STRATEGIC PLANNINGIN DYNAMIC ENVIRONMENTS (MGT30005)- WE.docx

STRATEGIC PLANNING
IN DYNAMIC ENVIRONMENTS (MGT30005)
- WEEK 3 -
§ www.swinburne.edu.au/news/latest-
news/2020/01/updates-on-coronavirus-
.php
§ 15 March – 7pm AEDT
§ Any Swinburne student or staff member
required to self-isolate will be supported
and offered flexible learning or working
arrangements where possible.
§ Universities and schools will stay open for
the time being.
§ At Swinburne, classes are continuing as
scheduled.
§ However, the university is preparing to
transition to remote delivery in case face-
to-face classes, labs and tutorials need to
be suspended.
§ Anyone who is unwell is asked to stay
home.

§ Staff and students are asked to familiarize
themselves with recommended public
health measures.
UPDATES ON
CORONAVIRUS
http://www.swinburne.edu.au/news/latest-
news/2020/01/updates-on-coronavirus-.php
§ Stay at home if you are unwell and
if you have any concerns about
your health, contact your medical
practitioner.
§ Wash your hands regularly and
cough into your elbow or a
disposable tissue.
§ Support each other to practice
social distancing:
§ Aim to stay 1.5 metres from other people.
§ Do not shake hands.
§ Avoid gatherings in enclosed spaces.
§ These are extraordinary and
challenging times. Let’s support
each user.
KEY
RECOMMENDED
PUBLIC HEALTH
MEASURES

THIS WEEK: CAREERS AND EMPLOYABILITY EVENTS
AROUND CAMPUS
Mon 16/03 Check out swin.nu/ask; swin.nu/careerpulse;
swin.nu/careerstart;
swin.nu/experts; swin.nu/careerhelp; swin.nu/aach
Tues 17/03 On Campus: ALL STUDENTS: Ask an Employer
- BA302 12.30-1.30pm:– Robert Bosch and students talk about
the
professional placement program
- GS Level 2 Rm 209: 10.15 -11am EY (Ernst & Young) Writing
Resumes
Webinar: Resumes & Cover letters 2.30 – 3.30pm
Wed18/03 On Campus: ALL STUDENTS: Ask an employer:
- GS Level 2 11.45-12.30pm VPSC
- JCSC 1.30-4pm National Security Careers Event
Portfolio development: Writing STAR - EN 406 12.30-1.30
Thurs 19/03 On Campus: ALL STUDENTS: Ask an employer:
- TD121 10.30-11.30pm: – NAB and students talk about the
professional placement program
- GS Level 2 11.45-12.30: DXC (INF students)
Coming up in Weeks 3 & 4
Placement Information
sessions with employers
and past students
Mid & Final degree students
Do this week:
• Submit your resume to

Career Start
• Register for a placement
(swin.nu/pp); Internship
(Swin.nu/intern)
Get your resume ready now:
Week 5 - Placements positions
for S2 2020 open
Week 8 - Internship positions
for Winter & S2 2020 open
Find out & register at https://www.swinburne.edu.au/events//
and SWINEMPLOY
https://www.swinburne.edu.au/current-students/work-study-
opportunities/jobs-careers/events/
16 March – 20 March
IS YOUR SEMESTER GOING
THE WAY YOU EXPECTED?
NOW’S THE TIME TO REFLECT
• What are you struggling to understand right now?
• How you can get the most out of your studies?
WE ARE HERE TO SUPPORT YOU
swi.nu/kfg4m
31
MAR

CENSUS
DATE
TIME TO MAKE
DECISIONS
Academic Development Advisors (FBL)
[email protected]
9214 8408
FOUR KEY
PILLARS OF
SUCCESS ON
CAMPUS
(SEE CANVAS)
Copyright: Porter (2008)
LAST WEEK:
ENVIRONMENT
AL ANALYSIS –
OVERLAP AND
INTEGRATION
Copyright: www.spotlightgrowth.com
THE TRANS-
PORTATION

SECTOR
“STRATEGY’ IN THE NEWS – LAST WEEK
https://iview.abc.net.au/show/business
https://iview.abc.net.au/show/business
“STRATEGY’ IN THE NEWS – THIS WEEK
www.iata.org/pressroom/pr/Pages/2019-06-02-01.aspx
http://www.iata.org/pressroom/pr/Pages/2019-06-02-01.aspx
“… Strategy can be viewed as
building defenses against the
competitive forces or as finding a
position in an industry where the
forces are weaker.
Changes in the strength of the
forces signal changes in the
competitive landscape critical to
ongoing strategy formulation. …”
Porter (2008, p78)
BUT, WHAT
INFLUENCES
COMPETITION
INSIDE THE
INDUSTRY?
PORTER’S FIVE

FORCES
MODEL OF
INDUSTRY
COMPETITION
§ Perfect Competition
§ Monopolistic Competition
§ Oligopoly
§ Monopoly
SO, WHAT
USUALLY
HAPPENS?
FOUR MARKET
STRUCTURES
§ Threat of new entrants: barriers
to entry
§ Bargaining power of suppliers
§ Bargaining power of buyers
§ Threat of substitute products
§ Rivalry among competing firms
INDUSTRY
ENVIRONMENT
ANALYSIS: THE
5-FORCES
COMPETITION
MODEL

Porter (2008, p78)
1
THREAT OF
NEW
ENTRANTS:
BARRIERS TO
ENTRY
§ High entry barriers tend to increase
the returns for existing firms in a
industry and may allow some firms to
dominate the industry
§ Industry incumbents want to maintain
high entry barriers in order to
discourage potential competitors from
entering the industry
§ Economies of scale
§ Product differentiation
§ Switching costs
§ Access to distribution channels
§ Cost disadvantages independent of scale
§ Government policy
THE EXPERIENCE CURVE & ECONOMIES OF SCALE:
REDUCING THE COSTS PER UNIT
Porter (2008, p78)

2
BARGAINING
POWER OF
SUPPLIERS
§ Supplier power increases when:
§ Suppliers are large and few in number
§ Suitable substitute products are not available
§ Suppliers’ goods are critical to buyers’ marketplace
success.
§ Supplier power increases when:
§ Suppliers’ products create high switching costs
§ Suppliers have substantial resources and provide a
highly differentiated product
§ Suppliers pose a credible threat to integrate forward
into the buyers’ industry.
Porter (2008, p78)
3
BARGAINING
POWER OF
BUYERS
§ Buyer power increases when:
§ Buyers purchase a large portion of an industry’s total
output
§ Buyers’ purchases are a significant portion of a

seller’s annual revenues
§ Switching costs (to other industry products) are low.
§ Buyer power increases when:
§ The industry’s products are undifferentiated or
standardised
§ Buyers pose a credible threat to integrate backward
into the sellers’ industry.
Porter (2008, p78)
4
THREAT OF
SUBSTITUTE
PRODUCTS
§ Function of a substitute
§ Goods or services outside a given industry perform
the same or similar functions at a competitive price
(e.g. plastic has replaced steel in many applications).
§ Differentiated industry products
that are valued by customers
reduce this threat.
Porter (2008, p78)
5

