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(Download PDF) Business Strategy and Development Canadian 2nd Edition Bissonette Solutions Manual Full Chapter
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Business, Strategy, Development, Application, Second Edition, Gary J. Bissonette, McGraw-Hill
Ryerson Limited, 2015
Chapter Summary
This chapter provides students with an introductory overview of the concept of business strategy
and of the fundamentals of the strategic planning process. A key emphasis within the chapter is
the identification of the key elements that managers need to assess as they develop a strategy for
their business or organization. These include the creation of vision and mission statements,
defining the products/services to be offered, assessing the resources the organization has or has
the capacity to acquire, configuring the business system to ensure the execution of the intended
set of actions, and defining managerial responsibility and accountability to ensure its success.
Also discussed, in detail, is the strategic planning process itself and the key stages within it
(revisiting the organization’s purpose, I/E analysis, the identification of strategic choices, strategy
formulation, and strategy implementation). Included within this discussion is an understanding of
the difference between corporate-level strategies, business level-strategies, and operating plans,
and the linkages among the three.
The chapter closes with some thoughts relating to the challenges that strategy development poses
for small and medium-size businesses, as well as the unique influences that not-for-profits need to
consider when assessing and developing their organizational strategies. For not-for-profits,
strategic plan development is uniquely challenged by the balancing requirements between
financial stability and meeting the needs of a collective interest, defined by its social mandate
and, in many cases, the altruistic goals of an organized collective.
Learning Objectives
Sun Tzu, in The Art of War, comments that “strategy without tactics is the long road to victory;
tactics without strategy is the noise before defeat.” For managers, regardless of the size of their
business, defining the direction of the company and determining where and how the business is
going to compete is essential. Successful businesses have one very common denominator: they
take the time to plan how the business will be positioned in the marketplace, and what markets it
will serve, and then they execute the critical components of their strategy better than their
competitors. A successful business person will be able to tell you why his/her business is different
from its competitors and unique to its customers. In essence, they know what their competitive
advantages are, and they know how to leverage them to ensure their business is “best of breed.”
In summary, then, what constitutes a successful strategy?
A successful strategy is one that properly assesses the external environment, defines the changes
and opportunities within market segments the organization intends to serve, and effectively
allocates resources and maximizes capabilities in a manner that is supportive of the products and
services it delivers to the marketplace. A key outcome of the strategy formulation process should
be the identification of the key competitive advantages the organization possesses and the
successful leveraging of these advantages within its marketing communication and operational
delivery processes.
To be successful, the organization must be able to transfer the knowledge gained during the
assessment process into a well-formulated strategy, which it then executes successfully to a
defined target market in need of the goods and services being offered. To be successful in this
regard, the organization needs to visualize this process from the customers’ perspective. This
means that as managers we need to fully understand the key buying criteria that customers are
using in making purchase decisions, and then determine how our organization can best align our
products and services to meet customer expectations identified via these criteria. This process is
what will enable us to develop and sustain competitive advantages, and will help us determine
how to most effectively allocate resources in order to drive innovation, efficiency, quality, and
customer responsiveness initiatives. Only when we have fully understood what the customer
wants, and how we can most effectively respond to this, will we be able to embark on a well-
thought-out path toward profitability and organizational wealth creation.
