Hull University Business SchoolConnected Thinking!Busi.docx

Hull University Business School
Connected Thinking!
Business Strategies 2019
Dr. Giles A. Hindle
600552
Summary to the module – Week 10 Session B
Dr. Giles A. Hindle
E: [email protected]
T: +44 1482 463 457
What is Strategy?
• What do you associate with the term strategy?
• What do you think of when you hear the term?
Our Definition

… the direction and scope of an organisation over
the long term, which achieves advantage in a
changing environment through the configuration of
resources and competencies with the aim of
fulfilling stakeholder expectations.
Johnson, Scholes and Wittington
Characteristics of Strategy
• Long-term and organisation-wide
• No right answer – uncertainty, values
• Involving significant commitments and resources
• Not easily reversible - ‘sunk cost’
• Critical but risky: complexity & uncertainty
• Limited resources, but deliberate choices
What are Strategic Issues?
• The performance of the organisation.
• The long-term direction of your organisation.

• The scope of your organisation’s activities.
• Your advantage over the competition.
• The fit with the environment.
• Your resources and competences.
• Actors and stakeholders in the organisation.
Searching for Differences?
•Strategy … often means performing
differently from our rivals
•It is about deliberately choosing to be
different, have a clear identity
•You can’t be all things to all people
Analytical Framework
Strategy
Organisation
Powerful actors
Mission and goals
Culture and values

Resources and
capabilities
Structure and
systems
Environment
Broad: Political,
economic, social,
environmental, legal.
Industry: entrants,
substitutes, buyers,
suppliers
Markets: strategic
groups, market
segments, customer
value
threats
opportunities
strengths
weaknesses
The Exploring Strategy Framework (p.12)
Strategic Management

•The strategic role of a manger
•A manager must:
• Understand the strategic position of the organisation;
• make strategic choices for the future; and
• manage strategy in action.
Strategic Mapping
Political Economic Social Technological
The Business Model Canvas
Osterwalder and Pigneur (2010)
A way of exploring
the holistic nature
of a business unit,
service or any type
of organisation.
Strategic Importance
R
e
la
ti
v
e

S
tr
e
n
g
th
L
o
w
Low
H
ig
h
High
Superfluous Strengths Key Strengths
Key WeaknessesZone of Irrelevance
Appraising Resources and Competencies
Contemporary Strategy Analysis, 9th Ed. © Robert M. Grant ,
John Wiley & Sons Ltd., 2016
Porter’s Three Generic Strategies
Source: Adapted with the permission of The Free Press, a

Division of Simon & Schuster, Inc., from Competitive
Advantage: Creating and Sustaining Superior Performance by
Michael E. Porter. Copyright © 1985, 1998 by Michael E.
Porter. All rights reserved.
Johnson, Whittington, Scholes, Angwin and Regnér, Exploring
Strategy Powerpoints on the Web, 10th ed., ©Pearson Education
Ltd. 2014
1
4 Corporate Strategy Directions
Source: Adapted from H.I. Ansoff, Corporate Strategy, Penguin,
1988, Chapter 6 . Johnson, Whittington, Scholes, Angwin and
Regnér, Exploring Strategy Powerpoints on the Web, 10th ed.,
©Pearson
Education Ltd. 2014
Images: By Mieremet, Rob / Anefo [CC BY-SA 3.0
(http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia
Commons and https://www.amazon.com/Corporate-Strategy-H-
Igor-Ansoff/dp/0070021112
Igor Ansoff
Corporate Strategies
• Consolidation/divestment – operation scope
• Integration/outsourcing - activity scope
• Diversification/focusing – industry/market scope

• Globalisation/localisation - geography scope
• Partnering - relationship/resources scope
Low
High
Cirque du Soleil
Traditional circus
The Strategy Canvas can help identify blue ocean strategies by
exploring new combinations of product attributes
Cirque du Soleil
John Wiley & Sons Ltd., 2016
Identify relevant stakeholders and
create multidisciplinary group of
actors for system delivery;
appreciate roles, responsibilities &
practices of HCPs
Appreciate Best Practice and
design the process for

developing Medical Standards
Develop Medical
Standards (MSs)
Give advice on FtD
through HCPs in
consultations
Establish MSs and
their application in (a)
educational systems
and (b) on-going
training programmes of
HCPs
Promote MSs to HCPs and the
public:
Use marketing tools
Raise public awareness
Target problematic HCPs,
patients and medical conditions
Make MSs available to
HCPs and the public:
Design various forms of
presentation;
use media + IT systems

Appreciate
evidence on Fitness
to Drive and
medical conditions
Operate flexible
administrative
system for
processing licences
Activity Model
Design flexible
license system
[email protected]
The Practice of Making Strategy
Problem
X
Problem
Y
Mapping
Analysis
Discussion:
Improvements
&
Actions Plans

involves
expressed in
leads tochanges
The Group
points of view
Complex
Situation
Structure of Action-Oriented Map
What do you want to do?
Why do you want to do it?
How would you do that?
Your STRATEGY
ACTIONS to achieve strategy
GOALS and consequences
“Ladder up”
“Ladder down”
Social system Analysis

• Based upon Vickers “appreciative system” (Checkland):
ROLES
VALUES
NORMS
Continually
changing
interaction
Strategy Implementation
Connected Thinking!
Dr. Giles A. Hindle
600552
Essay Writing: Week 9 Session B
Dr. Giles A. Hindle
E: giles.[email protected]

T: +44 1482 463 457
Assignment 2
» There are many factors which affect how we go about
conducting
strategy projects. Some factors are ancient, like competition and
culture,
and some factors are contemporary, like the internet and social
media.
» Choose TWO such factors which you find interesting and
relevant.
Discuss how they impact upon the practice of making strategy.
» When thinking about the practice of making strategy, you may
consider
some of the following aspects:
– Conducting strategy projects.
– The implementation of strategy.
– Business strategies – the actual strategies themselves.
» This is an academic essay, so you must present your own
argument and
you must support your argument with evidence from the
literature.
Think About This

Why do universities use essays?
Think About This
What are the characteristics of a good essay?
Think About This
Why do we reference other people in our essays?
Why do we reference other
people in our essays?
research
published in
the literature
creates
evidence
which
supports
your essay
The Question or Task

» Factual questions:
– How big is the moon?
– What is the stock price of Apple today?
– How many people do Amazon employ in the UK?
– Where are Nissan factories in the UK?
» Discursive questions:
– How should managers talk to staff?
– How will digital disruption affect John Lewis?
– What is the best strategy for Honda in Europe?
– Should Marks & Spencer hire Deloite to improve
performance?
– How important is leadership in business
university
questions
» Academic essays are usually written in response to a
question or a task.
» First you must interpret the question/task
» A question includes:

– The topic of the essay
– Your instruction [expressed as a verb]
• e.g. analyse, assess, compare, discuss, evaluate,
examine, illustrate, interpret, review, etc.
• TIP: check your interpretation of the question with the
tutor. Generate a provisional approach early on and
check this too.
Structure of an Essay
» Introduction Paragraph [<10%]
– Topic of the essay
– Your thesis statement (your argument)
– The structure of the essay
» Body Paragraphs [80%]
– One idea per paragraph
– Logical order with links
– Perhaps 2 or 3 paragraphs per page
» Conclusion Paragraph [<10%]
– Summary of thesis + argument
– Final comment on the topic

Y
O
U
R
A
R
G
U
M
E
N
T
Your essay will look like this
• 3 or 4 paragraphs
• No headings
• Help the reader with “signposting”
Introduction Paragraph
» Topic
– Introduce the topic of the essay
– Give background information. Set the scene.