RIVALRY
AMONG
COMPETING
FIRMS
§ Competitors are rarely homogeneous; they
differ in resources and capabilities and seek to
differentiate themselves from competitors.
§ Firms seek to differentiate their products in
ways that customers value and in ways the
firms have a competitive advantage.
§ Common rivalry dimensions include:
§ Price
§ Service after the sale
§ Innovation
§ Industry rivalry intensifies with:
§ Numerous or equally balanced competitors
§ Slow industry growth
§ High fixed costs or high storage costs
§ Lack of differentiation opportunities or low switching costs
§ High strategic stakes
§ High exit barriers
“… Strategy can be viewed as
building defenses against the
competitive forces or as finding a
position in an industry where the
forces are weaker.
Changes in the strength of the
forces signal changes in the
competitive landscape critical to

ongoing strategy formulation. …”
Porter (2008, p78), Johnson, Whittington & Scholes (2011)
BUT, WHAT
INFLUENCES
COMPETITION
INSIDE THE
INDUSTRY?
PORTER’S FIVE
FORCES
MODEL OF
INDUSTRY
COMPETITION
STRATEGIC
GROUPS
§ Strategic groups are organisations
within an industry or sector with
similar strategic characteristics,
following similar strategies or
competing on similar bases.
§ These characteristics are different
from those in other strategic groups in
the same industry or sector.
§ An industry is a group of firms producing products and
services that are essentially the same (e.g. automobile
industry, airline industry).
§ A market is a group of customers for specific products or
services that are essentially the same (e.g. the market for

luxury cars in Germany … Luxury = horizontal segment; SUVs
= vertical segment).
§ A sector is a broad industry group (or a group of markets)
especially in the public sector (e.g. the health sector)
§ Greater competition within a strategic
group than between strategic groups
§ Similar products
§ Similar market positions
§ Similar strategic actions
§ Strategic groups can be mapped on to
two dimensional charts – maps. These
can be useful tools of analysis.
Johnson, Whittington & Scholes (2011)
CHARACTERIST
ICS FOR
IDENTIFYING
STRATEGIC
GROUPS
TWO-DIMENSIONAL MAPPING OF STRATEGIC GROUPS
(INDIAN PHARMACEUTICALS, WATCH-MAKING,
EUROPEAN LOW-COST AIRLINES)
USES OF

STRATEGIC
GROUP
ANALYSIS
§ Understanding competition - enables
focus on direct competitors within a
strategic group, rather than the whole
industry.
§ Analysis of strategic opportunities -
helps identify attractive ‘strategic spaces’
within an industry.
§ Analysis of ‘mobility barriers’ i.e.
obstacles to movement from one
strategic group to another. These barriers
can be overcome to enter more attractive
groups. Barriers can be built to defend an
attractive position in a strategic group.
§ Helping to clarify…
§ ‘strategic customer’: the person(s) at whom the strategy is
primarily addressed because they have the most influence
over which goods or services are purchased (e.g. for a
pharmaceutical manufacturer, usually, it is the health
authorities and hospitals not the final patient)
§ ‘critical success factors’: those factors that are either
particularly valued by customers or which provide a
significant advantage in terms of cost. Critical success factors
are likely to be an important source of competitive advantage
if an organisation has them

§ Problem/opportunity: groupings are not
stable as there are pathways/trajectories
within or across
§ Lets change our perspective and we can
apply the idea of ‘grouping the similar,
but distinct’ by focusing on organisations
(to get Strategic Groups) or focusing on
Products (Segments)
§ Each of these products, organisations and
strategic groups can compete in the
same “space” as each other or in
differing segments…. And each of those
various sub-sections of the industry may
vary in terms of how well “developed”, or
‘aged’ that product segment is.
§ This metaphor of life stages that people
go through as they age has also been
applied to businesses and their products
– most famously by the application of the
idea of a Product Life Cycle
Moon (2005)
BREAK FREE
FROM THE
PRODUCT LIFE
CYCLE
InventionèInnovation

THE DYNAMICS
OF
COMPETITIVE
RIVALRY: KEY
ISSUES FOR
COMPETITION
OVER THE LIFE
CYCLE
THE DYNAMICS
OF
COMPETITIVE
RIVALRY:
MONEY FLOWS
PER LIFECYCLE
STAGE
Levitt (1965)
BUT
REMEMBER –
BEND THE
MODEL:
“THERE IS NO
SPOON”…. USE
STRATEGIC
THINKING
AND JUST AS

WE CAN WARP
THE IDEA OF
LIFE CYCLES,
WHAT IF WE
RE-EXAMINE
SEGMENTS &
PRODUCTS IN
TERMS OF
VALUE?
§ Value: A product’s performance
characteristics and attributes for
which customers are willing to pay
§ Analysing “value” is also a flexible
tool
§ So, remember your perspective
when analysing value
§ For example, value chain analysis can be used either
across an industry or within an organisation
§ What and where is the value?
§ Three external points of reference
can get us started:
§ (1) the customer
§ (2) competitor-centred comparisons
§ (3) vertical relationships within the industry
VERTICALLY
RELATED
VALUE CHAINS:

A
STEREOTYPICA
L INDUSTRY
Suppliers/
Components
Wholesale
Distribution
Retailers
Consumers
Manufacturer
A PRODUCT
VALUE CHAIN
Mining
Sorting & Grading
Sale of rough diamonds (sights)
Cutting and polishing
Jewellery Manufacture
Jewellery Sales
Customers

VERTICALLY
RELATED
VALUE CHAINS:
REMEMBER TO
KEEP TRACK
OF WHERE
YOU ARE
ANALYSING
Suppliers/
Components
Wholesale
Distribution
Retailers
Consumers
Manufacturer
Power
of Suppliers
Power of
Customers
Threat of
New Entrants
Threat of
Substitutes
Rivalry
Among

Existing
Competitors
Power
of Suppliers
Power of
Customers
Threat of
New Entrants
Threat of
Substitutes
Rivalry
Among
Existing
Competitors
VALUE CHAIN
OF AIRLINE
‘SPACE’
Supplier Airline Channels Customers
Fleet
Fuel
Catering
Staff
Maintenance
Services

Aggregate to
provide
transportation
service
Freight
Forwarders
Airlines
Travel agency
Tour packages
Business
customers
Individuals
USING VALUE
CHAIN
ANALYSIS
§ Analyse the value contributed at
different stages in (a) the
Industry, (b) the product’s value
chain
§ Integrate the messages from
these analyses into your
strategic thinking
§ Where could your organisation
add value that’s not being added
(or ‘denied’), and/or where
customers want value, and/or…

§ (Later, when we analyse inside the
organisation, we’ll look at which
activities contribute value Although
some activities are necessary and/or
strategic/part of a capability needed
for our competitive advantage)
“A MAN IS WHAT HE THINKS
ABOUT ALL DAY LONG.”
(RALPH WALDO EMERSON)
Copyright: Johnson, Scholes & Whittington (2011)
POTENTIAL
BENEFITS AND
DANGERS OF
STRATEGIC
PLANNING
Guide to Protecting the
Confidentiality of Personally
Identifiable Information (PII)

Recommendations of the National Institute
of Standards and Technology
Erika McCallister
Tim Grance
Karen Scarfone
Special Publication 800-122
NIST Special Publication 800-122
Guide to Protecting the Confidentiality of
Personally Identifiable Information (PII)
Recommendations of the National
Institute of Standards and Technology
Erika McCallister
Tim Grance
Karen Scarfone
C O M P U T E R S E C U R I T Y

Computer Security Division
Information Technology Laboratory
National Institute of Standards and Technology
Gaithersburg, MD 20899-8930
April 2010
U.S. Department of Commerce
Gary Locke, Secretary
National Institute of Standards and Technology
Dr. Patrick D. Gallagher, Director
ii
Reports on Computer Systems Technology
The Information Technology Laboratory (ITL) at the National
Institute of Standards and
Technology (NIST) promotes the U.S. economy and public
welfare by providing technical

leadership for the nation‘s measurement and standards
infrastructure. ITL develops tests, test
methods, reference data, proof of concept implementations, and
technical analysis to advance the
development and productive use of information technology.
ITL‘s responsibilities include the
development of technical, physical, administrative, and
management standards and guidelines for
the cost-effective security and privacy of sensitive unclassified
information in Federal computer
systems. This Special Publication 800-series reports on ITL‘s
research, guidance, and outreach
efforts in computer security and its collaborative activities with
industry, government, and
academic organizations.

