| ASSESSMENT ONE STRATEGY WORKBOOK BMO6511 Strategic Management & Business Policy | |||
| Case study …………………………………………. Team Names A_________________________ ID _________________ OVERVIEW AND SUMMARY B_________________________ ID _________________PESTEL C_________________________ ID _________________SWOT D_________________________ ID _________________5 FORCES E_________________________ ID _________________VALUE CHAIN | |||
| STRATEGY WORKBOOK BMO6511 Strategic Management & Business Policy |
ASSESSMENT 1. RESEARCH ANALYSIS (Individual and team assessment). 20% Submission Date: Week 5 (26/8)
Please Note: Assessments 1 and 2 as elements of one integrated strategic research analysis Select one company list below – this company will be used in assignments ONE and TWO
- Starbucks
- Toyota’s strategy for the Lexus
- Cathay Pacific.
- Tesla
- CTRIP: strategies in global travel
- Woolworths
- Hero Group: strategic alliance strategy.
- Bunning’s Home Improvement:
- Slater and Gordon.
- Alibaba: implementing business strategy
The cases entail a mix of US, Asian, Australian and European companies. Some are related to illustration cases in your text.
The relevant research questions for each company are addressed in Assignment two. So check the relevant research questions for your selected company before starting assignment one. Based on the company chosen for assignments 1 & 2, students in teams (it is expected that each team will have 5 members) need to formulate a business analysis of the company. This will entail completing the Workbook (see VU Collaborate). The different sections involve the following areas of analysis covered in the first part of the course.
1. Business Overview and summaries
2. PESTEL
3 SWOT analysis
4 PORTER % Force Analysis
5. Value Chain analysis
WORKSHEET 1: Over view of the Business (Student A NAME ________________)
Vision
Mission
Annual turnover and net profit for the last five years
Total FTE staff
Geographic operations scope – Operating in one nation or multiple nations
Nature of the industry that the business operates in
Main competitors
Others contextual factors researched to support general knowledge of business`
Worksheet 2: External Environment PEST analysis (Student B NAME __________________)
Economic Factors
Tesla’s strategy is to make an entry into the high-end market in which consumers are more than willing to shoulder a premium price for the car of their choice. The company then intends to successively drive down the market drastically to achieve high volumes per unit in sales, accompanied by lower prices per every subsequent model that enters the market. Tesla growth strategy is founded on the fact that it was not founded for the sole purpose of manufacturing expensive cars, but rather for changing the world’s energy in a positive direction. Job growth is an advantage to the consumerism of cars just like in other sectors, while low unemployment rates translates into weak consumer bargaining power as well as low consumerism behavior, since cars are in many cases referred to as luxury items. The economic factors affecting and influencing Tesla include economic growth in alternative energy sectors as well as the rising costs associated with cars, like an increase in fuel costs in the short run. Due to the changing factors affecting the motor vehicle market, there is an increasing demand in the more efficient to maintain vehicles. GDP recovery as well as a trading bloc’s inflation rate has a significant impact on the purchasing power of the consumer.
Figure 1: Trends in Tesla Car sales from 2011 to 2015. Source: (Eisler, 2016), A Tesla in every garage
Political/Legal Factors
Tesla has its market operation in more than 17 countries in the Northern parts of America, larger parts of Western Europe as well as Asia. Due to the company’s multinational statues/scope, Tesla has to be pretty much aware of the of the changing political patterns unique to every country that they have operations in. Political patterns as well as change go a long way in determining the company’s business operations. For Tesla as a company, the number one political factor affecting the industry is the laws pertaining to environmental protection. Tesla responds to this political concern in a positive way by manufacturing and inventing more environmental friendly cars that operate within the required levels of emissions to the environment. The company is also favored by the United States Government’s energy loan initiatives that are targeted at the research as well as development of car technologies that are neat and environmentally friendly. The political as well as the legal factors play a major role in guiding the consumerism of cars around the globe, thus determining the purchasing power of the consumers, for a given model of car.
Socio-cultural Factors
Modern day social factors take care of the rising concerns to do with the environment. Due to the increasing environmental concerns, consumerism in the motor vehicle sector is being guided largely by mistrust in the associated costs of having a car, such as the surging prices of fuel as well as the production costs that at times make the car prices go up, all in a bid to protect and or conserve the environment. Since people are increasingly judging each other based on the type of car they own, the idea of possessing an electric car is a growing trend in the global car market. The idea of owning an electric vehicle is so much of an improvement of consumer’s social status. The other social factor that favors or which is more likely to favor the future of Tesla is the increasing population of the aging consumers with good amounts of disposable income and willing to spend more on environmentally friendly vehicles, such as the electric cars.
Technological Factors
The level of improving technology coupled with rapid globalization is increasingly having a major effect on the car market sector. A lot of technological advancement has been in play within the motor vehicle industry, ranging from the invention of the fully electric vehicle to the fully computerization of vehicles to avoid causing accidents by automotive car drive techniques. Tesla stands a better chance in the technological evolution of the vehicle sector, given the environmental concern as well as the much required safety area coupled with convenience. In line with Tesla’s focus of producing the most electric and energy efficient cars, the car sector is increasingly creating business to business platforms, awarding better opportunities to the car companies that are focusing on increasing efficiency as well as reducing the costs as well as costs associated with maintaining and operating one. The biggest challenge that is facing Tesla is the inadequacy and demand for electric vehicle charging stations along highways in many countries that Tesla would want to enter.
