Learning Diary

Week 1 : What is Strategy?

This Learning Diary would comprise of all the subjects, points, reviews which have been
covered during the lecture. It also takes focus into examples and questions which had arisen
during these lectures. In the first lecture we developed basic understanding about strategy and
strategic management. In the class slide strategy was defined as “strategy is the means by
which individuals or organizations achieve their objectives” (Grant, 2008) but besides these
points careful planning and the implication of the actions which would be taken should also
be considered. It was also discussed upon that the strategic decisions may be Complex, Have
some Uncertainty, Rely on networks, etc. Hence I would like to conclude that strategic
choices and decisions are something which have to be given a lot of thought to before being
implemented in the organization as it may affect the whole dynamics of the organization. In
the class we also discussed few of the examples which may be considered as Strategic. Few
of the examples that came up had a deep insight of strategic decisions but the rest were not
strategic as they did not have any deep insight or implication in the long run.

We also learned about classifying strategy into various spheres as Corporate Strategy,
Business strategy and Functional Strategy. Corporate Strategy may be defined in reference of
industries and how they want to compete with a plan. For example, Iridium statellite phones
before coming into market were way ahead of their time but by the time they were launched
they were failing due to launch of mobile phones. So iridium instead of moving to mobile
phones tried to create a niche market and moved into military communications. In business
strategy an organization plans that how will it compete within its own industry. Functional
Strategy would apply within the organization so it can gain some edge from its competitors.
A very good example of this being the new versions of “Windows OS” that are coming up to
compete with “Apple’s OS”.

In the lecture we learnt that how can an organization describe its strategy either by using
concepts like “ Mission, Vision, Goals, Objectives, etc” but it is very necessary to understand
that all these terms apply to various hierarchical levels of an organization and they all may be
different to each other but lead to a same goal or path. For instance Vision may apply to the
organizations top managers only and may be defined by them but it would not imply or
motivate the workers or labours. For them we would need a goal or an objective. Hence these
terms have a meaning of their own and without a proper understanding if wrongly used can
create problems within the organization.
 This Diagram From the class slide helps up understand that all the aspects which we have
discussed above are inter-related to each other and may affect the overall outcome and should
be given due attention in their own respect.

A Very good method that was covered in the class was “ The Strategy Lenses” (Johnson,
Scholes and Whittington,2007) which helps us examine any strategy on three various levels:-

1) Strategy as Design
2) Strategy as Experience
3) Strategy as Ideas

These techniques are very helpful and provide us insight into challenges that are faced in
managing the complexity of strategy.

Furthermore on studying the textbook a very good example that was mentioned to describe
strategy was the merger between AOL and Times Warner. This was a very good example and
all the aspects which made this merger a strategic one were discussed in detail in the textbook
giving me a proper and a thorough understanding about Strategic Decisions and what factors
should be given consideration, what are the dynamics?, how are few factors inter-related and
how may they affect each other, etc.

Furthermore, the case study of the week is to identify the mission, vision, plan and
strategies (corporate, business and functional) between Google and Nissan organization.

What do
the
Google Nissan
articles tell
us about
the
company’s
:

Mission? To be the most leading creativity, Reach annual global sales of 4.2 million
innovation and strategy company in units by the end of fiscal year 2007;
the world maintain an operating profit margin at the
top level among global automakers;
maintain a minimum 20% return on
invested capital.
Vision / To Provide data to its customers Motivating people to compete
strategic with ease and hassles.
intent?

Strategies Process driven approach, strives to Alliance with Renault and joint
? try new things which makes the venture with Dong Feng
ahead of their competitors.

Plans? Experiment to “emergence” Nissan Revival Plan; NISSAN 180,

NISSAN Value Up

Business Turn anything that customer see on
model? the computer screen into advertising
supported media which is seen by
millions of people accessing internet
thus spreading the brand name.
Geographic expansion, they have
substantial growth in China,
Thailand and ASEAN countries and
Middle East. Now, they also were
turning new opportunity on Africa,
Russia, India and Pakistan.

Corporate Diversification by extending to Geographically expansion, by

strategy? Google News, Google Earth expand into new potential market

Business Both top down and bottom up Sourcing parts and services from
strategy? perspective, to create an ideas for Leading Competitive Countries and
internal markets increasing attention on the
manufacture and sale of light-duty trucks
globally, with emphasis on Japan, China
and Europe
Functional Attract the talent computer science Attract talent engineers and invest
strategies? brain into the organisation heavily on technical training
program to Global Executive
Training activities

Perspectiv
e of
strategy?
Hence during the first lectured I learned about What is strategy and what makes few
decisions strategic, what consideration and aspects should be studied before taking any
strategic decision, etc.

WEEK 2: Analysing the Environment

In the second we studied about analysis of the environment.