National Institute of Standards and Technology Special
Publication 800-122
Natl. Inst. Stand. Technol. Spec. Publ. 800-122, 59 pages (Apr.
2010)
Certain commercial entities, equipment, or materials may be
identified in this
document in order to describe an experimental procedure or
concept adequately.
Such identification is not intended to imply recommendation or
endorsement by the
National Institute of Standards and Technology, nor is it
intended to imply that the
entities, materials, or equipment are necessarily the best
available for the purpose.
GUIDE TO PROTECTING THE CONFIDENTIALITY OF
PERSONALLY IDENTIFIABLE INFORMATION (PII)

iii
Acknowledgments
The authors, Erika McCallister, Tim Grance, and Karen
Scarfone of the National Institute of Standards
and Technology (NIST), wish to thank their colleagues who
reviewed drafts of this document and
contributed to its technical content. Of particular note are the
efforts of Joseph Nusbaum of Innovative
Analytics & Training, Deanna DiCarlantonio of CUNA Mutual
Group, and Michael L. Shapiro and
Daniel I. Steinberg of Booz Allen Hamilton, who contributed
significant portions to previous versions of
the document. The authors would also like to acknowledge Ron
Ross, Kelley Dempsey, and Arnold
Johnson of NIST; Michael Gerdes, Beth Mallory, and Victoria
Thompson of Booz Allen Hamilton;
Brendan Van Alsenoy of ICRI, K.U.Leuven; David Plocher and
John de Ferrari of the Government
Accountability Office; Toby Levin of the Department of
Homeland Security; Idris Adjerid of Carnegie
Mellon University; The Federal Committee on Statistical
Methodology: Confidentiality and Data Access
Committee; The Privacy Best Practices Subcommittee of the
Chief Information Officers Council; and
Julie McEwen and Aaron Powell of The MITRE Corporation,
for their keen and insightful assistance

during the development of the document.
iv
Table of Contents
Executive Summary
...............................................................................................
............. ES-1
1. Introduction
...............................................................................................
.................... 1-1
1.1 Authority
...............................................................................................
..................1-1
1.2 Purpose and Scope
...............................................................................................
.1-1
1.3 Audience
...............................................................................................

.................1-1
1.4 Document Structure
...............................................................................................
1-1
2. Introduction to PII
...............................................................................................
........... 2-1
2.1 Identifying PII
...............................................................................................
..........2-1
2.2 Examples of PII Data
..............................................................................................
2-2
2.3 PII and Fair Information
Practices...........................................................................2 -3
3. PII Confidentiality Impact Levels
.................................................................................. 3 -1
3.1 Impact Level Definitions
.........................................................................................3 -1
3.2 Factors for Determining PII Confidentiality Impact Levels
.......................................3-2
3.2.1 Identifiability
...............................................................................................
3-3
3.2.2 Quantity of PII
............................................................................................
3-3
3.2.3 Data Field Sensitivity
.................................................................................. 3 -3
3.2.4 Context of Use
...........................................................................................

3-4
3.2.5 Obligation to Protect
Confidentiality............................................................ 3-4
3.2.6 Access to and Location of PII
..................................................................... 3-5
3.3 PII Confidentiality Impact Level Examples
..............................................................3-5
3.3.1 Example 1: Incident Response Roster
...................................................... 3-5
3.3.2 Example 2: Intranet Activity Tracking
........................................................ 3-6
3.3.3 Example 3: Fraud, Waste, and Abuse Reporting
Application..................... 3-7
4. PII Confidentiality Safeguards
...................................................................................... 4-1
4.1 Operational Safeguards
..........................................................................................4 -1
4.1.1 Policy and Procedure Creation
................................................................... 4-1
4.1.2 Awareness, Training, and Education
.......................................................... 4-2
4.2 Privacy-Specific Safeguards
...................................................................................4 -3
4.2.1 Minimizing the Use, Collection, and Retention of PII
.................................. 4-3
4.2.2 Conducting Privacy Impact Assessments
................................................... 4-4
4.2.3 De-Identifying Information
.......................................................................... 4-4
4.2.4 Anonymizing Information
............................................................................ 4 -5

4.3 Security Controls
........................................................................................... ....
.....4-6
5. Incident Response for Breaches Involving PII
............................................................ 5-1
5.1 Preparation
...............................................................................................
..............5-1
5.2 Detection and Analysis
...........................................................................................5 -
3
5.3 Containment, Eradication, and
Recovery................................................................5-3
5.4 Post-Incident Activity
..............................................................................................
5-3
v
Appendices
Appendix A— Scenarios for PII Identification and Handling
............................................. A-1
A.1 General Questions
...............................................................................................

. A-1
A.2 Scenarios
...............................................................................................
............... A-1
Appendix B— Frequently Asked Questions (FAQ)
............................................................. B-1
Appendix C— Other Terms and Definitions for Personal
Information .............................. C-1
Appendix D— Fair Information Practices
............................................................................ D-1
Appendix E— Glossary
...............................................................................................
......... E-1
Appendix F— Acronyms and Abbreviations
....................................................................... F-1
Appendix G— Resources
....................................................................................... ........
...... G-1
ES-1

Executive Summary
The escalation of security breaches involving personally
identifiable information (PII) has contributed to
the loss of millions of records over the past few years.
1
Breaches involving PII are hazardous to both
individuals and organizations. Individual harms
2
may include identity theft, embarrassment, or blackmail.
Organizational harms may include a loss of public trust, legal
liability, or remediation costs. To
appropriately protect the confidentiality of PII, organizations
should use a risk-based approach; as
McGeorge Bundy
3
once stated, ―If we guard our toothbrushes and diamonds with
equal zeal, we will lose
fewer toothbrushes and more diamonds.‖ This document
provides guidelines for a risk-based approach to
protecting the confidentiality
4
of PII. The recommendations in this document are intended
primarily for
U.S. Federal government agencies and those who conduct
business on behalf of the agencies,
5
but other

organizations may find portions of the publication useful. Each
organization may be subject to a different
combination of laws, regulations, and other mandates related to
protecting PII, so an organization‘s legal
counsel and privacy officer should be consulted to determine
the current obligations for PII protection.
For example, the Office of Management and Budget (OMB) has
issued several memoranda with
requirements for how Federal agencies must handle and protect
PII. To effectively protect PII,
organizations should implement the following
recommendations.
Organizations should identify all PII residing in their
environment.
An organization cannot properly protect PII it does not know
about. This document uses a broad
definition of PII to identify as many potential sources of PII as
possible (e.g., databases, shared network
drives, backup tapes, contractor sites). PII is ―any information
about an individual maintained by an
agency, including (1) any information that can be used to
distinguish or trace an individual‘s identity,
such as name, social security number, date and place of birth,
mother‘s maiden name, or biometric
records; and (2) any other information that is linked or linkable

