Write a brief report that demonstrates your active participation in the discussions and contributions to your personal journal. It should include examples of your postings on the activities, your thoughts and personal musings on the problems and issues introduced in the activities, and a summary of what you learned in this module.Required:Write a summary from the “discussion question and answer” file that I posted. 2-3 page maximum explaining what I learned.A differentiator need not worry about production costs because premium prices can be charged for its goods and services. • Cost is a huge factor to determine what customers buy. All consumers want the the best out of the products but with the right cost. Some customers have loyalty to the brand but cost remains the most important factor in the product. 2. Pursuing a low-cost and a differentiation strategy generates higher profits than a single generic strategy • I would agree with this statement just for the sole reason that cost is the important factor for generating profits for a company. The better cost you have the more customers you attract to your business. 3. The key to being a successful differentiator is having competencies in research and development. • Research and devolpment is important but we cannot rely on it solely. Add quality, customer feedback and efficiency to it and it would be successful. How important are functional strategies to the companies discussed in the above cases? • Functional strategies are important in sustaining and improving the efficiency and effectiveness of the company. Quality and innovation as well as customer responsiveness. How are the 4 generic building blocks of competitive advantage related to each other? • With the superior efficiency we are enabling the cost to be lowered. With quality control and improvement, we are able to charge a higher price and we can lower the cost of a product. With innovation we can also use that to increases our prices and lower costs as well. We can conclude that all the blocks relate to on another and they all help the company raise more profits. What role can top management play in helping a company achieve superior efficiency, quality, innovation, and responsiveness to customers? • Top management needs proper leadership to guide their employees into the right path with minimum errors. They can enhance the productivity of the organization in order for them to enhance the 4 generic building blocks. Over time, will the adoption of Six Sigma quality improvement processes give a company a competitive advantage, or will it be required only to achieve parity with competitors? • The six sigma process will give us or a company a competitive advantage. Using employees that have successfully completed the course will allow us to gain competition over other companies on the same field. This is a long term process in which it will take 2 years at a time. From what perspective might innovation be called “the single most important building block” of competitive advantage? • Innovation can be related to better products that will serve our customer’s need and wants. Improving the quality of all existing products that will satisfy future orders by customers. 1. What business-level strategy has each adopted? Refer to current marketing activity to show how the respective strategies are being expressed. Telus has adopted is the differentiation. They provide their customers with a multiple range of services and products , which are unique and different than their competitors. Examples are; Optik, satellite TV and great deals and bundles. Bel also uses the differentiation strategy. They describe that their mission is to “delight” their customers with the product or service that they provide. They provide service innovation. 2. Review and analyze their business strategy in the context of the industry life cycle. Do they have a strong or weak competitive position? How is this reflected in their business level strategies? The flexibility of the mobility and communications market makes it more stable, which shows that it’s at the mature stage. Both Telus and Bell have a strong stance in the market. Their strategies, resources, and capabilities have led them to their success and their unique competencies. 3. What other tools discussed to this point in the course could be used to assess the appropriateness of the strategies that Telus and Bell have pursued? Porter’s five forces, the value chain analysis, SWOT analysis, are the appropriate tools to use for Telus and Bell. 1. Assess and evaluate GM’s business strategy and explain how it tries to distinguish itself in the marketplace from the other major auto manufacturers. Operated under price levels 5 different automobiles targeting different markets Multidivisional structure 2. Is GM’s current financial position in the marketplace a result of over- or under-differentiation? Over differentiation 3. Create a Porter’s Five Forces model for the North American automobile industry. Based on your assessment of the relative forces affecting the industry and GM in particular, what could GM do to improve its competitive position Threat of entrants – Low – There isn’t really much room for new entrants in this market. Automobiles are one of hardest markets for new entires even though GM is faced with many challenged, it is still a successful company new competition may not survive for long Intensity of rivalry among competitors – Medium – Limited growth in the industry Buyer bargaining power – low to Medium – Buyers can switch to cheaper cars but GM has a lot of affordable cars for different target market. Supplier bargaining power – Medium – one supplier for raw material – both GM and supplier prices are parallel they both go up and down Availability of substitutes – medium to high – (few competitors; ford, Nissan, Toyota) this will depend on customer preferences. 4. Do you think that GM has been a victim of its past success? To what extent have cognitive biases and groupthink shaped its strategy? Yes I do, wrongful planning and management caused some set backs to the company but it also has a lot of support from the government in case they needed a bail out. Abell’s model: Distinctive competencies – Creating something unique that would make the competition fail to reach the same standards and retain customer loyalty with affordable and dependable functions. Customer groups – International customers from different generations and age groups. Customer needs – An affordable and reliable communications device. Porter’s Forces: • Bargaining power of suppliers = Normal – Companies rely on suppliers to provide industry standard products • Bargaining power of buyers is high/Very high – because there are many competitors, buyers have so many other choices • Threat of new entrants is high/Very high – Many other companies have capabilities to start their products within this industry. • Threats of new substitutes is high/Very high – Technology is always updating • Rivalry is high/Very high, (Apple, Samsung) Macroeconomic Forces: Nokia is facing lots of competition nowadays. Technology is changing very rapidly in this industry, every other brand is competing to be number one . Nokia needs to work on its new ideas and stability in this case since the other products are reaching more customers and getting more customer loyalty. Demographics and economic factors also influences the product as well as the social forces. Ethics and Social Responsibility Kelly Dorin The Friedman doctrine approach • This approach takes a shareholder/corporate approach to social responsibility and ethics. • This approach views shareholders as the economic heart of the organization/companies and the only group to which