This document discusses how organizations can pursue a blue ocean strategy through strategic alliances in a changing environment. It defines blue ocean strategy as creating new markets without competitors by differentiating and lowering costs. Strategic alliances are described as cooperative arrangements that improve competitive position by sharing resources. The document argues that strategic alliances help organizations overcome hurdles to blue ocean strategy by providing complementary resources, knowledge, and barriers to imitation from competitors. Pursuing a blue ocean strategy through strategic alliances is presented as a way for organizations to gain sustainable competitive advantage in today's complex business environment.
Mergers & Acquisitions are often used as part of a
company's globalization strategy, for both intra-regional and international deals. However, substantial number of them fail. Read more to find out the challenges or visit us at: http://www.verityconsult.com
Daimler and Chrysler merged in 1998 to become the fifth largest car producer. Daimler, founded in 1886, was known for luxury cars and commercial vehicles. Chrysler, founded in 1925, focused on affordable cars, trucks, and vans. The merger combined Daimler's technical innovation and financial power with Chrysler's broader product line. However, the companies also faced challenges from cultural differences and lagging presence in Asian markets. The new leadership would need to find ways to better integrate the management while expanding into new markets and customer segments.
The document discusses the merger between Daimler and Chrysler. It provides background on both companies and analyzes their strengths, weaknesses, opportunities, and threats. It then details the merger process and outcomes. However, cultural clashes between the German and American companies, as well as poor strategic decisions, led the merger to ultimately fail to achieve its goals.
This document discusses a potential merger between Daimler-Benz AG and Chrysler. It provides an overview of Daimler, including its business segments, global presence, and financial performance. The document then outlines key points of negotiation for the deal, including exchange ratio, valuation, board reorganization, and executive compensation. Finally, it evaluates the potential benefits of the merger for Chrysler, such as complementing product offerings and combining operations.
C.K. Prahalad was born in 1941 in Tamil Nadu, India. He received his bachelor's degree in physics from Loyola College in Chennai. After graduating, he worked for Union Carbide for four years. He then received his master's degree from the Indian Institute of Management Ahmedabad and his doctorate from Harvard Business School. Prahalad is known for introducing the concept of core competencies. He argued that companies should build capabilities in areas where they have unique skills and are difficult for competitors to replicate. Prahalad's work focused on strategies for business success and developing products and services for low-income consumers. He received many honors and awards for his influential work in business management and strategy.
Globalisation and CSR - grounding of Norwegian companies in local contextTarje Wanvik
This document provides background on a research project studying how corporate social responsibility (CSR) can help ground foreign companies in local communities in Indonesia. It discusses the researcher's background in activism, consulting, and research related to CSR. It outlines the research questions and methodology, which includes analyzing CSR laws and practices of nine Norwegian companies through document review and interviews. The document also discusses theories of place, globalization, networks, power, stakeholders, and CSR. It analyzes companies' CSR activities, motivations, stakeholders, and stakeholder management strategies. It discusses external forces that can attach or detach companies from local communities and the internal strategies companies use in response.
Daimler chrysler - a cultural mismatchManju Thomas
The Daimler-Chrysler merger in 1998 aimed to combine the German automaker Daimler-Benz with the American company Chrysler Corporation. However, the two companies had very different corporate cultures that clashed. Within 19 months, two American CEOs were replaced by German management, and Daimler-Benz tried to impose its culture onto Chrysler. This failure to integrate the cultures led to chaos at Chrysler and the merger ultimately failed to realize expected synergies. Cross-cultural mergers require recognizing differences, open communication, and developing a new shared culture rather than one culture dominating the other.
Mergers & Acquisitions are often used as part of a
company's globalization strategy, for both intra-regional and international deals. However, substantial number of them fail. Read more to find out the challenges or visit us at: http://www.verityconsult.com
Daimler and Chrysler merged in 1998 to become the fifth largest car producer. Daimler, founded in 1886, was known for luxury cars and commercial vehicles. Chrysler, founded in 1925, focused on affordable cars, trucks, and vans. The merger combined Daimler's technical innovation and financial power with Chrysler's broader product line. However, the companies also faced challenges from cultural differences and lagging presence in Asian markets. The new leadership would need to find ways to better integrate the management while expanding into new markets and customer segments.
The document discusses the merger between Daimler and Chrysler. It provides background on both companies and analyzes their strengths, weaknesses, opportunities, and threats. It then details the merger process and outcomes. However, cultural clashes between the German and American companies, as well as poor strategic decisions, led the merger to ultimately fail to achieve its goals.
This document discusses a potential merger between Daimler-Benz AG and Chrysler. It provides an overview of Daimler, including its business segments, global presence, and financial performance. The document then outlines key points of negotiation for the deal, including exchange ratio, valuation, board reorganization, and executive compensation. Finally, it evaluates the potential benefits of the merger for Chrysler, such as complementing product offerings and combining operations.
C.K. Prahalad was born in 1941 in Tamil Nadu, India. He received his bachelor's degree in physics from Loyola College in Chennai. After graduating, he worked for Union Carbide for four years. He then received his master's degree from the Indian Institute of Management Ahmedabad and his doctorate from Harvard Business School. Prahalad is known for introducing the concept of core competencies. He argued that companies should build capabilities in areas where they have unique skills and are difficult for competitors to replicate. Prahalad's work focused on strategies for business success and developing products and services for low-income consumers. He received many honors and awards for his influential work in business management and strategy.