to an individual, such as medical,
educational, financial, and employment information.‖
6
Examples of PII include, but are not limited to:
name, or alias
Personal identification number, such as social security
number (SSN), passport number, driver‘s
license number, taxpayer identification number, or financial
account or credit card number
Personal characteristics, including photographic image
(especially of face or other identifying
characteristic), fingerprints, handwriting, or other biometric
data (e.g., retina scan, voice signature,
facial geometry)
1
Government Accountability Office (GAO) Report 08-343,
Protecting Personally Identifiable Information, January 2008,
http://www.gao.gov/new.items/d08343.pdf
2
For the purposes of this document, harm means any adverse
effects that would be experienced by an individual whose PII
was the subject of a loss of confidentiality, as well as any
adverse effects experienced by the organization that maintains

the
PII. See Section 3.1 for additional information.
3
Congressional testimony as quoted by the New York Times,
March 5, 1989. McGeorge Bundy was the U.S. National
Security Advisor to Presidents Kennedy and Johnson (1961-
1966).
http://query.nytimes.com/gst/fullpage.html?res=950DE2D6123A
F936A35750C0A96F948260
4
For the purposes of this document, confidentiality is defined
as ―preserving authorized restrictions on information access
and disclosure, including means for protecting personal privacy
and proprietary information.‖ 44 U.S.C. § 3542.
http://uscode.house.gov/download/pls/44C35.txt.
5
For the purposes of this publication, both are referred to as
―organizations‖.
6
This definition is the GAO expression of an amalgam of the
definitions of PII from OMB
Memorandums 07-16 and 06-19. GAO Report 08-536, Privacy:
Alternatives Exist for Enhancing Protection of Personally
Identifiable Information, May 2008,
http://www.gao.gov/new.items/d08536.pdf.
http://query.nytimes.com/gst/fullpage.html?res=950DE2D6123A
F936A35750C0A96F948260

http://uscode.house.gov/download/pls/44C35.txt
ES-2
inkable to
one of the above (e.g., date of birth, place
of birth, race, religion, weight, activities, geographical
indicators, employment information, medical
information, education information, financial information).
Organizations should minimize the use, collection, and retention
of PII to what is strictly necessary
to accomplish their business purpose and mission.
The likelihood of harm caused by a breach involving PII is
greatly reduced if an organization minimizes
the amount of PII it uses, collects, and stores. For example, an
organization should only request PII in a
new form if the PII is absolutely necessary. Also, an
organization should regularly review its holdings of
previously collected PII to determine whether the PII is still
relevant and necessary for meeting the
organization‘s business purpose and mission. For example,
organizations could have an annual PII
purging awareness day.
7

OMB M-07-16
8
specifically requires agencies to:
and ensure they are accurate,
relevant, timely, and complete
performance of agency functions
ssary collection and
use of SSNs.
Organizations should categorize their PII by the PII
confidentiality impact level.
All PII is not created equal. PII should be evaluated to
determine its PII confidentiality impact level,
which is different from the Federal Information Processing
Standard (FIPS) Publication 199
9
confidentiality impact level, so that appropriate safeguards can
be applied to the PII. The PII
confidentiality impact level—low, moderate, or high—indicates
the potential harm that could result to the
subject individuals and/or the organization if PII were
inappropriately accessed, used, or disclosed. This

document provides a list of factors an organization should
consider when determining the PII
confidentiality impact level. Each organization should decide
which factors it will use for determining
impact levels and then create and implement the appropriate
policy, procedures, and controls. The
following are examples of factors:
valuate how easily PII
can be used to identify specific
individuals. For example, a SSN uniquely and directly
identifies an individual, whereas a telephone
area code identifies a set of people.
many
individuals can be identified from the
PII. Breaches of 25 records and 25 million records may have
different impacts. The PII
confidentiality impact level should only be raised and not
lowered based on this factor.
Organizations should evaluate the
sensitivity of each individual PII data
field. For example, an individual‘s SSN or financial account
number is generally mor e sensitive than
7
Disposal of PII should be conducted in accordance with the
retention schedules approved by the National Archives and
Records Administration (NARA), as well as in accordance with
agency litigation holds.

8
OMB Memorandum 07-16, Safeguarding Against and
Responding to the Breach of Personally Identifiable
Information,
http://www.whitehouse.gov/omb/memoranda/fy2007/m07-
16.pdf.
9
FIPS 199, Standards for Security Categorization of Federal
Information and Information Systems,
http://csrc.nist.gov/publications/fips/fips199/FIPS-PUB-199-
final.pdf.
http://www.whitehouse.gov/omb/memoranda/fy2007/m07-16.pdf
http://csrc.nist.gov/publications/fips/fips199/FIPS-PUB-199-
final.pdf
ES-3
an individual‘s phone number or ZIP code. Organizations
should also evaluate the sensitivity of the
PII data fields when combined.
use—the purpose for which the PII is
collected, stored, used, processed, disclosed, or disseminated.
The context of use may cause the same
PII data elements to be assigned different PII confidentiality

impact levels based on their use. For
example, suppose that an organization has two lists that contain
the same PII data fields (e.g., name,
address, phone number). The first list is people who subscribe
to a general-interest newsletter
produced by the organization, and the second list is people who
work undercover in law enforcement.
If the confidentiality of the lists is breached, the potential
impacts to the affected individuals and to
the organization are significantly different for each list.
is subject to any obligations to protect
PII should consider such obligations when determining the PII
confidentiality impact level.
Obligations to protect generally include laws, regulations, or
other mandates (e.g., Privacy Act, OMB
guidance). For example, some Federal agencies, such as the
Census Bureau and the Internal Revenue
Service (IRS), are subject to specific legal obligations to protect
certain types of PII.
10
take into consideration the nature of
authorized access to and the location of PII. When PII is
accessed more often or by more people and
systems, or the PII is regularly transmitted or transported
offsite, then there are more opportunities to

compromise the confidentiality of the PII.
Organizations should apply the appropriate safeguards for PII
based on the PII confidentiality
impact level.
Not all PII should be protected in the same way. Organizations
should apply appropriate safeguards to
protect the confidentiality of PII based on the PII
confidentiality impact level. Some PII does not need to
have its confidentiality protected, such as information that the
organization has permission or authority to
release publicly (e.g., an organization‘s public phone directory).
NIST recommends using operational
safeguards, privacy-specific safeguards, and security controls,
11
such as:
develop comprehensive policies and
procedures for protecting the confidentiality of PII.
Conducting Training. Organizations should reduce the
possibility that PII will be accessed, used, or
disclosed inappropriately by requiring that all individuals
receive appropriate training before being
granted access to systems containing PII.
e-Identifying PII. Organizations can de-identify records by

removing enough PII such that the
remaining information does not identify an individual and there
is no reasonable basis to believe that
the information can be used to identify an individual. De-
identified records can be used when full
records are not necessary, such as for examinations of
correlations and trends.
to PII through access control policies
and access enforcement mechanisms (e.g., access control lists).
Organizations can prohibit or strictly limit
access to PII from portable and mobile devices, such as laptops,
cell phones, and personal digital
10
The Census Bureau has a special obligation to protect based on
provisions of Title 13 of the U.S. Code, and IRS has a
special obligation to protect based on Title 26 of the U.S. Code.
There are more agency-specific obligations to protect PII,
and an organization‘s legal counsel and privacy officer should
be consulted.
11
This document provides some selected security control
examples from NIST SP 800-53.

