M12-ces_pre-module_writeups (2).docx

Plamen Dimitrov, GEMBA 18/19, h11747196

Day 1: Ben and Jerry’s Homemade Ice Cream, Inc: A Period of Transition Questions: 1. What is your view of the strategy concept? Ben & Jerry was an unconventional type of ice cream producer from the time of its establishment. To certain extend this is due to the “self-made” business model which evolved from gas station own shop to pint container supermarket distribution. By trying different strategies to keep their company operational, the two founders managed to shape their business model in a way which gave them competitive advantage over rivals (even without advertisement). In my view strategy is a set of different aspects of company business (starting simple with a product, production process, distribution, marketing, etc. and aggregating to vision and overall business model) which distinguish a company from its rivals. These aspects should work all the time together and in synergy (as a whole) which usually results in growth, creating value for all stakeholders, profitability, sustainability, etc. 2. What role does strategy play in a business enterprise? Strategy plays a significant role in any company. It could be compared to a language. Anyone who can speak (in terms of defining meaningful sentences) and understand the language of that company is able to lead, work and associate him-/herself with the same goals. It is very important that the senior management can formulate clearly all aspects of the strategy, setting the goals and boundaries of the intended business focus. The strategy of a company should enable the company to achieve competitive advantage by customizing and personalizing the approaches used to define and differentiate its product offerings, produce/deliver goods or services, acquire and keep customers and organize activities within the company. 3. What issues does Bob Holland face as CEO? Considering Bob Holland profile as experienced corporate manager, it is very likely that he faced challenges related to the corporate culture and strategic vision of the founders. In other words, he had to deal with a family grown business model; founders who would like to keep the current set-up, fast growing company which needs different corporate governance model and on the other hand resistance to change. Most probably the biggest challenge was to define a long-term vision/strategy as the founders are not corporate professionals (never targeting big success) and not interested in permanent corporate growth/profitability (but more in sustainability). “Holland left after 20 months following philosophical differences”1 4. What actions would you recommend to him? Not trying to implement the “consultant approach” by replicating large scale business models - well working somewhere else; consider all industry specifics; flexible and innovative approach; convince the owners that large scale companies must have a strong corporate governance to continue to be successful and at the same time keep the company identity and well established competitive advantages. 1

Source: Wikipedia, https://en.wikipedia.org/wiki/Ben_%26_Jerry%27s

Plamen Dimitrov, GEMBA 18/19, h11747196

Day 2: Ducati (9-701-132) Questions: 1. Analyze Ducati’s strategy under Minoli. Why was it a success? F. Minoli was a turnaround manager for Ducati, who succeeded to transform the company into one of the most profitable motorbike producers in the world. When Minolti took over the Ducati, it was lacking clear functional responsibilities. Moreover, the strategic direction was vague. His strategic vision was to emphasize on the core values (historical brand with passion for entertainment) and invest more in the developing iconic products for unique customer experience (including building a Museum). Of course, he did not forget to enhance the operative part of the company to improve quality and optimize costs. Main points of focus were: - Appointed new management team with clear functional divisions/accountability - Outsourcing – decreased number of suppliers (from 200 to 130), short contracts with at least two sources of supply which improved quality - New distribution strategy – aimed at taking control on key markets and improving the entire process (targeting unique customer experience) - R&D – by concentration the design internally, Ducati improved the time for releasing new products. The budget for innovations increased significantly (EUR3,2m in 1997 to EUR 12,9 in 2000) as well as relying on market research for better prediction of customer taste and needs The entire program was an enormous success which is visible from the doubled market share and revenues in only 4 years. The reason for this is that Minoli focused on the company competitive advantages and at the same time efficiently managing the operative day-to-day business. 2. Is Ducati’s success sustainable? Why or why not? Ducati success could be sustainable (from the point of view in Y2000) if maintained properly over the years. The main factor for this is that the company strategic positioning is towards building strong customer relationship, which will result in brand loyalty over the years. On the other hand, by managing both supply chain and distribution network, it will guarantee better cost overview/control and live connection to the customers. Additional factor to the success is the use of technology and power of Internet which at that point of time turns to be a new competitive advantage. That is a strong indication that Ducati besides being a historic brand is also highly innovative. 3. What should Ducati do going forward? Keeping this strategy successful/sustainable over the years would require that Ducati includes many emerging strategic components to keep up with the trends and customer/industry expectations. Strong marketing and brand positioning in combination with high quality customer experience would assure future success and leadership in its market segment. Of course, operative growth should be also managed properly investing in new technology.

Plamen Dimitrov, GEMBA 18/19, h11747196

Day 3: Amazon.com, Inc. (MH0031) Questions: 1. How is strategy different in the world of the internet? What impact might the internet have on each of the Five Forces? In the digital age each strategy should use Internet as interactive channel for strengthening company competitive advantages. Porter`s Five Forces are impacted by Internet at least in the following way: - the entry of new competitors – Internet lowers the entry barrier for newcomers not only from the focal industry but also from other industries. Often tech giants and startups that have built digital business model (i.e. new platform ecosystem) from scratch are our new competitors which very often are not seen as such until it is too late. A digital business model requires less capital and can bring large economies of scale. - the power of buyers – this is the biggest threat since the digital business came because of customer needs (lower prices, direct access to customer). Buyers can easy and convenient access information (like reviews, price comparison/lower price search platforms, social media, etc.) or other products which makes the business model very price sensitive. - the power of suppliers – suppliers orientation towards digital or traditional business models and the environment (i.e. regulation, development of technology) in which they operate might increase or decrease their bargaining power - the threat of substitutes – it can come from a digital product (or additional service) that could replace an existing physical product or change the way how it is delivered or used (i.e. Amazon or IoT). - the rivalry among the existing competitors – digital business models early adopters could gain considerable competitive and put some of the biggest player who did not envisaged the change on time out of the game. Rivalry increases mainly due to the ease of access and lower exit costs. 2. How are network externalities helping Amazon further its strategy? What are its competitive implications? Amazon has the ability to innovate and change quickly and in large scale. Not always the moves into the area of its competitors were successful and many times these new initiatives were either cannibalizing the core income activities or were just a big loss maker (Firephone). But network externalities which Amazon is positioning and trying to create are helping it to further achieve its goals of becoming one place for retail shopping, entertainment and customer experience. 3. How does digital convergence affect Amazon’s prospects? Alibaba? Amazon is adapting to the requirement of the new business models and political situation. Alibaba is replicating many of Amazon services sometimes in a better way. It is an example of company which is operating in huge market protected by the government. With the digital convergence, however Amazon could continue its way to increase market share also in the global market.