Globalisation and CSR - grounding of Norwegian companies in local contextTarje Wanvik
This document provides background on a research project studying how corporate social responsibility (CSR) can help ground foreign companies in local communities in Indonesia. It discusses the researcher's background in activism, consulting, and research related to CSR. It outlines the research questions and methodology, which includes analyzing CSR laws and practices of nine Norwegian companies through document review and interviews. The document also discusses theories of place, globalization, networks, power, stakeholders, and CSR. It analyzes companies' CSR activities, motivations, stakeholders, and stakeholder management strategies. It discusses external forces that can attach or detach companies from local communities and the internal strategies companies use in response.
Daimler chrysler - a cultural mismatchManju Thomas
The Daimler-Chrysler merger in 1998 aimed to combine the German automaker Daimler-Benz with the American company Chrysler Corporation. However, the two companies had very different corporate cultures that clashed. Within 19 months, two American CEOs were replaced by German management, and Daimler-Benz tried to impose its culture onto Chrysler. This failure to integrate the cultures led to chaos at Chrysler and the merger ultimately failed to realize expected synergies. Cross-cultural mergers require recognizing differences, open communication, and developing a new shared culture rather than one culture dominating the other.
The document provides an overview of the business strategy book "Blue Ocean Strategy" published in 2005. It describes the book's key concepts of creating "blue oceans" of uncontested market space through value innovation that differentiates and lowers costs simultaneously. It outlines the book's tools and frameworks for analyzing industries and formulating new market-creating strategies. It also discusses some criticisms of the book, such as that its concepts are not entirely new and its success remains to be proven through more case studies.
Purpose of AssignmentThe purpose of the learning team assignme.docxwoodruffeloisa
Purpose of Assignment
The purpose of the learning team assignment is to offer students the opportunity to investigate their understanding of how globalization affects a company's strategic plan. Additional objectives include allowing students to assess the effectiveness of strategic alliances in the growth process of a company and to understand the necessity for innovation to create a sustainable long-term organizational environment. The students will also identify how organizational structures facilitate company growth and controls in the global environment.
Assignment Steps
Create a 4-slide Microsoft® PowerPoint® presentation (excluding the title slide and references) with speaker notes and address the following topic:
· Evaluate the effects of globalization on strategic management planning.
International Journal of Management Vol. 29 No. 4 Dec 2012 531
The Effects of International Diversification on Firm
Performance: An Empirical Study across Twelve
European Countries
Alfredo M. Bobillo
University of Valladolid, Spain
Felix López-Iturriaga
University of Valladolid, Spain
Fernando Tejerina-Gaite
University of Valladolid, Spain
The relationship between international diversification and firm performance is a
binomial that has led to many investigations leading to mixed results, in some cases
there is a positive relationship, in others no significant relationship or even negative. In
this paper we try to find the possible reasons why these results occur. The international
diversification is assessed by the ratio of exports to total turnover. Besides, we extend
the research to the different performance that industrial and service firms could have,
bearing in mind, too, if their business culture base originates from civil law or common
law countries. Based on a sample of 1721 firms from twelve European countries, we
compare this relationship for the 2000-2009 period. The empirical results obtained
show a stronger ID-performance positive relationship in service firms than in industrial
ones. Those firms with a culture based on civil law systems (bank oriented financial
system) will have greater flexibility to counteract the negative relationship between ID
and performance, than those firms with culture based on common law systems (capital
market oriented system).
Introduction
Accessing foreign markets is becoming a more and more attractive option for firms.
International diversification (ID) is a stabilisation procedure for the firm’s sales and
also a way of reducing the risks derived from the reduction in demand on the domestic
market. Likewise, the presence of a firm on the global market entails greater derived
risks, mainly due to the greater uncertainty and commitment of resources entailed by this
action. It also represents a challenge to improve their competitiveness in their fight with
local firms (Lucas, 1993; Bowen & Wersema, 2005). The degree of internationalisation is
also contemplated a ...
Is Diversification a bad word in the Mining world by Aditya MehraAditya Mehra
This document is a dissertation analyzing whether diversification provides benefits in the mining industry. It compares the performance, credit risk, and valuation of diversified mining companies to pure play counterparts in different commodities. The dissertation outlines its methodology, which includes selecting the top 4 diversified miners and identifying 12 commodity segments. Pure play comparables are identified for each segment. Various financial metrics are calculated for the diversified miners and comparables over the 2007-2012 period to analyze the effects of diversification over the business cycle. Major transactions changing diversification levels are also identified to study stock market reactions.
This document analyzes the sustainability approaches of Starbucks and Walmart. It notes that their business models and core competencies lead to different sustainability strategies. Starbucks focuses more on environmental and social missions in its strategy, while Walmart prioritizes low prices and efficiency. The document will compare their mission statements, values, and corporate social responsibility systems to understand these divergent sustainability approaches and their support of long-term sustainability.
The document discusses five principal environmental factors that affect corporate strategy: competitors, creditors, customers, labor market, and suppliers. It explains how each factor influences business and strategy. Additionally, it discusses two key aspects - cost leadership and differentiation - that contribute to the overall environmental factors of a strategy. The document analyzes how external economic, political, social, and technological forces shape opportunities and threats for businesses.
