Week 6 : Business and functional level strategies

Business level strategies focus on improving the competitive position of a company’s or business unit’s product or services within the specific market segment that the business unit services. Seek to answer the following questions: Should the firm compete on the basis of lower cost or should we differentiate our products or services on some basis other than costs, such as quality or service

 There are three generic business level 

strategies that could be pursued by firms to defend and establish their position against competitors: cost leadership, differentiation, and focus strategy.

Cost leadership strategy

    That’s refers to the firm’s ability to produce goods and services at a lower cost than its rivals.

Companies which utilize a cost leadership strategy would concentrate on providing a basic and standardised product or service that can be produced at a relatively low cost and made available to a broad target market.

Firms that adopt this strategy do not customize their products or services to an individual customer’s tastes, needs or desires.

Successful implementation of the cost leadership strategy requires a consistent focus on driving costs  relatively lower to competitors’ costs.

For example even Air Asia airlines is not serve many services such as no luggage, no meal, no services and so on , they will still sustainable produces goods and services competitive Malaysia Airlines Berhad

                                                             

Differentiation strategy

      Differentiation strategy consists of creating differences in the firm’s products or services by offering something that is perceived industry wide as unique and valued by customers.  Firms that use this strategy would emphasize brand image, unique styling, technology, features, a dealer network, customer service or innovative design.

This strategy is based on the assumption that customers are willing to pay a higher price for a product or service that is distinct or perceived to be unique from that of its rivals.

Differentiation strategy creates customer loyalty to a firm’s products because customers perceive these products to be unique and as a result, are willing to pay more for a firm’s products or services.

Firms that use this strategy should constantly upgrade the differentiated features that customers value without significant cost increases.

For example differentiation strategy that Rolex have different based on own good quality, status of Rolex and standard image compare with Swatch.

                                                        

Focus strategy

     Focus strategy is based on the firm competing in a narrow scope within an industry where the firm selects a segment or group and tailors its strategy to serve them.

The success of a focus strategy rests on the firm’s ability to identify segments that are not properly served or to find market segments that have unique needs or that are so specialized that broad-based competitors select not to serve them.

v  There are two variants:

–        Cost focus where a firm strives to create cost advantage in its target segments

–        Differentiation focus where a firm seeks to differentiate its products or services in its target market

v  Firms that follow the focus strategy earn high profitability by

–        meeting the needs of a particular buyer group.

–        having the ability to attract a growing number of new customers.

–        continuing to attract repeat customers.

 Business level strategies focus on improving the competitive position of a company’s or business unit’s product or services within the specific market segment that the business unit services. Seek to answer the following questions: Should the firm compete on the basis of lower cost or should we differentiate our products or services on some basis other than costs, such as quality or service

 There are three generic business level strategies that could be pursued by firms to defend and establish their position against competitors: cost leadership, differentiation, and focus strategy.

 

Cost leadership strategy

    That’s refers to the firm’s ability to produce goods and services at a lower cost than its rivals.

Companies which utilize a cost leadership strategy would concentrate on providing a basic and standardised product or service that can be produced at a relatively low cost and made available to a broad target market.

Firms that adopt this strategy do not customize their products or services to an individual customer’s tastes, needs or desires.

Successful implementation of the cost leadership strategy requires a consistent focus on driving costs  relatively lower to competitors’ costs.

For example even Air Asia airlines is not serve many services such as no luggage, no meal, no services and so on , they will still sustainable produces goods and services competitive Malaysia Airlines Berhad

                                                            

Differentiation strategy

      Differentiation strategy consists of creating differences in the firm’s products or services by offering something that is perceived industry wide as unique and valued by customers.  Firms that use this strategy would emphasize brand image, unique styling, technology, features, a dealer network, customer service or innovative design.

This strategy is based on the assumption that customers are willing to pay a higher price for a product or service that is distinct or perceived to be unique from that of its rivals.

Differentiation strategy creates customer loyalty to a firm’s products because customers perceive these products to be unique and as a result, are willing to pay more for a firm’s products or services.

Firms that use this strategy should constantly upgrade the differentiated features that customers value without significant cost increases.

For example differentiation strategy that Rolex have different based on own good quality, status of Rolex and standard image compare with Swatch.

                                                        

Focus strategy

     Focus strategy is based on the firm competing in a narrow scope within an industry where the firm selects a segment or group and tailors its strategy to serve them.