» Thesis Statement
– Your answer to the question. A clear and concise
statement of your view.
– For example, “This essay argues the rise of social
media affects the practice of strategy making by
making the relationship with customers more
dynamic and turbulent.
The bucket approach?
• Students get nervous because they don’t know the right
answer.
• But at university, there are no right answers. Why is that?
• SO, students just put everything they know in the essay.
• That’s not an answer to the question, so the mark is 65% max.
• We don’t mark you essay based upon whether we agree with
you!
• Be brave. Say what you think.
Thesis Statement
» All academic essays must have a thesis statement because the
thesis is
your answer to the question – your opinion.
» A thesis should be contestable + specific.
» The thesis represents your views and must be clear, focussed
and

interesting.
» Interest is generated in the reader by making a substantive
claim.
» Be concise. If you can’t state your thesis in 1 or 2 sentences,
the thesis is
probably unclear or too broad.
» You must, must, MUST state your thesis. Be brave.
– Remember, the tutor doesn’t mark your essay on whether
he/she
agrees with your thesis. They mark the quality of the argument.
Body Paragraphs
» Each paragraph is part of your argument.
» Think of your essay as a set of building blocks
or sections which add up to your argument.
» Each paragraph should contain one main idea.
» Try to help the reader follow your structure by
adding signposting at the start and ends of
paragraphs.
Conclusion Paragraph
» Restate your thesis and summarize the
supporting evidence in your body paragraphs

[don’t add new information here!]
» Highlight the main points.
» Give final comments – a strong final message the
reader will remember.
» Use a clear transitional signal to flag your
conclusion section.
Referencing
» Academic research makes progress through
researchers in a community
» We need to know and acknowledge what our
colleagues are doing
» We need to find out if someone has already done
some work on our problem
» Research produces evidence, which we can use to
support our argument.
A Good Essay?
» Answers the question
– A clear thesis statement
» Presents argument logically

– Body paragraphs follow in a logical order
and are linked together.
» Supported by acceptable evidence
– Body paragraphs include support and
references to the sources of information.
» Use simple language
The essay writing
process is logical
but can often
be messy in
practice!
TUTOR
TUTOR
THESIS
Outline Plan
» Based on your analysis of the question, think about general
aspects of your essay.
– Create an initial thesis statement.
– What sources of evidence might be appropriate?

– What might be the structure of your argument?
Sources of Evidence
» For an academic essay, we mostly look to the work
already done by the research community.
– Journal papers – most up to date
– Books by leading researchers – overviews from a
particulate point of view
– Text books – overviews of the subject as a whole
» The library is our key resource
Researching
» Use text books and tutor to get an overview of a
subject
» Use reading techniques: over-viewing, skimming,
scanning – to cover the ground quicker
» Read with your thesis statement in mind
» Take records of useful material
» Follow interesting leads if necessary, but keep
focussed on your instruction

Final Plan
» Return to the initial plan to see if you need to change it
»Commit to your thesis statement!
» Clarify the structure of your paragraphs and the basic
content of them if possible
» Think about content of your introduction and write a draft
Final Remarks
The reader must be able to understand your ideas
purely from your text – we don’t employ mind readers!
The reader wants to know your answer to the question
and if you have supported your view with evidence.
The reader does not want to be bombarded with lots of
ideas and quotes from researchers without a clear link
to your thesis statement – don’t use a bucket approach!
Tutorial 5 Exercise – Assignment 2

Creating an academic essay...
We are coming towards the end of the module. Our main aim is
to develop your knowledge
and capability in terms of the practice of making strategy. You
have completed a strategy
project using a good quality methodology, but there are many
other aspects to the strategy
literature as a whole. This assignment enables you to explore
this literature and make the
link to the practice of making strategy.
The strategy literature is vast and confusing. We don’t expect
you to explore the whole of it,
as this would not be viable. Hence, we are giving you the
opportunity to explore the areas of
interest to you. We have asked you to explore TWO factors
which affect the practice of
making strategy.
Thinking about factors:
interests you?
interesting.
nature of businesses, the
way people think and behave. It could be something about
competition.
that factor affects the

practice of making strategy.
Your Task: In the essay, discuss how each factor impacts upon
the practice of
making strategy. If there is an overlap in your factors, you may
want to
combine the discussions. You must present an argument as to
how the factor
affects the practice of making strategy.
18/11/2019
1
Connected Thinking!
Dr. Giles A. Hindle
600552
Dr. Giles A. Hindle
T: +44 1482 463 457

18/11/2019
2
Assignment 2
conducting
culture,
media.
relevant.
consider
argument and
literature.
Think About This

18/11/2019
3
Think About This
Think About This
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4
research
published in
the literature
creates
evidence
which
supports
your essay

performance?
university
questions
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5

question or a task.
check this too.

Y
O
U
R
A
R
G
U
M
E
N
T
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• No headings

» Topic
» Thesis Statement
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answer.
you!
Thesis Statement

thesis is
and
interesting.
claim.
the thesis is
he/she
18/11/2019
8
Body Paragraphs

paragraphs.
conclusion section.
18/11/2019
9
Referencing

A Good Essay?
18/11/2019
10
The essay writing
process is logical
but can often
be messy in
practice!

TUTOR
TUTOR
THESIS
Outline Plan
18/11/2019
11
Sources of Evidence

Researching
subject
18/11/2019
12
Final Plan
Final Remarks

Connected Thinking!
Dr. Giles A. Hindle
600552
Dr. Giles A. Hindle
T: +44 1482 463 457
Assignment 2
conducting

culture,
media.
relevant.
consider
argument and
literature.
Think About This
Think About This

Think About This
research
published in
the literature
creates
evidence
which
supports
your essay

performance?
university
questions
question or a task.

check this too.
Y
O
U
R
A

R
G
U
M
E
N
T
• No headings
» Topic
» Thesis Statement

answer.
you!
Thesis Statement
thesis is
and
interesting.
claim.
the thesis is

he/she
Body Paragraphs
paragraphs.

conclusion section.
Referencing
A Good Essay?

The essay writing
process is logical
but can often
be messy in
practice!
TUTOR
TUTOR
THESIS
Outline Plan
Sources of Evidence

Researching
subject
Final Plan

Final Remarks
18/11/2019
1
Connected Thinking!
Dr. Giles A. Hindle
600552

Culture and Politics: Week 9 Session A
Dr. Giles A. Hindle
T: +44 1482 463 457
18/11/2019
2
Introduction
» We need to think about the context in which
strategy is being conducted.
» We work with organizations and businesses as
business managers.
» We need to have good quality theory in order to
have effective practice.
» In this lecture we will examine culture and politics
in more depth.
Social Systems
» Throughout a strategy study there needs to be
constant finding out about the social aspect in
which the work is being done
» This is because the feel of a situation can be just as
important as hard facts and logic and derives from
the meanings people attribute to themselves and
other people

» These features of the situation stem from the social
processes in operation there
18/11/2019
3
Culture:
" A corporation's culture is the collection of beliefs,
expectations
and values shared by the corporation's members and
transmitted from one generation of employees to another".
T L Wheelen & J D Hunger, 'Strategic Management and
Business
Policy', Addison-Wesley, 1998.
Therefore, culture is
» something that is shared by all, or almost all
members of some social group
» something that the older members of the
group try to pass on to the younger members
» something (morals, laws and customs) that
shapes the behaviour of individuals, and
structures one's perception of the world.
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4
Social system Analysis
» Based upon Vickers “appreciative system” (Checkland):
ROLES
VALUES
NORMS
Continually
changing
interaction
Roles, Norms & Values?
» Roles:
– a social position recognized as significant by people
in the problem situation
• defined by the institution or informally by behavior
» Norms:
– expected behavior in a problem situation (may be
associated with a particular role)
» Values:
– beliefs about what is ´good` or ´bad` performance
by someone occupying a particular role

18/11/2019
5
Finding out about culture
» Finding out about culture can be difficult for a
number of reasons:
– Direct questions may receive official ´myths` of the
situation, not what is really happening
– Participants may not want to admit what their real
norms and values are (deviation)
– People may not want the culture to change and there
not want to help you in the analysis
» Analyst needs to open a ´mental file` for analysis 2
and keep adding to it as the project moves forward
18/11/2019
6
THE CULTURAL WEB: USEFUL QUESTIONS
» Stories
– What core belief do the stories in my place reflect?

– How pervasive are these beliefs (through the levels of the
organisation)?
– Do stories relate to: strengths or weaknesses? successes or
failures?
– conformity or mavericks? Who are the heroes and villains?
– What norms do the mavericks deviate from?
» Routines and rituals
– Which routines are emphasised in my organisation?
– What behaviour do routines encourage? Which would look
odd if changed?
– What are the key rituals? What core beliefs do they reflect?
– What do training programs emphasise?
– How easy are the rituals/routines to change?
» Organisational structures
– How mechanistic/organic are the structures in my
organisation?
– How flat/hierarchical are the structures? How formal/informal
are they?
– Do structures encourage collaboration or competition?
– What types of power structure do they support?
» Control systems

– What is most closely monitored/controlled in my
organisation?
– Is emphasis on reward or punishment? Are there many/few
controls?
– Are controls related to history or current strategies?
» Power structures
– What are the core beliefs of the leadership in my
organisation?
– How strongly held are these beliefs (idealists or pragmatists)?
– How is power distributed in the organisation?
– What are the main blockages to change?
» Symbols
– What language and jargon are used in my place of work?
– How internal or accessible are they?
– What aspects of strategy are highlighted in publicity?
– What status symbols are there? Are there particular symbols
which denote the
organisation?
» Overall
– What is the dominant culture? How easy is this to change?