The in-class assignment before the beginning of lecture was quite good as the reviews given
later on helped us to understand the principle of strategy a bit more.

In the second week we understood about the dynamics of an environment of an organization

i.e. “How Managers, wether public or Private – can make sense of an uncertain world around
their organization-the business environment “ (Johnsons & Scholes, 6th edition)

Usually the environment is described as a Macro-environment within which the industry,

strategic groups and the Organizations exist. All these levels are influenced by any event
which occurs in the Macro environment, the example in the textbook which was cited was the
9/11 event and was termed as a Macro Shock because it was an event which was unexpected
or could not have been contemplated and all industries, sectors, organizations which existed
in that environment were affected adversely. To understand the macro environments the
onion diagram is very helpful.

Few of the techniques used to understand macro environments are mentioned below

1) PESTEL in which P stands for Political factors, E for Economic Factors, S for Socio-
cultural Factors, T for Technological Factors, E for Environmental factors and L for
Legal factors
2) ESTEMPLE , this technique is very much similar to PESTEL but there are added
columns of few more things to be considered which may gives us a broader insight.
3) SWOT analysis

The case Study which was done in the class was for BP and we practiced applying
ESTEMPLE on the case study to analyse it and identify as many factors as possible and
categorize them.

It is also to be noted that all the macro environments are subjected to some Dynamism,
Complexities and Unpredictability, hence they cannot always be fully predictable. Hence
these factors are always to be considered before planning for the future.

A very good example which was mentioned in the “Strategy Path Finder” was named as
“Ironclad Vs Canoes” it took into notice the musical instrument industry of England in the
late 1800s and analysed that sometimes not adapting to changes in technology can affect the
whole industrial region adversely. Hence one has to be always a step ahead of his competitors
to succeed all the time though the advancement may not be something very huge or patented
but sometime small factors can also make a lot of difference and affect the macro
Environment.

The 5- Forces analysis is again a very helpful tool to analyse the Macro-environment and
analyses the Supplies, Buyers, Substitutes and Potential Competitors it can help us to analyse
the current position of an industry in the market, what threats it is facing and how can it
reduce its productions/marketing costs to make it price competitive. Also emphasises the
industry to keep making advancements in its product line or technology to give it a
competitive edge.

Week 3 Strategic capability

This chapter focuses on the achievements that can be attained because of our present strategic
capabilities and how they will help us in future.

A good example mentioned in the class for competitiveness was 3M which has a very wide
product range. This helps the company to be ahead of its competitors and somewhat obtain a
monopoly in the particular industrial sector as it has a vast consumer base from all parts of
life and has a good brand reputation.

The terms like Threshold, etc should be studied from the book “ exploring corporate
Strategy”

Other key points covered are:-

How to maintain sustainable competitive advantage :-

 1) By being valuable to customers
2) Having a very durable product which cannot be replaced in a frequent manner
3) Product being difficult to replicate
4) Not being substitutable
5) Being easy to use and robust
6) Being scarce

These points give us a brief insight on how we can have a competitive advantage in a market
over our competitors by using various approaches. A good example being mentioned in the
lecture was that of Lincoln Electrics which makes Arc Welding Equipments.

Besides Identifying these strategic capabilities they have to be analysed so that they can be
developed by a period of time and we should be able to decide that what kind of strategic
capability and advantage we should go for after analysing the market, customer needs,
competitors and present threats. These processes may be based on design level, management
level, etc as the needs call for it.

A Very good tool for analysing our current position in the market is SWOT analysis which
stands for Strength, Weaknesses, Opportunities and Threats. Though it is a useful and easy to
use tool it does has some disadvantages and cannot be always useful for in-depth analysis.

Bedsides this establishing of Value is a very important concept and may prove fruitful to a
firm in the long run i.e. if the brand has a very good market value the customers tend to be
brand loyal and be irrespective of the prices to an extent. For eg. If someone has to buy a
good watch he may choose for a brand which is established and famous for its product and
durability and the cost of the watch is not an option to be considered( though it may always
not be the same case)

This diagram helps us analyse the profit earning capability of a firm by taking into
consideration various factors such as appropriability, sustainable competitive advantage,
extent of competitive advantage.
Week 5 Strategic Groups

Sbu’s are recent modification to divisional Structure, being composed of independent product
market segments that are given primary market responsibility.

Strategic types

How can firms compete on the business level :-

On the basis or price, on the basis of focus , differentiation,, competitive manoeuvring

Porter’s generic competitive strategies

The strategy clock

example of amec nuclear as focused differentiation

what is better approach in the long run ? cost or diffrentitation?

Cost advantage is less secure., sources of vulnerability

Competitors based in the low cost countries,

Currency fluctuations, etc

Concept of economies of scale

Competing on cost – economies of scope.

Better to make different products together rather than to make them separately, saves on cost
example steel industry, car manufacturing, etc