ES-4
assistants (PDA), which are generally higher-risk than non-
portable devices (e.g., desktop computers
at the organization‘s facilities).
protect the confidentiality of
transmitted PII. This is most often accomplished by encrypting
the communications or by encrypting
the information before it is transmitted.
affect the confidentiality of PII, such as
inappropriate access to PII.
Organizations should develop an incident response plan to
handle breaches involving PII.
Breaches involving PII are hazardous to both individuals and
organizations. Harm to individuals and
organizations can be contained and minimized through the
development of effective incident response
plans for breaches involving PII. Organizations should develop
plans
12
that include elements such as
determining when and how individuals should be notified, how
a breach should be reported, and whether

to provide remedial services, such as credit monitoring, to
affected individuals.
Organizations should encourage close coordination among their
chief privacy officers, senior
agency officials for privacy, chief information officers, chief
information security officers, and legal
counsel
13
when addressing issues related to PII.
Protecting the confidentiality of PII requires knowledge of
information systems, information security,
privacy, and legal requirements. Decisions regarding the
applicability of a particular law, regulation, or
other mandate should be made in consultation with an
organization‘s legal counsel and privacy officer
because relevant laws, regulations, and other mandates are often
complex and change over time.
Additionally, new policies often require the implementation of
technical security controls to enforce the
policies. Close coordination of the relevant experts helps to
prevent incidents that could result in the
compromise and misuse of PII by ensuring proper interpretation
and implementation of requirements.
12

OMB requires agencies to develop and implement breach
notification policies. OMB Memorandum 07-16, Safeguarding
Against and Responding to the Breach of Personally Identifiable
Information,
http://www.whitehouse.gov/omb/memoranda/fy2007/m07-
16.pdf.
13
Some organizations are structured differently and have
different names for roles. These roles are examples, used for
illustrative purposes.
http://www.whitehouse.gov/omb/memoranda/fy2007/m07-16.pdf
1-1
1. Introduction
1.1 Authority
The National Institute of Standards and Technology (NIST)
developed this document in furtherance of its
statutory responsibilities under the Federal Information Security
Management Act (FISMA) of 2002,
Public Law 107-347.
NIST is responsible for developing standards and guidelines,

including minimum requirements, for
providing adequate information security for all agency
operations and assets, but such standards and
guidelines shall not apply to national security systems. This
guideline is consistent with the requirements
of the Office of Management and Budget (OMB) Circular A-
130, Section 8b(3), ―Securing Agency
Information Systems,‖ as analyzed in A-130, Appendix IV:
Analysis of Key Sections. Supplemental
information is provided in A-130, Appendix III.
This guideline has been prepared for use by Federal agencies,
also referred to as organizations in the
guide. It may be used by nongovernmental organizations on a
voluntary basis and is not subject to
copyright, though attribution is desired.
Nothing in this document should be taken to contradict
standards and guidelines made mandatory and
binding on Federal agencies by the Secretary of Commerce
under statutory authority, nor should these
guidelines be interpreted as altering or superseding the existing
authorities of the Secretary of Commerce,
Director of the OMB, or any other Federal official.
1.2 Purpose and Scope
The purpose of this document is to assist Federal agencies in
protecting the confidentiality of personally
identifiable information (PII) in information systems. The

document explains the importance of
protecting the confidentiality of PII in the context of
information security and explains its relationship to
privacy using the Fair Information Practices, which are the
principles underlying most privacy laws and
privacy best practices. PII should be protected from
inappropriate access, use, and disclosure. This
document provides practical, context-based guidance for
identifying PII and determining what level of
protection is appropriate for each instance of PII. The
document also suggests safeguards that may offer
appropriate levels of protection for PII and provides
recommendations for developing response plans for
incidents involving PII. Organizations are encouraged to tailor
the recommendations to meet their
specific requirements.
1.3 Audience
The primary audience for this document is the individuals who
apply policies and procedures for
protecting the confidentiality of PII on Federal information
systems, as well as technical and non-
technical personnel involved with implementing system-level
changes concerning PII protection methods.
Individuals in many roles should find this document useful,
including chief privacy officers and other

privacy officers, privacy advocates, privacy support staff,
public affairs staff, compliance officers, human
resources staff, system administrators, chief information
security officers, information system security
officers, information security support staff, computer security
incident response teams, and chief
information officers.
1.4 Document Structure
The remainder of this document is organized into the following
sections:
1-2
Information Practices, and it explains how to
locate PII maintained by an organization.
impact of inappropriate access, use, and
disclosure of PII.
confidentiality of PII that can be implemented to
reduce PII exposure and risk.

incident response plan for breaches involving
PII and integrating the plan into an organization‘s existing
incident response plan.
The following appendices are also included for additional
information:
-related scenarios and
questions that can be adapted for an
organization‘s training exercises.
related to …
26/03/2020
1
MGT30005
Strategic Planning in
Dynamic Environment
Internal Analysis: Resource Based View: Resources,
capabilities, core competencies and competitive
advantages
CRICOS 00111D TOID 3059
Learning objectives
• Explain the nature of ‘competitive advantage’

• Discuss the concept of the value chain and its links to
competitive advantage
• Describe the role of an organisation's resources
and capabilities as a basis of competitive advantage
• Identify the resources and capabilities of an
organisation
• Evaluate the potential for an organisation's resources
and capabilities to sustain competitive advantage
26/03/2020
2
Competitiveness
Coles and Woolworths have long since dominated the
supermarket retail
industry, generally being the first-stop shop for Australian's
buying their
weekly groceries. The duopoly is about to be challenged
however by
foreign entities who want to muscle in on the retail market.
Only five years ago the two retailers added up to about 80% of
grocery
sales. That number has dropped in recent times because of
ALDI, which

equates to tens of millions of dollars.
What has ALDI done differently?
What are ALDI’s core
competencies?
Resource Based View (RBV)
Core
Competence
Distinctive
competence
Sustainable
Competence
Intangible
Resources
or Capabilities
Tangible
Resources
26/03/2020
3
• Core competencies are resources and
capabilities that serve as a source of competitive

advantage.
• A competitive advantage is more likely to be
sustainable if it is based on organisational
processes rather than products and sets of
assets
• Sustainable competitive advantage refers to
organisational capacity to continuously
outperform its rivals in attracting customers
Competency
Strategic vision
• A vision is a picture of what a firm wants to be
and, in broad terms, what it wants to ultimately
achieve
• Example
– ‘Our purpose is to create long term value
through the discovery, development and
conversion of natural resources and provision
of innovative customer and market-based

solutions.’ (BHP)
– ‘Our vision is to be the world’s best quick
service restaurant.’ (McDonald's)
26/03/2020
4
Strategic mission
The vision is the foundation for a firm’s mission
A firm’s mission is more concrete than its vision
McDonald’s mission statement
–Be the best employer for our people in each community
around the world and deliver operational excellence to
our customers in each of our restaurants
Myer’s Mission statement:
–"At Myer, our aim is to provide you with the highest
standard of service and to ensure that we consistently
meet and exceed your shopping expectations."
Quiz

A firm’s mission tends to be enduring while its vision can
change in
view of changing environmental conditions.
• T/F
A statement that articulates the ideal description of an
organisation
and gives shape to its intended future is a:
• A. mission
• B. vision
• C. strategic idea
• D. strategic objective
26/03/2020
5
ANALYSING THE INTERNAL ORGANISATION
Creating value
• By innovatively bundling and leveraging their
resources and capabilities and by exploiting their
core competencies or competitive advantages, firms
create value.

