on cost example steel industry, car manufacturing, etc