the firm must be socially and ethically responsible. • The goal of the firm is to maximize profits and lower costs and return a portion of those profits to shareholders as dividends. • Under this approach, company should have no “social responsibility” to the public or society because its only mission is to increase profits for the sole purpose of the company and for its shareholders and that the shareholders in their “private” capacity are the ones that have to deal with the social responsibility. Utilitarian and Kantian ethics • Utilitarianism – The view that right actions are those that are likely to result in the greatest happiness of the greatest numbers. • Kantian – Right and wrong are originated on duty. Rights theories • In the rights ethical theory the rights set forth by a society are protected and given the highest priority. Rights are considered to be ethically correct and valid since a large or ruling population endorses them. Justice theories • The justice ethical principle states that ethical theories should prescribe actions that are fair to those involved. This means that ethical decisions should be consistent with the ethical theory unless extenuating circumstances that can be justified exist in the case. This also means that cases with extenuating circumstances must contain a significant and vital difference from similar cases that justify the inconsistent decision. Canadian Firms should and must always be socially responsible. I disagree with the Friedman doctrine, simply because it feels like it is throwing out responsibilities to another party. Corporations must be socially and ethically responsible. Although making a profit is important, it shouldn’t be the only goal. • Should companies consider social responsibility issues before pursuing corporate-level strategies? Yes, companies should and must consider social responsibility issues before pursuing corporate-level strategies. It is proven that Friedman Doctrines approach of letting the shareholders take the responsibility for social ethics does not really work. . • How can companies mitigate the impact of their corporate-level strategies on the general community? Companies can mitigate the impact of their corporate-level strategies on the general community by using the local legal requirements and regulations as a guide and educate their own employees as well, effective communication and leadership is vital as well. • Under what circumstances and conditions might corporate-level strategies be inconsistent with a company’s social responsibility obligations? When the environmental and ethical concerns are ignored just to achieve profit gain. • If you were the manager of a firm about to implement corporate-level strategies, how would you address the impact on the general community? Educating and communicating with the employees is a must. Reminders and being the right role model would achieve social and ethical responsibility. • Under what conditions might be horizontal integration be inconsistent with the goal of maximizing profitability? Horizontal integration may not be inconsistent with maximizing profits if there are issues when merging companies and managerial turnover during those mergers, and if managers overestimate and underestimate the problems during a merger. • What is the difference between a company’s internal value chain and the industry’s value chain? What is the relationship between vertical integration and the industry value chain? A company’s internal value chain includes the research and development, production, marketing, sales, and customer service to add importance to their product for consumers. An industry’s value chain consists of taking the products from the raw material stage to the final product stage. Vertical integration is the process of growing operations to include all of the inputs to create a company’s products. A company will vertically integrate by creating its own raw materials rather than going to third part suppliers. This is a similar process of the industry value chain by including all of the inputs of the products sold in the market. • Why was it profitable for GM and Ford to integrate backward into component-parts manufacturing in the past, and why are both companies now buying more of their parts from outside suppliers? It was more profitable to integrate backward into manufacturing components in the past because manufacturing costs less than purchasing the materials from suppliers. It was more proficient to purchase raw materials, develop them into operational parts, and use them to create a final product. • What value-creation activities should a company outsource to independent suppliers? What are the risks involved in outsourcing these activities? Value-creation activities to be outsourced include sourcing quality resources, manufacturing parts, developing better-quality production lines for competence and lower-costs. • What steps would you recommend that a company take to build mutually beneficial long-term cooperative relationships with its suppliers? ? communication and long term investment with suppliers creates an understanding between the two parties and that would benefit the company in the long run. • What industry is Lockheed Martin engaged in? Lockheed Martin is engaged in the defense, aerospace, security and advanced technology industries. • What “corporate-level” strategy has Lockheed Martin pursued to improve its competitive position? Lockheed has persued related diversification to improve its competitive position. • Explain Lockheed Martin’s strategy in the context of developments within its industry. There has been ongoing merging in the local technology sector. They are implementing this strategy to stay competitive in the industry. • To what extent is the macro-environment shaping Lockheed Martin’s strategy? Technological forces are surely shaping Lockheed’s strategy. Obtaining other technology companies will allow them to use their “expertise in an innovative, creative way, and apply those same technologies to other government agencies.” • What position does Lockheed Martin occupy on the industry life cycle? Mature stage -Perform a Porter’s five forces analysis of the industry. Risk of entry would be low Bargaining power of suppliers would be moderate because of the specialization of products being produced. Rivalry in the industry would be normal as it is merging. Bargaining power of buyers is normal due to partnership of competitors. Threat of substitutes is low. Seagate and Maxtor 1. Evaluate the nature and condition of the hard drive market and refer to the industry life cycle in your analysis. The hard drive market is very challenging, fast and innovative but it is in a mature market. Hard entry to the market because the top companies are well known, it is very difficult to compete against these companies 2. Explain the rationale for the acquisition of Maxtor. Both Seagate and Maxtor are companies to a top brand in the Hard Drive market. Maxtor was selling hard drives at a lower price than Seagate, there were also other companies in the market that were trying to compete as well, Seagate wanted to be a key company of the industry and a vertical integration was the most effective way to overcome any comptetion. 3. What generic building blocks are relevant to this case? Efficiency, quality, R&D and Marketing. 4. What risks does Seagate face as a result of the acquisition, and how might these risks be mitigated? The main risk Seagate might have is foreknowing profit generated from Maxtor’s product sales and using Maxtor’s R&D to their own benefit. Seagate will have to recognize how Maxtor’s management used to operate and have good communication and training with the employees as well.