THE CULTURAL WEB: USEFUL QUESTIONS
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Political System Analysis
» Any human situation will have a political
dimension- we need to know about it
» Politics?
– a process by which differing interests reach
accommodation within the situation
– the processes by which order is maintained and
power is managed within the situation
» Power?
– power will affect the process of managing
relationships between people
Finding out about politics
» “How is power expressed in the situation?”:
– how is power obtained, used, protected, preserved,
passed on and through what mechanisms
» Commodities of power?
– formal role-based authority (being the boss)

– intellectual authority
– personal charisma
– internal or external reputation
– access to information / important people
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Finding out about politics
» Finding out about the politics of the situation is even
more difficult than the cultural analysis
– people will be reluctant to answer direct questions about
what is happening in the situation
– politics tends to be carried out in private or ´behind closed
doors` so it may be impossible to bring these issues out into
the open
– people may be unable to express important facts about
future development because they are secret
– people who ´know` something may not wish to let that
information out to others

11/11/2019
1
Connected Thinking!
Dr. Giles A. Hindle
600552
Making a Strategic Plan – Week 8 Session A
Dr. Giles A. Hindle
T: +44 1482 463 457
11/11/2019
2
Some reflections on Woodlands recommendations
» All businesses have issues. These can be internal or external.
They may be people, processes, profits, etc. Anything.
» Woodlands has lots of issues, which you will have identified.
Your analysis (steps 1-4) will help you see these more clearly.
» So, your analysis enables you to think about what Harry might
do next. It will help you create ideas for strategy.

» Try to look for a range of ideas for strategy. From improving
the
current business model to thinking about more radical ideas.
– For example: improving coordination between units
– For example: selling boards which are environmentally
friendly
» The maximum word count is 2500 words.
2 Types of Consulting
1. Expert Approach (traditional)
o experts provide solutions to the
problem using their expertise
o e.g. accountant, solicitor, advertising
executive, OR analyst
2. Process Approach
o Group of decision makers are facilitated through a process
o participants solve their own problems – they provide the
content
o participants are the real experts, but benefit from using a
methodology, in-depth knowledge, better buy-in
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3
Making Strategy towards Process End (not always)
Expert
Approach
Process
Approach
Over time move
Our Frames…
» Determine what we see, our
approach to problems, our ideas
for solutions
» We need a way of examining the
situation and the frames of the
participants
» Communication occurs both
implicitly and explicitly
» It’s difficult to examine your own
frame – people need tools!
11/11/2019
4
Decision Time?

Project teams
are often faced
with a range
of options
There may be
confusion and a
desire to take
immediate
decisions – resist!
Meaning derives from context
» Managers interpret situations according to the future
implications they see for themselves in terms of their
values and objectives, and act accordingly. In other
words…
» …management actions arise out of the meaning of
situations and the meaning will vary from manager to
manager.
» Multiple meanings can be attached to strategic issues!
11/11/2019
5
Identify relevant stakeholders and
create multidisciplinary group of
actors for system delivery;

appreciate roles, responsibilities &
practices of HCPs
Appreciate Best Practice and
design the process for
developing Medical Standards
Develop Medical
Standards (MSs)
Give advice on FtD
through HCPs in
consultations
Establish MSs and
their application in (a)
educational systems
and (b) on-going
training programmes of
HCPs
Promote MSs to HCPs and the
public:
Use marketing tools
Raise public awareness
Target problematic HCPs,
patients and medical conditions
Make MSs available to

HCPs and the public:
Design various forms of
presentation;
use media + IT systems
Appreciate
evidence on Fitness
to Drive and
medical conditions
Operate flexible
administrative
system for
processing licences
Activity Model
Design flexible
license system
[email protected]
Logic of Making Strategy
Problem
X
Problem
Y
Mapping
Analysis

Discussion:
Improvements
&
Actions Plans
involves
expressed in
leads tochanges
The Group
points of view
Complex
Situation
Typical Format for a strategy project
Workshop 1
Express situation
using mapping tool
[list of issues]
Workshop 2
Use models to think
and collect ideas
on the future
Workshop 3
Agree ideas for

action to improve
the situation
Reflection
&
Documentation
ongoing thinking,
learning & writing
11/11/2019
6
The role of language in strategy
» Managers use concepts (i.e.
‘statements’) to make sense of
strategic issues.
» The way concepts are arranged
form managers’ theories of
means/ends about
organizational life
» Eliciting managers’ theories
models can help to manage
emergent strategy.
» Causal maps are one way to
access these theories.

Strategic
Issues
Negotiating strategic issues
» Agreeing strategy is a psychological and social negotiation
(changing minds
and relationships).
» Good analysis must inform this negotiation where possible.
– However, managing the negotiation to achieve cognitive and
emotional
commitment drives making strategy.
» A well-designed social process is what can determine
commitment.
» Negotiation that can lead to consensus, rather than
compromise, requires a
number of important features:
– Start from 'where each participant is at' - their immediate and
personal/role
concerns
– Seek to develop new options rather than fight over 'old'
options
– Attend to procedural justice
– Use a transitional object - a picture/ model /map that is
equivocal (fuzzy but
meaningful) and changing, and that encourages shifting of
positions

11/11/2019
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What is causal mapping?
» A causal map is a word-and-arrow diagram
– Ideas and Actions are linked to each other through arrows –
i.e. how one
idea or action leads to another
– You can articulate many ideas and their interconnections
– Individual – “cognitive mapping” [based on personal
cognition]
– Group – “oval mapping” [because we use oval-shape cards]
» You can use it to:
– link strategic thinking and action,
– make sense of complex problems, and
– communicating with yourself and others how we see situations
and
what might be done about them
Causal Maps summary
through which we make sense of

problems
contrasts
t comes from the
relationships it has with other concepts
propositions:
-solving in groups requires
us to see how others interpret the situation
develop some consensus about
present and future events in order to achieve
coherent and coordinated action
11/11/2019
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Causal Maps: Shape
GOALS
ISSUES
…create possible…
…which exist within the
context of possible…

OPTIONS
…supported by…
ASSERTIONS/FACTS
First steps in linking to understand causality
11/11/2019
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Example – Giles goes cycling
Giles goes cycling
Enjoy being
outside
Feel good about self
Enjoy mechanics
of exercise
Negotiate time from family Get cycling equipment
Get nerdy pleasures
Build fitness
Think about things

Get endorphin
high
Lose time for
other things
Good strategies
Structure of Action-Oriented Map
What do you want to do?
Why do you want to do it?
How would you do that?
Your STRATEGY
ACTIONS to achieve strategy
GOALS and consequences
“Ladder up”
“Ladder down”
11/11/2019
10
Oval Mapping

» We use Oval Mapping when expressing the situation with a
group of people – facilitation
» Room, participants, equipment?
» Method:
– Develop a focus question (issues or ideas)
– Collect ideas from participants on Oval Post-its
– Cluster similar ideas & collect more ideas
– Organise clusters into a “teardrop” format
– Identify links between clusters & key issues (with *)
– Prioritise clusters using sticky dots (red & green)
A example from a project
11/11/2019
11
Or use Decision Explorer software…
Visit:
www.banxia.com
For FREE copy of
Decision Explorer

The onus for
contacting the DVLA
is with the patient
patient's cognitive
state
A person must have
good perceptual and
cognitive skills
Information from the
DVLA does not filter
down to OTs
Whether the patient
chooses to ignore
advice
clear guidelines
needed, knowledge to
be regularly updated
Not be visually

impaired
Specific medical
condition and how
that impacts each
patient
Some patients lack
insight into FtD
patients not telling
the DVLA when they
are diagnoed with a
relevant condition
How do you enforce
Pt responsibility to
inform DVLA
objective
measurements of
impairment needed
The information

provided to the
patient
?No consistency
amongst
professionals as to
advice given
General fitness of a
patient ie mobility,
function, cognition
Medical fitness of
the patient in terms
of physical and
cognitive
OTs would need
standardized
assessments to use
knowledge of medical
standards

