Due by 11:59 PM on December 03
This is an individual assignment.
Read Chapter 6, Organizational Strategy, and complete the following worksheet. (Note: each question is preceded by a brief summary of the question topic.)
The assignment involves applying the main concepts in Chapter 6 to either of the two famous organizations: Starbucks, and Apple Inc.
Submit your individually completed worksheet via the regular submission process by 11:59 pm on December 03.
Q. 1: Components of sustainable competitive advantage. Firms can use their resources to create and sustain a competitive advantage, that is, to provide greater value for customers than competitors can. A competitive advantage becomes sustainable when other companies cannot duplicate the benefits it provides and have, for now, stopped trying. Four conditions must be met if a firm’s resources are to be used to achieve a sustainable competitive advantage. The resources must be valuable, rare, imperfectly imitable (so that competitors may not be able to imitate them), and nonsubstitutable (so that imperfectly imitable resources may not be substituted with another type of resource that this different, but may yield identical outcomes for consumers).
A. List the source(s) of Starbuck’s sustainable competitive advantage:
____Reputation and current following, store locations on every corner of major cities, friendly workers, specific and extremely popular seasonal flavors, customer service (they will keep fixing any drink until it’s perfect- free of charge), etc._______________________________________________________________________________
B. List the source(s) of Apple’s sustainable competitive advantage:
___Sleek and attractive design, Apple’s reputation from the ipod and iphone as innovative and easy-to-use products, its ability to reconfigure new technology into a package that’s easy to use, elegantly designed, and therefore highly desirable by customers. Also, though Apple has had it’s “App Store” idea stolen by Google and Android, Apple (unlike the other two) prescreens every app before allowing it to be published in their store, which prevents developers with bad intentions to sell apps that can harm a device or steal info.
Q. 2: The strategy-making process. The first step in strategy making is determining whether a strategy needs to be changed to sustain a competitive advantage. The second step is to conduct a situational (SWOT) analysis that examines internal strengths and weaknesses as well as external threats and opportunities. The third step involves choosing a strategy. Strategic reference point theory suggests that when companies are performing better than their strategic reference points, top management will typically choose a risk-averse strategy. When performance is below strategic reference points, risk-seeking strategies are more likely to be chosen.
Conduct SWOT analysis for Starbucks by listing 1-2 examples of each aspect of the analysis:
A. Strengths:____Loyal customer base & high quality product___________________________
B. Weaknesses: ____Expensive (not in the budget of many people to drink it regularly). ________
C. Opportunities: ___Opportunities to expand into similar ventures (the success of adding the “La Boulange & Bakery” which includes pastries and real food). ______________________________________
D. Threats: ____If prices don’t lower, it will be hard for customers to be able to test out their new products.
Q. 3: Corporate-level strategies. Corporate-level strategies, consisting of portfolio strategies and grand strategies, help managers determine what businesses they should be in. Portfolio strategy focuses on lowering business risk by being in multiple, unrelated businesses and by investing the cash flows from slow-growth businesses into faster-growing businesses. One portfolio strategy is based on the BCG matrix. The BCG matrix is a portfolio strategy that managers use to categorize their corporation’s