Business Updates
Scotiabank, Cencosud S.A., Tangerine, ING Direct Canada, Canadian Tire, Cineplex,
National Hockey League (NHL), (Page 191)
Royal Bank of Canada (RBC), Canadian Tire Corporation, Bombardier Inc. (Pages 194-
195)
Suncor (Page 195)
Apple Inc., Beats Electronics, MusicMetric (Page 197)
Target Corporation (Page 197)
Jamba Juice Company, Whole Foods, Target Corporation (Page 197)
PayPal, Apple Inc., Google’s Google Wallet, WiMacTel, Toyota, Ford, GM,
Volkswagen, Tesla (Page 201)
Canada Post, United States Postal Service, Wal-Mart, Costco, Loblaw Companies, Metro
Inc., Sobeys Inc., Whole Foods Canada, T&T Supermarkets, Group Epicia(Page 201)
Bombardier, Boeing Company, Airbus Group N.V., Embrarer S.A., Republic Airlines,
Walmart Supercentre, Canadian Tire, (Page 202)Starbucks, Tim Horton’s, McDonalds
(Page 204)
JPMorgan Chase, Mars, (Page 204)
Apple Inc. (Page 204)
Shaw Communications Inc., ViaWest Inc., (Page 207)
International Business Machines (IBM), Google, Amazon, Nokia, Alcatel-Lucent,
Huawei, Ericsson, Samsung (Page 213)
Canadian Tire Corporation (Page 214)
How do you think replacing CP Railway’s CEO will influence business strategy? Specifically,
which of the six core areas do you believe that this change would have an effect on? How does
replacing the CEO influence the strategic planning process? What changes do you expect that
Hunter Harrison would make if appointed CEO?
Page 192
The long-term success of an organization and its ability to evolve and grow is predicated on two
fundamental principles: the ability to define and create a strategic direction and market position
for the organization (strategic plan), and the ability to execute the core tactical initiatives within
the plan in a manner that ensures the organization’s success.
Page 193
Strategy can be summarized by the answers to three questions: “Where do we want to play,”
“Why is this the best use of our resources” and “How do we plan to win.”
Page 198
For businesses, a strategic plan is the road map to success. It defines a specific route the business
intends to undertake, provides benchmarks to measure its success along the way, and identifies
where and how the organization will interact with its customers as it seeks to meet its overall
mission and vision.
Page 204
Businesses need to anticipate and react to new initiatives and changes in strategy and market
positioning by their competitors.
Page 205
A customer analysis focuses on trying to identify what shifts have taken place in our customer
base in terms of attitudes, behaviours, and needs.
Page 210
At the end of the day, the strategy being recommended should define, for the organization, where
and how it intends to compete in the marketplace, which weapons of competitive rivalry it will
leverage as its products and services battle for market share, and the marketing and operating
plans that will be required to effectively and efficiently execute the plan.
Page 212
A key requirement of the execution phase is for managers to continuously monitor the success of
the implementation of the strategy and to take corrective action quickly in the event that things
are not going well.
1
http://www.theglobeandmail.com/globe-investor/cps-activist-investor-eyes-former-cn-ceo-hunter-
harrison/article2286688/
Page 214
The need to plan strategically is just as important for a small business as it is for a major
multinational organization.
Chapter Exercises
Exercise #1
Figure 6.1 on page 192 provides an overview of the interdependency of strategy and tactics. The
exercise below is designed to get students to experience a practical application of this
relationship. Although a bit historical this exercise can form the basis for a larger discussion
relating to the market convergence of tablets with laptops, as well as the subsequent flatting of
iPad sales and the company’s attempt to resurrect them.
During the fall of 2011, Amazon.com announced its intention to enter into the tablet market with
an enhanced version of its e-reader which it called the Amazon Kindle Fire. The Kindle Fire,
backed by Amazon’s strength of its overall online product portfolio was designed to succeed at
what others have failed to do to date; create a viable competitive option when positioned against
Apple’s iPad and iPad2 tablets. Unlike its predecessors, Amazon chose to go down market and
look to gain market profile and market share at the entry level end of the marketplace. The
exercise can be further expanded to consider Apple’s anticipated response to the new segment
threat.
Prior to coming to class for participation in this exercise students should be encouraged to
“google” the Amazon Kindle Fire and to read the various news reports relating to its launch.
The emphasis on this exercise is for students to discuss and form an opinion as to the potential
success of this positioning strategy and to discuss what Amazon must successfully due tactically
in order to create a sustainable position at the low end of this segment. An option used
successfully in the past with this exercise is to spit the students into two groups, with one taking
the position of Amazon and the other the position of Apple. Specific questions which can be used
to guide this discussion are as follows:
Amazon Team
• Start with the decision which has been made…identify the reasons for Amazon’s decision
and the activity patterns within Amazon which you believe support it. What is Amazon’s
specific positioning strategy for this product offering?