The document discusses five key environmental factors that affect multinational corporations: competitors, creditors, customers, labor market, and suppliers. It explains how each of these factors can influence a company's strategy and ability to compete. The document also discusses four additional external factors: the economy, politics, society, and technology. It emphasizes that corporate leaders must understand how these environmental factors impact their business and account for them when planning strategy.
This document provides a summary of a World Bank policy research working paper on global value chains. The paper aims to provide a framework and tools to measure countries' performance in global value chains and provide guidance on how countries can join, maintain participation in, and move up global value chains. Global value chains have become an important source of opportunities for trade, competitiveness, and development. The paper analyzes what global value chains are, why they are important, and provides context on how production has increasingly fragmented across borders through various organizational models like outsourcing and offshoring.
5 marketing strategy and marketing performance does strategy affect performa...INFOGAIN PUBLICATION
This article surveys marketing management literature to find out the positive impact that a good market and marketing can have on marketing performance at the marketplace. The marketplace in this contest can be either a country or even a continent since the companies are multinational and also have diversified holdings which help them to spread their tentacles to every nook and cranny of the globe. Locally based companies are not left out since they all use marketing strategies to do their marketing. Companies or multinationals of U.S. and U.K. parentage will be used a lot. Does the literature attest to the positive impact of very good marketing strategies on a company’s marketing performance? This is going to be investigated to come out with the justify opinion. Coming out with a very good marketing strategy to pilot or direct a company’s marketing assault is not very easy. It is plainly herculean. Implementation, monitoring, controlling and evaluating marketing strategies are equally herculean. Top marketing management do not have it easy with formulating, managing, and evaluating marketing strategies. Marketing performance measurement is tackled in this piece. It is essential to point out that marketing is not the pressure of only those in marketing (pan–marketing). It is very general managerial with all corporate functional players all actively involved.
The case of_thai_joint_venture_with_japanese_partnsieuwerdgoedhart
The document discusses international joint ventures (IJVs) between companies from different countries. It defines an IJV as a legally separate entity jointly owned and controlled by two or more parent companies from different nations. IJVs allow companies to combine their resources and expertise to enter new markets, share risks and costs, and gain access to new technologies and distribution networks. Specifically, the document focuses on strategic IJVs which involve long-term cooperation between partners across multiple projects. Factors that drive the formation of IJVs include gaining market power through combined resources, reducing financial risks, achieving economies of scale, and avoiding competition between partners by cooperating within the IJV.
Here is an analysis of the proposed merger between United Insurance Company and Shama Pl:
Valuation Process:
- Determine the pre-merger value of each company using standard valuation methods like DCF, comparable company analysis, precedent transaction analysis etc.
- Estimate synergies from the merger like cost savings, revenue enhancements, tax benefits etc. Quantify the net present value of synergies.
- Allocate synergies between the combining companies based on relative size, synergies realized from each function etc.
- Add allocated synergies to the pre-merger value of each company to arrive at post-merger value.
- Determine exchange ratio for the merger based on post-merger values.
Rush University Medical Center historically did not engage in strategic planning or marketing, relying on its long history, which led it to fall from the top ranked medical center in consumer surveys. In response, the medical center recognized the need for strategic planning, marketing, and assessments to develop new business ideas and financial models to gain approval from administrators and the board for changes to the organization's approach. Comprehensive environmental scanning would help inform the strategic planning process to improve Rush's position in the competitive healthcare marketplace.
(Ivo Pezzuto) Turning Globalization 4.0 into a Real and Sustainable Success f...Dr. Ivo Pezzuto
This document provides an overview and analysis of the opportunities and challenges of the current era of globalization, known as Globalization 4.0. It discusses how technological innovation presents major opportunities for businesses but also risks like job disruption. It also examines challenges like rising inequality, debt levels, and economic uncertainty. The document advocates for reforms to global governance and business strategies like Creating Shared Value to promote sustainability and social inclusion and ensure globalization benefits all stakeholders.
The document discusses the concept of "Blue Ocean Strategy", which promotes creating new market space rather than competing in existing industries. It was proposed by W. Chan Kim and Renée Mauborgne of INSEAD as an alternative to Michael Porter's view that businesses must be low-cost or niche players. Blue Ocean Strategy involves creating new demand through value innovation that benefits both customers and the company. Once a blue ocean is created, it will eventually become crowded and competitive like existing markets. The document then provides examples of case studies on the IBSCDC website that demonstrate Blue Ocean Strategy, such as how IBM created the new market for utility computing and how Toyota pioneered the hybrid vehicle market.
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
Business Case Studies in Business Models and Business Strategy Cases, Structured Assignment,to be used alongwith case studies covering all the areas of business management.For many of the case studies, teaching notes are available
The document discusses the five forces framework for analyzing industry competition. It describes the five competitive forces as the intensity of rivalry among existing competitors, the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products. The framework suggests that the stronger these competitive forces are, the more difficult it is for firms in the industry to earn above-average returns. Various factors are identified that influence the strength of each competitive force.
