Answer Cases

 

 

CASE DISCUSSION ANSWERS

AND

 

  Course Code: MGT600 Course Title: Strategic Management Section: 01

Prepared for: Omar Faruq Assistant Professor Department of Business Administrat Administration ion

Prepared by:

Name

Id

2017-1-95-086

1. Md. Shariful Islam 2. Mohammad Reaj Uddin

2017-2-91-004

3. Md. Safayet Islam Chowdhury

2017-3-95-095

4. Md. Mostafa Al Mahmud

2018-1-91-034

East West University Date of submission: 12 April 2019.

 

 

CASE DISCUSSION ANSWERS AMAZON.COM

1. What functional-level strategies has Amazon pursued to boost its efficiency? Answer:

Functional level strategies can improve a company's ability to attain superior efficiency, quality, innovation, and customer responsiveness by reducing costs and improving production by ways such as economies of scale, learning effects, marketing strategies or efficient information technologies. To make its distribution centers work more efficiently, Amazon is embracing automation. In 2012 Amazon purchased Kiva, a leading manufacturer of robots that service warehouses. Amazon used Kiva robots to automate the picking and packing processes in its distribution centers to boost efficiency. This allowed Amazon to reduce the number of employees needed per distribution center by 30 to 40%, and boosts productivity.

2. What functional-level strategies has Amazon pursued to boost its customer responsiveness? Answer:

Amazon has always focused on customer responsiveness. Amazon has invested heavily in a large network of distribution center to boost customer responsiveness. Over time, Amazon has also  become increasingly efficient and effective at managing inventory and running its growing network of distribution centers. By opening more distribution centers and increasing the density of its distribution network, Amazon is able to deliver products to customers more rapidly (boosting customer satisfaction) and to do so at a lower cost. Amazon also uses a user-friendly interface to make online shopping easier. Taken together, these factors differentiate Amazon from its rivals in online and physical retailing. The current strategy of automating much of the work at its distribution centers  promises to further boost employee productivity. All of this helps Amazon to achieve a low-cost  position. The company is also innovative, developing new products (the Kindle reader, digital downloads of books) and services (Amazon Web Services) that are helping it to solidify its customer responsiveness.

 

  3. What does product quality mean for Amazon? What functional-level strategies has Amazon  pursued to boost its product quality? Answer:

American Management guru Peter F. Drucker said, “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.” for. ” Quality for Amazon would refer to the degree to which its products or services meet a customer's expectations. Controlling the quality of products sold by third party merchants is a great challenge of e-commerce retailers like Amazon. Quality for amazon means improving quality as excellence: providing products by third party merchant, that are not counterfeit, not damaged. Amazon pursued to boost its product quality by emphasizing attributes associated with a product offering, such as ease of ordering, product availability, and timely delivery Amazon has implemented several strategies to increase its efficacy and customer responsiveness to increase its overall product quality. These strategies include optimizing their picking and  packing processes by using robots to reduce the cost the customer pays. They also implemented an easy to use user friendly interface to improve the customers’ online shopping experience .On top of these things, Amazon offers customers just about everything they could need in one place at low prices. These things combined with product innovation can increase Amazon’s perceived quality to the customers.

4. How has innovation helped Amazon improve its efficiency, customer responsiveness, and  product quality? Answer: 

Innovation has allowed Amazon to offer its customers a wide array of digital media. Digital media increases efficiency, customer responsiveness, and product quality. Amazon offers customers a much wider selection of merchandise than they can find in a physical store, and does so at a low price. The current innovation strategy of automating much of the work at its distribution centers promises to further boost employee productivity. All of this helps Amazon to achieve a low-cost position. The company is also innovative, developing new

 

 products (the Kindle reader, digital downloads of books) and services (Amazon Web Services) that are helping it to solidify its competitive advantage. Innovation through expansion of its network of distribution centers, embracing automation, and investing early in “cloud“cloud - based”  based” infrastructure has helped Amazon improve its efficiency, customer responsiveness, and product quality. Amazon has become the world’s largest retail, with over 85 billion dollars in annual sales.

5. Do you think Amazon has any rare and valuable resources? In what value creation activities are these resources located? Answer:

Amazon’s “cloud“cloud- based”  based” infrastructure, including server farms and Amazon Web services (AWS), can be considered rare and valuable resources and value creation activity. activity. Investing early in “cloud“cloud- based”  based” infrastructure has helped Amazon improve its efficiency, customer responsiveness, and product quality. Amazon’s early investment in digitalization allowed them to become leader in cloud computing industr y. y. Amazon’ cloud-based cloud-based infrastructure has created novelty value. The server farms and AWS would both locate under the cloud-based infrastructure. This infrastructure has allowed them to be a leader in the cloud computing industry and has produced tremendous profits.

6. How sustainable is Amazon’s competitive position in the online retail business?  business?   Answer:

Amazon has proved that it can use its perpetual innovation to respond to what customers want. The company went from selling books to selling just about anything a shopper could want at low costs through an easy to user-interface. Amazon has implemented several strategies to increase its efficacy and customer responsiveness to increase its overall product quality. On top of these things, Amazon offers customers just about everything they could need in one place at low  prices. These things combined com bined with product innovation can increase Amazon’s perceived quality to the customers. Investing early in “cloud“cloud - based”  based” infrastructure has helped Amazon improve its efficiency, customer responsiveness, and product quality. The company is also innovative, developing new products (the Kindle reader, digital downloads of books) and services (Amazon Web Services) that are helping it to solidify its competitive position in the online retail business.