• Define what you believe are Amazon’s objectives and beliefs (macro assessment)
concerning this product offering. Does the anticipated approach fit with their current
organizational activity pattern? What about their current business model and the company’s
overall strategy? What would they effectively need to change (if anything) to make the
Kindle Fire a real threat? Is this a realistic move (in terms of probability for success) for
Amazon? Does it further leverage their competitive advantages?
Apple Team
• Does Apple need to respond? Identify what you believe are Apple’s options and the
decision-criteria which should guide this process.
• If you were Apple’s iPad management team…what would be your “macro- level”
response at this stage, given Amazon’s announced intended move? Is there a need for a
water-down version of the iPad to thwart Amazon’s market entry?
Exercise #2
The Bombardier Business-in-Action vignette, on page 202, offers an excellent framework for
discussion the challenges of strategic execution. This can bring into play the relationship
between strategy formulation and strategy execution and the outcome of company performance.
The strengths and weaknesses of the decision to commit to the C-Series aircraft can be explored
as well as the market and competitive dynamics influencing the overall rollout. Questions for
Discussion
1. What are the six key areas that managers need to assess when developing a business strategy?
How does managerial responsibility and accountability factor into this process?
This answer was compiled with reference to
pages 194-198.
2. What are the major stages of the strategic planning process? Why is revisiting an
organization’s mission and vision such a critical beginning point of the strategic planning
process?
This question will be answered with reference to pages 199- 204 in the text.
As the chart above demonstrates, the key steps associated with the strategic planning process are:
1) revisiting purpose; 2) undertaking an internal/ external analysis to better understand our
environment; 3) assessing our view of our world; 4) choosing a direction; and 5) implementing
the strategy.
Revisiting mission and vision is a critical first step in strategy formulation because owners or
managers must ensure that these two factors, which are in place to guide strategy in a direction
that is aligned with company values, are still applicable and represent desired outcomes.
Purpose and values are organizational constants, while vision has a 10 to 30 year time horizon.2
Revisiting purpose focuses on assessing how the current/ proposed strategy fits with mission and
vision. If the strategy does not fit, then it should be abandoned. Therefore, vision and mission are
an essential first step in strategic planning, as they ensure that a proposed strategy fits with the
organization’s heritage, reason for being, and envisioned future.
3. Why do managers need to assess the internal and external environment as part of the strategy
development process? What key takeaways do you believe should be the result of this analysis?
The purpose of assessing the internal and external environment is to determine the prevailing
level of business risk in four areas: macroeconomic, industry, competitor, and company. On the
internal side, companies should use frameworks like SWOT and the 3C analysis to define
strengths, areas for improvement, sources of competitive advantage, and company-level business
risk. On the external side, Porter’s Five Forces, PESTEL, and competitive analysis help managers
summarize market and non-market trends or changes that stand to influence the firm’s or the
industry’s profitability.
2
James Collins and Jerry Porras, “Building your company’s vision,” Harvard Business Review (1996): 65-
77.
As a result of this analysis, the organization should be able to determine where and how it wants
to compete, given the competitive landscape and unique organizational competencies.
Furthermore, the firm aims to identify opportunities and threats that stand to advance/derail
strategy. Finally, the I/E analysis will help the organization identify any competitive advantages
its has over the competition.
A corporate-level strategy defines what the organization intends to accomplish and where it plans
to compete. It identifies which businesses to compete in, which businesses to add, which business
areas to exit, and where emphasis should be placed.
A business-level strategy defines how the firm intends to accomplish its corporate-level strategy.
Business-level strategy identifies how the firm will compete in each of its identified business
initiatives or business units, and establishes objectives.
An operating plan is a set of tactics the organization will employ in order to ensure that the
business strategy, and therefore the corporate strategy, is met.
Figure 6.10 on page 208 illustrates the interconnection between mission and vision, corporate
strategy, business-level strategy, and operating plans. Essentially, mission and vision trickle down
through the organizational hierarchy, and inform processes and objectives throughout the
organization. For a case study on the interconnection between these levels of strategy, see the
Shaw Communications Inc. example on page 208 of the text.
