Chapter 10....I'm Coming:)

Assalamualaikum, good morning..:)

Alhamdulillah, today we still able to live in this world...Thanks to Allah for all the things that we have. So, with bismillahirrahman, i will start our sharing session today...hehe:)

The title of chapter 10 is 'Building Organization Capable of Good Strategy Execution: People, Capabilities, and Structure'. after learned this topic, i realized it was a little bit same with subject Human Capital Development because on this topic, we learnt about hiring, training and retaining the right people to sustain the capabilities of company. In other word, it was the strategy for the company (internal). 

Organizational Structure 

• Simple Structure (line-and-staff)

• Functional Structure (departmental or unitary)

• Multidivisonal Structure (divisional or M-form)

• Matrix Structure (composite or combination)

Organizational Approach to Decision-Making

• Centralized decision making - Authority is retained by top management

• Decentralized decision making - Authority is delegated to lower-level managers and employees

That's all for now. I'll edit or add more about this chapter later...

NEXT.....Corporate Strategy-Diversification?

Hi, we meet again..

As i said in the previous post, today i'll try to post as much as i can, regarding to my subject (Strategic Management). So, now i'll share about the chapter 8, which is 'Corporate Strategy, Diversification and The Multibusiness Company'. Actually, i dont really remember what i had learned in this chapter, maybe because i feel sleepy at that time..(huhu, sorry miss). But, i'll try to write, based on my notes and power point slide.:)

Before I jump to the strategies, i want to state the definition of corporate diversification, first. It is a process when a company expand their business into different areas, such as industries and product lines. Companies typically do this in order to build the business. So, basically, there two types of corporate diversification, which are related and unrelated.

1- Related

• When the company consists of an overarching structure that supports all of its different business.
• Have competitively valuable cross-business value chain and resource match ups.

2- Unrelated

• When a company consists of a series of individual businesses that do not share things such as customers and distribution channels.
• Have dissimilar value chains and resource requirements, with no competitively important cross-business relationship at the value chain level.

Diversifying into related businesses where competitively valuable strategic-fit benefits can be captured puts a company’s businesses in position to perform better financially as part of the company than they could have performed as independent enterprises, thus providing a clear avenue for boosting shareholder value and satisfying the better-off test.

Synergy
-Creating added value for shareholders via diversification requires building a multibusiness company where the whole is greater than the sum of its parts-an outcome. Or in simple form, 1+1=3

Three approaches to diversifying the business lineup

1- Acquisition of an existing business

• An acquisition premium is the amount by which the price offered exceeds the pre-acquisition market value of the target firm.
• Example : Affin Investment Bank and Hwang-DBS (M) Bhd

2- Internal new venture (start-up)

• Is the process of developing new businesses as an outgrowth of a firm's established business operations. It is also referred to as corporate entrepreneurship or intrapreneurship since it requires entrepreneurial-like qualities within a larger enterprise.
• Example : Tabung Haji venturing into food business

3- Joint venture

• Is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity.
• Sime Darby joint venture with Thailand's PTT Chemical International

So, that's all for this chapter...Sorry, i cannot share many things about this chapter. See you in next post..:)

A MONTH LATER...

assalamualaikum, everyone.

long time no see.:) today will be a busy day for me, because i have to write all things that i had learned in this subject. Means, there will be continuous post from me, from chapter 7 until chapter 12...wah sound scary...huhu. this is the effect of doing assignment last minute. i cannot blame others, it's all my fault. it would be a long journey for me, today. so let start now.

for the first topic for the day, i'll recap what i had learned in the chapter 7, which is 'Strategies for competing in International Markets'. Basically, there are many factors that the company have to consider if they want to enter foreign market. They will face with many obstacles and new barriers, so they have to prepare themselves by making analysis and strategies. So, to make it easier, i'll using a case study about 1901 Hot Dog (a Malaysian franchise) to explain further about this topic.

But, firstly i'll state the reasons why many companies decide to involve with foreign markets.

• to gain new customers 
• to further exploit core competencies
• to spread business risk across a wider market base
• to gain access to resources and capabilities located in foreign markets
• to achieve lower costs through economies of scale, experience, and increased purchasing power.

So, in case of 1901 Hot Dog, they want to bring their homegrown brand to the international level. They realize that it would be a big and risky decision as they have to change their strategies to survive in the bigger market and the worst situation that they might be meet is business failure. Thus, there are several problems that they may face when entering foreign market, which are;

1.  Different countries have different home-country advantages in different industries. 
2. Location-based value chain advantages for certain countries.
3. Differences in government policies, tax rates, and economic conditions.
4. Currency exchange rate risks.
5. Differences in buyer tastes and preferences for products and services.

However, the owner of 1901 Hot Dog, Mrs Rozidar believe that 'opportunity does not come rolling unless you look for it'. Thus, she has been eyeing the Middle Eastern market and other market with Muslim population for their Halal food. They aim to be a global Halal brand.

