MY BLOG EXPERIENCE

Goodbye, or is it?
This blog started out as a class project. I thought it was just going to be something I would do to just get the grade. But no, this blog has done so much more, it has helped me read my notes and also share it with the rest of the world. My viewers encourage me to make posts, without my blog being viewed I would have lost the confidence to make posts.
     I am finally done with the course that required me to create this blog, but I am definitely not going to stop making posts on other different things. So, to my professor (Jelena Zivkovic), thank you for making me create this blog and to my viewers thank you for giving me a good grade and the courage to try something new. THANK YOU!!!

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Many thanks to prof

HP CASE STUDY

Hewlett Packard (HP) is the world’s largest printer manufacturer. However, a decade ago it began to rethink its corporate level strategy and acquired Compaq, a leading PC manufacturer.  This move was the first major change in the scope of its business and as the decade progressed it continually developed its corporate level strategy addressing the question: what businesses should we be in? 

An overview of HP required us to answer these questions;

 1.    What is the difference between vision and mission and who are the stakeholders?

2.    What is HP’s Vision and Mission? Can you identify how it meets the needs of its stakeholders through its objectives?

3.    What different businesses does HP operate in and how does it seek to achieve competitive advantage?

answers

Question #1

The main difference between vision and mission is that vision focuses more on the future while mission focuses on the present. The vision where the organization wants to go in the future while the Mission is the summary of the beliefs of the organization. Mission focuses on the present.

The members and the users are the stakeholders.

Question #2

• Hewlett-Packard Mission Statement: 

"To provide products, services and solutions of the highest quality and deliver more value to our customers that earns their respect and loyalty." 

• Hewlett-Packard Vision Statement: 

"To view change in the market as an opportunity to grow; to use our profits and our ability to develop and produce innovative products, services and solutions that satisfy emerging customer needs."

• The needs of every stakeholder is profit among other things, HP tries to achieve sufficient profit maximization and create values for their stakeholders and achieve their corporate objectives.

Question #3

HP’s portfolio includes:

Application Services

Business Process Outsourcing

Cloud Services

Consulting Services: Converged Infrastructure

Consulting Services: Transform IT

IT Infrastructure Outsourcing Services

Services by Product

Software Services

Support Services

PC manufacturing

Smartphones manufacturing

Printers

New Strategy for achieving competitive advantage

Passion for the job

To ensure trust and respect

Effective use of team work

Speed and agility

Innovation

Integrity

answers

Hewlett- Packard SWOT Analysis

The Strengths

•           The company is Innovative: The Company emphasizes on innovation as a key business ingredient for business success.

•           The size and scale is big: The Company is the largest as far as PC is concern

•           The company’s synergy

•           The products & Services

•           The brand: HP is one of the most recognize brand in the world.

 Weakness

•           Size

•           Recent acquisitions

•           The supply chain

The opportunities

•           IPG

•           Cloud computing

•           Supply chain

The Threat

•           The partners

•           Stiff hardware competition

•           Supplier

Rationale for change of scope of business

For about the last five years now HP has spent a lot of money going into tens of millions of dollars in some kind of acquisition, somewhere beneficial and others are not.

HP seems to be struggling over a period of time and significantly after the company bought palm at the cost of $1.2 billion dollar which is in cash and debt. The company has lost its dominance of the market share of PC. The introduction of many different products which did not sell, the drastic fall of its share value, all the forgoing are what led to the changes in strategy and scope.

Reasons for exiting PC manufacturing

•           The market share is lost to the competitors who are now more aggressive

•           The drop in sales volume

•           The shift in the use of PC to tablets and handheld devices.

•           Internal rift

•           Poor budget for R & D.

Why HP should not exit PC manufacturing

•           Good brand

•           Large customer data base

•           Brand loyalty

•           Capital base

•           Innovation.

For more research on the topic, you can follow these links;

http://www8.hp.com/us/en/hp-information/about-hp/student-information/index.html

 http://www8.hp.com/us/en/hp-information/about-hp/corporate-objectives.html

BUSINESS STRATEGY - ANALYSIS

Business strategy focuses on identifying the changes to an organization that are required for it to achieve its strategic goals. Business analysis provides the foundation for almost every kind of business change. Analysis has to do with the review of a company's structure, its vision, mission and core values.
    There are six basic tools that can be used to analyze a firm, they are;

1. Core competencies

1. Core business

1. Required inputs

1. SWOT

1. PEST

1. Five-forces

The most commonly used among these tools are the SWOT, PEST and the five-forces.
-SWOT: the SWOT stands for strengths, weakness, opportunities threats.A SWOT analysis can be carried out for a product, place or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. 