5. How is strategy formulation different in the not -for- profit sector when compared to the for-
profit sector? In your mind, does this make the development of strategy in the NFP sector more
challenging? Why or why not?
Strategy formulation differs in the not-for-profit sector in two primary ways. First, NFP managers
must balance the effectiveness of their economic activities with the social goal or purpose of the
organization. Second, NFPs are accountable to government, a membership base, a collective
board, the community at large, or a combination of these. As a result, NFPs must balance these
interests in order to maintain access to financing – some NFPs do not generate any revenue.
Figure 6.14 on page 216 outlines five areas that NFP organizations must effectively address in
strategy formulation. It follows that the NFP strategy formulation process is equally if not more
difficult that for-profit strategy formulation because a number of additional interests must be
addressed, and bottom line performance is not the only valued outcome.
What are the fundamentals of operating plan formulation? Do you believe that this is a static or
dynamic process? Explain your reasoning.
There are a five of additional considerations that not-for-profit managers must make when
crafting strategy. What are they? Which do you feel is the most important/ has the ability to derail
the NPF’s course of business? Justify your answer.
Answered on pages 216-217 of the text. There exists room for subjectivity in responding to the
second half of the question. Figure 6.15 offers a summary insight into these additional, and
NFP-unique considerations.
What did Target Corporation fail to do, prior to its entry into Canada, which may have resulted in
its biased perception of the extent of opportunity in Canada? Target failed to establish a well-
defined strategy. As Brian Cornell stated, they tried to do too much at once. Target figured that
the standardized business model that worked for in the U.S. would be similar to what would work
in Canada. They failed to understand the Canadian marketplace and attempted to open all of their
stores all at once. They struggled to define a competitive advantage over their competitors and
position themselves high in the Canadian consumer purchase priority.
Looking back, what approach to entering Canada would you have taken in order to mitigate the
risk of failure? Responses will be varied, but look for students to question the assumptions made
by Target Corporation in their attempted Canadian expansion. Some possible suggestions include:
Target should have focused on defining its strategy before entering directional lock-in, and kept
its plans to itself rather than announcing its intentions a full two years before coming to market. It
should have focused on competitor locations in relation to the Zellers locations it was taking over.
It should have also ensured that supply chains were able to operate effectively. Perhaps Target
should have set up test stores in certain markets to research optimal operating procedures and
marketing efforts. Target could have been aware of the growth of e-commerce and set up online
distribution channels in order to become a more ubiquitous brand in both the physical and digital
spaces.
If you were a member on the Board of Directors for Target Corporation at the time of the
Canadian expansion proposal, what would be the three most important questions you would ask
the management team? Possible questions could include: What is the purchase behaviour of
consumers situated around our new stores? How do we expect to achieve the anticipated profit at
the end of the first year? How do we expect to capture our initial investment back? Can we
expect Canadian consumers to perceive Target in Canada the same as American consumers do in
America? Who are our main Canadian competitors, their competitive advantages, and how have
they achieved success? Can we take market share from them effectively? What is the Canadian
economic landscape currently? Are Canadian retail sales sufficient to provide ample revenue, and
profits?
Why have other retailers been successful in Canada? What is it that they have done that Target
did not do? Other retailers have been successful in Canada due to their savvy analysis of the
Canadian market. They have been on top of Canadian trends and are adaptive, adjusting their
strategic endeavours in tune with market shifts. Omni-channel distribution, which Target did not
employ, is a key driver of retailer awareness and consumer satisfaction, leading to greater sales.
Quiz Questions
1. Which of the following is NOT one of the six core elements for assessing business
strategy?
a) Markets
b) Resources
c) Business system configuration
d) Vision
e) All of the above are core elements
2. Which of the following statements best describes the distinction between mission and
vision statements?
a) Mission defines an organization’s purpose or reason for existence, while vision defines the
products that a company wants to produce
b) Mission defines an organization’s purpose or reason for existence, while a vision statement is
forward looking and defines what a company wants to become or where it wants to go.
