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