MAF661 - HOGWART INC

MIZANINA NABILA BINTI HAMZAH 2019326529

NUR ALIA BINTI ZAMRI 2019545167
NUR AINA BINTI AB AZIZ 2019317363
SITI KHAIRIAH BINTI KHALIDAN 2019329049
SITI MURSYIDAH BINTI ANUAR 2019314959
SITI NORIZZATI BINTI MOHD JAMIL 2019726071

1) Discuss the importance of environmental scanning and monitoring to predict

and detect changes in Hogwart’s external environment.

Environmental scanning involves surveillance of a firm’s external environment to

predict environmental changes to come as well as detecting changes already under
way. Other than that, it also allows firm to be proactive. Environmental scanning is the
process of gathering information about events and their relationships within an
organization's internal and external environments. The basic purpose of environmental
scanning is to help management determine the future direction of the organization.

Then, environmental monitoring tracks evolution of environmental trends,

sequences of sequences of events, or streams of activities. Monitoring enables firms
to evaluate how dramatically environmental trends are changing the competitive
landscape.

In the case of Hogwart Inc, environmental scanning and monitoring are adopted
by Hogwart Inc to predict the external environment that may impact the
company. Consequently, Hogwart is able to respond to changes and has the ability to
spot new opportunities and seize them. Hogwart also capable of identifying threats and
devising methods of dealing with them. Furthermore, Hogwart can keep an eye on the
extend of threats and their potential risk to harm Hogwart’s performance.
Lastly, Hogwart can plan for strategies to reduce the risk.
2) Identify ten (10) external factors of the telecommunication industry faced by
Hogwart.

i) Deregulation
ii) Not subcontract to other suppliers – developed on its own
iii) Economic downturn
iv) World leading mobile phone manufacturers with 20% global shares
v) Educated population
vi) Listed in stock exchange
vii) Government support advantage
viii) Rapidly growing industry
ix) Significant resources on building up local sales
x) Operate in high income cities and highly developed country
3) Analyze Hogwart’s industry and its competitive environment using Michael
Porter’s five forces model
The competitive environment consists of factors in the task or industry
environment that are particularly relevant to a firm’s strategy. Porter's Five Forces is a
model that identifies and analyzes five competitive forces that shape every industry
and helps determine an industry's weaknesses and strengths. Five Forces analysis is
frequently used to identify an industry's structure to determine corporate strategy. The
five forces are, competition in the industry, potential of new entrants into the industry,
power of suppliers, power of customers and threat of substitute products.

The first force is competition and rivalry in the industry. Rivalry tactics include
price competition, advertising battles, new product introductions, increased customer
service or warranties. Hogwart has a high intensity of rivalry due to the fact that it is
one of the world's leading mobile phone manufacturers, currently holding an
approximately 20% global market share. Hogwart's central operations are based in one
of the high-income cities in Griffindor, a highly developed country, unlike any of its
major competitors in the industry. Due to the recent global economic downturn,
Hogwart’s business activities are declining. Moreover, the industry is under more
intense competitive pressure making the intensity of the competition is still high
presently.

Second force is potential of new entrants into the industry where the threats of
new entrants is low according to the case due to the high barrier to entry. Hogwart is
quoted on the Griffindor stock exchange and is listed in the largest companies' ranking
by market capitalization as well as being the market leader for the mobile phone
manufacturer. Unlike many of its competitors, who subcontract their manufacturing to
others, Hogwarts assembles most of its mobile phones internally. Other than that,
Hogwart has also gain economies of scale which allowed cheaper production than the
later new emerging competitors due to a rapidly growing market. Hogwart are able to
reduce the cost of production as Griffindor government deregulate their
telecommunication market.

Third force is threats of substitutes products where the threats can be low or
high depending on certain situations. The threats are low since the competitors are not
able to provide products that can replace Hogwart’s. The products are considered as
differentiated products because it focusses on the more compact and lighter mobile
phone market. However, due to the fast-growing demand for cheaper and basic
 models that only carry out voice calls and text messaging, the threats of substitutes
can also be high.

Fourth force is bargaining power of buyer or customer. The factories of Hogwart

are mostly in Griffindor where it benefits from the highly educated population and high-
quality local suppliers. This showed Griffindor is a high-income country which indicates
that its population has high purchasing power. Education and income make the
customer has the option to make choices. Therefore, the bargaining of buyer is high.

Last force is bargaining power of suppliers. In Griffindor, the bargaining power

of supplier is low as Hogwart announced that they would increase the proportion of
mobile phones manufactured in low-income countries from 15% to 40% over the next
three years. Component manufacturers announced plans to follow them to the new
locations. Consequently, 1000 jobs in Griffindor have been cut off. Therefore,
components manufacturer cannot demand for higher price from Hogwart.

4) To succeed in today’s challenging market, managers need to be ambidextrous.

Demonstrate how being ambidextrous could help Hpgwart gain its competitive
advantages.

Being ambidextrous means that Hogwart managers focus on long-term effectiveness

and cost reduction plans to overcome the government policy of new anti-pollution.
Next, we can see that Hogwart increased the proportion of mobile phones
manufactured in low-income countries from 15% to 40% over the next three years in
order to reduce waste disposal cost. The manager is also proactively exploring new
opportunities and then able to expand their product market scope. This can help
Hogwart gain its competitive advantage.

In Hogwart, they have been proactively expanding their product and market scope
since 25 years ago from making traditional telephone equipment and then strategizing
to produce compact phones and now launching smartphone models rather frequently.
This shows that they have constantly equipped themselves with the current trend of
technology.

Their market ranges from high end customers who go for higher cost to those who
want the Hogwart brand at cheaper cost.

At the same time, being ambidextrous also focuses on short-term efficiency and
aligning resources to take advantage of existing product markets. Furthermore,
 Hogwart invested significant resources in building up a local sales presence in these
markets, which allows them to spot trend and produce phones tailored to local tastes
and languages.

5) Explain how Hogwart can create values by incorporating its customers and
suppliers into the value creation process.

Value creation process can be achieved through a management process of defining,

creating, delivering and sustaining value. Value is ultimately defined by customer,
investors and other stakeholders. It can be created through organization purpose,
strategy, and business model taking into account all resources, capitals and
relationship in an integrated way. Value can be delivered to ever-more demanding and
sophisticated stakeholders through responsible products and services and trough new
channels at an appropriate price. It can be sustained by retaining and protecting value
internally and by appropriate reinvestment and distribution to shareholders and wider
society.

In Hogwart, the customers want to be associated with Hogwart’s brand name. They
want branded product but cheap. Thus, Hogwart have to choose the right supplier who
can meet their needs to reduce cost/ timely delivery of raw materials