• Value is measured by:
– product performance characteristics
– product attributes for which customers are willing to
pay.
No competitive advantage lasts forever.
COMPONENTS
OF AN
INTERNAL
ANALYSIS
26/03/2020
6
RESOURCES, CAPABILITIES AND
CORE COMPETENCIES
Resources:
• are the source of a firm’s capabilities
• are broad in scope
• cover a spectrum of individual, social and
organisational phenomena
• represent inputs into a firm’s production
process

• do not yield a competitive advantage or
create value that results in above-average
returns on their own (e.g. a brand is no use
unless you use it).
Core
competencies
Capabilities
Resources
• Tangible
• Intangible
CORE COMPETENCIES
26/03/2020
7
Compared to tangible resources, intangible resources are a
superior
source of core competencies.
CORE COMPETENCIES
Capabilities:
• emerge over time through complex

interactions among tangible and intangible
resources
• stem from employees’ unique skills,
knowledge and functional expertise
• are activities that a firm performs exceptionally
well relative to its rivals
• are activities through which a firm adds unique
value to its goods or services over an extended
period.
Core
competencies
Capabilities
Resources
• Tangible
• Intangible
CORE COMPETENCIES
26/03/2020
8
EXAMPLES OF
FIRMS’

CAPABILITIES
BUILDING CORE COMPETENCIES
The four criteria of sustainable
competitive advantage
• Capabilities that fulfil the four criteria of
sustainable competitive advantage are
considered core competencies.
Core
competencies
Capabilities
Resources
• Tangible
• Intangible
26/03/2020
9
OUTCOMES FROM COMBINATIONS OF THE CRITERIA
FOR SUSTAINABLE COMPETITIVE ADVANTAGE

OUTCOMES
FROM
COMBINATIONS
OF THE
CRITERIA FOR
SUSTAINABLE
COMPETITIVE
ADVANTAGE
VRIO analysis Woolworths
26/03/2020
10
BUILDING CORE COMPETENCIES
Value chain analysis
• Both primary and support activities should
be analysed.
• The competitive landscape demands that
value chains and supply chains be examined

in a global context.
• Each activity should be examined relative to
competitor’s abilities and rated as superior,
equivalent or inferior.
Value chain analysis
• Value chain analysis enables organisations to
understand which activities create value and which do
not.
• The value chain is a template used by an organisation to
identify its cost position, and the means that might be
used to facilitate implementation of a chosen business
level strategy.
• A competitive advantage can be created if the
company’s value chain creates additional value without
incurring significant extra costs
26/03/2020
11

Value chain
Primary activities
• Primary activities are actions directly
associated with production, delivery, sales and
service. The key activities include:
– Inbound logistics: inventory handling, store inputs
– Operations: machining, packaging, assembling
– Outbound logistics: warehousing, order processing
– Marketing and sales: advertising, branding
– Service: after-sales support
26/03/2020
12
Support activities
• Support activities are actions that enable
primary activities to take place, including:
– Human resource management: hiring, training
– Procurement: supply chain
– Technology development: research, design

– Organisational infrastructure: planning, financing
• A major department store chain has a strict policy of banning
photographs or videos of its sales floor or back room
operations. It also does not allow academics to conduct
studies of it for publication in research journals. In fact, some
of its own top managers refer to the management’s policies
on secrecy as “verging on paranoid.” These policies indicate
that the top management of the firm believes the
organization’s core competencies are
• a. causally ambiguous.
• b. unobservable.
• c. imitable.
• d. common.
26/03/2020
13
SWOT analysis
SWOT summarises the strengths, weaknesses,
opportunities and threats likely to impact on

strategy development.
INTERNAL ANAYSIS: STRENGTHS and
WEAKNESSES
EXTERNAL ANALYSIS: OPPORTUNITIES and
THREATS
Uses of SWOT analysis
26/03/2020
14
Risks in a SWOT analysis
• Long lists with no attempt at prioritisation.
• Over generalisation – sweeping statements often
based on biased and unsupported opinions.
• SWOT is used as a substitute for analysis – it
should result from detailed analysis using the
internal and external analyses.
• SWOT is not used to guide strategy – it is seen
as an end in itself.
Final quiz
If a firm has a service that is valuable, rare, and

costly-to-imitate, but a substitute exists for the service,
the firm will
• a. achieve competitive parity.
• b. have a competitive disadvantage.
• c. have a temporary competitive advantage.
• d. gain a sustainable competitive advantage.
26/03/2020
15
Summary
The following concepts have been
discussed in this session :
– competitive advantage
– value chain analysis
– VRIO analysis
– SWOT analysis

27/04/2020
1
MGT30005
Strategic Planning in Dynamic Environment
Strategy Narrative 8
Acquisition and Restructuring Strategy
Introduction
This session will address the following issues:
• Distinguish between mergers and acquisitions and
determine their relative merits in exploiting the linkages
between different businesses
• Assess the relative advantages of vertical and horizontal
integration in organising related activities
• Portfolio Analysis
27/04/2020
2
E-commerce giant Amazon purchased high-end

organic grocery chain Whole Foods for $13.7
billion. The purchase took Amazon near the top of
the $700 billion grocery industry, and sank stocks
of traditional grocers on fears that they would be
outmanoeuvred into oblivion.
Is it a business level strategy
or corporate level strategy?
What drives Amazon for
making this strategy?
In 2018, Intel has completed its tender offer for the
outstanding shares of Mobileye, a company that develops
sensors and cameras for Advanced Driver Assisted
Systems (ADAS); the company is also known for its
computer vision and machine learning technology. The
$15.3 billion deal gives Intel a huge advantage in the
growing self-driving car industry, a market they estimate will
grow to $70 billion annually by 2030.
Is it a diversification

strategy?
27/04/2020
3
Different types of corporate-level strategy
Fig. 8.1
Mergers and acquisitions
• Acquisition refers to the purchase of one
company by another (also known as a takeover or
a buyout
• It usually refers to a purchase of a smaller
company by a larger one
• An acquisition may be friendly or hostile
• There are 2 types of acquisition:
– share acquisition
– asset acquisition
27/04/2020
4
Mergers and acquisitions

• Merger is the combination of two companies into
a bigger company
• Both companies’ stocks are surrendered and
new company stock is issued in its place
• A merger is a transaction in which the assets of at least
two companies are transferred to a new company so that
only one separate legal entity remains.
• Acquisition is a transaction in which both companies in
the transaction can survive but the acquirer increases its
percentage ownership in the target
Reasons for merger and acquisition
• Many companies actively engage in merger
and acquisition activities to seek better
financial performance.
• The following reasons are the most common:
• Economies of scale
• Economies of scope
• Tax benefits

• Higher return on investment
27/04/2020
5
Some examples of Merger and
Acquisition
• BHP Billition -
– In 2001, BHP merged with the Billiton mining company to
form BHP
Billiton, the largest mining company in the world
• GlaxoSmithKline
– 1999 merger of Glaxo Wellcome and SmithKline Beecham,
both firms ceased to
exist when they merged, and a new
company,[GlaxoSmithKline], was created.
• Chrysler & Daimler Benz
• Walt Disney @ 21st Century Fox
• PriceWater houseCoopers (PWC)
• Microsoft LinkedIn
In 2018, Alphabet's Google division confirmed that it plans
to acquire part of HTC's mobile division team for $1.1 billion

as it grows its smartphone hardware business. Google has
become very serious about its hardware development with
the debut of its Pixel line of smartphones, and scooping up
a chunk of HTC's team means that the tech giant can better
directly challenge Android partners like Samsung, LG, and
Huawei.
Is it an example of
acquisition or Merger?
How do you explain this
kind of partial takeover?
27/04/2020
6
Quiz
Many companies engage into mergers and
acquisitions to seek better financial performance.
All of the following are common reasons, except:
a. Increase return on investment

b. Economies of Scale
c. Reducing the size or diversity of operations to
increase organisational flexibility
d. Tax benefits
Integration strategy
• The objective of integration strategy is to
develop a consistent approach to guide
implementation decisions and reduce
costs of key projects
• A company seeking integration strategies
faces a subset of choices:
– horizontal and
– vertical integration
27/04/2020
7
Vertical & Horizontal integration options
Figure Diversification and integration options: car manufacturer

example
Dimensions of Vertical integration
• Vertical integration is integration along a
supply chain through which a company will
control the production and distribution of
products
• Vertical integration has many dimensions:
• Backward
• Forward
• Full integration
• Partial integration
27/04/2020
8
Benefits of Vertical integration
• Vertical integration has multiple dimensions and
offers potential benefits including:
– Technical economies from physical integration
– Developing distinctive capabilities
– How to manage strategically different businesses?

