1. WK7 Agenda News: Safari World Cup, World Expo, Chinese Enterprise and ROI, Lebron ASEAN MNEs CCTV: Chinese Enterprise Wii discovery Tows matrix discovery Homework Update, mind map 1 MIB, BBA 2010

2. Wii Discovery Wii game, meet all teams. Do your team have a competitive advantage? Resources+capability+competencycompetitive advantage SWOT of your team? Strategy use? MIB, BBA 2010 2

3. Alternative Strategies Find news, video clip, article or reality role play of these alternatives. Ask your friends what strategy that your team use as well as the probability of success. MIB, BBA 2010 3

4. Homework & Mind Map Mind map, check understanding Is Oishi an MNE? MIB, BBA 2010 4

5. WK7.2 Agenda Hot topics: World Expo AHA, our discovery moment Mind map SWOT homework and evaluation MIB, BBA 2010 5

6. SWOT Evaluation Rate team work of SWOT homework (1-5). Give necessary comment.

7. WK7.3 Agenda Hot topics: Lao Timber, Telecom Industry growth, real estate bubble in China, labor work situation in Thailand, Cambodia day of anger? SWOT homework continue Lecture MIB, BBA 2010 7

8. Strategy Formulation Situational Analysis: SWOT analysis Strategy=opportunity/capacity (only strength and opportunity) Strategic alternative=O/(S-W), what’s the minimum number that we’ll be happy? Should we invest more in our strength to create a distinctive competence? Should we invest more in our weakness to at least make them competitive? SWOT criticism: lengthy list, no weight to reflect priorities, ambiguous words, same factor in two categories MIB, BBA 2010 8

9. Strategy Formulation Find a niche using Strategic Factors Analysis Summary (SFAS) matrix. List the most important items for each factor (SWOT) and recreate the matrix. The SFAS matrix is the firm’s strategic factors. Generate alternative strategies using a TOWS matrix MIB, BBA 2010 9

10. Strategy Formulation MIB, BBA 2010 10

11. I.Business Strategies Focuses on improving competitive position of a company or business unit’s products or services within the specific industry or market segment. MIB, BBA 2010 11

13. Greater efficiencies than competitors

14. Differentiation strategy

16. Breadth of the target marketResources+capability+competencycompetitive advantage MIB, BBA 2010 12 Can we use both cost leadership and differentiation strategy? Benz, BMW, Apple, Bally Wal-Mart, Dell, Southwest What is stuck in the middle? No competitive advantage, Below average performance Sansabai Buffet, Nunyang Villa Supermarket Bulavi Natural Treatment Sport Club

17. Risks of Generic Strategies MIB, BBA 2010 13

18. Requirements for Generic Strategies MIB, BBA 2010 14

19. Tactics MIB, BBA 2010 15

21. Strategic Alliances: advantages include: obtain technology, access to specific market, reduce financial and political risks, learn new capabilities

22. Mutual service consortia: partnership with similar companies to share resource(too expensive to develop alone): IBM&Toshiba, Ford&Mazda

23. Joint ventures: most popular, but the disadvantages include: the loss of control, lower profit, conflict potential, possible technology transfer

24. Licensing arrangements

25. Value-chain partnerships: alliance with key suppliers or distributorsMIB, BBA 2010 16 Value chain partnership Mutual Service JV, Licensing Strong&Close Weak&Distant

29. WK8.2 Agenda Revised homework on Friday 23, 2010. Inflated presentation points Use the slides diagram Use the strategic audit sheet. News, article, corporate website, competitor websites information search. Bring all your information. Need better understanding of your business and industry. Threat~highratinghandle well Weakness~high rating??? Lecture Mind map and Simulation Game/Start download MIB, BBA 2010 20

30. Stability Strategy MIB, BBA 2010 21

31. Retrenchment Strategy MIB, BBA 2010 22

32. Portfolio Analysis : BCG BCG Matrix use growth rate and relative competitive position. Relative Competitive position =market share/mk share of the largest competitor The cut off position is at 1.5X. More than 1 means? Question marks: new product with potential for success, but need lots of cash for development Stars: market leader, peak of the product life cycle, generate lots of cash Cash cows: decline stage of the product life cycle, generate cash to invest for question mark Dogs: low market share and do not have market potential due to unattractive industry. MIB, BBA 2010 23