Set guidelines from
the DVLA relating to
specific conditions
Not have balance
problems, poor grip
strength, problems
with motor movements
in upper arms
availability of the
medical standards to
professionals
system to ensure
information is given
and re-inforced
Variability of
severity of
condition may make
standards difficult

to interpret
assessing patients
as cognitivly fit to
drive
Not have poor leg
control, unless car
has been adaptedFull recovery after
an operation
needs to be liaision
between health
professionals re:
decision of ftd A person must good
attention span and
be alert to sudden
changes
How would the
emotional
psych/social

repercussions be
addressed
assessing patients
physically fit to
drive
Lack of clarity over
legal aspects of
advising on FtD
How can the
standards be
reinforced
it must be clear who
is responsible, but
it should also be a
team effort,
re-inforcement and
confirmation is
needed
Consideration

regarding
concentration levels
and length of
journey
A person needs to be
able to transfer
independently in to
a car
Who has the final
decision i
Consultant / dvla
... e Consultant /
dvla
How information from
the DVLA can be
enforced to patients
Kilverstone driving
assessment costs £80

many patients say
they can't afford
this
Lack of clarity over
whose responsibility
to advise
Specialized training
would need to be
given and regularly
updated
alternative
transaport to be
explored
Responsibility -
legal aspects of
informing DVLA
Particular areas
have well defined

standards
Not be able to drive
with any limbs in
plaster
driving is a very
emotive topic and
many view as a life
line
How are
deteriorating
conditions monitored
cognitive impairment
creates most
problems - patients
may lack insight
DVLA informing
specific professions
re standards

Need better guidance
on partial loss of
senses with regard
to fitness to drive
Emotional /
distressing decision
for patient if not
ftd
Use of prostheses
when driving
The difference in
duration of recovery
times makes it
logistically
difficult
creates difficulties
for pt's in rural
area if unable to

drive
Patients with
diagnosis of
Dementia,
parkinsons,
alziemers, epilepsy,
heart
many doctors feel
its not their
rosponsiblity
Consideration
regarding what
medications a
patient is on and
how this affects
their function
mobility centre
assessment should be

free
it should be a
multidisiplinary
team discussion
whether dvla can
inforce depends on
persons honesty
Lack of
communication
between the dvla and
health professionals
involved with Pt
Patients with
diagnosis of
dementia,
parkinsons,
alziemers, epilepsy,
heart conditions

should be reviewed
regulary
who is legally
responsible
patients are unclear
of when they should
tell the DVLA or
their insurance
http://www.banxia.com/
11/11/2019
12
Awareness of
internet site for
information low
health professionals
make their own
judgements
Awareness of all
areas where rules

apply low:
neuro/cardovascular:
GOOD; psychiatry:
BAD
Negotiation in the
consultation: impact
of taking a license
away
Issues of compliance
by patients/drivers
with advice given
How to increase
patients' awareness
of their
responsibilities
lack of HCP & public
awareness
patients need their
cars in rural areas
Patients unwilling
to take personal
responsibility
Lack of clarity as
to responsibility:

patient is
responsible to
inform, but doctor
may inform if there
is a clear risk
eg old people are
careful, if rather
blind
DVLA unwilling to
educate patients
directly
Current system is
based on self-report
by drivers ...
Resistance to
changing this
if patient won't
tell truth, what can
doctor do?
patients have little
incentive to tell
the truth
disseminating

changes in
guidlelines
Medical profession
notoriously slow to
implement change
Lack of public
awareness on
advice/support
available
making guidlines
more accessible to
the public
Not many accidents
are actually caused
by patients with med
conds HCP roles
compliance
patients'
responsibility
HCP workload & time
constraints
HCP priorities
some conditions
easier to have

definite guidelines
than others eg
epilepsy, diabetes
1 4 0 5 6
1 3 2 1 2 7
1 2 9 1 0
1 2 8 1 3 2 1 4 3 1 5 7 4 2 3 8 3 7 3 6 4 0 5 1 5 5 5 3
1 3 3
1 2 9
1 2 9
1 3 8
3 2 1 5
1 3 6 5
1 3 2
1 2 9 1 3 7
1 3 9 3 0 1 7
5 6
improve process of
developing
guidelines
Make guideline
creation more

transparent
provide more
information for the
public
Use NHS email to
contact HCPs
Media campaign for
patients and
professionals
promote process of
developing
guidelines
Use public awareness
campaigns to alert
drivers to their
responsibily to
self-report
Have public
awareness campaign
on drivers
responsibilities
encourage wider
participation in
developing

guidelines
work more closely
with health
professionals
Use routine mailings
(tax disc renewals)
to remind drivers of
their responsibility
to self-report
medical conditions
make website very
user friendly
Work with nurses
more - currently
most DVLA/HCP
correspondence is
with doctors
Updates offered in a
form easy to
integrate with
existing material
Wide publicity of
internet site
Make the DVLA
guidelines more

accessable and more
user-friendly
Show that they're
using evidence-based
medicine in
producing guidelines
involve other
professionals in
process eg the
police
use insurance
companies to scare
patients
provide evidence to
support guidelines
All new licenses
sent out with a
letter about medical
conditions
involve public in
guideline
development
Media campaign to
emphasise patients'

families'
responsibilities
make FTD part of
police and LA
iniciatives
regarding accident
reduction
use existing
channels of
communication
Info re ... FTD to
all practice nurses
use DVLA database to
target patients
More flexible
guidelines,
especially for
professional drivers
Leaflets in GP
surgeries
Wider publication of
FTD rules e
libraries ... g

libraries
Automatic computer
prompts for HCPs
involvement
guideline
development
dissemination to HCP
& public
1 0 2
1 2 9
1 3 0
1 2 9
1 4 0 1 3 2
1 2 9 1 9
1 3 2
1 1 0 1 3 0
11/11/2019
13
Further Reading

On Cognitive Mapping:
» Eden, C. (2004). Analysing Cognitive Maps to Help Structure
Issues
or Problems. European Journal of Operational Research, 159(3)
» Eden, C. (1988). Cognitive Mapping: a review. European
Journal of
Operational Research, 36(1)
12/11/2019
1
Connected Thinking!
Dr. Giles A. Hindle
600552
Assignment 2 and International Strategy
Week 8 Session B
Dr. Giles A. Hindle
T: +44 1482 463 457

12/11/2019
2
3
International Strategy
Assignment 2 – full briefing available on Canvas
» Making and implementing strategy within organisations has
always been a
challenging task. There are many factors which affect how we
go about
conducting strategy projects. Some factors are ancient, like
competition and
culture, and some factors are contemporary, like the internet
and social media.
relevant. Discuss
how they impact upon the practice of making strategy.
consider some of
the following aspects:
– Conducting strategy projects – for example, the 5 steps of
Assignment 1.
– The implementation of strategy – for example, making action
plans and
managing change within organisations.
– Business strategies – the actual strategies themselves – for
example, the

decision to pursue cost leadership or the decision to sell goods
online.
argument and you
must support your argument with relevant evidence from the
literature. More
briefing on essay writing will follow in another lecture.
12/11/2019
3
Drivers of Internationalisation (1)
Source: Adapted from G. Yip, Total Global Strategy II,
Financial Times Prentice Hall, 2003, Chapter 2.
Johnson, W hittington, Scholes, Angwin and Regnér, Exploring
Strategy Powerpoints on the W eb, 10th ed., ©Pearson
Education Ltd. 2014
National Advantages: Porter’s Diamond
Source: Adapted with permission of The Free Press, a Division
of Simon & Schuster, Inc., from The Competitive Advantage of
Nations by Michael E. Porter.
Copyright © 1990, 1998 by Michael E. Porter. All rights
reserved.
Education Ltd. 2014

Why do some nations succeed and others fail in international
competition?"
12/11/2019
4
Images from:
https://en.wikipedia.org/wiki/Cinema_of_the_United_States;
https://en.wikipedia.org/wiki/Bollywood;
https://en.wikipedia.org/wiki/Cinema_of_Nigeria;
https://en.wikipedia.org/wiki/Flag_of_China
The Film Industry
Four International Strategies (1)
Export strategy
• Leverages home country capabilities, innovations and
products in foreign markets
• Used when pressure for both global integration and local
responsiveness is low
• Suitable for companies with strong brands (e.g. Google)
• The key risk is a home country-centred view in contrast to
skilled local rivals

Education Ltd. 2014
https://en.wikipedia.org/wiki/Cinema_of_the_United_States
https://en.wikipedia.org/wiki/Bollywood
https://en.wikipedia.org/wiki/Cinema_of_Nigeria
12/11/2019
5
Multi-domestic strategy
» Maximises local responsiveness – different product
offerings for different countries
» A low level of international co-ordination
» Organisation is like a collection of relatively independent
units
» Commonly found in marketing-orientated companies (e.g.
food companies)
» Risks include manufacturing inefficiencies and brand
dilution
Education Ltd. 2014