The document provides an overview of the business strategy book "Blue Ocean Strategy" published in 2005. It describes the book's key concepts of creating "blue oceans" of uncontested market space through value innovation that differentiates and lowers costs simultaneously. It outlines the book's tools and frameworks for analyzing industries and formulating new market-creating strategies. It also discusses some criticisms of the book, such as that its concepts are not entirely new and its success remains to be proven through more case studies.
Purpose of AssignmentThe purpose of the learning team assignme.docxwoodruffeloisa
Purpose of Assignment
The purpose of the learning team assignment is to offer students the opportunity to investigate their understanding of how globalization affects a company's strategic plan. Additional objectives include allowing students to assess the effectiveness of strategic alliances in the growth process of a company and to understand the necessity for innovation to create a sustainable long-term organizational environment. The students will also identify how organizational structures facilitate company growth and controls in the global environment.
Assignment Steps
Create a 4-slide Microsoft® PowerPoint® presentation (excluding the title slide and references) with speaker notes and address the following topic:
· Evaluate the effects of globalization on strategic management planning.
International Journal of Management Vol. 29 No. 4 Dec 2012 531
The Effects of International Diversification on Firm
Performance: An Empirical Study across Twelve
European Countries
Alfredo M. Bobillo
University of Valladolid, Spain
Felix López-Iturriaga
University of Valladolid, Spain
Fernando Tejerina-Gaite
University of Valladolid, Spain
The relationship between international diversification and firm performance is a
binomial that has led to many investigations leading to mixed results, in some cases
there is a positive relationship, in others no significant relationship or even negative. In
this paper we try to find the possible reasons why these results occur. The international
diversification is assessed by the ratio of exports to total turnover. Besides, we extend
the research to the different performance that industrial and service firms could have,
bearing in mind, too, if their business culture base originates from civil law or common
law countries. Based on a sample of 1721 firms from twelve European countries, we
compare this relationship for the 2000-2009 period. The empirical results obtained
show a stronger ID-performance positive relationship in service firms than in industrial
ones. Those firms with a culture based on civil law systems (bank oriented financial
system) will have greater flexibility to counteract the negative relationship between ID
and performance, than those firms with culture based on common law systems (capital
market oriented system).
Introduction
Accessing foreign markets is becoming a more and more attractive option for firms.
International diversification (ID) is a stabilisation procedure for the firm’s sales and
also a way of reducing the risks derived from the reduction in demand on the domestic
market. Likewise, the presence of a firm on the global market entails greater derived
risks, mainly due to the greater uncertainty and commitment of resources entailed by this
action. It also represents a challenge to improve their competitiveness in their fight with
local firms (Lucas, 1993; Bowen & Wersema, 2005). The degree of internationalisation is
also contemplated a ...
Is Diversification a bad word in the Mining world by Aditya MehraAditya Mehra
This document is a dissertation analyzing whether diversification provides benefits in the mining industry. It compares the performance, credit risk, and valuation of diversified mining companies to pure play counterparts in different commodities. The dissertation outlines its methodology, which includes selecting the top 4 diversified miners and identifying 12 commodity segments. Pure play comparables are identified for each segment. Various financial metrics are calculated for the diversified miners and comparables over the 2007-2012 period to analyze the effects of diversification over the business cycle. Major transactions changing diversification levels are also identified to study stock market reactions.
This document analyzes the sustainability approaches of Starbucks and Walmart. It notes that their business models and core competencies lead to different sustainability strategies. Starbucks focuses more on environmental and social missions in its strategy, while Walmart prioritizes low prices and efficiency. The document will compare their mission statements, values, and corporate social responsibility systems to understand these divergent sustainability approaches and their support of long-term sustainability.
The document discusses five principal environmental factors that affect corporate strategy: competitors, creditors, customers, labor market, and suppliers. It explains how each factor influences business and strategy. Additionally, it discusses two key aspects - cost leadership and differentiation - that contribute to the overall environmental factors of a strategy. The document analyzes how external economic, political, social, and technological forces shape opportunities and threats for businesses.
The document discusses five key environmental factors that affect multinational corporations: competitors, creditors, customers, labor market, and suppliers. It explains how each of these factors can influence a company's strategy and ability to compete. The document also discusses four additional external factors: the economy, politics, society, and technology. It emphasizes that corporate leaders must understand how these environmental factors impact their business and account for them when planning strategy.
This document provides a summary of a World Bank policy research working paper on global value chains. The paper aims to provide a framework and tools to measure countries' performance in global value chains and provide guidance on how countries can join, maintain participation in, and move up global value chains. Global value chains have become an important source of opportunities for trade, competitiveness, and development. The paper analyzes what global value chains are, why they are important, and provides context on how production has increasingly fragmented across borders through various organizational models like outsourcing and offshoring.
5 marketing strategy and marketing performance does strategy affect performa...INFOGAIN PUBLICATION
This article surveys marketing management literature to find out the positive impact that a good market and marketing can have on marketing performance at the marketplace. The marketplace in this contest can be either a country or even a continent since the companies are multinational and also have diversified holdings which help them to spread their tentacles to every nook and cranny of the globe. Locally based companies are not left out since they all use marketing strategies to do their marketing. Companies or multinationals of U.S. and U.K. parentage will be used a lot. Does the literature attest to the positive impact of very good marketing strategies on a company’s marketing performance? This is going to be investigated to come out with the justify opinion. Coming out with a very good marketing strategy to pilot or direct a company’s marketing assault is not very easy. It is plainly herculean. Implementation, monitoring, controlling and evaluating marketing strategies are equally herculean. Top marketing management do not have it easy with formulating, managing, and evaluating marketing strategies. Marketing performance measurement is tackled in this piece. It is essential to point out that marketing is not the pressure of only those in marketing (pan–marketing). It is very general managerial with all corporate functional players all actively involved.