Global Factors
In the global car market, there is no clear cut with respect to the change direction in a few years to come. However, automakers as well as the suppliers of automobiles do not have the luxury of taking time to lag behind the industry’s transformation. The year 2015 presented a mixed bag of measure in the car industry. The year 2015 proved to be a tough one for the car market, with only the United States, boosting the sector, while the rest of the world market with an emphasis on the developing economies presenting a relatively flat out the year. However, for the electric car market within which Tesla operates, the shift driven by environmental concerns as well as the need to evade the high costs of fuel and maintenance costs, Tesla remains to enjoy a good run in the increase in the sales for its model of electric cars, with many getting a lot of booking even before they get rolled out. Technological advancement is the driving force behind Tesla’s market growth.
Demographic Factors
As people age with a good level of disposable income, their lifestyle keeps changing since they develop demand for highly differentiate products as well as the most convenient consumables. With this respect, the change in lifestyle as well as the influence of trends and fashion are driving more people towards the electric car market to satisfy the environmental regulations and then actualize their ego in the eyes of other people in the society. Population shifts are another driving force behind the motor vehicle market, where the more the number of aging, wealthy individuals in a society the more luxury spending is increases on such expensive items as the Tesla models of cars. Wealthy young generations also are instrumental in the purchasing of a motor vehicle with a differentiated art of technology. Education levels, on the other side are a very important piece on the car market since the more learned or informed a population is the better and informed choices in the car purchase trends among consumers.
Worksheet 3: Identifying Opportunities and Threats (Student C NAME __________________)
Translate your notes from the above brainstorming exercise into the following table. Be specific and identify particular factors.
| Factor | Opportunity (O) or Threat (T) | Why? | Impact? High, Medium or Low | Source of further information? |
| Eg ageing population (Demographic) | Opportunity Threat | Opportunity: ageing population is increasingly active, they’re living longer, many are interested in exercise and healthy life-stylesThreat: Are there as many ‘young’ people interested in joining a gym? | High Low | Government reports on healthy life-stylesOfficial statistics on population trends |
Worksheet 4:
Internal Analysis: strength and weakness assessment test (Student C)
| Strengths | Why is this a strength? | Weaknesses | Why is this a weakness? |
| Strong brand | Instantly recognisable and trusted in the market | Unfamiliar with specific gym industry | Could be difficult to compete with more knowledgeable competitors |
Worksheet 5:
Integrated SWOT Analysis (STUDENT C) | Strengths (include from internal analysis) | Weaknesses (include from internal analysis) |
| Opportunities (include from external analysis) | [How do I use these strengths to reduce the likelihood and impact of these threats?] | [How do I address the weaknesses that will make these threats a reality?] |
| Threats include from external analysis) |
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Worksheet 6: Industry Environment: 5 force analysis (Student D NAME __________________)
WORK SHEET 7 – OFFER COMMENTS ON YOUR ASSESSMENT
TREAT OF NEW ENTRANTS
THREAT OF SUBSTITUTES
SUPPLIER BARGAINING POWER
BUYER BARGAINING POWER
COMPETITIVE RIVALRY
Worksheet 7: Assessing Competitive Dynamics (Student D)
On each scale, place a circle around the number you consider as the closest position to the two extreme position labels for each scale
For example: – If you consider in item 1 that there are ‘no barriers’ or almost ‘no barriers’, then circle number 1 or2 . Alternatively if you consider that it is ‘virtually impossible to enter’ or almost ’virtually impossible to enter’ then circle 6 or 7. If you consider it is somewhere in between these extremes circle 3 or 4 or 5. Just circle one number per scale
1. Ease of entry of new firms into industry
| No barriers | 1 2 3 4 5 6 7 | Virtually impossible to enter |
2. Intensity of competition among firms
| Extremely competitive | 1 2 3 4 5 6 7 | Almost no competition |
3. Degree of product substitutability
| Many substitutes available | 1 2 3 4 5 6 7 | No substitutes available |
4. Degree of dependency on complimentary or supporting products and services
| Many substitutes available | 1 2 3 4 5 6 7 | No substitutes available |
5. Degree of bargaining power buyers and customers possess
| Buyers dictate terms | 1 2 3 4 5 6 7 | Selling firms dictate terms |
6. Degree of bargaining power suppliers and vendors possess
| Suppliers dictate terms | 1 2 3 4 5 6 7 | Purchasing firms dictate terms |
7. Degree of technological sophistication in industry
| High level technology | 1 2 3 4 5 6 7 | Very low-level technology |
8. Rate of innovation in industry
| Rapid innovation | 1 2 3 4 5 6 7 | Almost no innovation |
Worksheet 8: Value Chain Analysis (Student E NAME _________________________ or all students if a team of 4)
Map your strengths and weaknesses on to the organizations value chain
chainchain
| From Hanson et al (2011) |
SUPPORTIVE COMMENTS
PRIMARY ACTIVITIES
Service
Marketing and sales
Outward bound logistics
Inbound logistics
Operations
SUPPORT ACTIVITIES
Firm Infrastructure
Human Resource Management
Technical Development
Procurement
WORKSHEET 9: Summary and Emerging issues for the business (Student A)
Summarise the implications of the analysis and detail the emerging issues for the business _____________________________________________________________________________________________
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