Chapter 10

MG800: Strategic Management Member of Team B Ayoub Bokhabrine Hyungnam Kim Shail Thakkar Adit Pandya

Chapter 10 Question 1 page 312: The heart of Toyota's strategy in motor vehicles is to out-compete rivals by manufacturing worldclass, quality vehicles at lower costs and selling them at competitive price levels. Executing this strategy requires top-notch manufacturing capability and super-efficient management of people, equipment, and materials. Illustration Capsule 10.2 discusses the principles, practices, and techniques grounded in Toyota's famed Toyota Production System. How does Toyota's philosophy of dealing with defects, empowering employees, and developing capabilities impact strategy execution? Why are its slogans such as "Never be satisfied" and 'Ask yourself 'Why?' five times" important? Answer: Toyota is one of the largest car manufacturers all over the world, their Operational strategy is to achieve a competitive advantage in the marketplace by providing high-quality vehicles at competitive prices. Toyota has a unique philosophy of its kind to treat defects, and empower employees and develop their capabilities. All of these factors in society contribute to the effective implementation of the strategy, as shown below: 

The company focuses on addressing the defects only when they occur. It allows the company to save time, resources and effort by using control techniques only at the time of the problems. Therefore, it saves the unnecessary use of technology staff and control used in the operations smoothly.

In addition, the company also emphasize on identifying the root cause of the errors that helps to avoid them in future. Thus, the company could reduce the defects in its products. 

Toyota confirms the company has enabled workers by giving them the power to stop the assembly line at a time to identify defects. It allows the company to track faulty items in the initial stages and safe. If the items will go further in the assembly line, the company must make an extra effort to identify the problem in the product. It can lead to the

manufacture of poor quality products also. Thus, to enable staff to help in the 

manufacture of high quality products. Capacity building: In order to achieve this goal, and focus on the company's continuous development. In addition to this, also focus on developing staff that can offer innovative ideas to improve the production process. These steps will help in the development of the company's capabilities, which further help in the production of high quality products at reasonable prices.

The company used many slogans such as "Ask yourself:" Why? "Five times" and "never be satisfied", etc. To keep employees motivated. These logos help to create a positive and competitive work environment. In addition, it also helps to remind staff on the principle of continuous development and production of high quality products for the company. Staff and encourages the exchange of ideas and value assessments and information with the company, which is crucial to improve the efficiency and effectiveness of production processes.

Chapter 8: Question 1: See if you can identify the value chain relationships which make the businesses of the following companies related in competitively relevant ways. In particular, you should consider whether there are cross-business opportunities for (1) skills/technology transfer, (2) combining related value chain activities to achieve lower costs, and/or (3) leveraging use of a well-respected brand name. Outback Steakhouse  Outback Steakhouse  Carrabba’s Italian Grill  Roy’s Restaurant (Hawaiian fusion cuisine)  Bonefi sh Grill (Market-fresh fi ne seafood)

 Fleming’s Prime Steakhouse & Wine Bar  Lee Roy Selmon’s (Southern comfort food)  Cheeseburger in Paradise  Blue Coral Seafood & Spirits (Fine seafood) L’Oréal  Maybelline, Lancôme, Helena Rubenstein, Kiehl’s, Garner, and Shu Uemura cosmetics  L’Oréal and Soft Sheen/Carson hair care products  Redken, Matrix, L’Oréal Professional, and Kerastase Paris professional hair care and skin care products  Ralph Lauren and Giorgio Armani fragrances  Biotherm skincare products  La Roche–Posay and Vichy Laboratories dermocosmetics Johnson & Johnson  Baby products (powder, shampoo, oil, lotion)  Band-Aids and other fi rst-aid products  Women’s health and personal care products (Stayfree, Carefree, Sure &Natural)  Neutrogena and Aveeno skin care products  Nonprescription drugs (Tylenol, Motrin, Pepcid AC, Mylanta, Monistat)  Prescription drugs  Prosthetic and other medical devices  Surgical and hospital products  Accuvue contact lenses Answer: Outback Steakhouse:The general strategy of the company is to differentiate its restaurants by emphasizing consistently high quality food and service, generous portions at moderate prices and a casual atmosphere. This is a good example of two strategic fit opportunities: transferring skills

and combining the related value chain activities to achieve lower costs, especially in the administrative functions. .

L’Oréal: Opportunity fit strategy is to transfer skills which involves cross business cooperation to focus on new beauty-products, creation of new strengths and capabilities. In some companies, it is possible to combine the relevant value chain activities, including manufacturing, research and development. Johnson & Johnson: This a great example of leveraging a well-respected brand name. Another potential strategic fit opportunity is combining related value chain activities, including distribution and manufacturing.

