Porter's generic strategies & Ansoff Matrix.

Meet Porter's generic strategies.

Some research upon this topic has led me to understand that there are originally 3 segments instead of 4, but here are two different types of porter's generic strategies. Both works and produce results.











A great stress is emphasized on PICK A STRATEGY ! DON'T GET STUCK IN THE MIDDLE OF DIFFERENT STRATEGY! when this topic comes up.

As I learn from more and more of these tools, I began to realized a common feature amongst all of them, they're all limited. Take this tool, porter's generic strategies for example. Hybridization is frowned upon when using this tool. If we were to look at the organizational structure, tall structure , flat structure, they're all specific and the academics who proposed these ideas believed that their ideas were the best.

Look at Google, the company is an example of hybridization of tall and flat structure, and look at how successful it is! Learning these strategies and following them will only limit us, it is, however, good for guidance, but not to the extent where you worship it. Imagine the possibilities that were demolished because they followed the "pick a strategy, don't get stuck in the middle of it or else it'll fail" idea. I believe, there are a lot of companies that pick a strategy, hence making the market tougher to beat because of the number of people to beat, however, if you have a good combination ( which is a little harder to do ) , the number of competitors would be less as you provide a more unique service/product to them.


NEXT STOP : ANSOFF MATRIX !
After searching numerous videos about this topic, I've decided to give up. None of them is good enough to catch my attention the whole way, hence I'd like to summarize about this topic on my own.


Market Penetration : Growth strategy where business focus on selling existing products into existing markets.

Market Development : Growth strategy where the business seeks to sell its existing products into markets.

Product Development:  Growth strategy where a business aim to introduce new products into existing markets.

Diversification : Growth strategy where a business markets new products in new markets. (HIGH RISK)

Ansoff Matrix suggests that a business' attempts to grow depend on whether it markets new or existing products in new or existing markets.This tool helps businesses to determine its product and market growth strategy.



I've thought long and hard about this, and I believe that this theory doesn't include the possibilities of a business growth from taking over other businesses or merging with other businesses. This is also a strategy that is possible for the growth of a business.


Aside from that, I've finally understand the required reading of Mintzberg's  of strategies, deliberate and emergent journal after reading it over and over again, but mostly thanks to my tutor's handout which clarified the topic because the reading consists of words which confuses me. With it, it helped me realize that different companies have different preference of emergent or deliberate strategies to certain extents.

Globalization and Corporate Social Responsibility

Globalization have moulded the world it is today, and after reading numerous articles about it for my academic skill assignment, despite the fact that there are many people thinks globalization has made the world better, I believe that globalization have more negative effects on us more than it brought us good.

There are many points that I could show about globalization being a terrible thing, there are just a few factors that made my blood boil, to the point it disgusts me. First, the distribution of money into a country is repulsively unequal because people who work in labour is composed of poor people usually, and capitalists are mostly rich people, this causes them the be richer and wages goes lower, making workers work harder and get paid less.

Another factor is that human and drug trafficking drastically increased because of globalization. In 2010, it has been reported by the United Nations that MORE THAN US$320 Billion has been generated globally.People get kidnapped, trafficked for forced labour, sex slave or have their organs stolen. Drugs appearing increasingly easy for people to acquire. What has globalization done to the safety of society?

Media plays a major role in globalization, and what does media do to the world? It massacres cultures. Big companies sell their product all over the world, shutting minor local business shops, ultimately, all products all over the world are more homogeneous. If that's not enough, media advertises them, and cultures begin to hybridize. The unique cultural experience of individual countries will one day be tainted by the mixture of other cultures, or probably vanish completely because all the attention goes somewhere else. Take the culture of Brunei for example, their traditional wear has been altered to hug their body to show body figures, which is inspired by the western culture that media emphasizes on. You go to a country half way across the globe, hoping to try something new and exotic, but only find the same things you'd find the same things you'd find at home.

