Chapter 10

Assalamualaikum w.b.t

Last week, we have learned about the new chapter which is chapter 10, Building an organization capable of good strategy execution; people, capabilities and structure.

Miss Ummi was explained the detail about the action of agenda for executing strategy. There are:

1. Allocate sufficient resources to the strategy execution effort
2. Establish a strategy-supportive organizational structure
3. Staff the organization with the right people for executing the strategy
4. Exercise strong leadership to proper strategy executive forward
5. Tie rewards and incentives directly to the achievement of strategic and financial targets

Miss Ummi also explained about the several approaches to build building and strengthening capabilities.

• developing capabilities internally
• acquiring capabilities through mergers and acquisition
• try to accessing capabilities through collaborative with partnership. 

Chapter 8 and 9

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In that week, miss Ummi informed that the corporate agency should diversify their strategy when:

• technologies and product complement it's present business
• resources and capabilities can be used as valueable competitive assets
• cost reduce b cross-business sharing or transfer of resources and capabilities
• transfer a strong brand name to the product of other business help to increse sales and profit 

The corporate agency also need to testing the strategy whether diversification  add value for shareholders.

1. The attractiveness test = investment as good or better than presnt business?
2. The cost of entry test = cost of overcoming entry barries so great as long as delay
3. The better-off test= 1+1=3 synergy

Synergy is 1+1=3. It is not 1+1=2. The advantages and disadvantages of synergy are:

Advantages (+)

• quick entry into an industry
• barries to entry avoided
• access to complementary resources and capabilities

Disadvantages (-)

• pay a premium for a successful firm
• overestimating the acquisition's potential to deliver added shareholder value
• underestimating cost for integrating firm

And corporate venturing is process of developing new business as an outgrowth of a firm's established business operations.

 

Oshima Food Japan sharing session

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On 12 November, Tuesday. The owner of Oshima Food Japan, Madam Asnidar Hanim Yusuf came to our class and we have the sharing session of her experiences in business field. She was listed the important things and highlighted that as the boarder to the up and down the business.

Madam Asnidar said that businees is form of ibadah. People need your product/services and it is a kind of fardhu kifayah to correspond to people's need. Imagine your life if there is no barber shop, no nasi lemak stall, no baby nursery, maybe yo have to make your own apam balik when you want to eat it? Customer satisfaction is important, but customer's respect towards product/services provider is equally important.

She also shared her common strategy to succeed in doing business:

• have your niche but understand needs
• have a good location 
• increase brand awareness
• retain current customer and increse new one
• make a full use of social media, website or blog (tips: be genuine)
• promotion, promotion and promotion. (coca-cola the best brand in the world never fail to advertise everyday)
• have a passion in your own business don't just copy
• do not use your profit, take salary instead
• your friends and families also pay, if they don't you do
• learn
• do not ask for money, "ikhlas for Allah" money will come

Here, madam Asnidar also explained about the common reason for business failure:

• have no knowledge about business
• do not intend to study about business
• do not separate private private with business account
• have no sense of customer satisfaction
• premises existenceare unknown
• have a little or no budget for promotion
• do not take advantageous af social media, internet etc
• have a little or no budget for HRD, training
• do not have niche in theirproducts or services

All and all, even they hard to get the halal certificate and did not get yet but they not give up in order to get it and keep searching for halal raw material and always motivate our self to move forward.

chapter 7: strategies for competing in international market

In generally, these topic explained about why companies decide to enter foreign markets:

Firstly, the company want to gain access to new customers.

Secondly, the company want to achieve lowest cost through economies of scale, experience and increased purchasing power.

The company also want to further exploit core competencies and to gain access to resources and capabilities located in foreign markets.

Lastly, to spread business risk across a wider market base.

chapter 6 : strengthening a company's competitive position : strategic moves, timing and scope of operations.

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These chapter roughly explain about how can the company maximizing the power of strategy. They can use one of these alternative which are offensive or defensive competitive ways.

There are the strategic offensive principles:

• focus competitive advantages to sustain in industries
• use the sources fully to compete with the rivals
• use the strategy that the rivals can't expect it
• use the opportunity to defense the company from threat  

Here, there are the best targets 4 offensive attacks:

1. markets leaders that are invulnerable competitive positions
2. runner up firms with weaknesses in areas where the challenger is strong
3. small local and regional firms with limited capabilities
4. struggling enterprises on the verge of going under

The new terms that I've learn is a "Blue Ocean Strategy". Actually, blue ocean strategy is offers growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand.

Horizontal scope is the range of product and service segment that a firm serves within its local market including merger and acquisition. 

Benefit of increasing horizontal scope are:

• improving the efficiency of its operations
• reducing the market rivalry
• heightening its product differentiation
• increasing the firm's bargaining power over suppliers and buyers
• enhancing its flexibility and dynamic capabilities

Outsourcing involves contracting out certain value chain activities to outside vendors.

 

generic strategies

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For the generic strategies, the strategies that I choose from the four categories of generic business strategies are broad differentiation strategies which is Nike.

The broad differentiation strategies approaches that Nike company use is carefully study their buyer need and behaviors,values and willingness to pay for a unique product or service. The company of Nike also incorporate features that both appeal to buyers and create a sustainably distinctive product offering. They also use higher prices to recoup differentiation costs such as they provide their product with their suitable prices and quality. As we know the product that Nike provide is always make their customer satisfied with the Nike product. The advantages of differentiation of broad differentiation strategies are it command premium prices for the firm's products. It also increased the units sales due to attractive differentiation. The brand loyalty that bond buyers to the firm's product. 

We know that Nike brand only have at certain place which is they still sustain their brand and quality. They do not distribute Nike product into some shop. Their try to maintain their quality and price with put the product at the suitable place and together with other brand. 

Differentiation enhances profitability whenever a company's product can command a sufficiently higher price or produce sufficiently greater unit sales to more than cover the added costs of achieving the differentiation. The essence of a broad differentiation strategy is to offer unique product attributes that wide range of buyers find appealing and worth paying for.

chapter 5 the five generic competitive strategies

Assalamualaikum w.b.t

This week is week 5th for us and that means we have done our 5th lecture with miss ummi. is it so fast right? i thought that i have know her about yesterday but it over a month already. 

today we have learned about the five generic competitive strategies. the five generic competitive strategies are:

1- low cost provider

2- broad differentiation

3- focused low cost

4- focused differentiation

5- best cost provider

:) a low cost advantage over rivals can translate into better profitability than rivals attain.

:) a firm's cumulative costs across its overall value chain must be lower than the competitor cumulative costs.


miss ummi also explain what is cost drivers. here, i have stated about the cost drivers that miss ummi try to make it simple to understand:

-economies scale
-learning and experience
-capacity and utilization
-supply chain and efficiencies
-input costs
-production technology and design
-communication systems and information technology
-bargaining power
-outsourcing and vertical integration
-incentive systems and culture