Critical Evaluation of Different Strategies

Strategy Context – Organizational

Elon Musk’s Quotes about Tesla 3

• “We’re going to go through at least six months of production hell,” July 17,
• “Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated,” and
• “The Model 3 is overly ambitious, and the production process too technical” Twitter April 18.
• "I wrote in 2006 the master plan for Tesla and step three was an affordable car, at least reasonably affordable. It's not as affordable as we would like," Oct 19.
• "Friends ask, 'When should I buy a Tesla?'" Musk said. "Well, either buy it right at the beginning or when production reaches a steady state. During that production ramp, it's super hard to be in vertical climb mode and get everything right on the details." Feb 21.

- Identify 5 points of a differential between an organizational context that has a Chaotic orientation and one that has a controlled orientation (20% of the grade for this Question).

- Critically evaluate the issues of control and chaos in the implementation of the above strategy (40% of the grade for this Question).

- Describe a context where the Tesla approach would likely fail, giving examples. (40% of the grade for this Question) 

“When Michael Dubin was offered a warehouse full of surplus razor blades in 2012, he had a bold idea. Once he’d shaved, he had another, even bolder idea. He founded Dollar Shave Club. It was a straightforward offering — customers would get razors delivered to their door for just one dollar a month. No fuss, much cheaper than the alternatives, a job is done. Eight years later, Dollar Shave Club offers a wider product range, but their core ethos remains, as ever, to make shaving simple. Oh, and make a lot of money. Like, a LOT a lot. The brand was acquired last year by Unilever for a sharp $1 billion.” White Label Comedy web site (Accessed 15/2/21)

- Identify 5 points of a differential between a strategy that displays Choice and one that displays Compliance (20% of the grade for this Question).

- Critically evaluate why DSC Has chosen to express choice versus the conventional way a market operates (40% of the grade for this Question).

- Why would it not be advised for another business in another market? (40% of the grade for this Question).

Fear of business disruption can paralyze — but it can also be a powerful motivator. For Kodak, the failure to respond to the rise of digital photography at the start of the millennium, and smartphone cameras, later on, brought about the company’s humiliating demise in 2012. At rival Fujifilm, by contrast, the same disruptive forces were the launchpad for a bold transformation journey, based on well-executed diversification. The Japanese company took all of its in-house expertise in chemical compounds and nanotechnology and learned to apply it in new ways. These developments ultimately enabled Fujifilm to enter new markets that include pharmaceuticals, cosmetics, and healthcare products; to start making optical films for LCD flat-panel screens; to sell computer tapes for back-up in large data centers; and, of course, to make digital cameras. Today, Kodak is just a salutary lesson from history, while Fujifilm is profitable and growing. Photographic film, once at the center of its portfolio, now represents less than 1% of its ¥2.43 trillion ($23.0bn) in annual revenues. Twentyman J., (2019) How Fujifilm lives by the maxim: never stop transforming, NYTimes, New York.

Strategy Context - Industry

- Identify 5 points of a differential between a strategy that is based predominantly on Markets and one that is based predominantly on Resources (20% of the grade for this Question).

- Critically evaluate Fujifilm’s “diversification” strategy in terms of product development, market development, and synergy with existing competencies (40% of the grade for this Question).

- What are the weaknesses of diversification, giving examples of failed strategies? (40% of the grade for this Question).

Question 4 : Strategy Content – Corporate Level

AstraZeneca to Acquire Alexion.

• Accelerating the Company's Strategic and Financial Development.
• Greater scientific presence in immunology by adding Alexion's innovative complement-technology platforms and a strong pipeline
• Dedicated rare disease unit to be headquartered in Boston.
• Geographical presence to be enhanced with broad coverage across primary, specialty, and highly specialized care.
• Double-digit revenue growth through 2025; acquisition strengthens AstraZeneca’s broad-based revenue, and the company will further globalize Alexion’s portfolio.
• Enhanced operating margin and cash flow to enable rapid debt reduction with an ambition to increase the dividend.

Notes are taken from FT Company Announcements, December 12, 2020

- Identify 5 points of a differential between a strategy that is based predominantly on Synergy and one that is based predominantly on Responsiveness (20% of the grade for this Question).

- Critically evaluate the synergy in this acquisition for AstraZeneca (40% of the grade for this Question).

- Critically discuss the ethics of corporate consolidation within the pharmaceutical industry. (40% of the grade for this Question).

