‫المملكة العربية السعودية‬

Kingdom of Saudi Arabia ‫وزارة التعليم‬

Ministry of Education ‫الجامعة السعودية اإللكترونية‬
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment-3
Strategic Management (MGT 401)
Due Date: 4th May 2024 @ 23:59

Course Name: Strategic Management Student’s Name: ِAhlam Salem Alrashdi

Course Code: MGT401 Student’s ID Number: S200089653
Semester: 2nd CRN:23858
Academic Year: 2023-24

For Instructor’s Use only

Instructor’s Name: Ahad ALdossari
Students’ Grade: Marks Obtained/Out of 10 Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY

 The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
 Assignments submitted through email will not be accepted.
 Students are advised to make their work clear and well presented, marks may be reduced for
poor presentation. This includes filling your information on the cover page.
 Students must mention question number clearly in their answer.
 Late submission will NOT be accepted.
 Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
 All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
 Submissions without this cover page will NOT be accepted.
Learning Outcomes:
1. Describe the different issues related to environmental scanning, strategy formulation, and strategy
implementation in diversified organizations. (CLO2)
2. Explain the contribution of functional, business, and corporate strategies to the competitive advantage of
the organization. (CLO3)
3. Distinguish between different types and levels of strategy and strategy implementation. (CLO4)
4. Communicate issues, results, and recommendations coherently, and effectively regarding appropriate
strategies for different situations. (CLO6)

I. Case study (1.5 Marks for each question)- Max 700 words
Read carefully the case No.26 from your textbook entitled “Rocky Mountain Chocolate
Factory Inc. (2008): Recipe for Success” (Authors: Annie Phan and Joyce Vincelette) and
answer the following questions:
1) Briefly discuss the different functional strategies of the corporation (marketing,
operations, distribution, HR, finance, and purchasing).
2) Describe the competitive position of the company. Briefly explain which type of
competitive strategy is used.
3) What is/are the type(s) of the directional strategy (ies) used by the company? Justify.
4) How is the relationship between the company and its customers? What is the company
doing to enhance their satisfaction and sustain the relationship with them? Justify.

II. Mini-project (1 mark for each question)- Max 400 words

From a real national/international market, choose an example of acquisition or merger between

companies and answer the following questions:

1) Present your chosen companies and explain the reasons for this acquisition/merger.
2) What is the method used by the company to manage the culture of
the acquired/merged company(ies)? Justify.
3) Assess the cultural compatibility of the companies.
4) Is this acquisition/merger successful? Why or why not? Discuss the competitive
position of the company (after acquisition/merger).
 Answers

Briefly discuss the different functional strategies of the corporation (marketing,

operations, distribution, HR, finance, and purchasing).

RMCF's marketing strategy prioritizes localized initiatives over national campaigns,

focusing on events, sponsorships, and partnerships at the local and regional levels. Franchisees

receive customizable marketing materials, contributing to expenses through sales-based fees.

Intellectual property protection through trademark registrations safeguards the brand's identity

and unique offerings. (Wheelen, Hunger, Hoffman, Bamford, 2015)

In terms of operations, RMCF maintains strict control over its manufacturing processes to

uphold product quality, manage expenses, and regulate production schedules. RMCF ensures

quality by tightly managing manufacturing processes to regulate expenses and uphold

production schedules. Using both manual and automated methods, they prioritize automation

for efficiency. The Durango, Colorado facility, expanded strategically, acts as the main

manufacturing hub, meeting rising demand while maintaining quality standards. (Wheelen,

Hunger, Hoffman, Bamford, 2015)

For distribution, RMCF focuses on freshness by shipping frequently from Durango to

distribution points, maintaining product quality. Franchisees align orders with sales forecasts to

avoid excess inventory, optimizing management. Diverse distribution channels, including

wholesaling and online sales, broaden market reach. Enhanced point-of-sale systems

streamline logistics, improving customer experience in stores. (Wheelen, Hunger, Hoffman,

Bamford, 2015)
RMCF's purchasing strategy prioritizes supplier engagement, quality assurance, cost

optimization, inventory control, sustainability, and risk mitigation. Through strong

partnerships, rigorous quality standards, efficient cost management, and proactive risk

mitigation, RMCF maintains a reliable procurement process crucial for operational success and

long-term growth. (Wheelen, Hunger, Hoffman, Bamford, 2015)

Human resources (HR) strategy at RMCF prioritizes a supportive work culture and high

performance. With around 190 employees, the company fosters mutual respect and

professionalism. Competitive wages and benefits attract talent, and temporary hires manage

peak periods. Positive employee relations reflect RMCF's commitment to a rewarding work

environment. (Wheelen, Hunger, Hoffman, Bamford, 2015)

RMCF's finance strategy encompasses diverse revenue streams, including franchise sales and

royalties. Growth in earnings per share and revenue is driven by factors like increased

franchised stores and sales to specialty markets. Cost management targets sales expenses and

operational efficiency. Financial stability is ensured through prudent capital expenditure and

cash flow management. Adaptive strategies manage risks amid market fluctuations. (Wheelen,

Hunger, Hoffman, Bamford, 2015)

Describe the competitive position of the company.