Global strategy
» Maximises global integration with little or no local
adaptation of products/services
» Standardised products are deemed to suit all markets and
efficient production is emphasised through economies of
scale
» Geographically dispersed activities are centrally controlled
from headquarters
» Common for commodity products (e.g. cement) but also
might include IKEA
Education Ltd. 2014
12/11/2019
6
Transnational strategy
» Complex strategy that maximises local responsiveness and

global co-ordination
» Aims to maximise learning and knowledge exchange
between dispersed units
» Efficient operations but products/services adapted to local
conditions
» Hard to achieve but General Electric is a possible example
Education Ltd. 2014
The CAGE framework
Cultural
Distance
– differences in language,
ethnicity, religion
and social norms
Administrative
and
political distance
– compatibility of administrative,
political or legal traditions
Geographic
Distance

– not just miles but also aspects
such as size, sea-access and
the quality of communications
Economic/wealth
Distance
– wealth and
income differences
Copyright © 2017, 2014, 2011 Pearson Education, Inc. All
Rights Reserved
12/11/2019
7
13
In
tr
u
m
J
u
s
ti
ti
a
,
E

u
ro
p
e
a
n
P
a
y
m
e
n
t
R
e
p
o
rt
2
0
1
7
a
v
a
il
a
b
le

a
t
h
tt
p
s
:/
/w
w
w
.i
n
tr
u
m
.c
o
m
/e
n
/a
b
o
u
t-
u
s

/p
u
b
li
c
a
ti
o
n
s
/e
u
ro
p
e
a
n
-p
a
y
m
e
n
t-
re
p
o
rt
/

Competitive Characteristics
• Market attractiveness to
the new entrant
• The likelihood and extent of
defender’s reaction
• Defenders’ clout – the
relative power of defenders
to fight back.
Source: Reprinted by permission of Harvard Business Review.
Exhibit adapted from ‘Global gamesmanship’ by I. MacMillan,
S. van Putter and R. McGrath, May 2003.
Copyright © 2003 by the Harvard Business School Publishing
Corporation. All rights reserved.
Education Ltd. 2014
Size of bubble indicates defender’s relative clout
12/11/2019
8
Modes of International Market Entry

Education Ltd. 2014
16
Organic Development,
Mergers, Acquisitions &
Alliances
12/11/2019
9
Organic Development
Where a strategy is pursued by building on and developing an
organisation’s own capabilities. This is essentially the ‘do it
yourself’ method:
»Knowledge and learning can be enhanced
»Spreading investment over time – easier to finance
»No availability constraints – no need to search for suitable
partners or acquisition targets
»Strategic independence – less need to make compromises or
accept strategic constraints
»Culture management – new activities with less risk of a
culture clash
Education Ltd. 2014
Acquisitions, Alliances & Organic Development

Education Ltd. 2014
12/11/2019
10
Do the firm’s resources and
capabilities fit the needs of
the current strategy? YES
INTERNAL
DEVELOPMENT
NO
Contract or inter-firm
combination?
• Parties’ level of agreement
over the value of the
required resources
HIGH
LOW
Alliance or acquisition?

• Desired closeness with
resource provider
CONTRACT
HIGH
LOW ALLIANCE
ACQUISITION
Choosing the Right Growth Path
John W iley & Sons Ltd., 2016
05/11/2019
1
Connected Thinking!
Dr. Giles A. Hindle
600552
Corporate Strategy 2 – Week 7 Session B

Dr. Giles A. Hindle
T: +44 1482 463 457
05/11/2019
2
3
The Corporate Parent,
Portfolio Matrices &
Some reflections on Woodlands recommendations
» All businesses have issues. These can be internal or external.
They may be people, processes, profits, etc. Anything.
» Woodlands has lots of issues, which you will have identified.
Your analysis (steps 1-4) will help you see these more clearly.
» So, your analysis enables you to think about what Harry might
do next. It will help you create ideas for strategy.
» Try to look for a range of ideas for strategy. From improving
the
current business model to thinking about more radical ideas.
– For example: improving coordination between units
– For example: selling boards which are environmentally

friendly
» The maximum word count is 2500 words.
05/11/2019
3
• Late 1960’s: GE encounters problems of direction, co-
ordination, control, and
profitability
• Corporate planning innovations include:
• Portfolio Planning Models —matrix frameworks for evaluating
business
unit performance, formulating business strategies, and
allocating resources
• Strategic Business Units —GE organizes its strategic planning
system
around SBUs. An SBU is a business that comprises a
strategically-distinct
group of closely-related products
• Profit Impact of Marketing Strategy (PIMS) —a database
which quantifies
the impact of strategy on performance. Used to appraise SBU
performance
and guide business strategy formulation
General Electric’s Development of Techniques of

Corporate Strategy during the 1970’s
Managing the Corporate Portfolio
Corporate Rationales
Source: Adapted from M. Goold, A. Campbell and M.
Alexander, Corporate Level Strategy, W iley, 1994.
The parental developer seeks to employ its own
central capabilities to add value to its businesses:
Corporate office – large
Main emphasis – downward, providing parental
capabilities
The portfolio manager operates as an active investor
in a way that shareholders in the stock market are
either too dispersed or too inexpert to be able to do:
Corporate office – small
Main emphasis – downward, investing and intervening
The synergy manager is a corporate parent seeking
to enhance value for business units by managing

synergies across business units:
Corporate office – large
Main emphasis – across, facilitating cooperation
05/11/2019
4
Portfolio Matrices
Models which can determine financial investment and
divestment within
portfolios of business. Each model uses three criteria:
• the ‘balance’ of the portfolio;
• the ‘attractiveness’ of the business units;
• the ‘fit’ of the business units.
BCG (or growth/share) matrix – uses market share and
market growth criteria for determining the
attractiveness and balance of a business portfolio
The GE–McKinsey directional policy matrix which
categorises business units into those with good
prospects and those with less good prospects

Parenting matrix – introduces parental fit as an important
criterion for including a business in a portfolio
Copyright © 2017, 2014, 2011 Pearson Education, Inc. All
Rights Reserved
The BCG Growth-Share Matrix
HIGHLOW
A
n
n
u
a
l
ra
te
o
f
m
a
rk
e
t

g
ro
w
th
(
%
)
Relative market share
Earnings: high stable
Cash flow: high stable
Strategy: milk
Earnings: low, unstable
Cash flow: neutral or negative
Strategy: divest
Earnings: high stable, growing
Cash flow: neutral
Strategy: invest for growth
Earnings: low, unstable, growing
Cash flow: negative
Strategy: analyze to determine

likelihood of the
business becoming
a “star” or a “dog”
H
IG
H
?
L
O
W
05/11/2019
5
» Allocating resources—indicating both the investment
requirements of
different businesses and their likely returns
» Setting performance targets—indicating likely performance
outcomes in
terms of cash flow and ROI
» Formulating business-unit strategy—offering generic strategy

recommendations (e.g.: “invest”, “hold”, or “harvest”)
The Directional Policy (GE–McKinsey) Matrix
Low
Medium
High
Low Medium High
In
d
u
s
tr
y
A
tt
ra
c
ti
v
e
n

e
s
s
Business Unit Position
The GE/
McKinsey
Matrix
• Portfolio balance—guiding business portfolio changes in order
to achieve
corporate goals such as a balanced cash flow by combining
mature and
growing businesses.
HEARTLAND
--businesses with
high potential
for adding value
EDGE OF
HEARTLAND
-- businesses where for
value adding potential is
lower or of negative risks higher

BALLAST
--typical core
business position:
fit high, but limited
potential to add
more value
VALUE TRAP
--potential for adding value is
seldom realized because of
problems of management fit
ALIEN TERRITORY
--exit: no potential for
value creation
LOW
HIGH
LOW HIGH
Potential for value
destruction from

misfit between
needs of the
business and
parent’s corporate
management style
Potential for parent to add value to the business
Ashridge Display: Parenting Advantage
05/11/2019
6
EDGE OF
HEARTLAND
BALLAST
VALUE TRAPALIEN TERRITORY
LOW
HIGH

LOW HIGH
Restaurant
chain C
Restaurant
chain D
Restaurant
chain B
Restaurant
chain APubs and
bars
Hotels
Coffee
chain
Tennis
clubs
Spas
Liquor
chain
Size of circle represents sales

Potential for value
destruction from
misfit between
needs of the
business and
patent’s corporate
management style
Potential for parent to value added to the business
A Diversified Leisure Company
HEARTLAND
» Consolidation/divestment – operation scope
» Integration/outsourcing - activity scope
» Diversification/focusing – industry/market scope
» Globalisation/localisation - geography scope
» Partnering - relationship/resources scope