– The incentive problem
– Competitive effects of vertical integration
– Flexibility
https://www.youtube.com/watch?v=JHzm0YSQmSU
Choosing between alternative vertical relationships
• Designing vertical relationships is not just a
‘make or buy’ choice
• Between full vertical integration and spot market
contracts, there is a broad spectrum of
alternative organisational forms
• Choosing the most suitable vertical relationship
depends on the economic characteristics of the
activities involved, legal and fiscal
circumstances, and the strategies and resources
of the companies involved
https://www.youtube.com/watch?v=JHzm0YSQmSU
27/04/2020
9
Horizontal integration strategy
• Horizontal integration refers to the expansion
or addition of business activities in the same
industry and at the same level of the supply
chain

• Organisations can achieve horizontal growth
through mergers and acquisitions
• Horizontal integration offers significant
advantages as well as drawback to the
organisations
Facebook bought Instagram
• In 2017, Facebook announced one of the best
business takeover in the history of Silicon Valley:
The $1 billion purchase of a photo-sharing app
called Instagram. At the time of the
takeover, Instagram had just 30 million users
and zero revenue.
• Is it an integration or acquisition?
27/04/2020
10
Quiz
Vertical integration provides:
a. Integration up or down a supply chain through

which a company will control the production and
distribution of products
b. A larger margin
c. Increased power over rivals in the same industry
d. Superior visibility at different stages of the value
chain of an industry
Retrenchment strategies
• When a company is not performing well enough,
its management considers either a turnaround or
a retrenchment strategy
• retrenchment strategy refer to the plan and effort to
return an underperforming company to acceptable
levels of profitability and long-term growth
• A well-designed retrenchment strategy involves
redefining strategic objectives, reducing cost
and restructuring organisational processes
27/04/2020
11
Retrenchment & Turnaround activities

• There are four activities that characterise
retrenchment and turnaround:
• Restructuring
• Divestment
• Liquidation or bankruptcy
• Tie to a larger company
German $350 million takeover: Continental AG buys Kmart
Tyre
and Auto Service in Australia
• Kmart Tyre and Auto Service (KTAS) has 258 stores
across Australia with over 1,200 employees. It is one of
Australia’s largest tyre, automotive service and repair
retailers.
• Wesfarmers announced the sale of KTAS to Continental
AG for 350 million Australian dollars. Continental is
based in Germany. Its five divisions in 2017 generated
sales of 44 billion Euro and it currently employs more
than 243,000 people in 60 countries.
• Is it a Retrenchment strategy for Kmart?

27/04/2020
12
Portfolio analysis
• Portfolio analyse is one of the key means of
analysing the scope of activities of a diversified
organisation
• It is an important aspect to understand the
position of each SBU in relation to its
competitors and growth potential
Portfolio analysis methods
Growth/Share (BCG) Matrix
Directional Policy (GE-McKinsey) Matrix
Parenting Matrix
27/04/2020
13
The growth share (or BCG) matrix (1)

Figure: The growth share (Boston Consulting Group - BCG)
matrix
• A star is a business unit which has a high
market share in a growing market.
• A question mark (or problem child) is a
business unit in a growing market, but it does
not have a high market share.
• A cash cow is a business unit that has a
high market share in a mature market.
• A dog is a business unit that has a low
market share in a static or declining market.
27/04/2020
14
Problems with the BCG matrix:

-fulfilling prophecies and
business units.
The directional policy: (GE–McKinsey) matrix
Figure Directional policy (GE–McKinsey) matrix
27/04/2020
15
The directional policy
(GE–McKinsey) matrix (2)
Figure Strategy guidelines based on the directional policy
matrix
The parenting matrix (1)
Figure The parenting matrix: the Ashridge Portfolio Display
Source: Adapted from M. Goold, A. Campbell and M.
Alexander, Corporate Level Strategy, W iley
27/04/2020
16

The parenting matrix (2)
1. Heartland business units - the parent understands these well
and
can add value. The core of future strategy.
2. Ballast business units - the parent understands these well but
can
do little for them. They could be just as successful as
independent
companies.
If not divested, they should be spared corporate bureaucracy.
3. Value-trap business units are dangerous. There are attractive
opportunities to add value but the parent’s lack of feel will
result in
more harm than good . The parent needs new capabilities to
move
value-trap businesses into the heartland. It is easier to divest to
another corporate parent which could add value.
4. Alien business units are misfits. They offer little opportunity
to add
value and the parent does not understand them. Exit is the best
strategy.

Quiz
In the Boston Consulting Group Matrix, stars:
A. Have high growth rates and low relative market
share
B. Have low growth rates and high relative market
share
C. Have low growth rates and low relative market
share
D. Have high growth rates and high relative market
share
E. Have low growth rates and low profitability
27/04/2020
17
Summary
• This session has covered issues of Corporate
level strategy including:
• Merger and acquisition

• Vertical and horizontal integration
– Shell New Energies, a subsidiary of oil major Royal Dutch
Shell,
acquired EV charging start-up Greenlots, claiming a bigger
stake
in the emerging electric mobility marketplace.
– Greenlots will keep its brand and leadership, and will become
the “foundation” of Shell’s electric mobility business in North
America, the companies said in a statement.
• Portfolio Analysis
2/05/2020
1
MGT30005
Strategic Planning in Dynamic Environments
Strategy Narrative 9
International Strategy
Introduction
• This session examines the strategy

implications of the international business
environment.
• The discussion will differentiate between
international strategies, local and
international operations and international
trade
• International market entry mode; benefits and
challenges in each and every entry mode.
2/05/2020
2
Case study: Kaufland
• On 22 January 2020, Kaufland, the grocery giant which has for
three
years been making big promises about its Australian expansion,
has decided to abandon its plans, despite having invested $523
million in
paid capital.
• Back in 2017 Global German supermarket chain Kaufland
decided to
enter in Australia’s $90 billion grocery sector and aimed to
compete with
the nation’s leading supermarket giants, Woolworths, Coles and
Aldi.