c) Mission and vision statements are the same thing
d) Vision statements describe the organization’s strategic goals, while mission statements outline
the organization’s core values
e) None of the above statements accurately describe the distinction between mission and vision
3. Which of the following is NOT a tool companies can use during the internal assessment
stage of strategic planning?
a) PESTEL
b) SWOT
c) 3C Analysis
d) Porter’s Five Forces
e) Two of the above
i) Innovation
ii) Customer Responsiveness
iii) Low-cost leadership
iv) Quality
v) Differentiation
a) i, ii, iv
b) ii, iii, v
c) i, iv, v
d) ii, iii, iv
e) All of the above
6. Fill in the blanks. ____________ competitive advantages are the result of being able to
execute the ____________ activities required of the transformation and marketing support
processes within an organization in a manner that is superior to the same execution
requirements of ____________.
8. According to Ken Wong, what are critical considerations when developing strategy?
i) Does your proposed strategy leverage your organization’s resources and capabilities?
ii) Does your strategy fit with current and anticipated industry/market conditions?
iii) Are the competencies that you plan to leverage considered to be sustainable for the required
period?
iv) Are the key drivers of your strategy consistent with the organization’s strategic objective and
position?
v) Do you have the ability and wherewithal to successfully implement the chosen strategy?
a) i, v
b) ii, iii, iv
c) i, ii, iv, v
d) i, iii, iv, v
e) All of the above are critical considerations
9. Which of the following is NOT a fundamental of operating plan formulation?
11. Which of the following would NOT increase the level of directional lock-in?
12. Fill in the blanks. ______________ monitor and manage processes and materials
purchases, as well as labour levels, to ensure that ____________ stay in line.
13. Which of the following is NOT a strategy consideration for social economy enterprises/
a) Operational effectiveness
b) Access to funding
c) Vitality
d) Rootedness
e) Mission balance
15. Which of the following statements best describes the notion of ‘rootedness’?
a) The extent to which a NFP is interwoven into the fabric of the community that it serves and
supported by a representation of businesses, organizations, and citizens
b) The extent to which the organization’s financial vitality is connected to the successful
execution of strategy
c) The idea that NFPs must constantly increase membership and community support in order to
survive
d) For a NFP to be successful, it must involve community members in the strategy formulation
process, which will increase donations
e) None of the above
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The attempt will not be made here to picture nor go into a minute
description of the various forms of the cystoscope. Their use, like
that of the ophthalmoscope, requires special aptitude and training.
With the latter they are of great value; without them they confuse and
complicate. The cystoscope may be used for ordinary purposes of
inspection, for aid in introducing the ureteral catheter, or even for
photographic purposes, for it is now possible with the latest
instruments to photograph the image thus obtained of the bladder
interior. To one not accustomed to viewing the field seen in such an
instrument these revelations are of little interest. To the expert,
however, they may be made of the greatest value. Without further
description, then, allusions made below to the use of the instrument
must presuppose some familiarity with it, and the advantages and
even necessity of securing special training in its use.
CYSTITIS.
The condition of true cystitis arises invariably either from the
irritation of a foreign body or the presence of bacteria; the former
need not necessarily be large, and minute and irritating crystals are
often sufficient to produce at least some of its features. Sooner or
later, however, the germ element enters, and from that time on
cystitis is a bacterial infection. Furthermore this infection is usually
secondary, rarely if ever primary, and may come from without or
within. Thus it may be the consequence of the introduction of
unclean instruments; is a very frequent consequence of gonorrhea,
including all forms of urethritis; or may be the result of local
tuberculous processes or those travelling downward from the
kidneys; or, again, of more general toxic or septic conditions, such as
typhoid and other infectious fevers. Certain conditions predispose,
such as the presence of calculi or the occurrence of traumatism.
Again, a bladder weakened by overdistention or paralysis, as in
cases of spinal injury, loses its natural resisting power and succumbs
to infection abnormally easily. It should be emphasized that the
absolutely healthy bladder wall is resistant to all germ activity, but
this resistance is easily lost or modified in the presence of disease,
either close by or distant. A bladder whose normal shape has been
greatly changed by enlargement of the prostate is again rendered
not only unhealthy, but incapable of acting normally. It becomes,
therefore, easily infected, and cystitis is a frequent accompaniment
of prostatic hypertrophy.