Why Middle East?
As you can see, there are a lot potential countries that 1901 Hot Dog can enter, but why they choose Middle East as their main location to expand their franchising business. It definitely because of the current development in the Middle East that helps the region to become one of the fastest-growing regions in the world, thus becoming an ideal location for industry player. Other advantages are:

•  The region is among the most investor-friendly where the local government provides full support
• Attractive tax-free facilities
• A world-class infrastructure
• High number of consumer in the upper market range
• High level of consumer spending

There are three strategies approaches:

1- Multidomestic Strategy

It is one in which a firm varies its product offering and competitive approach from country to country in an effort to be responsive to differing buyer preferences and market condition. It is a think-local, act-local type of international strategy, facilitated by decision making decentralized to the local level.

2- Global Strategy

It is one which a company employs the same basic competitive approach in all countries where it operates, sell much the same products everywhere, strives to build global brands, and coordinates its actions worldwide with strong headquarters control. It represent a think-global, act-global approach.

3- Transnational Strategy

It is a think-global, act-local approach that incorporates elements of both multidomestic and global strategies.

In brief, to expand business to oversea is not an easy things. it require a lot of knowledge as well as capital. company must have a good strategy to strengthen business and survive in the area. As a student, i dont really know about 'real business' area as i still does not involve with any type of business, so i can't say too much, but one thing that i'm sure 100% is, all the success or failure are depends on us. If we put effort and try to continue improving our performance, and never ever give up, i believe the victory will be ours. So, fighting!! :)   

SO DON'T EVER GIVE UP, EVERYTHING IS POSSIBLE

STRATEGIES IN BUSINESS

Assalamualaikum, everyone:).
Before I start, let me ask you 1 question. Do you know what month we are in right now? hehe, yup of course in normal calendar, we are in the end of the year (November) but in Islamic calendar, we are in the sacred month of MUHARRAM or known as Maal Hijrah. So, let's hijrah (change) to better side and add our good deeds (amalan soleh). Hopefully, we can ISTIQAMAH in our 'amal'. Fighting!!!

STRATEGY TO BE COMPETITIVE

Today, we will learn some terms in business strategy (actually, it’s quite a lot..hehe). But, don’t worry, I’ll just make it simple..

  

To maximize the power of a strategy, the company can use:-

1) OFFENSIVE STRATEGIES

* Principle

  - focus in the competitive advantages

  - use all the resources to attack the rivals

  - employ the element of ‘surprise’

* Choosing the basis for competitive attack

  - avoid directly challenge rival’s strongest advantages

  - Be prepared for the threatened competitor’s counter- response

  - use the best strength to attack

* Choosing which rivals to attack

  - Market leader that vulnerable

  - Runner-up firm with weaknesses

  - Struggling enterprise in some area

  - Small local and regional firm

* Example:

Ø use/offer lower price – AIR ASIA

Ø leapfrog competitor by being first with future generation – GAMES

Ø pursue continuous product – APPLE

Ø adopt and improve – SAMSUNG ANDROID

Ø use hit and run marketing (guerilla) – promote through FACEBOOK, TWITTER etc

Ø   launch a preemptive strike – DUPONT

p/s: if the rival conquers the product segment, we have to do well in buyer segment to stay compete. (find other initiative)

2) DEFENSIVE STRATEGY

*Purpose

  - Lower the firm’s risk of being attacked

  - Weaken the impact of an attack that does occur

  - Influence challengers to aim their efforts at other rivals

  - Blocking the avenue

  - Signaling the challengers

p/s: good defensive strategies can help protect a competitive advantage but rarely are the basis for creating one.

TIMING FOR OFFENSIVE AND DEFENSIVE STRATEGIC MOVES

ü Knowing when to make a strategic move is crucial as knowing what move to make.

ü Moving first is no guarantee of success or competitive advantage.

ü The risk of moving first to stake out a monopoly position must be carefully weighted.

            So, as the leader of company, we should plan our strategy wisely and the most important thing is we have to make sure that the timing is also on our side. Sometimes, it's better to not make a quick decision as we may take a reckless step. To success we have to wait for the correct timing to make a move so that we can grab all the opportunities in front of us as what we planned.

3) BLUE OCEAN STRATEGY

Concept: new thing that no one had done yet

#1M4U

#e-bay

#Starbuck

#Fed Ex

#Cirque Du Soleil

HORIZONTAL

Concept: range of product/service segment that a firm serves within its focal market through –

1) Merger

2) Acquisition

-ex of merger: Bank Bumiputera + Commercial Bank = Bumiputera Commerce + Southern Bank = CIMB

VERTICAL

Concept: include all of the activities that make up an industry’s entire value chain, ranging from raw-material production to final sales and service activities

-ex: KFC outlet with Ayamas

Other terms in Business are:-

OUTSOURCING

Concept: involve contracting out certain value chain activities to outside vendors

STRATEGIC ALLIANCE

Concept: is a formal agreement between two or more separate companies in which they agree to work cooperatively toward some common objective.