 

CASE DISCUSSION ANSWERS NORDSTROM

1. What is Nordstrom’s segmentation strategy? Who does it serve?  serve?   Answer:

The high-end retailer Nordstrom focuses on serving mid- to upper-income consumers who desire fashionable high-quality merchandise.   Nordstrom’s approach to business was to provide exceptional customer service, selection, quality, and value. This approach is still the hallmark of  Nordstrom today.  Nordstrom is a niche company compa ny and focuses on a very specific group of customers. They provide exceptional customer service, selection, quality and value to their customers. They chose to focuses on a relatively affluent customer base that is looking for affordable luxury. Nordstrom attempts to satisfy the desires of this customer segment not only through merchandising, but also through excellence in customer service.   Nordstrom’s  Nordstrom’s philosophy is that the customer is always right. To the extent it has been successful; Nordstrom has differentiated itself from rivals in that segment of the retail space.

2. With regards to its core segment, what does Nordstrom offer to its customers? Answer:

 Nordstrom is a niche n iche company co mpany and focuses on a very specific group of customers. . At its core,  Nordstrom provide its customer with exceptional ex ceptional customer service, selection, quality and value. Exemplary customer service; Nordstrom’s philosophy is “the customer is always right”.  Nordstrom’s   stores located upscale areas have expensive fitting and fixtures that convey an  Nordstrom’s impression of luxury and invite browsing. Thank-you cards, home deliveries, personal appointments, and access to personal shoppers are the norm at Nordstrom. Touches such as live music played on a grand piano help create an appealing atmosphere. The merchandise is fashionable and of high quality, that truly differentiates Nordstrom from many of its rival, is its legendary excellence in customer service. Finally, Management is constantly looking for ways to improve efficiency and customer service. 3. Using the Porter model which generic business-level strategy is Nordstrom pursuing?

 

Answer:

Michael Porter, who was the originator of the concept of generic business-level strategies, has argued that companies must make a clear choice between the different options outline. If they don’t, Porter argues, they may become “stuck in the middle” and experience poor relative  performance. According to Porter, differentiation by its very nature raises costs and makes it impossible to attain the low-cost position in an industry. By the same token, to achieve a lowcost position, companies necessarily have to limit spending on product differentiation.  Nordstrom is pursuing a business-level strategy of focused differentiation that is built on a distinctive competence in customer service. This is when a company targets a certain segment or niche and customizes its offering to the need of that particular segment through the addition of features and functions. To the extent it has been successful; Nordstrom has differentiated itself from rivals in that segment of the retail space. In essence, Nordstrom has been so successful at  pursuing this strategy that it has been consistently profitable, measured by ROIC, while also continuing to grow both its sales revenues and its net operating profit. In other words, through successful execution of its chosen business-level strategy, Nordstrom has built a sustainable competitive advantage. As previously stated Nordstrom is a niche company and provides their customers with a luxury shopping environment with excellent ex cellent customer service.

4. What actions taken at the functional level have enabled Nordstorm to successfully implement its stategy? Answer:

Pursuing functional-level strategies that enable the company to achieve superior quality in terms of both reliability and excellence are important, as is an emphasis upon innovation in the product offering, and high levels of customer responsiveness.    Nordstrom constantly emphasize the importance of customer service in order to build a company-wide companywide culture that internalizes this key value. Nordstrom’s successful differentiation is due to its excellent customer service, which is an element of customer responsiveness.  Nordstrom also pays close attention to employee recruitment and training to ensure that salespeople at Nordstrom behave in a manner that is consistent with Nordstrom’s customer service values when interacting with customers.

 

 Nordstrom has implemented good compensation plan for their sales person and human resurce.Apart form compensation benefit,payment is presented for the salespepople.Nordstrom  belives that proper compensation plans for the salesperson is necessary for ensuring the complete support from the sales person.

5. What is the source of  Nordstrom’s long term, sustainable competitive advantage?what valuable and reare resources doe Nordstrom No rdstrom have that its rivals find difficult to imitate? Answer:

To ensure the competitive advantage o long-term, Nordstorm is trying to create brand loyalty among the customer by providing superior value.The source of long term competitive advantages is their excellent customer service.  Nordstrom is one of American’s most successful fashion retailers that provides exceptional customer service, selection, quality, and value.  Nordstrom’s legendary  legendary  excellence in customer service ensure that the customer is always satisfied with their “the customer is alwys right”  philosophy. Their commited to excellent customer service could also be considerd a valuable ad rare resource that could be hard for rivals to imitate. The personal touch such as luxury shopping environment, thank you cards,appointments, I and  personal shoppers greatlyenhance the customer experience at Nordstro and differentiate them even more from their rivals. Despite its emphasis on quality and luxury, Nordstrom has not taken its eye off operating efficiency and Management is constantly looking for ways to improve efficiency and customer service.

 

6. Is Nordstrom organized for success? Answer:

Yes, Nordstrom is organized for success. Nordstrom is a niche company and focuses on a relatively affluent customer base that is looking for affordable luxury . Nordstrom is one of the sucessful fashion retailers and consistently makes higher-than-average returns on invested capital. Nordstrom consistently earns higher-than-average returns on invested capital. Its return on invested capital (ROIC) has exceeded 30% since 2006, and was 36% in 2012, a remarkable  performance for a retailer. This can be attributed to the unique shopping experience exp erience provided by a combination of their customer satisfaction and shopping environment.  Nordstrom’s approach to business was to provide exceptional customer service, selection, quality, and value. This approach is still the hallmark of Nordstrom today.  Nordstrom’s  philosophy is that the customer is always right. They also comitted to providing quality product and make sure their employees are well compensated. This could lead to higer retention of qualified and knowledgeable salespeole. Despite its emphasis on quality and luxury, Nordstrom has not taken its eye off operating efficiency. Finally,on top of these things, Management is constantly looking for ways to improve efficiency and customer service that esures Nordstrom’s success.