05/11/2019
7
Consolidation
Fragmented
industry
Consolidated
industry
Consolidation
» Also called ‘horizontal integration’
» Reducing the number of firms in an industry
» By means of merger, acquisition, franchise, government
mandate …
» For the benefit of economy of scale, cost reduction,
efficiency in scarce resources allocation, market share,
bargain power …
» Big is beautiful!
05/11/2019
8

Consolidation
For the economy and government officials,
the very size of these banks means they should
be better insulated from big shocks. But it also
means these banks are now ‘too big to fail’.
Wall Street Journal, Sept. 30 2008
Divestment
» Selling a business with which a firm had been
operating – reducing firm size or scope or both
» Also called disposal, spin-off, demerger
» For simplifying operation, promoting
entrepreneurship, raising capital, withdrawing
from declining industry
» Small is beautiful!
05/11/2019
9
Outsourcing
» Turning an activity to outside
suppliers – buy, not make

» Dispersing activities to take
advantages of best partners/locations
» Balancing efficiency and control
» Ideally: leveraging competence than
cost-cutting
M & A
»Merger: two similar-size firms
are combined to establish a
new legal entity
»Acquisition: a firm (acquirer)
purchases another firm (target)
05/11/2019
10
Relationship management between firms
» Franchising
» Long-term contracting
» Alliances
» Joint ventures
» Network organisations

» Virtual organisations …
Ways of collaborating
»Strategic alliance
»Joint venture
»Subcontracting
»Networking
05/11/2019
11
SA vs JV
» Strategic alliance: two or more independent
firms cooperate in the development,
manufacture, or sale of products or services
» Joint venture: cooperating firms create a
legally independent firm, in which they invest
and from which they share profits and loses
that are created
SA between Airlines
» Star Alliance: United, Lufthansa, Air
Canada, SAS, etc.
» Sky Team: Delta, Air France, KLM,
Korean Air, etc.

» One World: American Airline, British
Airlines, Cathay Pacific, Qantas, etc.
05/11/2019
12
What do they want from JV?
The foreign investment view
Connection with relevant local
administrations
2.952
Experience in local
management
2.714
Local information channel 2.595
Local market channel 2.548
Currently available facilities 2.524
What do they want from JV?
The host view
Channel to international market 3.262
Flexibility 3.024

Management skills 3.857
Capital 2.786
Technology and know-how 2.548
Economies of scale 2.500
05/11/2019
13
Networks
» Persistent and structured sets of players
» Cooperate on the basis of implicit and open-ended
contracts
» Contracts are socially rather than legally binding
» Networks provide specialisation, low cost, flexibility
and stability
» Need to be maintained and enhanced – not cost-free
Subcontracting
(dominated networks)
» Downsized, delayered, core-competence-based, lean and mean
form of inter-firm organising

» Benefit for the dominant firm: regular quality supplies, pre-
agreed
price, low capital investment
» Benefit for satellite firms: reliable orders, low sales and
marketing
costs
» Efficiency at the cost of autonomy
» Long-term commitment and trust
04/11/2019
1
Connected Thinking!
Dr. Giles A. Hindle
600552
Corporate Strategy – Week 7 Session A
Dr. Giles A. Hindle
T: +44 1482 463 457

04/11/2019
2
3
Corporate Strategy,
Diversification &
Integration
Lecture 7A
4
4 Corporate Strategy Directions
Source: Adapted from H.I. Ansoff, Corporate Strategy, Penguin,
1988, Chapter 6 . Johnson, W hittington, Scholes, Angwin and
Regnér, Exploring Strategy Powerpoints on the W eb, 10th ed.,
©Pearson
Education Ltd. 2014
Images: By Mieremet, Rob / Anefo [CC BY-SA 3.0
(http://creativecommons.org/licenses/by-sa/3.0)], via W
ikimedia Commons and https://www.amazon.com/Corporate-
Strategy-H-Igor-Ansoff/dp/0070021112
Igor Ansoff

04/11/2019
3
5
A. Market Penetration
This strategy:
• builds on established strategic capabilities
• means the organisation’s scope is unchanged
• leads to greater market share and increased power vis-à-vis
buyers and suppliers
• provides greater economies of scale and experience curve
benefits.
But there may be constraints, such as:
• retaliation from competitors e.g. price wars
• legal barriers e.g. restrictions imposed by regulators
When there is a downturn in demand:
• Consolidation - organisation focuses defensively on their
current
markets with current products

• Retrenchment - withdrawal from marginal activities in order to
concentrate on the most valuable segments and products within
the existing business
Education Ltd. 2014
6
B. Product Development
Product development is where an organisation
delivers modified or new products (or services) to
existing markets.
This strategy:
• involves varying degrees of related diversification (in
terms of products)
• can be expensive and high risk
• may require new strategic capabilities
• typically involves project management risks.
Education Ltd. 2014

04/11/2019
4
7
C. Market development
Market development involves offering existing products
to new markets.
This strategy involves:
• product development (e.g. packaging or service)
• new users (e.g. extending the use of aluminium to the
automobile
industry)
• new geographies (e.g. extending the market to new areas –
international markets being the most important)
• meeting the critical success factors of the market
• new strategic capabilities (e.g. in marketing).
Education Ltd. 2014
8
D. Diversification

This involves increasing the range of products or
markets served by an organisation.
• Related diversification involves diversifying into
products or services with relationships to the
existing business.
Conglomerate (unrelated) diversification
involves diversifying into products or services with
no relationships to the existing businesses (both in
terms of markets and products) and radically
increases the organisation’s scope.
Education Ltd. 2014
04/11/2019
5
9
Drivers for Diversification
• Exploiting economies of scope – efficiency gains through
applying the organisation’s existing resources or
competences to new markets or services.
• Stretching corporate management competences –
‘dominant logics’ i.e. applying these competences across a

portfolio of businesses.
• Exploiting superior internal processes.
• Increasing market power via mutual forbearance or cross
subsidisation.
• Creates synergy, the benefits gained where activities or
assets complement each other so that their combined effect
is greater than the sum of the parts.
Education Ltd. 2014
10
Economies of scope in diversification derive from two types of
relatedness:
• Operational Relatedness—synergies from sharing resources
across
businesses (common distribution facilities, brands, joint R&D)
but the
benefits from economies of scope may be dwarfed by the
administrative costs involved in their exploitation.
• Strategic Relatedness—synergies at the corporate level
deriving from
the ability to apply common management capabilities to
different
businesses.

Types of Relatedness
04/11/2019
6
11
0
18
35
53
70
1949 1964 1974 1950 1970 1993
Single business
Dominant business
Related business
Unrelated business
United States United Kingdom

Diversification Strategies of Corporations
12
Findings of Empirical Research
Do diversified firms
outperform specialized
firms?
• No consistent relationship
• Evidence of a ∩-shaped relationship: diversification first
increases profitability, then further diversification
reduces profitability (increased complexity?)
• McKinsey & Co. identify benefits from moderate
diversification —especially for firms that have run out of
growth opportunities
• Question of direction of causation: does diversification
drive profitability, or vice-versa?
What type of
diversification is most
profitable? Related vs.
unrelated
• Most studies show related diversification
outperforms unrelated diversification
• Related diversification offers greater synergies—but
also imposes higher management costs

• But what is “related diversification ”? Businesses can
be related in many different ways (e.g. LMVH, GE,
Virgin group)
04/11/2019
7
13
Diversification
• What diversification options are open to an organisation?
• What might the risks and rewards be?
14
Vertical Integration
• Vertical integration means entering activities
where the organisation is its own supplier or
customer.
• Backward integration refers to development into
activities concerned with the inputs into the
company’s current business.
• Forward integration refers to development into
activities concerned with the outputs of a
company’s current business.