Fig. 651
VESICAL CALCULUS.
In the urinary bladder as well as in the gall-bladder mineral
elements held in solution by the contained fluids are precipitated, the
consequence being the formation of calculi or stones in the bladder,
which vary in size from the smallest concretions to those weighing
many ounces, and in number from one to scores, a large proportion
of these representing original concretions passed down from the
kidneys, i. e., minute renal calculi. Every calculus has a nucleus, and
in many instances this may be a clot, or clump of cells encrusted
with salts, which have formed within the bladder and not come down
from above. Such foreign bodies will become the nidus for a
calculus, while in vesical calculi are frequently found pieces of
catheter, of straw, chewing-gum, hairpins, and the like, which have
been introduced from without. These stones are constituted mainly
of the ordinary urinary salts, i. e., phosphates, urates, or oxalates,
deposited as described above. Much more rarely cystin and xanthin
are found. Instead of urates crystallized uric acid will be occasionally
seen. The oxalates are mostly those of calcium, while the
phosphates are those of calcium, magnesium, or ammonium, more
or less combined. The first requisite for a calculus is a nidus, the
second the deposition of one or more of these salts. Calculi are
sometimes composite in structure, some having a uric or urate
nucleus becoming later encrusted with phosphates. The oxalic
calculi are exceedingly hard and usually rough, being often spoken
of as mulberry. They rarely attain large size. The rapidly forming
phosphatic calculi are often so small as to disintegrate or break in
the process of removal. Thus there may be great differences in
density of these stones. Their formation is particularly favored by
retention of alkaline urine, as in many cases of prostatic
enlargement.
Symptoms.—Discomforts and symptoms produced by bladder
stone depend upon their size, number, roughness,
movability, and location. The larger and rougher stones, which are
more or less easily moved inside a tender and irritable bladder, will
cause a large amount of discomfort and actual pain, while a small
calculus, which may be formed within a pocket or become encysted
at some distance from the urethral opening may remain unnoticed.
The indications of calculi are essentially those of cystitis, pain,
frequency of urination, and pyuria, sometimes with hematuria. The
pain is local and referred, especially along the urethra, to the glans in
the male, and is often aggravated by the final expulsive movements
of the bladder at the termination of urination. Local discomfort is
aggravated by active exercise. Reflex pains have been known in
distant parts of the body. The frequency of urination is increased by
exposure to cold or by activity. Pyuria and hematuria do not differ
from those of non-calculous cystitis. A most significant feature is
sudden stoppage of the urinary stream, with more or less pain.
Statements to this effect, especially if accompanied by a history of
renal calculi in time past, are most suggestive.
Unless, however, particles of calcareous material have been
passed the positive diagnosis of calculus rests upon its detection by
examination, either with a stone searcher or with the cystoscope.
The former is essentially a short-beaked, light sound, which may be
more easily manipulated after introduction within the bladder. In
using it the same precautions are taken as for catheterization or
sounding, while the deep urethra may be made less sensitive by a
cocaine solution. The instrument is introduced exactly as is a sound,
and its beak is carried completely into the bladder. Sometimes even
before this has been accomplished will be noted the rough, grating
sensation which indicates contact with a stone. At other times it is
only after considerable search that a small stone is “touched.” A
stone easily found is within the possibilities of unskilled manipulation,
but to accurately examine a bladder, especially behind a large
prostate, is a fine art. For this purpose the bladder should be partially
distended with fluid, the patient should be in the horizontal position,
and the stone searcher so manipulated that its beak may be made to
traverse every portion of the lower part of the bladder and to come
into contact with its wall, for only in this way can an encysted
calculus be discovered. The beak must, moreover, be rotated so as
to be carried down into the pocket behind an enlarged prostate, as in
such pockets many calculi nestle. Some stones are felt even in
introducing a soft catheter; others are discovered only after such
manipulation as the above. Nothing but necrosed bone or a foreign
body can convey to the metal instrument, and through it to the finger,
the peculiar sensation produced by contact with a stone. By