PEST
-Political: local, national and international political developments. How they will affect the organization and in what way/s?
-Economic: what are the main economic issues- both nationally and internationally that might affect the organization?
-Social: what are the developing social trends that may impact on how the organization operates and what will they mean for future planning?
-Technological: changing technology can impact on competitive advantage very quickly!

FIVE-FORCES
Developed by Michael Porter, forces that shape and influence the industry or market the organization it operates in.
-Strength of barriers to entry: how easy is it for new rivals to enter the industry.
-Extent of rivalry between firms: how competitive is the existing market?
-Supplier power: the greater the power, the less control the organization has on the supply of its inputs. 
-Buyer power: how much power do customers in the industry have?
-Threat from substitutes: what alternative products and services are there and what is the extent of the threat they pose?

http://www.youtube.com/watch?v=2FzYhdS4pqM

http://www.youtube.com/watch?v=GNXYI10Po6A

CORPORATE CULTURE AND STRATEGIC PLANNING IN BUSINESS STRATEGY

    A business strategy describes how a particular business intends to succeed in its chosen market place against its competitors.it therefore represents the best attempt that the management can make at defining and securing the future of that business. In other to achieve the organizational goals, there are certain strategies to be used; corporate culture, types of strategy, evaluation, analysis, strategic planning, strategic intent, futures thinking. I am going to discuss corporate culture and strategic planning.

CORPORATE CULTURE; corporate culture describes and governs the ways a company's owners and employees think,feel and act. ;

• beliefs/ideas

• mission statements

• vision

• leadership

• team work

• logos

• image

• flexibility/adaptability

• 
  

STRATEGIC PLANNING; this is an organization's process of defining strategy, or direction, and making decisions on allocating its resources to pursue in this strategy  

• vision

• goals

• aims/objectives

• analysis

• development

• evaluation

Stages in planning  may involve
- future thinking: thinking about what the business might need to do in 10-20 years.
- strategic intents: thinking about key strategic themes that will inform decision making.
- analysis: critic your pal. Be realistic.
- the vision: communicating to all staff where the organization is going and where it intends to be in the future.
   WHAT IS YOUR STRATEGIC PLAN??

STRATEGIES FOR DECLINING INDUSTRIES

The conventional strategy for declining industries are either to divest or to harvest, that is, to generate the maximum cash flow from existing investments without reinvesting. However, these strategies assume that declining industries are inherently unprofitable. There are four strategies that can be pursued either individually or sequentially in declining industries.
These four strategies are;

• leadership
• Niche
• harvest
• divest

LEADERSHIP: by gaining leadership, a firm is well placed to outstay competitors and play a dominant role in the final stages of the industry life cycle. Once leadership is attained, the firm is in a good position to switch to a harvest strategy and enjoy a strong profit stream from its market position. For example, by supporting more stringent environmental controls that make it costly for them to stay in business.

NICHE: Identify  segment that is likely to maintain a stable demand and that is likely to maintain a stable demand and that any other firms are unlikely to invade, then pursue a leadership strategy to establish dominance within the segment. The most attractive niches are those that offer the greatest prospects for stability and where demand is most inelastic.

HARVEST: By harvesting, a firm maximizes its cash flow from existing assets, while avoiding further investment. A harvesting strategy seeks to boost margins wherever possible through raising prices and cutting costs by rationalizing the number of customers.

DIVEST: If the future looks bleak, the best strategy may be to divest the business in the early stages of decline before a consensus has developed as to the inevitability of decline. Once industry decline is well established it may be extremely difficult to find buyers.

         Choosing the most appropriate strategy requires a careful assessment both of the profit potential of the industry and the competitive position of the firm.