33. Portfolio Analysis : BCG What should we do if we have a dog? Dog farm…sell out Limitations include: Too simple(use high and low) Market share does not always link to profitable Growth rate is only one aspect of the industry attractiveness. Market share is only one aspect of the overall competitive position. Only consider the largest competitor (the divisor) ignore other firms. MIB, BBA 2010 24

34. Portfolio Analysis: GE Business Screen MIB, BBA 2010 25 C Winners Winners A Question B High Marks D Winners E Average Businesses F Industry Attractiveness Medium Losers H Losers G Low Profit Producers Losers Strong Average Weak Business Strength/Competitive Position Industry Attractiveness: Market growth rate, comparable market share, industry profitability, size, and pricing practices Competitive position: market share, technological position, profitability, and size A-H are the product lines. Size of the circle represent the industry. The highlighted area is the market share. Limitations include: Complicated and cumbersome Subjective judgment rating Not effective for depicting new product positions

36. Examine the business unit to improve performance

37. Analyze the characteristic fit between parent corporation and the business unitMIB, BBA 2010 26

38. III. Functional Strategy The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity. MIB, BBA 2010 27

39. Marketing Strategy MIB, BBA 2010 28

40. Financial Strategy Leverage buyout: acquire the company with the borrowed money from the third party organizations. Reverse stock splits: each share is worth only half as much to raise the stock price Tracking stock: Common stock issued by a parent company that tracks the performance of a particular division without having claim on the assets of the division or the parent company. The objective is to separate a high-growth division from a larger parent company. MIB, BBA 2010 29

41. R&D Strategy MIB, BBA 2010 30

42. Operation Strategy Job shop: skilled labor Connected line batch flow: components are standardized Flexible manufacturing systems: parts are grouped into manufacturing families to produce a wide variety of mass-produced items Dedicated transfer lines: highly automated assembly lines, use little human labor Mass production: produce a large number of low cost, standard goods and services Continuous improvement system: improve production process, manager is a coach Modular manufacturing: JIT to a company’s assembly line Mass productionmass customization: Dell Six sigma MIB, BBA 2010 31

43. Purchasing Strategy MIB, BBA 2010 32

44. Logistics Strategy MIB, BBA 2010 33

45. HRM Strategy MIB, BBA 2010 34

46. Information Strategy Key driver of a business. Must align to the company vision and satisfy the business need. Support better business decision. Balance cost, convenience and security. CRM, EDI,ERP, SAP, SAS, E-commerce etc. MIB, BBA 2010 35

48. Hit another home run: Polaroid instant movie camera

49. Arms race: market share fight but the result is offset by the increase in advertising, promotion, R&D, and manufacturing cost. Chang and Singh

50. Do everything: Jump into all opportunities. Disney company increasing sales but decreasing net income.

51. Losing hand: Unwilling to accept its failure. Throw good money after bad. Pan American AirlinesMIB, BBA 2010 36

52. Strategic Choice Create three scenarios(Optimistic, Pessimistic, and Most Likely) and cost estimation. Select the alternative that use the least resource and fewest negative side effects as well as minimize cost and risk. MIB, BBA 2010 37

54. Dialectical Inquiry: debate two proposals using different assumptionsMIB, BBA 2010 38

55. Evaluation of Strategic Alternatives Mutual exclusivity Success: doable, high probability of success Completeness: include all key strategic issues Internal consistency: make sense, not contradict key goals, policies, and current strategies MIB, BBA 2010 39

56. Mind Map &Simulation Prepare the mind map of this lecture. In 4 groups, download Industry Player. http://www.industryplayer.com/download.php Start playing level 1. What did you learn from this simulation? MIB, BBA 2010 40

57. Redo SWOT Homework Use the slides diagram Use the strategic audit sheet. News and article information search. Bring all your information. Need better understanding of your business and industry. MIB, BBA 2010 41

58. WK8.3 Agenda Mind map Group work MIB, BBA 2010 42