The case of_thai_joint_venture_with_japanese_partnsieuwerdgoedhart
The document discusses international joint ventures (IJVs) between companies from different countries. It defines an IJV as a legally separate entity jointly owned and controlled by two or more parent companies from different nations. IJVs allow companies to combine their resources and expertise to enter new markets, share risks and costs, and gain access to new technologies and distribution networks. Specifically, the document focuses on strategic IJVs which involve long-term cooperation between partners across multiple projects. Factors that drive the formation of IJVs include gaining market power through combined resources, reducing financial risks, achieving economies of scale, and avoiding competition between partners by cooperating within the IJV.
Here is an analysis of the proposed merger between United Insurance Company and Shama Pl:
Valuation Process:
- Determine the pre-merger value of each company using standard valuation methods like DCF, comparable company analysis, precedent transaction analysis etc.
- Estimate synergies from the merger like cost savings, revenue enhancements, tax benefits etc. Quantify the net present value of synergies.
- Allocate synergies between the combining companies based on relative size, synergies realized from each function etc.
- Add allocated synergies to the pre-merger value of each company to arrive at post-merger value.
- Determine exchange ratio for the merger based on post-merger values.
Rush University Medical Center historically did not engage in strategic planning or marketing, relying on its long history, which led it to fall from the top ranked medical center in consumer surveys. In response, the medical center recognized the need for strategic planning, marketing, and assessments to develop new business ideas and financial models to gain approval from administrators and the board for changes to the organization's approach. Comprehensive environmental scanning would help inform the strategic planning process to improve Rush's position in the competitive healthcare marketplace.
(Ivo Pezzuto) Turning Globalization 4.0 into a Real and Sustainable Success f...Dr. Ivo Pezzuto
This document provides an overview and analysis of the opportunities and challenges of the current era of globalization, known as Globalization 4.0. It discusses how technological innovation presents major opportunities for businesses but also risks like job disruption. It also examines challenges like rising inequality, debt levels, and economic uncertainty. The document advocates for reforms to global governance and business strategies like Creating Shared Value to promote sustainability and social inclusion and ensure globalization benefits all stakeholders.
The document discusses the concept of "Blue Ocean Strategy", which promotes creating new market space rather than competing in existing industries. It was proposed by W. Chan Kim and Renée Mauborgne of INSEAD as an alternative to Michael Porter's view that businesses must be low-cost or niche players. Blue Ocean Strategy involves creating new demand through value innovation that benefits both customers and the company. Once a blue ocean is created, it will eventually become crowded and competitive like existing markets. The document then provides examples of case studies on the IBSCDC website that demonstrate Blue Ocean Strategy, such as how IBM created the new market for utility computing and how Toyota pioneered the hybrid vehicle market.
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that firms need to create ‘Sensational Strategies’ which is about playing a different game.
Business Case Studies in Business Models and Business Strategy Cases, Structured Assignment,to be used alongwith case studies covering all the areas of business management.For many of the case studies, teaching notes are available
The document discusses the five forces framework for analyzing industry competition. It describes the five competitive forces as the intensity of rivalry among existing competitors, the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products. The framework suggests that the stronger these competitive forces are, the more difficult it is for firms in the industry to earn above-average returns. Various factors are identified that influence the strength of each competitive force.
Similar to Blue oceans through alliance. How we can find blue oceans in a highly changing and interconnected environment (20)
Van je profiel tot bedrijf, van groepen tot vacatures en van InMail tot uitnodiging; Ja, het is te merken dat LinkedIn al sinds 2004 bestaat kijkende naar alle mogelijke functionaliteit. Wanneer u door de bomen het bos niet meer ziet, en wel graag met LinkedIn concreet en met toegevoegde waarde aan de slag wil is dit dé oplossing! Deze discussie, die versterkt en verweven is met een presentatie, gaat over het reilen en zeilen in LinkedIn, helpt met het optimaliseren van je profiel en geeft met name een duidelijk beeld op netwerken anno 2010. Kortom breng je netwerk in actie ‘the social way’.
Een krachtige en gepassioneerde introductie over social media waarin we niet alleen de verschillende sociale netwerken toelichten maar ook ingaan op waarom social media toegevoegde waarde biedt. Belangrijke vragen zoals ‘wat kan ik met social media?’ of ‘waarom zou ik iets met social media moeten doen?’ worden hier beantwoord. Het doel van deze presentatie is mensen inspireren en ze de kracht van social media te laten ontdekken.
Developing Relationships; consumers as a source for sustainable competitive a...Kevin Rommen
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Blue oceans through alliance. How we can find blue oceans in a highly changing and interconnected environment
1. Blue oceans through alliance.
How we can find blue oceans in a highly
changing and interconnected environment?