Education Ltd. 2014
04/11/2019
8
15
• Technical economies from integrating processes, e.g.
iron and steel production, but doesn’t necessarily
require common ownership
• Avoids transactions costs of market contracts in
situations where there are:
-small numbers of firms
-taxes and regulations on market transactions
• Superior coordination
The Benefits of Vertical Integration
16
• Inhibits development of distinctive capabilities
• Difficulties of managing strategically different

businesses
• Incentive problems: lack of “high-powered”
incentives
• Limits flexibility
-in responding to demand fluctuation
-in responding to changes in technology, customer
preferences, etc.
• Compounding of risk
The Costs of Vertical Integration
04/11/2019
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17
How many firms in the adjacent stage?
Do transaction-specific investments
necessary?
The greater the need for transaction-specific
investments, the greater the advantages of VI
Is information evenly distributed

across the stages?
The greater are information asymmetries, the greater
the advantages of VI
Is there uncertainty over the period of
the relationship?
The greater the uncertainty, the more incomplete is
the contract and the greater the advantages of VI
How similar is optimal scale between
the two stages?
The greater the dissimilarity, the less advantageous
is VIHow strategically similar are the two
stages?
Do capabilities in the adjacent stage
need to be continually upgraded?
The fewer the number, the less advantageous is VI
Are profit incentives critical to
performance?
The greater the need for high-powered incentives
the greater the disadvantages of VI

Unpredictable demand reduces advantages of VI Is market
demand uncertain?
The greater the need for capability development the
greater the disadvantages of VI
Is the adjacent stage highly risky? VI tends to compound risk
Characteristics of the vertical relationship Implications for VI
Vertical Integration v. Outsourcing
Do transaction-specific investments
necessary?
18
• From competitive contracting to supplier partnerships, e.g.
in autos
• From vertical integration to outsourcing (not just
components, also IT, distribution, and administrative
services).
• Diffusion of franchising
• Technology partnerships (e.g. IBM- Apple; Canon- HP)
• Inter-firm networks
General conclusion:- boundaries between firms and

markets are becoming increasingly blurred
Recent Trends in Vertical Relationships
04/11/2019
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19
To Outsource or Not?
The decision to integrate or subcontract rests on the
balance between two distinct factors:
• Relative strategic capabilities:
Does the subcontractor have the potential to do the work
significantly better?
• Risk of opportunism:
Is the subcontractor likely to take advantage of the
relationship over time?
Education Ltd. 2014
20

Diversification and Integration Options
Education Ltd. 2014
04/11/2019
11
21
Integration
• What integration options are open to an organisation?
• What might the costs (including transaction and
administrative)
and benefits be?
Horizontal
Backwards
Forwards
Horizontal
Running head: STRATEGY PROJECT REPORT 1
Woodlands Project

201913489 Kechenglou
Kechenglou 201913489 2
Executive Summary
Woodlands group is comprised of three constituent firms,
namely Albion mill, Bettafinish and
Surface Stockists all under different managements. It was an
initial work by Albion mills that
had been in existence for centuries dealing in wood products.
They later realized the potential
in combining forces with other players in the market, which led
to the union of the three firms.
The union was aimed at controlling the entire commerce process
of the goods from production
to the sale of the product to the final consumer. However with
time, the group was faced with
financial hiccups mainly due to its mode of operation as
separate entities in a larger group.
Tyzacks acquired the woodlands group and now being under
new overall management, and
necessity arises to create new strategies that aim to revive the
growth of the woodlands group
as one entity. The firm was found to have issues as each of the
constituents was working
independently and often were found to be sabotaging the
primary goal of the large woodlands
group. This calls for a recreation of the image of the woodlands
group. It is difficult to make and
implement policies if the firms are running autonomously.
Therefore under the new
management of Harry Hayes of Tyzacks, the firms should be
able to embark on a mission of

working together to dominate the entire wooden board product.
This will create a platform to
evaluate the growth of woodlands group as a whole and bring
forth unified approaches to
diversifying the product to fit the ever-changing markets and
consumer preferences.
Table of Contents
Introduction............................................................................
...........................................................4
Situation
Mapping..................................................................................
............................................4
Review of the Business
Environment............................................................................
....................... 6
Internal Review of the
Business..................................................................................
.........................8
Assess Competitive Performance
...............................................................................................
....8
Project
Outputs...................................................................................
...............................................8

Reference list
…………………………………………………………………………
……………………………………………… 10
Introduction
This report encompasses an analysis of the Woodlands group of
companies in their
existing mode of operations and focuses on ways in which the
group of companies can be
improved under the new management of Harry Simons of
Tyzacks. The Woodlands Group of
Companies has existed as three autonomous companies
operating together to produce, cover
and sell the fully processed wooden boards. The three
companies are Albion Mill under the
management of John Albion, Bettafinish under the management
of Tony Thompson and Surface
Stockists under the management of Daisy Elworthy. Albion mill
produces the wooden boards
and sells them to Bettafinish who cover them to make them
fully processed wooden boards
while Surface stockists are tasked with the role of selling the
fully functional product to the final
consumer. The managers of these three independent firms are
experts in their respective fields.
This makes it hard for them to agree on a common ground to run
the Woodlands Group due to
their difference in approaches. The group has been faced with
some financial hitches of late.
This strategic report project aims to analyze the situation at
Woodlands and recommend areas

that require polishing as well as recommending the new
strategies that can be used to make
this firm profitable once again. In the report, there is a detailed
methodology that shows how
the analysis of the firm was done, as one entity and also
focusing on the three mother entities.
The report outlines also highlights the findings on each mother
entity and their overall
contribution to the larger Woodland Group. In addition, the
report shows which practices are
worth keeping and which are supposed to be changed. The
report factors that the intention of
the strategic analysis is to ensure the running of the Woodlands
by Tyzacks by as a single entity.
This means that the recommendations are aimed at cementing
the association of the three
mother firms to enable their unified functionality as one
company.
Situational mapping
The woodland group stands at a point where it is being faced
with financial crisis that
has seen it being acquired by the Tyzack company. The firm is
comprised of three constituent
firms each run independently by the respective managers. The
three are Albion mill headed by
John Albion who has been the overall in-charge, Bettafinish led
by Tony Thompson and Surface
Stockists led by Daisy Elworthy. Albion mill was tasked with
initial processing of raw wood to
boards while Bettafinish would lay vinyl covers on the
processed boards. Surface Stockists has
been selling the final product to the consumers.
The group produces three weight gauge boards namely the light,

medium and heavy
gauge boards. According to Albion, the light gauge boards
attract the highest profit margins and
therefore believe that they should put more into their
production. Additionally, Albion states
that the heavy gauge boards are costly to process, and
consequently, they have focused on
thinning their supply due to nearly zero profit margins. Albion
considers the purchase of a new
machine to boost the production of the light gauge boards as a
good strategy of ensuring the
profitability of the firm.
Table: Production details
Bettafinish is headed by Tony Thompson, and they specialize in
putting vinyl covers on
the processed boards. They feel that the prices being asked by
Albion for the boards are high
and require adjustments. This has forced them out of their way
to outsource the processed
boards from Laver which is the competition to Albion.
However, the move is to blackmail Albion
to lower the prices because the only better deal they get from
Laver is that of the heavy gauge
boards. That is Tony Thompsons’s secret which he does not
want to be known by others.
Bettafinish supplies the boards to Surface Stockists and states
that they are faced with a
problem of meeting the demand from Surface Stockists. Tony
believes that if they acquire a
new machine they will be able to meet the demand of the

finished goods.
Surface Stockists is headed by Daisy Elworthy and stocks the
finished boards from
Bettafinish and some untreated boards from Albion mill. They
supply directly to customers, and
they have managed to secure four major customers to whom
they provide the boards
consistently. They are concerned with the flow of the products
originating from Albion mill, and
they propose putting up a new warehouse to be able to cater to
the growing demand of the
product. Surface Stockists have further concerns regarding the
depreciation in the quality of the
light gauge boards from the mill over time. However, dismisses
the fears saying that the
customers are still purchasing the product in good numbers.
Surface Stockists is also concerned
with the fact that the other two companies are lagging behind in
terms of adoption of new
technology in the processes of manufacturing. Daisy feels that
there is a lot of technology that
can be put into ensuring a better production of the boards and
also improved quality. She
suggests the use of alternative but cheaper raw materials other
than wood whose supply is
diminishing due to the stringent measures against logging.
Review of The Business Environment
Opportunities

