Week 15

WEEK 15

                                            MADONNA – CASE STUDY

 

Why has the artist been successful? What are her key sources of sustainable competitive advantage?

Entertainment world has many faces that have been performing and entertaining whole world for years. Some are successful and have the name and fame while some are unsuccessful and are struggling to achieve that name and fame. Madonna is one of the most successful superstars. She is the star, the diva and the brand as well. An Italian-American entertainer who aspired to become a world renowned female performer, currently is the best selling female recording artist of all time recognized by the Guinness World Records by selling more than 300 million records worldwide. She is a multi-talented entertainer and is not only a performer but also dancer, actress, producer, fashion designer and much more. (Jock McGregor, 1997).

Here are some of the reasons for Madonna’s success and sustainable competitive advantage:

•          Innovative, creative and hardworking 
•           There is a chance in her style and pattern according to time. 
•      Good network with well-known and popular music houses. 
•      She has created different songs which are fit for fans of all age group.
•      Uses competencies to overcome weaknesses. 
•      Business minded person who has invested in many business sectors.

Madonna is still the pop sensation in the entertainment industry because she took time, worked hard and did everything to gain public support and hence gained fame and popularity.

What strategy directions could the artist pursue over the next ten years to continue her commercial success?

There is a huge competition in the entertainment industry and for the star like Madonna it is very necessary and important to maintain her success and competitive advantage over the successful new comers. Ansoff matrix helps to develop marketing strategies for both individuals and the firms. She can use Ansoff matrix and develop strategies to continue with her success. (Allesia Bertana, 2012).

Here, we are going to use Ansoff matrix and the directions Madonna can follow to sustain her success:

 Product development: In this strategy existing products and services are re-designed and launched in current or same market. Madonna can come up with same songs in different genres like many other artists have done and improve her acting skills to get more access on movies and television commercials. In this way she can undergo product development strategy.

Market penetration: In this strategy high market share in obtained with current products and services in the current market. Madonna can re-launch her hit songs in a collection album and include some of her not so hit songs as well and even enroll herself in music tours and entertain her fans.

Market extension: In this strategy existing products and services enters into a new marketplace. We know that Madonna is engaged in fashion industry and has her own clothing line which is famous in developed countries like US and Europe. She has fan following in less developed countries as well so she can launch her clothing in these countries and as a promotion method she can organize a concert in that marketplace so that people can notice it especially her fans.

Diversification: In this strategy new products and services are offered in new marketplace. Madonna is already a pop star and a fashion designer so she can enter into other businesses like perfume business as Jennifer Lopez did and even open her own music school. Se can also invest in music companies which are familiar with and can enroll herself in social service activities.

References:

1. Allesia Bertana. (2012). Madonna - Strategy Success and Business Development. Available: http://prezi.com/ovitr7eycw49/madonna-strategy-success-and-business-development/. Last accessed 20/10/2013.
2. Jock McGregor . (1997). Madonna: Icon of Postmodernity. Available: http://www.facingthechallenge.org/madonna.php. Last accessed 20/10/2013.
3. Marked by Teachers. (2013). Marketing Madonna . Available: http://www.markedbyteachers.com/university-degree/business-and-administrative-studies/marketing-madonna-describe-and-explain-the-strategy-being-followed-by-madonna-in-terms-of-the-explanation-of-compe. Last accessed 20/10/2013.

Week 14

WEEK 14 – LEARNING JOURNAL

In your own words and using referenced quotes describe the difference between “business unit level” strategy and “corporate level” strategy.

Strategy is the long term goal which each business prepares. Every business set targeted goals and operates accordingly to achieve that goal. Business strategies are hierarchically divided into three groups. They are: Corporate Level Strategy, Business Unit Level and Functional Level Strategy.