The success of a focus strategy rests on the firm’s ability to identify segments that are not properly served or to find market segments that have unique needs or that are so specialized that broad-based competitors select not to serve them.

v  There are two variants:

–        Cost focus where a firm strives to create cost advantage in its target segments

–        Differentiation focus where a firm seeks to differentiate its products or services in its target market

v  Firms that follow the focus strategy earn high profitability by

–        meeting the needs of a particular buyer group.

–        having the ability to attract a growing number of new customers.

–        continuing to attract repeat customers.

Week 5 : learn about the internal environment analysis

The Internal Environment Analysis

Swot analysis

     2 weeks before the Iceps10 program is coming, we learn about swot analysis.  For make exposure about meaning the swot analysis Madam Ummi explain the swot analysis is regarding the Iceps10. There are involve 4 based of analysis which are strength, weaknesses, opportunity and threats.

Strength

  Manpower - involves 400 students

   Define objective and goals iceps10

ü     Strategic location

üHigh financial capital

ü  Good team work                                                            internal environment

Weaknesses                                                                                           

ü  This is huge events

ü  Risk

ü  Lack cost

ü  Mission n vision

ü  Conflict interest

Opportunity

ü  Will be improve your soft skill

ü  More networking

ü  Internalization

ü  Can marketing of iceps10

Threats                                                                                                                          external environment

ü  Crowd fees

ü  Competitors

ü  Terms n condition

ü  Facilities

Week 4 : Srtudy Case about Portes 5 Forces

PORTER’S 5 FORCES

A model introduced in 1979 by Michael Porter and used by companies for industry analysis and corporate strategy development. The five forces include competition, supplier strength, customer power, the potential for new companies joining the industry, and the threat of substitute products.

                                                           

    

Bargaining Power of Suppliers

The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or services.

Suppliers provide the raw material needed to provide a good or service. This means that there is usually a need to maintain strong steady relationships with suppliers. Powerful suppliers may be able to increase costs without affecting their own sales volume or reduce quantities that they sell.

Supplier bargaining power is likely to be high when:

-          There are no substitutes for the particular input,

-          The suppliers customers are fragmented, so their bargaining power is low,

-          The buying industry has a higher profitability than the supplying industry,

-          Forward integration provides economies of scale for the supplier,The buying industry has low barriers to entry.

Bargaining Power of Customers

The bargaining power of customers determines how much customers can impose pressure on margins and volumes.

Customers bargaining power is likely to be high when

-          They buy large volumes, there is a concentration of buyers,

-          The supplying industry operates with high fixed costs,

-          The product is undifferentiated and can be replaces by substitutes,

-          Switching to an alternative product is relatively simple and is not related to high costs,

-          Customers have low margins and are price-sensitive,

-          Customers could produce the product themselves,

-          The customer knows about the production costs of the product

Threat of New Entrants

If an industry is profitable, or attractive in a long term strategic manner, then it will be attractive to new companies. Unless there are barriers to entry in place, new firms may easily enter the market and change the dynamics of the industry.

The particular dynamics of an industry that restrict entry into it are called barriers to entry The most attractive scenario for a new company is when a potential market has low barriers to exit but high barriers to entry.

  Threat of Substitutes

A threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players.

Similarly to the threat of new entrants, the threat of substitutes is determined by factors like

-          Brand loyalty of customers,

-          Close customer relationships,

-          Switching costs for customers,

-          The relative price for performance of substitutes,

-          Current trends.

Competitive Rivalry between Existing Players

  This force describes the intensity of competition between existing players (companies) in an industry. High competitive pressure results in pressure on prices, margins, and hence, on profitability for every single company in the industry.

Competition between existing players is likely to be high when

-          There are many players of about the same size,

-          Players have similar strategies

-          much price competition

-          Low market growth rates

-          Barriers for exit are high

Critically argue of the made of entry used by Gloria Jeans Coffea into Malaysia

GLORIA JEAN’S COFFEE

1)    Critically argue of the mode of entry used by Gloria Jean’s Coffees into Malaysia.

Ultimately, the Gloria Jeans Coffee is a one available product that has a good potential to go worldwide. It have an own strategies to promote their product to achieve the goals and objective of company. Even it have a variety of obstacle in term of managing, marketing, monitoring and evaluating it still can be in charge to become one of top and recognizing product. They have cultivated the strong effort and strive hard to enter a market in Malaysia and other outsides of country, so they join MyFranchise. 

From the article, it shows that GJC was joints with MyFranchise. There are several challenges regarding to the MyFranchise which is 4 from the 13 outlets is operate by GJC. So, MyFranchise need to find a dynamic entrepreneur to take over their corporate outlets. It was a good opportunity to the people who seek a job because it gives them a chance to get a job. Besides, the article shows that MyFranchise provides a compulsory behavioral interview. The candidates will go through in-house training at the Coffee Academy.