It is undeniable that globalization helps everyone to connect easily and help in advancement of the world -- but is it worth it ? The world is clogged with smoke and inequality. Corporate Social Responsibility has been introduce to counteract the problem caused by globalization, and honestly, it is a feeble attempt. Look at China, one of the best economy in the world, but the toxicity levels of the air is ridiculously high, and some of the working conditions of their workers are unimaginable. 
Globalization shows mother nature's true executioner; not bears or sharks, but us. We're the ones setting the world on fire.

"Death By China" is a book that illustrates the problems that rose from China's "successful" economy. Very interesting stuff :)

Something to ease your mind a little, dear readers, especially lecturers who have been endlessly marking non-stop.

Business jokes, ever heard of it ?
You should, because this guy is PHENOMENAL.

Somebody please have a montage of Vish's jokes in lecture, it would be a hit !

SWOT & Stakeholder analysis.

This week focuses on SWOT & Stakeholder analysis. First, let's take a look at SWOT. After looking through different videos, I find this the least time-consuming, yet most informative video I've found.

   http://www.youtube.com/watch?v=GNXYI10Po6A

Here's an example of how it is being done too !
McDonald's SWOT analysis

The presenter in the video does make a strong argument. She makes it sound like it is easy to make this analysis that anybody could do it, and it is true --- anyone can do that analysis. That's the problem with the SWOT analysis.

SWOT analysis is not exactly 100% clear as many factors can be omitted if the inexperienced or unspecialised personnel conducting that analysis, factors that are possibly omitted could cause disastrous mistakes for the company. The SWOT analysis is not specific enough.

I feel that SWOT analysis sees each of its components individually, not as possible merging factors. The presenter shows that how you can take a factor and use it to link to other factors, so does various other resources I've encountered. A factor of strength could be a factor of threat; an possible example is that if a business strive well, other companies would up their game or merge with each other in order to try to topple the business. A factor of weakness can be seen as an opportunity too! Placing the word "Strength" and "Weakness" would also probably put people off.

 People are probably most likely think that their strength are too good to become a threat, and weakness as an opportunity. SWOT also doesn't see the possibilities of changes caused by individual staffs. Individual staff are important, especially in organisations that needs innovative ideas. Each minds are different, and if one quits, promoted or get fired, the company's possible services or new products would change differently too, maybe little bit, but in total, it would change and affect customer and ultimately the company itself.

After learning what SWOT is, it does feel a little like it is just a five year old's maths problem, anybody could've done it. I feel that the SWOT analysis needs a few tweaking to improve itself.

Now, onto Stakeholders, here's a little thing or two about stakeholder mapping.

                                     

I believe that the stakeholder analysis fails to see the integration of problems caused by different sectors of the analysis. Media, for examples, would probably be at high influence and low risk, where as customers whose at another sector. This stakeholder analysis fails to identify the chain of problems that could arise from just one sector. An unsatisfied customer may report to the media, which may cause a change of events, causing bad publicity, leading to fall of goodwill and less people may want to invest in the company.

It is, however, a good tool for guidance.

PESTLE analysis

PESTLE analysis is a framework for analysing macro-environmental factors which affects an organisation. Each individual letter stands for something different.

P - Political
E - Economical
S - Socio-Cultural
T - Technological
L - Law
E - Environmental


Some examples of each factors :

Political : Political stability, Labour law, Tax policy
Economical : Interest rates, exchange rates, inflation rates
Socio-cultural : Population, age distribution, health conciousness of the society
Technological : Rate of technological advancement, Technological incentives
Law : Company law, labour law, safety laws
Environmental : Climate, Weather, waste produce of a company that affects environment



Applying PESTLE on Airline Industries:
Political : Having read about multiple articles, terrorism has played a huge role in this section as real possibilities of planes being hijacked or bombed mid-air has occurred. Airline industries has suffered a great deal from cancellations of bookings and flights.

