Posted: April 24th, 2015

Strategy Analysis and Evaluation Project;

Strategy Analysis and Evaluation Project;

In this assignment you are required to provide analysis of the strategy and evaluate the strategy of a large company (or business unit of a large company) you have selected. In part one of the report, you are required to provide the analysis of the strategy. In part two you are required to evaluate the strategy. In order to complete this assessment, you are required to use the following article “Hambrick, D. C. & Fredrickson, J. W 2001. Are you sure you have a strategy? Academy of Management Executive, 15(4): 48-59”. This article can be downloaded from blackboard (learning resources) website.
Approaching this assessment,
1.    First, read the above article at least twice to understand

a.    The elements of strategy (page 51)

b.    Six questions to evaluate the quality of the strategy (page 59)

2.    Transform the questions provided under each element (page 51) to past tense. In other words, for element Arena, the main question provided in the article is “Where will we (the company) be active?”. You need to transform that to “ Where was the company active ? (e.g. in last 5-10 years)”

3.    Select a large company (or business unit of a large company)

a.    This website (http://money.cnn.com/magazines/fortune/fortune500/) provides a list of top 500 companies of the world. You are not strictly required to select a company from this list. However, you may select one of the companies (or its division) from this list as there is a lot of information available about these companies for your analysis.

b.    You are not allowed to select IKEA and Brake Products International to complete your assessment as these cases are used in the article to illustrate the elements of strategy.

Dos and Don’ts to write the report
Dos
1.    First, conduct extensive research to gather relevant information (quantitative and qualitative) about the company from multiple sources. Company websites, company annual reports, company profile, company analysis and the case studies are the good starting points to collect the information. You must collect both qualitative information and quantitative information such as historical financial statements, income statements, data on market shares etc.

2.    Categorize the information into five elements of strategy and six questions to evaluate the strategy.

3.    Analyse the information to build your arguments

4.    Provide rationale and evidence for your arguments. Evidence could be both quantitative and qualitative. Try to provide maximum evidence for your arguments such as tables, graphs, figures.

5.    Be consistent with your arguments throughout the report

6.    Use appropriate referencing

Don’ts

1.    Do not just list information

2.    Do not just provide a qualitative essay without any quantitative information to support your arguments.

3.    Do not rely on company annual reports and company websites only.

4.    Do not provide tables, graphs which is not used or referenced in the report

Structure of the report (suggestion only)
In order to structure the report, follow the structure below. The following structure is a guideline. You must include additional points based on the above article and your information. However, the report MUST address the following three sections.
1.    Introduction
This section should be very short (within 200 words) outlining
1.    Very brief introduction of the company you have selected
2.    Why have you selected this company
2. Analysis of Strategy
Use the framework provided in page 51 titled “The five major elements of strategy” in the above article. In your analysis provide a comprehensive analysis of the following
2.1    Arenas: Where was the company active?
2.1.1    What are the product/service sectors of the company? How much revenue/sales is generated from each sector etc? Has the company changed its products and services in last 5-10 years? How has the composition of products and services changed? Why did the company changed its products/ services (added new products/ exited from old products etc.)?
2.1.2    Which market (consumer) segments do the company focus on? Has it changed its market segment in last 5-10 years? Why ?
2.1.3    How much revenue is generated from each geographical region (or countries)? Has the geographical focus changed in recent years (e.g. from focus on Asia to Europe)? Why has it changed its geographic focus?
2.1.4    What are the core technologies the company focuses on? Has it changed over the years?
2.1.5    Has the value creation stages changed (e.g. from cost leadership to differentiation strategy) over the years?

2.2    Vehicles: How did the company get there?
2.2.1    How many joint ventures, licensing/franchising, acquisition has the company undertaken? Is there a preference for a particular type of vehicle (e.g. franchising/joint venture)? Has it changed over the years?
2.2.2    In which countries are these joint ventures and acquisitions? Has the country focus changed? Is there a pattern in certain countries the company prefers joint ventures (e.g. developing countries) and acquisition in other (e.g developed countries)?
2.2.3    What is the composition of revenues from joint ventures and internal development/ joint venture and acquisition/ internal development and acquisition? Has it changed over the years?
2.2.4    Why has the company undertaken internal development in certain countries and joint ventures or licensing in certain countries not in other?

2.3    Differentiators: How did the company win (succeed) in the market place?
2.3.1    How does it gets customers? Has it changed over the years?
Brand?
Price?
Customization?

2.4    Staging: What was the speed and sequence of the moves made by the company?
2.4.1    What was the speed of national/international expansion?  Fast/slow? Has it changed over the years (e.g. initially slow but fast later OR fast in national market but slow in international market)
2.4.2    Why did it enter a particular set of countries or diversified to a new product/ line first and to the other set of countries or product/ service later?
2.5    Economic Logic: How did the company obtained returns (profit)?
2.5.1    Low cost? How could it reduce cost (e.g. economies of scale/scope)? Has it changed over the years?
2.5.2    Premium product/ services? How could it provide premium product/ services (e.g. building superior products; developing technology etc.)
Summary of five elements
After outlining the analysis of five elements provide a brief summary of company’s strategy based on the analysis of the above five elements
Part 3. Evaluation of Strategy
Based on the elements of strategy above, provide the evaluation of the company’s strategy. Use the questions provided in Table 1: Testing the Quality of Your Strategy in page 59. Your evaluation must provide answers to the following questions.
1.    Does the strategy of the company fit with what is going on in the external environment?
a.    Does this strategy fit with the situation in macro- environment (Political, Economic, Socio-cultural, Technological, Legal and Environment)? A PESTEL analysis will help to answer this question.
b.    Does the strategy fit with the industry (competitive) environment? Conduct a five forces analysis to answer this question.
2.    Does the strategy of the company exploit the key resources and capabilities?
a.    Identify key resources and capabilities (R&C) of the company. Are the resources Valuable, Rare, Inimitable and embedded in the Organization (VRIO)?
b.    Explain if it is exploiting its R&C to compete?
3.    Are the differentiators sustainable?
a.    Are the competitors matching the company? Is the company innovative to compete with the competitors?
4.    Are the elements of the strategy internally consistent?
a.    Are the five elements internally consistent? If no, which elements are not consistent? How severe is the inconsistency?
b.    Do the five elements support each other? If no, which elements do not support the other elements?
5.    Does the company have enough resources to pursue this strategy?
a.    Do the company have resources which satisfy VRIO? Are there enough resources to pursue this strategy? If not, is the resource obtainable?
6.    Is the strategy implementable?
a.    Does the company have right organization structure (including managers, employees, incentive systems and control systems etc.) to implement this strategy?
Summary of Strategy Evaluation
Based on the answers to above six questions, provide a brief summary of the strengths and weaknesses of the present strategy in taking the company to achieve future objective