   The challenge of the GJC is to secure choice business. Meaning here, the location of the premise is taken by competitor before the actual construction. So, it is difficult for GJC to overcome this matter. However, GJC managed to get heart of CEO of Tesco Malaysia that offering excellent premises which is Tesco Kepong and Tesco Seremban. Besides, GJC has yet obtain Halal certification from JAKIM that make the customer get attract to the safe product regarding to Islamic dietary law. This really makes sense that GJC can be compete other Kopitiam.

 Gloria jean's coffee shifted it’s to capture and grow the coffee market in Malaysia with plans to open more stores in the country. To start up grows in Malaysia market, first the best way is to get the acquisition and qualified of franchise rights by Malaysia International Franchise Sdn Bhd. MyFranchise, a franchise investment arm and a wholly-owned subsidiary of Perbadanan Nasional Berhad (PNS) is actively promoting Entrepreneurship as a Career of Choice programmers.

The benefits Gloria Jean’s Coffee to invest under Myfranchise is given more extensive support including for financing, management, operations and promotions. for the management, is be more systematic under the connection of PNS that provides financial assistance in form of term-loan with very low interest rate as well as guidance and training prior to the commencement of business of PNS’ potential candidates.

 For the management operation of Myfranchise , MyFranchise plans to open more Gloria Jean’s Coffees outlets to add to the existing outlets and inviting local entrepreneurs to join the expanding Gloria Jean’s Coffees family. As part of the continuous development plan, Gloria Jean's Coffees has through by plan to identified numbers of potential coffee house locations within Klang Valley and several potential locations outside Klang Valley and within institutes of higher learning, both private and government-owned.

The specialty on GJC from other competitors in term aroma and flavor because of the coffee had been roasted process in Australia. Based on the customer suggestion for provide local food was approval by obtaining their Australian franchisor. GJC offer local delights and food such as Nasi Lemak Bungkus, Nasi Briyani with Chicken and even Murtabak at the normal price but no local drinks like ‘cendol’ or ‘sugarcane juice’ at this time.

After that, GJC try new strategies to increase their sales and achieve the benchmark from the franchisor for attract more young collage students. First strategy is GJC was hosted a talent show contest and got local music acts to perform at their Sunway Pyramid outlet but it is not success. So, MyFranchise decide to change the strategy. Then, a GJC students club was introduced, the members of the club will get 30% discount on food and beverage items. 

WEEK 3... Definition of Strategic Management

Week 3

                             

DEFINITION OF STRATEGIC MANAGEMENT

Strategic management is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives. The strategic management process involves analyzing cross-functional business decisions prior to implementing them. Strategic management typically involves:

·         Analyzing internal and external strengths and weaknesses.

·         Formulating action plans. 

·         Executing action plans.

·         Evaluating to what degree action plans have been successful and making changes when desired results are not being produced.

Strategic management necessitates a commitment to strategic planning, which represents an organization's ability to set goals to determine the decisions and actions that need to be taken to produce those results.

Hhye what we need to learn this week....aaha!!

Week 2

First of all, before we start do the something we need to have organization strategy a.k.a strategic formulation.

We need defining vision, mission goals and objective.

1    Vision is long term strategy how to we achieve in the future. Dream or a picture to be achieved ultimately. Describe forms mental image of future to which people can align. In other words vision is to describe something possible, not necessarily predictable. Provides direction and focus.

2    Mission is statement of business. How to we achieve something. Provides basis for decisions on, resources allocation and appropriate objectives. Defines current and future business in term of product, customer, reason and market place.

3    Goals are result to achieve. Defined consistent with and related directly to vision and mission. Need to guide everyday decisions and actions.

4   Objectives is to plan achieve the desired result. Describe activities to be accomplished to achieve goals.

Mission + Vision + Objective must

                                                                 SMART

                      S: specific

                      M: measurable

                      A: achievable

                      R: realistic/reliable

                      T: timely

icebreaking week wuhuuuu!

Peace Be With You

  For make completed in study corporate administration and relation, in this semester, there are compulsory to me for taking the subject of strategic management by Dr.Ummi Salwa Bustaman. She is adorable lecturer who is responsibility to lead our group until final exam.

    Today, we start our lecture with play the ice breaking game. The instruction from madam we need to perform the group and build a highest tower in duration 20 minutes.

Lesson from this game, here we got are following:

·         We need agreed to with vision, mission and goals of our management

·         The important a team work in doing something

·         In the team work we need a skill such as communication skill

·         Related of eye contact, body language and understanding each other.