  Corporate Level Strategy: Corporate level strategy is establishes at the corporate level of an organization. It is the long term plan of an organization concerning its direction and scope. The process of establishing corporate level strategy begins by preparing the goals, objectives and scope by considering the internal and external environmental factors of the organization. (Donald W. Beard and Gregory G. Dess, 1981)

Business Unit Level Strategy: Business unit level strategy involves the process of pricing, promotion etc. Hence, we can say that business unit level strategy is related with facilitating customers with goods and services along with that gaining competitive advantage. (Donald W. Beard and Gregory G. Dess, 1981)

 Difference between ‘business unit level’ and ‘corporate level’ strategy.

BUSINESS UNIT LEVEL STRATEGY	CORPORATE LEVEL STRATEGY
ü  Line managers of each business unit develop this strategy. ü  Concerned with the performance of each business unit. ü  Concentrates only on specific business unit i.e. strengths and weaknesses. ü  Usually is short term because it changes with the change in the market and demand.	ü  Top level executives like BOD and CEO develop this strategy ü  Concerned with the organization’s structure, unit and size ü  Concentrates on broad areas which affect the entire organization. ü  Are long term in nature and does not change frequently. (Amanda L. Webster, 2013).

Discuss the corporate parenting style of Virgin group.

What type of corporate parent is Virgin? (portfolio manager, synergy manager or parental developer)

The reason for the success of Virgin Group is because of the reputation and name of Sir Richard Branson. Virgin group emphasizes on their own innovation and capabilities in order to add value to their business. Virgin group gives authority is completely to each operating business unit respectively. Hence, it falls under parental developers and follows the developer type of corporate parent. (Dess G, 2007).

How does the Virgin Group, as a corporate parent, add value to its businesses?

All the companies which operates under Virgin group shares similar and common kind of ideas, goals, values and interests so they are able to solve their problem by combining their similar ideas, goals, values and interests which helps them to create good rapport with each other. Along with that, it is a parent company so its even its competitiveness adds value to their business and even Sir Richard Branson’s reputation, style of management and partners also helps a lot to add value to their brand and the business. In these ways, the Virgin Group, as a corporate parent adds value to its businesses.

What is the logic of portfolio? Why do you think they are in mobile telephony, travel, financial services, leisure, music, holidays and health & wellness?

We know that if there is high risk then there will be high return but usually businesses want to achieve high return with low risk. Portfolio is the diversification of investment on different products which minimizes risk and increases the possibility of return. Hence, businesses maintains portfolio so that they can recover the loss of one business from another and portfolio even enables a business to enroll in every segment of business which helps to make strong brand image. Virgin Group are in mobile telephony, travel, financial services, leisure, music, holidays, and health & wellness because Virgin is the well known brand name so even the name attracts many customers and there many loyal customers of the brand Virgin. (Dick and Avaucourt, 2000)

What are the main risks facing Virgin Group as a result of their strategy? How might they be reduced?

One of the main asset or we can say the popularity of Virgin is because of Sir Richard Branson. They are able to maintain brand image and brand value because of Sir Branson. If anything happens with Sir Branson then the company will have to face with difficulties in spite of strong and expert management team.

References:

1. Amanda L. Webster. (2013). Difference Between Corporate Level Strategy & Business Level Strategy Read more: http://www.ehow.com/info_7829547_difference-strategy-business-level-strategy.html#ixzz2rlwcawWZ. Available: http://www.ehow.com/info_7829547_difference-strategy-business-level-strategy.html#page=0. Last accessed 2/10/2013.
2. studymode. (2010). Strategic Management - Virgin Case Study. Available: http://www.studymode.com/essays/Strategic-Management-Virgin-Case-Study-286757.html. Last accessed 2/10/2013.
3. Donald W. Beard and Gregory G. Dess. (1981). Corporate-Level Strategy, Business-Level Strategy, and Firm Performance. Available: http://www.jstor.org/stable/256169. Last accessed 2/10/2013.
4. Guest Contributer. (2007). Virgin Corporate Strategy. Available: http://www.techinasia.com/virgin-corporate-strategy/. Last accessed 2/10/2013.