COMPETITIVE ADVANTAGE IN MATURE INDUSTRIES

COMPETITIVE ADVANTAGE IN MATURED INDUSTRIESAnalysis of industry life cycle suggest that maturity has two principal implications for competitive advantage:a. Firstly, it tends to reduce the number of opportunities for establishing competitiveb. secondly, it shifts these opportunities from differentiation-based factors to cost-based factors. The overall three competitive business strategies that can be used over competitors are:

1. COST ADVANTAGE
Cost is the overwhelmingly important key success factor in most mature industries, to attain low cost in this stage, there are 3 driving forces that can enhance that;
i. Economies of scale; buying in bulk for cheaper prices.
ii. low cost inputs; cheaper raw materials.
iii.low overheads; lower expenses.

2. SEGMENT AND CUSTOMER SELECTION
The sluggish demand growth, lack of product differentiation, and international competition tend to depress the profitability of mature industries. And for these reasons, countries/industries need to segment their target market or reduce a niche strategy to grow and be efficient. As a result, segment selection can be a key determinant of differences in the performance of companies within the same industry.
An example is Wal-Mart, their profitability was boosted by locating their stores in small and medium-sized towns where it faced little competitors.
                             

3. THE QUEST FOR DIFFERENTIATION
Differentiating to attain some insulation from the rigors of price competition is particularly attractive in mature industries. the problem is that the trend toward commoditization narrows the scope for differentiation and reduces a customer willingness to pa a premium for differentiation.

your competitors do not stand a chance. Choose wisely!!!!!!!
                                        

THE INDUSTRY LIFE CYCLE

Everything has its beginning and its end,it will pass through stages. Just as we humans start from birth to death, an industry also does that. From its emergence stage to its decline stage.
    The industry life cycle comprises of four phases; the introductory(emergence) stage, growth stage, maturity stage and decline stage. Business strategy needs to try to understand, predict and manage change.
                The diagram below gives a visual of these stages in the industry life cycle;
                     

                         T


1. The Introduction stage; in this stage, sales are small and the rate of market penetration is low because the industry's product are little known and and customers are few.
2. The Growth stage is characterized by accelerating market penetration as technical improvements and increased efficiency open up the mass market.
3.The Maturity stage increasing market saturation cause the onset of the maturity stage. once saturation is reached, demand is wholly for replacement.
4.Decline in this stage as the industry becomes challenged by new industries that produce technologically superior substitute product, the industry enters its decline stage.
        There are two forces that drive industry revolution;
a. Demand growth
b. Creation and diffusion of knowledge

a. Demand growth; the life cycle and the stages within it are defined primarily by changes in the industry's growth rate over time.in the introduction stage, there is high costs and low quality, high demand and low supply. the growth stage, the demand is high and increasing and supply is low and increasing. Then, in the maturity stage, demand begins to decrease and supply becomes high. in the decline stage, demand decreases as well as the supply. If the industry involved decides to transform the demand/supply pattern, a change will occur in the cycle.
b. Creation and diffusion of knowledge; new knowledge is the form of process innovation is responsible for an industry's birth, and the dual processes of knowledge creation and knowledge diffusion exert a major influence on industry evolution. the two sectors  involved here are ; dominant designs and technical standards and also product to process innovation
- Dominant designs and technical standards; dominant designs refers to the overall configuration of a product or system. a technical standard is a technology or specification that is important for compatibility.
-product to process innovation;  the emergence of a dominant design marks a critical juncture in an industry's evolution. once the industry marks a critical juncture around a leading design, there is a shift from radical to incremental product innovation.

Robert M. Contemporary Strategy Analysis,7th Edition

http://www.youtube.com/watch?v=CRfjJ9yOyp0

he introduction sage

Strategy

Strategy is a "unifying theme" that gives the coherence and direction to the actions and decisions of an individual or an organization.
- strategy is about winning.

Corporate strategy - where to compete ?
Business strategy - how to compete?

Corporate strategy
   This defines the scope of the firm in terms of the industries and markets in which  it competes.
Corporate strategy decisions include choice over in diversification, vertical integration, acquisition, and new ventures, and the allocation of resources between the different businesses.

Business strategy
 Business strategy is concerned with how the firm competes within a particular industry or market.

About me

My name is Amal Aliyu. i am a student of the American University of Nigeria, my major is marketing . I am in my final year. This blog is going to be about strategy, I will post what I get taught in class and what I understand. Enjoy!!