Rocky Mountain Chocolate Factory (RMCF) contends in a highly competitive global

chocolate market, facing a diverse array of rivals ranging from multinational corporations to

local enterprises. Many of these competitors possess superior financial resources, brand

recognition, and marketing capabilities compared to RMCF. The company encounters

challenges not only in product differentiation but also in securing optimal retail locations,
recruiting proficient franchisees, and competing for consumer attention amidst evolving market

dynamics. (Wheelen, Hunger, Hoffman, Bamford, 2015)

Briefly explain which type of competitive strategy is used:

RMCF appears to adopt a differentiation strategy to establish its competitive foothold. The

company emphasizes distinctive attributes such as its artisanal chocolate offerings and

franchise model to distinguish itself from rivals. By prioritizing unique product features and

enhancing customer experience, RMCF aims to create value for its clientele and differentiate

itself within a crowded market landscape. Additionally, RMCF likely utilizes components of

cost leadership and market segmentation to address diverse consumer segments and sustain

competitiveness in pricing and market penetration. (Wheelen, Hunger, Hoffman, Bamford,

2015)

What is/are the type(s) of the directional strategy (ies) used by the company? Justify.

Considering the competitive market environment and the challenges posed by formidable

competitors, Rocky Mountain Chocolate Factory Inc is inclined towards growth strategies that

aim to expand its activities. This directional approach involves efforts to broaden its market

presence, diversify product offerings, and explore opportunities in new markets for sustained

expansion. Hence, the company's directional strategy is Growth strategies. (Wheelen, Hunger,

Hoffman, Bamford, 2015)

How is the relationship between the company and its customers?

Rocky Mountain Chocolate Factory Inc maintains a responsive relationship with its customers,

attuned to shifting tastes and trends. The company prioritizes understanding consumer

preferences, catering to demands in both established and emerging markets. This indicates a

customer-centric approach, aligning offerings with desires for healthier snacks, higher quality

chocolate, and ethical sourcing. (Wheelen, Hunger, Hoffman, Bamford, 2015)

What is the company doing to enhance their satisfaction and sustain the relationship with

them? Justify.

To bolster customer satisfaction and loyalty, Rocky Mountain Chocolate Factory Inc likely

implements various strategies. These include introducing healthier options, enhancing product

quality, ensuring ethical sourcing practices, and engaging in community initiatives. Through

these efforts, the company aims to build trust and sustain enduring relationships with its

diverse customer base. (Wheelen, Hunger, Hoffman, Bamford, 2015)

Present your chosen companies:

Microsoft strategically acquired LinkedIn in 2016 to strengthen its presence in professional

networking and enterprise software. Leveraging LinkedIn's vast user base of over 500 million

professionals, Microsoft aimed to integrate its productivity tools like Office 365 and Dynamics

365, creating new opportunities for collaboration and productivity enhancement in the digital

workplace. (Communications Share LinkedIn Facebook Twitter)

Explain the reasons for this acquisition/merger.

Microsoft acknowledged the untapped potential of LinkedIn's wealth of data and insights in

driving innovation and customization across its product portfolio. By harnessing LinkedIn's

comprehensive dataset in conjunction with Microsoft's advanced AI and cloud computing

capabilities, the company aimed to deliver more sophisticated and tailored experiences to

users. These experiences encompassed targeted advertising, talent acquisition, and professional

development initiatives, thereby enriching the value proposition for Microsoft's clientele.

( Feller, 2016)

What is the method used by the company to manage the culture of the acquired/merged

company(ies)? Justify

1) Autonomy Preservation: Microsoft respected LinkedIn's independence, allowing it to

maintain its brand identity, leadership structure, and culture, fostering employee morale

and loyalty. (Altendorf, 2018)

2) Leadership Alignment: Microsoft ensured alignment between the leadership teams,

facilitating effective communication and collaboration to reinforce LinkedIn's culture.