Economical: Oil prices has increased, causing a shift for the worse for airline industries. Planes are fuelled by oil and it causes a massive impact to the industry

Socio-cultural: Lately, the people aged 18 and above tend to go to different destinations for vacations with friends or families, more often than the previous decades. The increase helps airline companies to gain new opportunities and expand their horizons.

Technological: The technological advancements has helped many airline industries for the production of better planes, easier booking via internet and services provided with the usage of technologies.

Law: Customs have to check and make sure that all arrivals and departures of individuals are legal to enter or exit a country, thus slowing down the rate of flight switch and departures of flights.

Environmental: With the use of oil, the planes emits carbon dioxide in heavy amount.


Possible solutions to the probable problems that arise from the results of the analysis.
The factors of the analysis are mostly too big to change, however, the organisation can mould itself to adapt to the problems, ensuring the survivability of the organisation.

In political, to prevent possibilities of terrorism, security checks should be thoroughly made with every individuals and making sure each claims of terrorism are legitimate, as well as employing air marshals in every plane to ensure the safety of every flight.

In the economical factor, tactics should be taken such as joining an airline partnership in order to increase fuel buying power

In law, custom checks are inevitable, however, airlines do provide forms that can be filled in during the flight instead of in the airports to save time for both the airline and people.



PESTLE, just like Porter's 5 Forces, is a tool. It plays a big role in showing the need for adaptation from the problems caused by the macro environment and shows what opportunities could arise from some circumstances.

Organisational Context

In this topic, the word ENVIRONMENT has been rephrase in terms of business/organisation.

Environment: The surroundings or conditions in which an organisation operates.


The 3 main environmental layers of an organisation is as follows :

• Internal
• Micro (competitive)
• Macro (external)

This week's lecture stressed on the internal environment as well as the micro environment.

The internal environment within an organisation which affects them are as follows :

• Structures
• Objectives
• Cultures
• Power and Authority
• Technology
• Leadership
• Finance
• People

All these points are quite straightforward on how it affects. Additionally, lectures and classes had already clarify how most of these points affects the organisation.

An example would be "Technology", where Eric Trist established the link between social system and technical system and how it would affect communication within a company.

Micro Environment
Micheal Porter revealed that there are 5 forces which affects a micro environment of an organisation.
The five forces include :

• Threat of substitute products
• Bargaining power of suppliers
• Bargaining power of buyers (the organisation's immediate customer)
• Threat of new entrants
• Intensity of rivalry within the industry

We can use porter's 5 forces as a tool to consider the possible threats of the company, which is VERY useful. The picture I've found have given the main points that how each factors affect an organisation.

Multiple heated discussions in the lectures and classes of different organisations have led us to conclude that different organisations have different highs and lows of each aspects of the 5 forces.

Example: Threat of new entry of a coffee shop, is high, however the threat of new entry of aircraft manufacturing is lower because of the big difference of cost to set up the company.

There are also examples of how these forces have led to the downfall of an organisation.
Such as how Kodak did not see the threat of a substitute product of digital camera.

Some companies amalgamate to form new products together such as camera manufacturing with phone companies. Again, Porter's 5 forces have to be considered.



http://www.youtube.com/watch?v=uvwjip3CTMA




Porter's work on this theory is very impressive, however it has some flaws, such as:

• The model assumes relatively fixed marketing structures which hardly the case of our current generation where the markets are ever-changing.
• Technological breakthroughs  have not been may tip the scales of a business, as seen in Kodak and their digital camera rivals
• The relationship between supplies and buyers may form or break within short times

However, the forces are still useful for analytical purposes, revolving around the idea of competition, not in terms of strategic, such as amalgamation of companies. Hence, Porter's 5 forces usefulness has its limits.

Management Theory Lecture

Sure enough the great minds of the past have their own paradigm when it comes to business. Different theories will produce different results depending on what the work orientation is; it is quite specific. Choosing the right strategies and applying the theories will greatly affect the business, hence, it is quite a challenge.

Frederick Winslow TaylorInvented "Taylorism" where he minimised time, waste as well as money by timing how the job is done by each individual, putting them in positions most suited to them and ultimately, the job was done in a very efficient way.