How can companies like Kaufland
evaluate the advantages of moving
into particular international markets?
What strategic factors need to be
taken into account when a business
expands into international markets?
International strategy
Definition
–a strategy through which a firm sells its
goods or services outside its domestic
market
–focuses on creating and exploiting
opportunities
–a process that a firm can use to increase
its international awareness.
2/05/2020
3

• The international context is the arena of two or more
nations in which the firm can operate. Key question is to
what extent firms should work in a standardised and
integrated manner across international boundaries.
5
The International Context (De Wit & Meyer, 2010)
• Globalisation is the process of increasing world-wide
similarity and integration. Managers want to coordinate
their activities across international boundaries as the
world merges into one global economic and cultural
system.
• The global convergence perspective emphasises the
importance of globalisation.
– “You may say I'm a dreamer, but I'm not the only one; I
hope some day you'll join us, and the world will live as
one.” (John Lennon)
6
Globalisation: Convergence (De Wit & Meyer, 2010)
2/05/2020
4

• Localisation is the process of increasing regional
dis-similarity and fragmentation. Managers want to
adapt their activities to local demands as the world
remains a loose system of semi-independent
economies and cultures.
• The international diversity perspective
emphasises the importance of localisation.
– “When I am at Milan, I do as they do at Milan; but
when I go to Rome, I do as Rome does.” (ST.
Augustine)
7
Globalisation: Diversity (De Wit & Meyer, 2010)
8
Tension: Convergence vs Diversity (De
Wit & Meyer, 2010)
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5
Analysing an international market
• Analysis of an international market is one of the
most important aspects of the structured entry
approach

• Most organisations find that an international
market is rarely as attractive as their
assessment indicated
• The analysis of a foreign market should
incorporate knowledge of the market and a
sensitivity analysis to determine the impact of
inaccuracies in the analysis
National competitive advantage
Porter’s Diamond Model
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
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6
The elements of Porter’s model
Porter’s diamond framework is based on the following elements:
• Factor conditions are operational issues in the country or
region — cost of capital, cost and skill of labour, and cost and
availability of resources, including technology and information
— as well as infrastructure.

• Demand conditions are the number and nature of customer
preferences.
• Related and supporting industries help develop efficiencies
along the supply chain.
• Industry strategy, structure and rivalry may force
organisations to develop strategies and structures to make
them more effective, in order to stay in business.
Internationalisation Drivers
Yip’s Model
Source: Adapted from G. Yip, Total Global Strategy II,
Financial Times Prentice Hall, 2003, Chapter 2
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7
Comparative Advantage:
Impact of Local Conditions
• The term comparative advantage refers to
the relative efficiencies of producing different
products
• Comparative advantage refer to the advantage
gained by production of a product or service in
one nation/region over another due to local
external conditions such as skill levels. It does not
apply to specific organisational capabilities

Table 11.1
Comparative Advantage:
Selected OECD Countries (ca. 2018)
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8
Assessing Country Markets
Country markets can be assessed according to
three criteria:
extent of defenders’ reaction
– the relative power of defenders to
fight back.
Quiz
Porter's National diamond describes:
• a. The strategies of different countries
• b. How national conditions influence the
dynamics of resource and capability

development in different industries
• c. A process of development of a national
economy
• d. The evolution of De Beers over time
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EXPORTING
LICENSING
STRATEGIC ALLIANCES
ACQUISITIONS
NEW WHOLLY
OWNED SUBSIDIARY
RISK
INCREASES
CONTROL
INCREASES
Choice of International Entry Mode
Exporting
Advantages

• No need for
operational facilities
in host country
• Economies of scale
in the home country
• Internet can facilitate
exporting marketing
opportunities
Disadvantages
• Lose any location
advantages in the
host country
• Dependence on
export
intermediaries
• Exposure to trade
barriers
• Transportation costs
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10
Licensing / Franchising
Advantages
• Contractual source
of income
• Limited economic
and financial
exposure
Disadvantages
• Difficult to identify
good partner
• Loss of competitive
advantage
• Limited benefits
from host nation
Joint Ventures and Strategic Alliances
Advantages
• Shared investment

risk
• Complementary
resources
• Maybe required for
market entry
Disadvantages
• Difficult to find good
partner
• Relationship
management
• Loss of competitive
advantage
• Difficult to integrate
and coordinate
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11
Foreign direct investment
Advantages

• Full control
• Integration and
coordination
possible
• Rapid market entry
through acquisitions
• Greenfield
investments are
possible and may be
subsidised
Disadvantages
• Substantial
investment and
commitment
• Acquisitions may
create integration/
coordination issues
• Greenfield
investments are
time consuming and
unpredictable

• Traditional approach to internationalisation
– “Stage” model
– Company first grows solidly in home market
– Then starts exploring opportunities for expansion
(especially into adjacent countries in the region)
• Born global or international new ventures (INVs)
– Definition 1: Business organisations that, from inception,
seek to derive significant competitive advantage from the
use of resources and the sale of outputs in multiple
countries.
– Definition 2: Companies who have reached a share of
foreign sales of at least 25 per cent within a timeframe of
two to three years after their establishment.
22
“Traditional Internationalisation” vs
“Born Global”
www.london.edu/lbsr/born-global
http://www.london.edu/lbsr/born-global
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12
• Technological advances that better enable delivery

of products and services into global markets;
• Relatively small domestic market for a company's
products or services – a feature particularly relevant to
technology firms whose services or products have
scalability/applicability across a wide range of markets;
• Born global founders may have established
international networks, an international market
background and/or an international vision enabling
them to exploit market opportunities;
• Greater need to open up offices overseas (supports
tailored customer servicing for services firms that
benefit from closer proximity to customers).
23
Australian Context: Some Reasons for
Increasing Number of “Born Global”
There are several reasons that explain the limits to the
positive effects of the diversification associated with
international strategies:
• Geographic dispersion
• Trade barriers
• Logistical costs
• Cultural diversity and barriers
• Complexity of competition
• Relationship between firm and host country
• Other country differences.
Challenges and Limits to International
Expansion

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13
Quiz
Which of the following entry-modes involves
the lowest resource commitment?
• a. Strategic alliances
• b. Licensing
• c. Wholly-owned subsidiary
• d. Exporting
Selecting an entry mode
• What is the source of organisation’s competitive
advantage?
• Is the product tradable and what are the barriers
to trade?
• Does the organisation possess the resources
and for establishing a competitive advantage?
• Can the organisation directly appropriate the

returns to its resources?
• What transaction costs are involved?
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14
Dunning’s eclectic theory
Dunning’s eclectic theory provides a useful approach
for selecting the best market entry mode
It argues that, for a successful entry:
– the organisation must possess a competitive advantage
that it can use in that market
– the best (highest return) use of the organisation’s
capabilities is through market entry, rather than exporting
– the location selected must provide at least one desirable
characteristic that can be combined with these capabilities
advantageously
• Dunning, John H., Towards an Eclectic Theory of
International Production: Some Empirical Tests. Journal of
International Business Studies, Vol. 11, Issue 1, pp. 9-31,

1980.
The structured entry approach
• Structured entry refer to a systematic approach
to planning and implementing foreign market
entry
• The following steps should be considered:
• assess the products in relation to the markets
• set up objectives and goals
• choose the entry mode
• design the marketing plan
• Source: Erin Anderson, and Hubert Gatignon, 1986
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Quiz
The superiority of firms competing on a global basis, over
those competing on a national basis, stems from:
• a. The globalisation of customers' preferences, and
economies of scale

• b. Economies of scale, and financial power
• c. The power of influencing international organisations in
charge of regulating the world trade, and the knowledge
of foreign markets
• d. The cross-subsidisation and predatory pricing
practices
Summary
• Internationalisation potential in any particular market is
determined by Yip’s four drivers: market, cost,
government and competitors’ strategies.
• Sources of advantage in international strategy can be
drawn from both global sourcing through the
international value network and national sources of
advantage, as captured in Porter’s Diamond.
• There are five main types of international strategy,
varying according to extent of coordination and
geographical configuration.
• Born global firms are an emerging phenomenon.

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