(Altendorf, 2018)

3) Diversity Promotion: Microsoft promoted diversity and inclusion, respecting and

celebrating LinkedIn employees' diverse backgrounds and perspectives to foster a

culture of mutual respect and collaboration. (Altendorf, 2018)

 4) Transparent Communication: Microsoft prioritized transparent communication with

LinkedIn employees, offering regular updates on the integration process to alleviate

concerns and build trust. (Altendorf, 2018)

5) Employee Development: Microsoft invested in LinkedIn employees' development and

well-being, offering resources for career growth and support, demonstrating

commitment to enhancing LinkedIn's culture. (Altendorf, 2018) (Stewart, 2018)

Assess the cultural compatibility of the companies

- Evaluation of Compatibility:Microsoft's strategy of leveraging LinkedIn's platform

to strengthen its presence in professional networking and enterprise software

corresponds with LinkedIn's culture of innovation, collaboration, and emphasis on

professional growth. This alignment suggests a conducive environment for

implementing the strategy. (Wheelen, Hunger, Hoffman, Bamford, 2015) (Stewart,

2018)

- Adaptability of Culture:** Microsoft may need to make minor adjustments to

LinkedIn's culture to ensure it aligns with its strategic objectives. This could entail

integrating Microsoft's values and practices while preserving LinkedIn's autonomy

and identity. (Wheelen, Hunger, Hoffman, Bamford, 2015) (Stewart, 2018)

- Management's Readiness for Change:** Given Microsoft's history of successful

acquisitions and integrations, management might be prepared to enact necessary

 organizational changes to support the new strategy. This could involve establishing

new structures or processes to promote collaboration and synergy between the two

entities. (Wheelen, Hunger, Hoffman, Bamford, 2015) (Stewart, 2018)

- Dedication to Strategy Execution:** If management remains steadfast in its

commitment to the strategy but faces cultural hurdles, alternative approaches like

forming partnerships or joint ventures with external entities could be explored to

achieve strategic aims while navigating cultural complexities. (Wheelen, Hunger,

Hoffman, Bamford, 2015) (Stewart, 2018)

Is this acquisition/merger successful?

The merger between Microsoft and LinkedIn has generally been regarded as successful.

Why or why not?

This success can be attributed to the synergistic alignment of their offerings, where Microsoft's

suite of productivity tools seamlessly integrates with LinkedIn's professional networking

platform. Moreover, Microsoft's dedication to preserving LinkedIn's autonomy and culture has

facilitated a smooth transition, boosting employee morale and customer satisfaction. (Bishop,

2021)
Discuss the competitive position of the company (after acquisition/merger).

Following the acquisition, Microsoft has fortified its competitive standing by expanding into

the professional networking and enterprise software sectors. The amalgamation of LinkedIn's

extensive network of professionals with Microsoft's product portfolio has enriched its value

proposition, empowering Microsoft to deliver comprehensive solutions for both businesses and

individuals. This integration has further solidified Microsoft's competitive advantage in the

market. (Bishop, 2021)

References:

- Wheelen, T. L., Hunger, J. D., Hoffman, A., & Bamford, C. (2015). Concepts in
Strategic Management and Business Policy: Globalization, Innovation, and
Sustainability. Prentice Hall

- Altendorf, M. (2018, March 7). Microsoft-LinkedIn acquisition and the cultural

difficulty of m&as. LinkedIn. https://www.linkedin.com/pulse/microsoft-linkedin-
acquisition-cultural-difficulty-mas-mike-altendorf
- Bishop, T. (2021, July 28). LinkedIn posts first $10 billion year, 5 years after
Microsoft deal, but profits remain a Mystery. GeekWire.
https://www.geekwire.com/2021/linkedin-posts-first-10-billion-year-5-years-
microsoft-deal-profits-remain-mystery/
- Communications Share LinkedIn Facebook Twitter, L. C. (n.d.).
LinkedIn announces second quarter 2016 results. LinkedIn Pressroom.
https://news.linkedin.com/2016/linkedin-announces-second-quarter-2016-
results#:~:text=On%20June%2011%2C%202016%2C%20LinkedIn%20entered
%20into%20a,approximately%20%2426.2%20billion%2C%20inclusive%20of
%20LinkedIn%27s%20net%20cash.
- Feller, G. (2016). Microsoft to acquire LinkedIn. LinkedIn Pressroom.
https://news.linkedin.com/2016/microsoft-to-acquire-linkedin
- Stewart, M. (2018, July 30). Culture: Did Microsoft and linkedin do their
diligence?. LinkedIn. https://www.linkedin.com/pulse/culture-did-microsoft-
linkedin-do-diligence-michael-stewart