His theory was based mostly on efficiency and productivity and believe this was the best way to get the work done. His theory on Taylorism also include that the workers took no responsibilities (the managers are the operating force) and financial rewards are the workers' main motivation.

Personal opinion : I believe that Taylorism is a great theory to adopt in a company that relies on productivity of their factories, but definitely not the "best way" to do every task. However, skilled and talented workers may be discouraged to keep their job, because it seems to me that Taylor see his workers not as employees, but see them as machines.

Max WeberHis theory revolves around bureaucracy, where large organisations need strict rules and regulations, hierarchical type of management with strict responsibilities which also stresses out the need for close supervision and disciplines and minimal employee discretion.

Personal opinion : Max Weber's theory is similar to the description of Tall Structures, which I believe works very well in large corporate organisations as it is easier to control and big corporations earn a great sum of money, chances of corruption is lowered if close supervision and disciplinary actions are well carried out.

Henry Ford"Fordism" is a term made, named after Henry Ford himself, that describes that modern economics and social system should be based on an industrialized and standardized form of mass production and maximum efficiency.

 Personal opinion : So far, I've find "Fordism" and "Taylorism" one of the most interesting theories I've encountered. I feel that emphasis is made on production and results, which is a crucial part in a company's growth. However, adopting these ideas might be inhumane and insensitive to their staffs. There are cases in China that factories revolves on how to improve productivity, and quality and standards deteriorate and their personnels are paid in a ridiculously low amount of money and the factories generate a great deal of harmful waste causing harm to whomever live near the area and ultimately, the world. To adopt "Fordism" to this extent, is ludicrous. Hence, I believe, maximum production and efficiency is not the most important.

Henri Fayol
He believed that the fundemental management principles are as follows:
-Division Of Labour
-Authority and Responsibility
-Discipline
-Fair Remuneration
-Centralisation
-Efficiency
-Harmony

Personal Opinion : In contrast of the Federick Winslow Taylor, Max Weber and Henry Ford, Mr. Fayol seems to put into account the thoughts and feelings of his workers, which is a very good thing to keep morale up. I believe this theory fits very well in stressful line of work such as law firms. Nevertheless, to keep efficiency and fairness, is not an easy task, and will affect the peace within the company. It may be easy for Henri to suggest it, but it is clear that harmony and efficiency is difficult to establish together at once

Elton MayoHe was famous for the term "The Hawthorne Effect" or, as most would call it, "The Observer Effect", which describes the form of reaction of the subjects improve or change in terms of their behaviour  (which is being experimentally measured). Subjects would know that they're being studied but not in any kind of experimental manipulation.

The Hawthrone Effect showed that physical condition doesn't affect productivity, and that social and human interaction would boost the output. This helped in the recognition of the importance of teamwork in an organisation, bringing a big contribution in terms of Human Relations (showing that economic and social factors influence workers' performance)

Personal opinion : Different individual react differently in stressful situations, and the observer effect will definitely add to stress. Some individual may work harder in stressful situations, but not everyone. Personally, I do not like to work in such a condition where my manager breathes down my neck, constantly criticizing my work. It may gravely damage morality of the staffs.


Eric TristHe has the notion that there is a link between social system and technical system.



In the lecture, I've also learnt that management must be aware that although technical advancement is important to the success of a business, the work force may be damaged as it damages social interactions at work.

A good example would be corporates owning cubicles and computer its individual personnels.

Personal Opinion: Technologies may affect in that way, damaging social interactions, or, optimistically speaking, make work easier. Not everybody has the time to entertain every single one of their colleague with a heavy pile of work, face to face. It depends on how technology is being used.



_______________________________________________________________________


These are some of the classical approaches to management, which are still widely applicable to modern times, but in different forms.

Other factors that could affect a business would be :

• Suppliers
• Rivalry of other similar organisations
• New Entrants
• Substitute products or services