Author: Kevin Rommen (S4072294)
Course: MOR005 - Project Designing Research
Contact information: info@kevinrommen.nl / 00 31 (0)6 4390 5126
2. Introduction
Especially in the constantly changing environment organizations have to be cautious and aim to
stay aligned with the industry context. Organizations have to play by the rules of the game,
meaning that they have to shape their organization around the environment. However, playing by
the rules of the game also inherits the fact that strategist aren’t shaping the organization but the
environment is (Wit, de and Meyer, 2010b). Thus between organizations there is little difference in
goals and strategies, evidence for this can be found within the generic strategies described by
Porter (1985). When every organization is lead by generic strategies and no one is really unique
sustainable competitive advantage is narrow.
De Wit and Meyer (2010b) state that “the more innovative the rule breaker, the larger will be
the competitive advantage over rivals stuck with outdated business models”. Gaining sustainable
competitive advantage thus implies shaping your environment instead of letting the environment
shape you. In other words constantly innovating in order to shape a new industry context, which is
also referred at as a blue ocean by Kim and Mauborgne (2004, 2005a).
This paper investigates how a blue ocean strategy through alliances provides sustainable
competitive advantage in a highly changing and interconnected environment.
I will address blue ocean strategy and its hurdles from a strategic alliance perspective, how
strategic alliances in a complex world add value and i will end the paper with a discussion on how
strategic alliances strengthen blue ocean strategies.
Blue ocean strategy
The external drivers of industry development (Wit, de et al., 2010b) have influenced the our
world-economy immensely over the last 20 years. The technological, economic and socio-cultural
drivers are increasingly driving innovation, expanding our capabilities, rising globalization, offering
load of products and services and a huge amount of ‘similar’ organizations. While there are more
products and services available the world demand isn’t increasing (Kim et al., 2004 & 2005a)
resulting value deprecation of the products and services, which leads to commoditization of these
products and services (Kim et al. 2004, 2005a; Pine and Gilmore, 1999). This is substantiated by
Pine and Gilmore (1999) in their book on the experience economy, where they explain experience
as a new economic offer and means to achieve high profit margins. This commoditization leads to a
hardened environment where competitors fight for a piece of the pie through price wars, thereby
reducing the profit margins (Kim et al. 2005a). In short, a bloody red ocean with a negative vicious
circle.
2 Blue oceans through alliance: how to reach sustainable competitive advantage in a highly changing and interconnected environment
3. Instead of fighting for a piece of the pie, struggling with competitors and battling as rivals blue
ocean strategy proposes a different approach. Blue ocean strategy is about creating new markets,
otherwise know as blue oceans, where there are no competitors to fight with. It is not technical
innovation that thrives a blue ocean strategy, nor is it a specific industry or organization that
explains the creation of blue oceans. This view is aimed at creating superior value for the customer
and organization through bot differentiation and low-cost at the same time. (Kim et al., 2004,
2005a)
Blue ocean strategy isn’t new and surely isn’t something that is limited to new players in an
industry as would be expected. It is even true that most blue oceans are found within red oceans,
just by expanding existing industry boundaries (Kim et al., 2005a). Examples provided by Kim et al
(2004) include among others Ford, Apple, Cirque du Soleil, Dell and IBM and show that the
principle can be related back to at least 1905. The question arises how in this day and age, where
the environment is extremely complex, how blue oceans can be found, created and protected?
Blue ocean strategy & strategic alliances
“Strategic alliances are cooperative arrangements between two or more firms to improve their
competitive position and performance by sharing resources” (Ireland, Hitt and vaidyanath, 2002, p.
413) is on the one hand to general but on the other hand it clearly defines the goal behind a
strategic alliance; which is gaining competitive advantage (Dyer, Kale and Singh, 2001; Ireland et
al., 2002; Dyer and Singh, 1998). Dyer and Singh subdivides this in 4 potential sources: relation-
specific assets, knowledge-sharing routines, complementary resources/capabilities, and effective
governance. In this paper we’ll use strategic alliance in the broadest sense of the word, as it is our
goal to analyze strategic alliances in a blue ocean strategy and not the other way around. Also we
won’t be differentiating between alliance contexts, like joint ventures, buyer-seller relationships or
channel partnerships (Spekman, Forbes, T.M., Isabella, L.A. and MacAvoy, 1998)
De Wit and Meyer (2010a) divide relational actors into eight different groups which each fulfill a
different role towards an organization. Organizations either can, must or want to interact with
these actors. Four groups can be clearly divided in horizontal relation, industry insiders and
industry outsiders, and vertical relations, suppliers and buyers. Through the ‘september distinction’
we can list the other groups: socio-cultural actors, economic actors, political/legal actors and
technological actors which all have a position within the broader environment of the organization.
Because blue ocean strategy strives for differentiation and low-cost at the same time (Kim et al.,
2004, 2005a) the horizontal relationships, vertical relationships and even the other actors can be
opportunities for a strategic alliance. In this increasingly complex environment, due to accelerating
3 Blue oceans through alliance: how to reach sustainable competitive advantage in a highly changing and interconnected environment
4. globalization, it’s difficult for organizations to have all resources available to compete effectively in
this highly changing and interconnected environment (Ariño, A. and Torre, J. de la., 1998).