Question 2: Peruse the business group listings for United Technologies shown below and listed at its website (www.utc.com). How would you characterize the company’s corporate strategy? Related diversification, unrelated diversification, or a combination related-unrelated diversification strategy? Explain your answer. Answer: The corporate level strategy of unrelated diversification has been pursued by UTC Corporation in which it has been successful in pursuing such strategy. United Technologies Corporation (UTC) is Hartford based company, which has owned a wide variety of companies that operate in different lines of business and industry. With UTC operating differed lines this will help them grow very quickly. Otis: the world’s leading manufacturer, installer and maintainer of elevators, escalators and moving walkways Carrier: the world’s largest provider of air-conditioning, heating, and refrigeration solutions. Sikorsky: a world leader in helicopter design, manufacture and service.

UTC Fire& Security: fire and security systems developed for commercial, industrial, and residential customers. UTC Power: a full-service provider of environmentally advanced power solutions. Hamilton Sundstrand: technologically advanced aerospace and industrial products. Pratt Whitney: designs, manufactures, services and supports aircraft engines, industrial gas turbines and space propulsion systems. Question 3: The Walt Disney Company is in the following businesses: Theme parks Disney Cruise Line Resort properties Movie, video, and theatrical productions (for both children and adults) Television broadcasting (ABC, Disney Channel, Toon Disney, Classic Sports Network, ESPN and ESPN2, E!, Lifetime, and A&E networks) Radio broadcasting (Disney Radio) Musical recordings and sales of animation art Anaheim Mighty Ducks NHL franchise Anaheim Angels major-league baseball franchise (25 percent ownership) Books and magazine publishing Interactive software and Internet sites The Disney Store retail shops Based on the above listing, would you say that Walt Disney's business lineup reflects a strategy of related diversification, unrelated diversification, or a combination of related and unrelated diversification? Be prepared to justify and explain your answer in terms of the nature of Disney's shared or transferred resources and capabilities and the extent to which the value chains of Disney's different businesses seem to have competitively valuable cross business relationships.

Answer: A related diversification strategy is when the firm’s value chain exhibits competitively important cross business relationships. An unrelated diversification strategy occurs when a business tries to enter a new market. Disney uses a related diversification strategy. Disney started out making cartoon films and soon moved into feature length films. After the success the sold merchandise and began to open theme parks. The theme parks were a way to incorporate the characters they featured in the films as real beings that the visitors could visit with and see in person. Disney kept the cross business relationship going as they bought shares in the Anaheim Mighty Ducks and Angels and made the films “The Mighty Ducks” and “Angels in the Outfield”. Every operation Disney embarks on is a cross business relationship. They began to become more diversified and offered “The Disney Channel” and eventually began filming their own television shows. They made the shows into full feature movies, dolls; and released numerous successful music artist albums. Disney went on to purchase Pixai, Marvel Entertainment, and the latest venture, the purchase of Lucas film and the Star Wars Brand. With the purchase of Pixar, Disney was able to release numerous popular films like “Finding Nemo”, “Toy Story”, “Cars”, and “Monsters mc”. The acquisition of Marvel Disney released “Iron Man” and “The Avengers”. Disney had already had huge successes with “The Pirates of the Caribbean”. They even started the “High School Musical” series which has been successful as a TV show, movie, and had their own top selling album. If Disney was using an unrelated diversification strategy they would try to enter a new market. But Disney sticks with what they know, entertainment. They keep churning out new movies, music, television shows, and theme parks. They have built a huge group of loyal customers and are a globally recognized brand.

Chapter 7: Question 3: Assume you are in charge of developing the strategy for a multinational company selling products in some 50 countries around the world one of the issues you face is whether to employ a multi-domestic, a transnational, or a global strategy. a. If your company’s product is mobile phones, do you think ¡t would make better strategic sense to employ a multi-domestic strategy? A transnational strategy. Or a global strategy? Why?

Answer: A) A mobile phone is an electronic device components programmable and each one expects something new from ¡t. It is not worthwhile to include each person's preferences. In addition, the basic requirements for the mobile phone is the customer need to communicate the use of mobile phone technology. Thus, there is no need to customize mobile phones to meet local preferences. Thus, the company should use cell phones produce a comprehensive strategy to take advantage of unified products and economies of scale. B) Culture, society and demographics determine the strength of the company's preference. Most Indians prefer to eat vegetarian food, while the vast majority of the Danish People prefer to eat non-vegetarian. The point is that food tastes fit according to buyers and preferences of society change. Therefore, the entity must use a multi-local strategy to customize the soup to meet the preference of different buyers and local eating habits. C)

A company producing consumer appliances must use transnational strategy to standardize its product quality and technology and then customize ¡t to meet the local preferences such as environmental considerations, buying behaviors, purchasing capacity its. For example. The expectations from a heater in semi humid region are quite different than that of very cold region.