JOINT VENTURE

Concept: is a partnership involving the establishment of an independent corporate entity that the partners own and control jointly, sharing in its revenues and expenses.

              In brief, after I learned this chapter, i realized that business area is a place for brave people and creative thinker as they have to take the risks to success (the bigger the risk, the bigger the profit). Not all people have the courage to put their money and their life to business (including me...hehe), so i give big salute to all businessman and businesswomen out there, cause you guys are amazing and hopefully, someday i can follow your step...:)

Hehe, i hope that all of you can understand all the terms above..:) See you next time. Wish you all a happy life...Assalamualaikum.

Chapter 5 - FIVE GENERIC COMPETITIVE STRATEGIES

Assalamualaikum. Good morning, everyone!! :)

As I  promised before this, right now i will share what i had learned in the Chapter 5, which was about FIVE GENERIC COMPETITIVE STRATEGIES. This tool strategy was originally came from Micheal Porter, who was also the ones that introduced The Five Forces.


Key factor that distinguish ones strategy from the other :-

• Market Target - Is the firm's market target broad or narrow?
• Competitive Advantages - Is the competitive advantage pursued linked to low costs or product differentiation?

The 5 Generic Competitive Strategies are :-

*LOW-COST PROVIDER - Striving to achieve lower overall costs than rivals on products that attract a   broad spectrum  of buyers. Successful low-cost leaders, who have the lowest industry costs, are exceptionally good at finding ways to drive costs out of their businesses and still provide a product or service that buyers find acceptable.

Example : AIR ASIA

*BROAD DIFFERENTIATION - Differentiating the firm's product offering from rival's with attributes that appeal to a broad spectrum of buyers. Usually, it use higher prices to recoup differentiation costs.

Example : APPLE 

*FOCUSED LOW COST - Concentrating on narrow price-sensitive buyer segment and on costs to offer a lower-priced product.

Example : GIANT

*FOCUS DIFFERENTIATION - concentrating on a narrow buyer segment by meeting specific tastes and requirements of niche members.

Example : FERRARI

*BEST-COST PROVIDER - Giving customers more value for the money by offering upscale product attributes at a lower cost than rivals. (combination of 4 strategies)

          So, it's up to the company which strategies that they want to use for their product. But, before that, the company must identify first, their strengths, weaknesses and competitive advantages, so that they can choose the suitable/best strategies to stay compete in the business area.

                                         

      I guess, that's all for chapter 5. I apologize for         the delay...huhu. 

      See you in next day with other interesting post       and with more pictures.

      Assalamualaikum:)

           

The delay chapters.....

Assalamualaikum, hi everyone...

Today, i would like to post about the chapters that i had delay for a long time. Actually, i'm suppose to post it on week 4 and week 5, but due to my daily activities - 'busy' (just an excuse) and also my habit (lazy), i cannot complete my task in the given period...huh, i'm also disappointed with myself...huhu:( 

   

Chapter 4 : Evaluating A company's resources, capabilities, and competitiveness

OK, now i will start with the chapter 4 first. As you can see, this topic is about the company itself, like the company's strength, company's competitive advantages, and how the company use all their resources to compete their rival, etc. After this, I will explain about it further, but firstly, lets me define the meaning of resource, capability, and competitiveness.

Definition:

Resource - a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively.

Capability - a talent/power/ability or that has potential for development or use     

Competitiveness - an aggressive willingness to compete.

Based on the slides that given by Miss Ummi, there are 3 main questions that related to this topic.

Question 1
How well is the present strategy working?

Best indicator 
- the company achieve its objective and stated financial                    
- the company is an upper player (means that the firm is an above-average industry performer)                    

There are also other indicators which are:-
-The company's growth in sales and market share
-The company's profit margins, net profit and ROI (Return on  investment)
-The financial strength and credit rating

Thus, if we want to indicate our company's strategy and performances, we have to look up all the listed factors above. Actually, there are many more indicator of performance, but i just put several...(so, you have to find the other indicator by yourself..;)

Question 2
What are the firms competitively important resources and capabilities? 

On that class, we also learned about the Barney's framework (1991) that known as VRIN. Through this framework, we can determine if a resource is a source of sustainable competitive advantage. To serve as a basis sustainable competitive advantage, resources must be:-

VRIN - test for sustainable competitive advantages.

1. Valuable - meaning that they must be a source of greater value, in terms of relative costs and benefits, than similar resources in competing firms.
2. Rare - the sources must be rare in the sense that it is scarce relative to demand for its use or what it produces.
3. Inimitable - it is difficult to imitate.
4. Nonsubstitutable -other different types of resources cannot be functional substitutes.  

p/s : if other firms can easily understands and copy a capability, it is not a source of advantage.