Week 12:Group Video

The link to our group video:

http://www.youtube.com/watch?v=h7y_ksNVgkM

Week 10 - Pepsico Case Study

WEEK 10

What are Pepsi Co’s strategic objectives? Why does the firm exists?

Pepsi Co is an American Multinational Corporation which produces food and nonalcoholic drinks and aims to be the world’s top food and beverage manufacturing company. Strategic objectives of Pepsi Co’s are as follows:

Ø  Provide products which suits people of every age group.

Ø  Conduct all activities with the sense of urgency.

Ø  Undertake investments in developing countries.

Ø  Provide food items and beverages that are healthy and nutritious as well.

Ø  Increase goodwill.

Ø  Ready to take corporate social responsibility.

Ø  Expand in other parts of world and even merge with efficient firms to increase their market.

Like every organization, Pepsi Co wishes to lengthen their profitability period, be one of the best company, along with it improve the society and the country in which they operate and even to increase the value of shareholders i.e. make more money. For these reasons Pepsi Co exists. (Paul Ziobro, 2012).

What are the possible strengths and benefits of the strategy?

Pepsi Co has been successfully achieving almost all of their strategic objectives hence; they have strengths and benefits like demand, brand image, good income and customer loyalty. All these gives the company even more motivation to do more and best. In this way the services they provide even benefits to the customers. 

What are the possible weaknesses and disadvantage of the strategy?

The weakness of the strategy is that it does not specifically define how to compete with other firms as there are many competitors of Pepsi co. And the disadvantage of the strategy is that merger or acquisition is not easy especially in foreign countries where there are different cultures and they have different products with different names and has confused people about whose products they are consuming.   

Do you think the organization has the right balance between profitability and responsibility?

In my opinion Pepsi Co has got the right balance between profitability and responsibility. The company not just focuses on making money but also do care about the welfare of the people and the society as a whole in which they operate. They provide nutritious and hygienic food to people and they are even willing to take any responsibility of any kind of default they cause. They even have donated $20m to Refresh Project which aims to help young homeless people. For these reasons we can say that Pepsi Co has got right balance between profitability and responsibility. 

References:

1. tmcorp. (2013). PepsiCo International Case Study. Available: http://www.tmcorp.com/Our-Solutions/Case-Studies/PepsiCo-International-Case-Study/110/. Last accessed 2/5/2013.
 2. Paul Ziobro. (2012). PepsiCo Overhauls Strategy. Available: http://online.wsj.com/news/articles/SB10001424052970203646004577212742610551170. Last accessed 2/5/2013.
 3. pepsico. (2012). Performance with Purpose is our goal to deliver sustained financial performance. Available: http://www.pepsico.com/Purpose/Performance-with-Purpose. Last accessed 2/5/2013.

Week 9

WEEK 9

In your own words and using referenced quotes describe what is meant in strategy  by the “resource based view”.

“Resource based view” is a management device used to assess the available amount of a business’ strategic asset. It is based on the idea that the effective and efficient application of all useful resources that the company can gather which helps to determine its competitive advantage. According to Mwailu & Mercer, 1983, “the resource based view (RBV) as a basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable interchangeable and intangible tangible resources at the firm’s disposal”.

Organization may have resources in the form of tangible goods such as assets, intangible goods such as brand name, human resource and capital. The resources of the organization have its own importance but the point of importance is that how they are used. In strategy, resource based view refers to the strategy formulation so that competitive advantage is gained over others by focusing on how effectively and efficiently the organization’s internal resources and capabilities can be used. Each and every organization has same or similar resources but what makes difference is that how these resources are employed by the organizations.  (RM Grant, 2001).

How might you undertake internal strategic analysis? What models would you apply and why? Where would you go to find information you need?