The company is set in a very productive layout by having three
expert companies each
tasked with the commerce process they have specialized in.
Each of the three forming
companies has the expertise on the processes that they manage.
The firms also have prior
experience running into centuries in dealing with their areas of
expertise. This translates to a
trustworthy brand that has been in existence for long and so
they do not need to do a lot of
convincing to their customers. The new management has come
in handy when there have been
disagreements from the three bosses on how to run the company
going forward. The
woodlands group could surely use some new managerial tactics
to put the three expert
companies and resume their profitable culture of production.
(£ per board) Heavy (9g) medium (8g) light
(6g)
Income: sales 79.64 66.56 53.95
Costs: board 55.84* 42.24 29.12
Glue + surface 10.56 10.56 10.56
Total costs 66.40 52.80 39.68
Profit 13.24 13.76 14.28
Table. Profit details (*Lavers, price).
Threats
When Tyzack acquired the possession of the company, it

changed the system to allow
the constituent companies to operate autonomously. This means
that the Albion mill had to sell
their halfway processed wooden boards to Bettafinish who in
turn used to sell the coated
boards to Surface Stockists. This was intended to make the
groups competitive according to
what they indicated during the interviews. When Albion mills
acquired Bettafinish and Surface
stockists, their aim was to control the entire process of the
wooden boards, that is, control
production process all the way to the selling of the finished
product. This means that the aim of
forming Woodlands was to operate as a single entity. Allowing
the firms to work independently
has led to the erosion of the initial mission of the woodlands
groups. The individual firms are
now opting to other external sources for their product, yet their
customer base remains the
same. For instance, Bettafinish has been outsourcing wooden
boards of different gauges from a
competing firm, and this has reduced the margins of Albion mill
and the woodlands group as a
whole.
Bettafinish has been managing to secure a better deal on the
heavy gauge boards only
and used this to push Albion mills to produce additional heavy
gauge boards with the claim of
higher demand. Albion mill, on the other hand, feels that
making more heavy gauge boards

would reduce their profitability and that most customers were
not even aware of the different
types of gauges, they simply just used the commodity. Surface
Stockists also claim that the
heavy gauge boards are more profitable to sell than the lighter
gauges. This means that Albion
mills are on the receiving end of the tug of war about the heavy
gauge boards.
The information from the clients shows that there have been
recent concerns on the
quality of the lightweight gauge boards. As much as they have
been purchasing the product, it
is based on their loyalty to the group and the fact that the
woodlands group had the best deal
in the market on the lightweight boards. This means that the
assumption by Albion mill about
the customers being aware of the variations in weight was
misguided. It is based on the fact
that they feel like they possess all the knowhow on making
boards because of being in practice
for over two centuries. They are still holding to their traditional
ways of making the boards.
Albion mill was not aware of the technological advancements
over time as they were in a quest
to maintain the originality of their product. It is not a bad thing
to keep one’s brand, but the
brand should be able to factor in the ever-changing customer
preferences, which are influenced
by changes over time.
Albion has been stuck in making more lightweight gauges than
the heavy ones for
profitability purposes. According to the questionnaires given to
customers, nearly half of them
were aware of the benefit of having to use the heavy gauge

boards and often used them. They
acquired them from woodlands through Surface Stockists.
Surface Stockists got the heavy
gauge boards from Bettafinish, but the later outsourced them
from another source and not the
Albion mills. The fact that Tyzacks allowed the three firms to
run independently means that
each would only look out for their own interests and not the
interests of the woodlands groups.
Analysis
The company has already a steady customer base whose
bargaining power is not
extreme given that apart from the heavy gauge boards,
woodland offers the best deals on all
other boards in terms of prices and quality. They are a leading
wood processing company, and
their success can be attributed by the fact that they control their
entire production process
from the first stage until the product reaches the market. The
process has been divided into
three phases which each of the three companies in the group
assuming the roles for which they
are highly skilled. The access to highly skilled knowledge and
skill coupled with prior experience
on their respective skills gives them a competitive edge of the
market. The company is faced
with limited competition as it produces high-quality products
and their union has created the
economies of scale that no other company can achieve quickly.
This has given them a market
dominance, and high chances of success.

Internal Review of The Business
Strengths
The company has vast resources at its disposal by the
combination of the forces of each
of the three firms. This has created a steady production process
culminating into a constant
supply of the product to the consumers. The consumers have
confidence in the product as the
firms boast of experience in the venture which assures them of
the quality of the produced
goods.
Weaknesses
The woodlands group was not keen on opting for different ways
of production, such as
using different raw materials and incorporating new technology
in their processes. Only Surface
Stockists was open to such changes since they interacted with
the clients more often and would
factor in their changes in preference over time. It is difficult to
calculate the profitability of the
group as each of the three companies was calculating profits
independently. This means that
profit is calculated at each step of the entire process rather than
being a cumulative profit for
the whole of the process. This comes about due to the
autonomous operation of the three
constituent companies. This makes it hard to evaluate the
growth prospects of the woodland
group.

Assess Competitive Performance
Woodland group has a competitive edge in the market based on
its layout. The firm
boasts of experience in the venture and therefore can be able to
attend satisfactorily to the
needs of their customers. Their customers do not have to worry
about the quality of the
product. The combination of three firms, each catering for a
given process in the production
chain makes it able to produce substantial amounts of the
products that otherwise are
impossible to meet by a single company. The group has an
existing customer base courtesy of
Surface Stockists, and therefore they can maintain a steady
supply due to steady demand. The
company has also been able to profitably offer the light and
medium gauge boards at a lower
price compared to the other companies.
Project Outputs
First, Tyzacks should consider changing the way the constituent
companies operate.
They should operate as one entity such that the process is
governed by similar production
policies. They should consider drafting a legally binding
agreement that holds each firm
accountable to the woodlands group. This means that no entity
is allowed to engage in any
activity that undermines or contradicts the works of the large
woodlands group. This will aid in
valuation of the entire production process as one entity hence
easier to calculate the profits of
the whole process beginning from production to sale of the
finished product to the customers.

Secondly, the group should consider looking for alternative raw
materials for their
product. There is a recent rise in a ban on logging which means
that wood is expensive and
therefore the reserved trees for the woodlands group will not be
able to handle the demand for
the product. Alternative sources which are cheaper should be
looked at. There are options such
as recycled plastics, which is a move that environmentalists
would advocate for. However, this
has to be done in a particular way. The group should create
collection points for the waste
plastics and use them to produce the boards. The customers
should be notified that any
possible wastes or cuttings from the boards should also be
returned to collection points for
recycling. This would help save the environment and at the
same time, cut on the production
costs.
The company should put in place a management system with a
representative from the
three firms to oversee the implementation of policies. The
management should be headed by
the Tyzacks management. The other three managers should be
left to handle their respective
dockets and be answerable to the central management system.

References
I：HUBS. Strategy Project: Woodlands Group. Retrieved
from:file:///C:/Users/HP/Downloads/BSAssignment1Case%20(1
).pdf
file:///C:/Users/HP/Downloads/BSAssignment1Case%20(1).pdf
1
Hi, great response so far on Assignment 2, which is great to see.
With this assignment we are challenging you to make a link
between the literature on strategy and the practice of making
strategy. We've asked you to identify TWO factors and discuss
As there are TWO factors, there will be TWO arguments and
therefore TWO thesis statements. You may want to split the
essay in TWO parts to structure this. However, if your TWO
factors are similar, you may want to combine your arguments to
some extent.
With regards to choosing your factors and how they affect
practice, I would encourage you to be more specific rather than
more generic. This is simply because it will be easier for you to
answer the question. For example, answering the question "How
does culture affect the practice of making strategy?" will be
more difficult than "How does working in groups affect the rich
picture stage of a strategy project?" or "How does the concept
of value proposition affect the practice of business
modelling?".
So I would encourage you to follow your interests and be
specific. Once you have some factors you find interesting, you
can use your tutor to help you define your essay question in the
tutorial next week.

2
Hi, great response so far on Assignment 2, which is great to see.
With this assignment we are challenging you to make a link
between the literature on strategy and the practice of making
strategy. We've asked you to identify TWO factors and discuss
As there are TWO factors, there will be TWO arguments and
therefore TWO thesis statements. You may want to split the
essay in TWO parts to structure this. However, if your TWO
factors are similar, you may want to combine your arguments to
some extent.
With regards to choosing your factors and how they affect
practice, I would encourage you to be more specific rather than
more generic. This is simply because it will be easier for you to
answer the question. For example, answering the question "How
does culture affect the practice of making strategy?" will be
more difficult than "How does working in groups affect the rich
picture stage of a strategy project?" or "How does the concept
of value proposition affect the practice of business
modelling?".
So I would encourage you to follow your interests and be
specific. Once you have some factors you find interesting, you
can use your tutor to help you define your essay question in the
tutorial next week.
3I know it's a bit early, but when you're thinking about the
structure of the assignment, I suggest you think of it as 2 essays
- one for each factor. Hence, you will have 2 arguments (thesis
statements). One argument for how factor 1 affects the practice
of making strategy and another argument for how factor 2
affects the practice of making strategy. There's no need to
combine the two factors into a single argument, but you can if
you wanted to.
4
I've had a number of discussions and emails from students and
I'm starting to see where you find this assignment challenging.

Hull University Business SchoolConnected Thinking!Busi.docx

Hull University Business SchoolConnected Thinking!Busi.docx

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