Strategic alliances can be a valuable tool for organizations to seek competitive advantage
especially in a highly changing environment; it helps organizations, for example. to cut overhead
costs, increase responsiveness, improve flexibility and efficiency (Lorenzoni and Baden-Fuller,
1995), cope with uncertainties, minimize transaction costs, reduce resource dependence (outside
their control) and repositioning in dynamic markets (Das and Teng, 1996, 2000; Spekman, Forbes,
T.M., Isabella, L.A. and MacAvoy, 1998; Young-Ybarra & Wiersema, 1999) and lastly it helps
organizations to combine, exchange or invest in resources/capabilities, knowledge and assets (Dyer
et al., 1998).
Central toward blue ocean strategy is creating and capturing new demands, reaching towards
uncontested market space (Kim et al., 2004, 2005a, 2005b). Especially in creating new markets
strategic alliances can provide the resources, knowledge and capabilities to shape these dynamic
environments. Collaboration can create value when complementary resources are aligned with
each other (Ireland et al., 1995), a starting point to create and capture new demand. This is
strengthened through research by Ahuja which found that social capital increases the possibility of
radical breakthroughs in technology (2000).
Creating blue oceans is often done by established players within their current core business
(Kim et al. 2004, 2005a). Though relatively new entrants can also be the creator of a blue ocean
strategy as well, which comes with a disadvantage because “the creation of blue oceans, in other
words, is a product of strategy, and as such is very much a product of managerial action.” (Kim et
al., 2004, p. 81). Though managerial action can be imitated, especially by established players
where efficiency and effectivity is high. Theoretically they have the resources and capabilities to
follow, and even outrun the smaller companies due to their experience. So it’s important for new
players to create as much barriers as possible, especially barriers with social complexity and causal
ambiguity make imitation hard.
When organizations created a new value curve and made their strategic moves they have found
their blue ocean (Kim et al., 2005a). They have an uncontested market space without competitors,
at least for a while. Competitors could, and probably will, choose to pursue the same strategy,
while they probably cannot create a blue ocean themselves they do have a life long experience in
red ocean competing. Kim et al. (2005b, p. 188) discuss several economic and cognitive barriers
which are: “(1) Value innovation does not make sense to a company’s conventional logic, (2) blue
ocean strategy may conflict with other companies’ brand image, natural monopoly: (3) the market
cannot support a second player, (4) patents or legal permits block imitation, (5) high volume leads
4 Blue oceans through alliance: how to reach sustainable competitive advantage in a highly changing and interconnected environment
5. to rapid cost advantage for the value innovator thereby discouraging followers from entering the
market, (6) network externalities discourage imitation, (7) imitation often requires significant
political, operational and cultural changes and (8) companies that value-innovate earn brand buzz
and a loyal customer following that tends to shun imitators”. However, it’s inevitable for
competitors to arrive in ‘your’ blue ocean as they want a piece of the pie. Thus the barriers for
imitation cannot be high enough. This is especially true because Kim et al. (2005) describe
possible/potential barriers which don’t automatically apply or occur in every situation. From an
imitation perspective strategic alliances provide barriers which have to be understood by the
competition. These barriers are, as described by Dyer et al. (1998), that the competitor cannot to
ascertain how returns are generated due to causal ambiguity, cannot quickly replicate resources
due to time compression diseconomies have an influence on, cannot imitate practices or
investments due to the interconnectedness of the assets, cannot find the necessary strategic
alliances to provide complementary resources and capabilities and cannot create the same socially
complex environment. These are significant barriers which strengthen blue ocean strategy and are
difficult to overcome in a dynamic environment.
Blue ocean strategy pursues differentiation and low cost within the complete system of activities
in order to break the trade-off between cost and value (Kim et al. 2004), a viewpoint which
especially shows how blue ocean strategy challenges the status quo. This connects perfectly with
strategic alliances for they stimulate co-specialization (Wit, de et al. 2010a). Here each
organization is specialized and contributes more to the whole than if it was one organization. This
improves the change & innovation lifecycle and cuts down costs. Also alliances prevent
competencies from becoming rigidities (Floyd & Wooldridge, 1999; Leonard-Barton, 1992), which
constrains the organizations in changing and executing a blue ocean strategy. These strategic
alliances also prevent organizations from becoming unwieldy in this highly changing environment.
Organizations can pursue the search for a blue ocean and don’t have to be limited due to their own
size. Strategic alliances thus reduce risk and increase flexibility which can make it a preferred
alternative towards acquisitions (Harrison, Hitt, Hoskisson & Ireland, 2001).
Tiers of non-customers are an important opportunity for creating blue oceans, as every
organization aims to find their customer base they forget to look at this from the exact opposite
way (Kim et al., 2005b). Why aren’t we selling our products to the people who aren’t buying it,
and can we change our product so we will be selling our products to them in the future? Kim et al.
(2005b) describe multiple tiers within non-customers depending on the distance from the current
market. Through a channel partnership strategic alliances can add value in reaching non-
customers. This soft approach, which build upon current brand image of that channel, makes it
easier and thus less costly to ‘wheel in’ new customers.