Assessing the internal factors of the organization such as resources, competences, goals and objectives, structure and system etc is known as the internal strategic analysis. This process helps to  identify the performance of the business according to the change in the external environment and its strategic capabilities which can be used to gain competitive advantage.

In order to undertake internal strategic analysis there are different models available. Some of them are:

Ø  McKinsey’s 7s Model

Ø  VRIN Model

Ø  Value Chain Analysis

Ø  SWOT Analysis

McKinsey’s 7s Model

In this model, 7s comprises of Skills, Staff, Strategy, Style, Shared Values, Structure and Systems. McKinsey’s 7s Model assess all the aspects that are internal within the organization. It helps to identify how the organization is performing as the strategies are implemented using staffs and skills as well as the shared value and whether the structures and systems are well-suited or not. (Annmarie Hanlon, 2012)

VRIN Model
 V stands for Value, R stands for Rarity, I stand for Inimitability and N stands for Non-Substitutability. VRIN model helps to identify the organizations’ key resources and strategic capabilities. The resources and capabilities can be used in a way that no other organization can either copy or imitate and is rare. After this the organization gain competitive advantage over others as these resources helps to form core competences. (Anita Talaja, 2012).

Value Chain Analysis

Value chain consists of a chain of activities starting from extraction of raw materials to supplying final products. Value chain analysis is the analysis of activities which add value within the chain, relationships between the activities and those activities that can be seen in terms of the strengths of the organizations.

Value chain analysis divides value chain into different group of activities, identifies the activities of the value chain that are best or worst, identifies the activities that have competitive advantage, add value to the product, decrease the value chain of the organization and develop strategies which utilizes the activities and other resources within the value chain. (Ovidijus Jurevicius, 2013).

SWOT Analysis

SWOT analysis refers to the identification of strengths, weaknesses, opportunities and threats of the organization. Identification and analysis of strengths and weaknesses are the internal analysis of the organization whereas identification and analysis of opportunities and threats are the external analysis of the organization. This analysis helps to identify the strengths which can be used to get the opportunities in the external environment of the organization and to overcome the weaknesses as well. It also helps to identify the organizations’ weaknesses which must be overcome.

Reference:

RM Grant . (RM Grant - ‎2001 ). The Resouce Based Theory. Available: http://www.skynet.ie/~karen/Articles/Grant1_NB.pdf. Last accessed 25/04/2013.
Annmarie Hanlon. (2012). How to use the McKinsey 7S model in marketing. Available: http://www.smartinsights.com/marketing-planning/marketing-models/mckinsey-7s-model/. Last accessed 25/04/2013.
Anita Talaja. (2012). TESTING VRIN FRAMEWORK: RESOURCE VALUE AND RARENESS AS SOURCES OF COMPETITIVE ADVANTAGE AND ABOVE AVERAGE PERFORMANCE . Available: http://www.efst.hr/management/Vol17No2-2012/3-Talaja.pdf. Last accessed 25/04/2013.
Ovidijus Jurevicius. (2013). Value Chain Analysis. Available: http://www.strategicmanagementinsight.com/tools/value-chain-analysis.html. Last accessed 25/04/2013.

Week 8

WEEK 8

Make a list of competitors for Islington College.

Islington College has many competitors. Among them following are few of the competitors:

Ø  The British College

Ø  Sofwarica College of IT and E-commerce

Ø  Apex College

Ø  Ace Institute of Management

Ø  Kathmandu College og Management

Ø  Kathmandu University

Ø  Tribhuwan University

Ø  Kathmandu Institute of Science and Technology

Ø  Asian Institute of Management and Technology

Ø  Northampton University

Ø  Lord Buddha College

Develop a porter’s five forces model for Islington College.

Michael Porter developed the theory of five forces model in order to identify the different types of competition within the industry, to identify the current position of the firm in the industry as well as to identify and analyze the attractiveness and captivation of the industry. In the external environment there are various factors which create competition. Porter’s five forces model helps to analyze and identify those factors. (Jim Riley,
2012).

