Strategic Leadership Mid-Term Exam

Question 1

The order in which internal and external evaluation is performed while conducting a SWOT analysis is important. In that, the internal analysis should proceed then after its completion the external one can then be conducted. In that the ability of the business to succeed in the market is not only determined by the external opportunities and threats rather it is fueled more by the inner weaknesses and capabilities of the company (Sengupta, 2005). The analysis must begin to consider the advantages and weaknesses that the firm has in meeting all the needs of the target consumers. The advantages are the firm’s core competencies that position it an advantage in meeting all the markets requirements (West, Ford & Ibrahim, 2015). It is only by solving the internal limitations that the company can venture into business and should all be integrated together. After this then the existing opportunities and risks of that venture are assessed to determine how the internal strengths can be utilized in overcoming such hurdles and attain success.

Question 2

Based on the market scenario I will not lend my roommate the money that he needs to open a pizza restaurant in Washington, DC. This is because despite the fact that it is apparent that the market has high pizza and convenience foods demand the market is already saturated with the fresh restaurants that are being opened on regular basis. In addition, there are other well-established firms that are based in the market providing similar services such as Door-Dash, Pizza Hut, Dominos, GrubHub and Uber Eats.  Both the new and the well-established firms create high competition that will be challenging for a new restaurant to overcome. Regardless of the low entry barrier, such firms have already dominated the market and therefore, a fresh business will need more investment in creating awareness and familiarity of its presence. Consumers mainly trust well-recognized brands particularly when it comes to meals and it will be difficult to gain a significant share (West, Ford & Ibrahim, 2015). In addition, the presence of many restaurants in the market means that every restaurant only owns a small share in the market that is characterized by low profits. In other words, there is no opportunity for my roommate to acquire profit with his pizza restaurant because of the presence of many companies in the market most of which are well recognized and successful. The best opportunity for such a business would be in emerging market where competition is low and the chances of making high profits are high.

Question 3

The primary competitive advantages that southwest airlines have is differentiation and cost leadership strategies. In that, for the company to sustain its low pricing strategy, it has focused on creating a business approach that revolves around minimal operating expenses. In addition, the company’s approach is concentrated on efficiency, consumer experience, logistics solutions and motivated workforces (West, Ford & Ibrahim, 2015). The company is guided by the belief that workers are an essential aspect of business and should always be inspired to achieve higher. On the other hand, consumer satisfaction and differentiated consumer experience are at its core. This approach has assisted the company in attaining efficiency and in turn reducing its operating expenses (Singh, 2008). It is such competitive advantages that have ensured and sustained its relevancy in the face of intense competition and operative threats. The company’s competitive advantages are fueled by having the right staffs, consistent improvement, and flexible policies and rewards that are aimed at motivating its employees to achieve high.

Question 4

I do agree with the raised notion from the article that it is only large multinational companies can be innovative. This is because unlike such firms like Apple and Nike which started as small firms prior to growing into the international industry it should be acknowledged that innovation today is in a new level and competition is particularly high. This means that in order for a company to be innovative much resources, recognition and stability are required which is not possible for small firms which are trying to be established in the market and acquire recognition (Singh, 2008). Innovation is very expensive and takes so many risks and a large share in the international market is necessary for such a venture.

Question 5

In my opinion, these companies are mainly using both forward and backward integration. This is because the firms use vertical integration and some form of merging with the suppliers. Forward integration refers to a business approach that incorporates vertical operations where business operations are extended to incorporate the primary control of actual supply (Singh, 2008). The oil and the pipeline company are involved in a form of vertical integration where the company is shifting down to the supply network. This is a form of backward integration that reflects some sort of a unification that is mainly aimed at reducing the expenses of operations while improving its revenue gains and ensuring that the corporations become more competitive by achieving high stability and efficiency.

Question 6

Market diversification is a business approach that involves getting into fresh markets where the business does not exist while at the same time generating fresh products that are to be supplied in the market (Knecht, 2014). In my view, if Gore Company had not engaged in corporate diversification that ensured that it was situated in a different market then its market and competitive advantage would have been lost. This is because the value of a company is bound to increase as its sales increases. Economies scale is vulnerable because it results in the general rise of the company’s revenue while lowering its operating expenses when being compared with the scenario where the market diversity had not been exploited (Knecht, 2014).

Question 7

It is widely known that in order to succeed in the technology business one mush focus on being the first, the finest or least priced (Singh, 2008). In the phones world android owned by Google became the cost leader which attracted most consumer’s sensitive of prices but in need of innovation. On the other hand, Apple has positioned itself as the firm and the leading in terms of quality. Microsoft despite acquiring success in the computing market failed to compete either through cost leadership or even quality. Their products become highly prices when equated to what the android devices were priced which led to its loss in the cost aspect (Warren, 2017). More so not even a single of its operating systems was characterized by the high quality when compared to that of firms such as Apple.

Further, Microsoft killed its own investment by venturing on a development that was not compatible with the Android version by trying to be differentiated. This move was expensive and therefore means that its products would be characterized by particularly utmost prices thus discourage purchase. By focusing to be the innovation leader the company did not consider the needs of the market. In addition, it focused on a strategy that had already been occupied by Apple which competes on the basis of quality and therefore lost its competitive benefits that it would have gained by being characterized by minimal pricing (Singh, 2008).

References

 

Knecht, M. (2014). Diversification, industry dynamism, and economic performance: The impact of dynamic-related diversification on the multi-business firm. Wiesbaden: Springer Gabler.

Sengupta, S. (2005). Brand positioning: Strategies for competitive advantage. New Delhi [u.a.: McGraw-Hill.

Singh, M. (2008). Strategic management and competitive advantage. New Delhi: Global India Publications.

Warren, T. (2017). Windows Phone Dies Today. Retrieved from https://www.theverge.com/2017/7/11/15952654/microsoft-windows-phone-end-of-support

West, D., Ford, J. B., & Ibrahim, E. (2015). Strategic marketing: Creating competitive advantage. Oxford: Oxford University Press.