5 Blue oceans through alliance: how to reach sustainable competitive advantage in a highly changing and interconnected environment
6. Hurdles in executing a blue ocean strategy
Even if the blue ocean is found, a new business model is created managers claim that the
execution of this strategy is an enormous challenge. Organizations face four hurdles which prevent
them from successfully implementing the blue ocean strategy. These hurdles are:
(1) cognitive: employees don’t really want to change they’re routined and comfortable. A
problem solved by Kim et al. (2005b) through experience, seeing is believing. However firms active
mostly as suppliers in the supply chain don’t have the tangibility which is emphasized. When, from
a bottom-up perspective, organizations at the end of the supply chain engage in strategic alliances
with their suppliers this hurdle becomes easier to overcome. When the final product/brand is
admirable and an alliance is set it will be easier to change the routines of the employees.
(2) Limited resources: the greater the change the more money this will cost and companies
mostly don’t have adequate resources available. A problem which is approached through “simply”
being creative with your resources. Organizations should concentrate on multiplying the value of
and freeing resources through hot spots, cold spots and horse trading (Kim et al., 2005b). Kim et al.
(2005b) propose this as a solution, but i see this to be more a nifty workaround instead of concrete
solution. Strategic alliances, however, provide a more solid base in leveraging the necessary
resources. Vertical strategic alliances within the supply chain, or horizontal strategic alliances with
industry in- and outsiders can cut overhead costs, improve efficiency and flexibility, minimize
transaction cost (Lorenzoni and Baden-Fuller, 1995; Das et al., 1996, 2000; Spekman et al., 1998;
Young-Ybarra et al., 1999) and thus the availability of resources grows.
(3) Motivation: how to get key players motivated and get them to break with the status quo. So
when you’ve got the people aware of the problem, you still have to motivate them in order act
upon it. From this point of view strategic alliance cannot provide added value. Even more the
solution provided by Kim and Mauborgne (2005b) is powerful within strategic alliances and
necessary for success when strategic alliances is a fundamental part of blue ocean strategy.
(4) Politics: even when a strategy is ground-breaking through either inter- or intra-
organizational politics everything can be shot down. (Kim et al., 2005b). Unfortunately this
happens in every organization, and as such also within strategic alliances. According to Kim and
Mauborgne (2005b) you should have a consiglieri which knows the territory and paves they way;
an occupation or unit (group of occupations) which is widely spread within strategic alliances and
respectively better know a an alliance manager (Dyer et al., 2001) or strategic centre (Lorenzoni et
al., 1995). Walking that political line will take effort, even when you play by that book, but when
that road doesn’t lead you anywhere in strategic alliances there’s a way out. When the power
6 Blue oceans through alliance: how to reach sustainable competitive advantage in a highly changing and interconnected environment
7. relationship is either mutual independence, unbalanced independence or unbalanced dependence
(Wit, de et al., 2010) and you’re the “stronger” than your adversary you can force the organization
to comply or substitute the organization. Though do keep in mind that this is an last resort, as
you’ll probably weaken the relationship. This is equal to the power versus authority relationship
described by Simon (1997).
Conclusion & Discussion
The top 500 global businesses have on average some 60 alliances each, which was back in
2001 (Dyer et al., 2001). Expected is that this number has been growing since then, and will keep
growing as also the environment keeps changing at this high pace. Even though many of the
strategic alliances fail. They apparently have the power to create added value, at least that is the
view of top-level managers. They see strategic alliances as a primary growth vehicle (Ireland et al.,
2002). Deriving from that managers want to create added value, thus see the need improving their
offering and innovation their products, or in other words searching for new uncontested market
space. We could argue that strategic alliances and blue ocean strategy are an ideal combination
where there is mutual interdependence towards each other; thus where blue ocean strategy offers
strategic alliances a structure for developing strategic alliances and strategic alliances provide blue
ocean strategy with new barriers to imitation, easier access to resources, prohibits competencies
changing into rigidities, stimulates differentiation and lowers costs.
While this previous statement might go a bit far, i’ve definitely shown that strategic alliances
can be useful within blue ocean strategy. Especially within a highly changing and interconnected
environment, where product life cycles decline and organizations don’t have the necessary
resources available, strategic alliances add value through social capital which stimulates the
creation of new demands, adding more imitation barriers for potential competitors, by lowering
costs through co-specialization, preventing organizations from becoming unwieldy institutions and
even can weaken different hurdles faced in blue ocean strategy. While Kim et al. (2005b) provide
workaround to these hurdles, the strategic alliance can provide a more than that especially when
limited resources are available.
Within this paper we propose different positions in which strategic alliances can strengthen
blue ocean strategy. However, we should not forget that forming strategic alliances is an unstable
and difficult operation, a subject which is further researched by Das et al. (2000). Still top level
managers see these alliances as a primary growth vehicle (Ireland et al., 2002), so knowledge and
experience in this area will continue to evolve. A positive direction for blue ocean strategy through
strategic alliances
7 Blue oceans through alliance: how to reach sustainable competitive advantage in a highly changing and interconnected environment
8. Solutions provided in this paper could in a empirical (real-life) situation contradict each other. In
order to really assess which choices need to be made in specific situations further research is
needed, eventually following with the construction of a framework. In this research different forms
of strategic alliances should be incorporated, i.e. if the relationship is tight/loose and the kind of
strategic alliance that is made (joint venture, channel partnership, buyer-seller relationship).
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