“According to Gucci CEO Marco Bizzarri, these critical conversations go beyond environmental impacts. “Gucci is driven by the issues that are fundamentally influencing and creating our collective future,” he said. “It is paramount that we build this future to be more equitable, where injustice and discrimination in all their forms are not allowed to prevail. In light of current events, our unwavering commitment to combat racism and fight for equality is now even stronger.”

Gucci Equilibrium is “defined by the two pillars, People and Planet.” The initiative’s website includes an explanation of Gucci’s recent pledge to “combat racism” and a history of the company’s diversity, inclusion, and equality efforts. The website also shared the brand’s efforts to empower local communities. The Gucci Changemakers fund will provide $1 million a year to local, community-focused non-profits for the next five years. In 2020, 16 non-profits including the ACLU of Louisiana, the Black AIDS Institute, and Slay TV received funding.” https://www.crfashionbook.com/fashion/a32828728/gucci-equilibrium-sustainability-marco-bizzarri-alessandro-michele/ (Accessed 15/2/21)

- Identify 5 points of a differential between a strategy that is based predominantly on Profit and one that is based predominantly on Purpose (20% of the grade for this Question).

- Critically evaluate how a luxury brand like Gucci, can show social sustainability (40% of the grade for this Question).

- Critically discuss the need for all elements of corporate social responsibility in today’s business and how this will affect long-term profitability for an organization (40% of the grade for this Question).

Strategy Content – Business Level

Uber has developed a business worth 80bn USD, by using different approaches in different countries, fighting against local governments, incurring condemnation for its internal conduct and constantly changing its offer. Starbucks has carefully planned extensions of its business to over 120,000 global stores, it adapts carefully to local demand, but keeps control of all its franchises and partners. Critically evaluate the issues of control and chaos in the implementation of strategy using the above two businesses.

Dans Le Noir Restaurant in London offer diners a sensory experience of eating in the dark. Critically evaluate why a company may choose to comply with the conventional way a market operates or may choose to differentiate themselves away from other members of the market.

Elon Musk (Tesla CEO) last year, when asked by investors when the Tesla 3 project would return a profit, said “Don’t ask stupid Questions”. The overall project was made up of a number of smaller projects; The solar roof, energy transferring bearings and production robotics to name a few. The project was clearly emergent rather than planned. Critically evaluate the contextual factors that may lead an organization to choose a planned or emergent strategy using examples.

Luxottica, a little-known Italian producer of frames is dominating the global eyewear market with a strategy of gaining synergy through vertical integration. As well as being the largest producers of frames, they own top brands like Ray Ban and Oakley, they own multiple distribution points like Sunglass Hut and Pearle Vision, they own industry outsiders like vision medical insurance companies and in 2017 they merged with Elisir the World’s largest prescription lens producer. Critically evaluate the advantages and disadvantages of responsiveness versus synergy in the next merger or acquisition for this business.

Starbuck’s new store in Milan (Nov 2018) – The Roastery is not like any other Starbucks in The World. Howard Schultz “Says Starbucks is coming to Italy to pay homage to Italian Coffee”. Starbucks have a five-year plan to open up to 400 stores in Italy. Critically analyse the approach of Globalisation versus Localisation of a strategy like Starbucks’ entry into Italy.

 “Sexual misconduct allegations - Businesses must change to help end the abuse of power.” (FT Jan 28) The above comment taken from the financial times in January this year advises businesses that change is vital. Managers must adapt their business to face the changes in our business environment. Critically evaluate how organisations face a changing business environment and the effect on their strategy by giving the advantages and disadvantages of revolutionary change versus evolutionary change.

Tesla identifies a major strength as being its relationship with its supplier base. Yet many critics say that Tesla doesn’t meet its deadlines because of its soft approach and close relationship with suppliers. (Supply Chain Dive, Feb 2018) How should companies deal with suppliers and customers according to Network Level Strategies?

On 20th June last year Travis Kalanick resigned from Uber in the hope of bringing to an end the chaos at Uber (The Guardian, 21 June 2017). Discuss the issues of control and chaos in the implementation of strategy.

A company may choose to comply with the conventional way a market operates or may choose to differentiate themselves away from other members of the market (A Blue Ocean Strategy). Why would a company like Go-Pro be considered to display a strategy of choice rather than compliance?

The gaining of profit is seen by many people as the major purpose of organisational strategy, yet the requirements of all stakeholders are growing. Explain the need for corporate social responsibility in today’s business and how this will affect long term profitability for the organisation.