MGB 4013 - Week Three

Hi guys! This week we've learnt another chapter which titled Evaluating A Company's External Environment. The objective of this topic is to thinking strategically about a firm's external environment that we have to form a strategic vision of where the firm needs to head, to identify promising strategic options for the firm as well to select the best strategy and business model for the firm to achieve the best result in business. 

Basically, this chapter covered by 7 questions. Let's cover those questions briefly. :)


QUESTION 1: WHAT ARE THE STRATEGICALLY RELEVANT FACTORS
IN THE MACRO-ENVIRONMENT?

   It's known as PESTEL Analysis which focuses on principal components of strategic significance in the macro-environment. 

QUESTION 2: HOW STRONG ARE THE INDUSTRY’S COMPETITIVE FORCES?

   There are 5 competitive forces; 1)competition from rival sellers. 2)competition from potential new entrants. 3)competition from producers of substitute products. 4)supplier bargaining power. and 5)customer bargaining power. 

# Whether an industry's entry barriers ought to be considered high or low depends on the resources and capabilities possessed by the pool of potential entrants.

# High entry barriers and weak entry threats today do not always translate into high entry barriers and weak entry threats tomorrow.

# The strongest of the five forces determines the extent of the downward pressure on an industry's profitability.

# Having more than one strong force means that an industry has multiple competitive challenges with which to cope. 

   A company's strategy is increasingly effective the more it provides some insulation from competitive pressures, shifts the competitive battle in the company's favor, and positions firms to take advantage of attractive growth opportunities.

QUESTION 3: WHAT FACTORS ARE DRIVING INDUSTRY CHANGE, AND WHAT IMPACTS WILL THEY HAVE?

   First, we have to identify what the driving forces are. Then, assessing whether the driving forces are, on the whole, acting to make the industry more or less attractive and next, determine what strategy changes are needed to prepare for the impact of the driving forces as the driving forces are the major underlying causes of change in industry and competitive conditions.

QUESTION 4: HOW ARE INDUSTRY RIVALS POSITIONED IN THE MARKET?

   As we've learned in this topic, a strategic group is a cluster of industry rivals that have similar or identical competitive approaches and market positions while strategic group mapping is a technique for displaying the different market or competitive positions that rival firms occupy in the industry. Thus, the strategic group maps reveal which companies are close competitors and which are distant competitors. 

A Strategic Group Map Example

QUESTION 5: WHAT STRATEGIC MOVES ARE RIVALS LIKELY TO MAKE NEXT?

   Any business company should know some information about rivals that is useful in anticipating their next strategic moves. We have to know and understand those signals of the likelihood of strategic moves as studying competitors past behavior and preferences provides a valuable assist in anticipating what moves rivals are likely to make next in the marketplace.

QUESTION 6: WHAT ARE THE INDUSTRY’S KEY SUCCESS FACTORS?

   KSF's are the strategy elements, product and service attributes, operational approaches, resources, and competitive capabilities that are necessary for competitive success by any and all firms in an industry. Vary from industry, and over time within the same industry, and in importance as drivers of change and competitive conditions change.

QUESTION 7: IS THE INDUSTRY OUTLOOK CONDUCIVE TO GOOD PROFITABILITY?

   The anticipated industry environment is fundamentally attractive if it presents a company with good opportunity for above-average profitability BUT, the industry outlook is fundamentally unattractive if a firm's profit prospects are unappealingly low. 

That's all i can share with you in this entry. see you in the next entry, insyaAllah. :)

MGB 4013 - Week Two

Hello friends! In this entry I will write about the second lecture of the subject. In this lecture, we've learnt two topics where Chapter One is The Nature of Strategic Management and Chapter Two is The Business Vision and Mission.


Chapter One - The Nature of Strategic Management

Basically the strategic management process consists of three stages:

1. Strategy formulation that includes developing a vision and mission, identifying an organization's opportunities and threats, and determining the strengths and weaknesses as known as SWOT analysis, generating strategies and choosing particular strategies to be done. This strategy formulation including;

• Deciding the new businesses to enter,
• What businesses to abandon,
• How they can allocate resources,
• Whether to expand the operations,
• Whether to enter international markets,
• Whether to form a joint venture, and
• How to avoid a hostile takeover.

2. Strategy implementation requires a firm to establish their annual objectives, devise policies, motivate employees, and allocate resources so that the formulated strategies can be executed and it is also called as the action stage.

3. Strategy evaluation is defined as reviewing external factors that are the bases for current strategies, measuring performance, and taking the corrective actions to the strategy.

As in the first chapter, we covered all topics that we will learn in the Strategic Management throughout the semester briefly. So, figure 1.1 shows a comprehensive strategic management model while figure 1.2 shows the benefits to a firm that does strategic planning in their business.  

Chapter Two - The Business Vision and Mission

In this chapter, we were explained that a vision statement should answer the basic question, that is, "what do we want to become?" as the vision statement should be short, differ from the mission statement as it is a declaration of an organizations --"reason for being" and answering the important question --"what is our business?" and it is an essential for effectively establishing objectives and formulating strategies.


There are 9 mission statement components as following;

1. Customers
2. Products or services--how we entertain our customer
3. Markets
4. Technology--to produce product(quantity with quality)
5. Concern for survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image--its related with CSR(corporate service resposibility) 
9. Concern for employees

I think, tingtong. hihi. This is what i can share about the second week of lecture. Enough saying for this time entry i guess. see you next time! :)

MGB 4013

Bismillahirrahmanirrahim.

It's a new semester friends! And this is absolutely a brand new subject for us to get to know about and understand the knowlegde.

so, in the first lecture, Miss Ummi asked us to built a tower from the newspaper within 10 minutes as she said the tallest tower will be the winner. So we were divided into groups of 10 to 13 group members to set up the highest tower as we can. 10 minutes passed quickly and the tower were evaluated based on its strength and verily, my group tower was not the one that stand still till the end. Poor us but its okay. Anyhow, the essence of the activity is basically a good strategic followed by an excellent cooperation from group members.

It was an exciting activities as everybody participated and learnt that strategic is important as the implementation of the strategy itself. 

Thank you for spending your time, see you in the next entry. :)