 Porter’s five forces model includes the following:

Ø  Competitive rivalry within an industry

Ø  Threat of new entrance

Ø  Threat of substitute products

Ø  Bargaining power of suppliers

Ø  Bargaining power of customers

Porter’s five forces model for Islington College are as follows:

1.     Threat of new entrance/Barriers of entry

Every profitability industry has a threat of new entrance as others are also attracted to profitability industry. The only thing which prevents the entrance of new competitors is barrier of entry. The new firms have to get over barriers of entry so that they can enter in the industry and successfully compete with the existing firms.

International Degree in Nepal is very expensive. There are barriers like huge amount of investment and difficult to acquire license from the Government of Nepal as it challenges the local degree. Islington College has invested huge amount as well as acquired license from the government to run the college. It is one of the well known college which provides international degree for BIT and BBA. It is the market leader in the industry because it was one of the first college to introduce international degree in Nepal. Other colleges will find difficulties in competing with Islington college because of the facilities like: excellent lecturers, brand image, digital classrooms, quality education, friendly staffs, latest technologies, good environment etc.  

2.     Competitive Rivalry

Competitive rivalry comes into existence when other firms enters in the same industry and facilitates same customers with same kind of products and services. Students of Islington College and other college which provides international degree are those who do not want to leave the country and wants international standard education in the country itself. In Nepal, there are only few colleges which provide international degree. Islington college as well as Lord Buddha college is one of the oldest but the difference is that Lord Buddha provides Indian degree whereas Islington college provides British degree. Recently colleges like British college and Softwarica introduced international degree but they have not been able attract students since they are new in the market. From this we can say that currently Islington is one of the best college providing international degree without much threat from the rivals but the college should try even hard to assess its competitive position so that they can do better in future as well and be ahead of their competitors.

3.     Bargaining power of buyers and suppliers

This is the relative power of the customers/buyers to influence a firm. Buyers have this power when they have more choices and they purchase high volume of products and services form the suppliers. 

Islington College currently is providing its services to around 800 students. There are many who want to study in this college and every semester there are hundreds of students applying for the college. This is because Islington College provides quality education and few colleges providing international degree. The students have very few choices and thus bargaining power of buyers here is relatively low and the bargaining power of the college is very high.

4.     Threat of substitute products

Substitute products of same quality and satisfaction level may reduce the demand of the firm’s service and product. Consumers may prefer substitute goods because of increase in price, decrease in quality and so on. Substitution can be in the form of products or needs. For Islington College, there are various threats of substitutes like Computer Engineering courses, short term certified IT trainings and Computer Application Development courses. Also, the later trainings are cheaper and are of short duration too. Many people these days in order to save time and money attend trainings and short term courses. Thus, this shows that there exists high level of threat of substitute products for the college. 

References:

cgma. (2012). Porter’s Five Forces of Competitive Position Analysis . Available: http://www.cgma.org/Resources/Tools/essential-tools/Pages/porters-five-forces.aspx. Last accessed 23/04/2013
Jim Riley. (2012). Porter's Five Forces Model: analysing industry structure. Available: http://www.tutor2u.net/business/strategy/porter_five_forces.htm. Last accessed 23/04/2013.

Educate Nepal, 2011. Higher education in Nepal: issues and challenges. Available at : <http://www.educatenepal.com/contributors/articles/higher-education-in-nepal-issues-and-challenges > [Accessed 23/04/2013].

Higher education in Nepal Available at< http://www.criticalthinkingblog.org/on-line-ct-resources/ct-research/higher-education-in-nepal-prospects-and-challenges-in-new-millennium> [Accessed on 23/04/2013] 

Higher education in Nepal: challenges and way forward.  Available at: <http://www.telegraphnepal.com/national/2011-12-14/higher-education-in-nepal:-challenges-and-way-forward.html > [Accessed on 23/04/2013].