Question 3
SWOT

Ok, enough with that, hopefully tonight I can continue with chapter 5....:) Please pray for me, huhu...:)

Evaluating external environment (chapter 3)

Bismillahirahmanirahim...

Right now, i will continue with another topic in the strategic management, which is the evaluating external environment (as shown in the title above). So, basically the two main things that i learned in this topic are about PESTEL and 5 Forces. 

Firstly, I want to introduce the six components of Macro-Environment, or in short-form, we called it as PESTEL.
.

So, from the picture above, you can straightly get the main components of Macro-Environment, right? But, it will be much easier if we just remember the PESTEL word. PESTEL analysis is a popular framework that used to understand the impact of external factors on organization and is used as strategic analytic technique. I will put a video that Miss Ummi had shared in the lecture class. 

  

Other than PESTEL, we also had learned about the 5 Forces analysis that was inspired by Micheal E.Porter and it was consists of five elements which are:

1) RIVALS        2) SUPPLIER       3) BUYER      4) SUBSTITUTES      5) NEW ENTRANCE

Actually, there are many others tools that an organization or individuals can use such as:

-SWOT (Strength, Weaknesses, Opportunity, and Threat)

-MOST (Mission, Objectives, Strategies, Tactics) 

-McKinsey 7-S (shared values, systems, staff, structure, style, strategy, and skills)

So, choose the suitable analysis tools, and use it to develop your business.

That's all for the chapter 3, i hope all of you can get benefits from it...:) 

'Arafah Day'

Assalamualaikum….good morning

Today, is a special day…do you know why? Ok, I will give a hint. It is one of the most important days in the Islamic calendar which falls on 9^th of Zulhijjah. So, anyone knows? Actually today is the ‘Arafah Day’. It is the day when pilgrims stand on the plain of Arafah to pray, while other Muslims all over the world who do not do the Hajj should spend the day in fasting. Fasting on this day is expiation for two years of sins.

It was reported from Abu Qutaadah (may Allaah be pleased with him) that the Messenger of Allaah (peace and blessings of Allaah be upon him) was asked about fasting on the Day of ‘Arafaah. He said, “It expiates for the sins of the previous year and of the coming year.” Narrated by Muslim.

So, let’s fasting today and try to get forgiveness from Allah...:) 

p/s: hopefully, i can go there (Makkah) sooner ....:)

My prayer (doa)

Bismillahirahmanirahim...

Today, i want to share something that differ from the previous post...not about the strategic management but about our relationship with Allah. i hope that all these pictures can remind us about our obligation toward Allah..:) Amin..

On the next post, I will continue share about the Strategic Management...:) Fighting!!

oh my presentation....huhu

Assalamualaikum, Hi everyone…:)

Right now, I’m still at Usim, waiting for our night class with En. Mahdhir (E-Commerce). Today, I had a presentation in the tutorial class with Pn. Siti Nurul Huda, (our tutor for strategic management). We had to present about our restaurant and also our competitors. It was fun, enjoyable and also informative as each group has different type of restaurants. We have burger, arabian foods, traditional foods and also steamboat....yummy:)

To be honest, actually on that presentation, I kept doing mistakes. I don’t know why but, as soon as my turn came, all the things that I want to talk about were disappeared…huhu:(  Sad but also funny too, because our team also make a huge mistake as we didn't realize that the lake beside our restaurant was actually a sewage plant (loji kumbahan - refer to google translate). Hehe…:)

Ok, enough with that. Now, I will continue with the second week of our lecture with Miss Ummi on 17 September 2013. During those 2 hours, we had learnt 2 chapters, which were the introduction of strategic management and also the vision & mission. 

Ok, lets share some new things that I got on that day…:)

Chapter 1….

Definition of strategic management:

The art and science of formulating, implementing, and evaluating cross-functional decision that enables an organization to achieve its objectives.

Nature of strategic management:

1) Strategy formulation – (consist of mission and vision)

2) Strategy implementation – (SWOT analysis and long-term objectives)

3) Strategy evaluation – (some activity that related to: review/observe/take corrective action)

We also learn about:

     *the three hierarchical level                                                         

·    *competitive advantages

·    *integrating intuition and analysis

Chapter 2…

Vision : our objective and aim

Mission : how to achieve those targets ( the ways/methods)

Actually, Miss I still cannot remember the things that I had learned in this subject very well, but I promise that I will put more effort…:) Today, I feel very motivated to get more knowledge about business, our current economic and also things that happened around the world as my classmates shared many interesting and informative knowledge, stories and also their experience in the tutorial class. So, hopefully i can achieve my targets.

Ok, that’s all for today….see you in the next post..:) sayonara...