Purpose: This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit. You should be able to answer the questions using the strategy models taught in this unit and the facts provided in the cases, without resorting to external sources. Any external resources used in your answers, however, must be correctly cited in-text and listed at the end of the respective answer in Harvard style. Question 1 (7 marks) Explain how the Strategic Management Process is applied in business. Please answer in less than 400 words ANSWER: ** Answer box will enlarge as you type Question 2 (7 marks)
The Case Apart from its economic strategies, Coca Cola Amatil has identified three main CSR objectives: • Sustainable water management,
• Efficient energy use
• Reduction in packaging and post-consumer waste. There is ongoing concern at the environmental costs arising from the packaging and distribution of bottled water. Critics argue that the unnecessary transport of water leads to increased carbon emissions.
The water used in CCA’s bottled water products is sourced locally – from within around two hours’ drive of their production plants. The bulk of their water is purchased at market rates from small businesses or farmers. Sourcing water locally means minimal environmental negatives, such as carbon emissions that come from unnecessary transportation of water. Measures such as increased efficiencies in water use, less waste in plant operations and harvesting rain water have helped CCA to maintain world’s-best practice in the global Coca-Cola system, with just 1.55 litres of water used per litre of product in Australia. CCA has installed a range of energy saving devices, resulting in electricity consumption for lighting declining by 30 to 40 percent. CCA expects energy saving programs to reduce greenhouse gas emissions by more than 2,000 tonnes of carbon dioxide a year. CCA is also a significant user of Green Power. Coca Cola Amatil are partnering with key customers as part of Australia’s ‘Refresh, Recycle, Renew’ program to implement public place recycling at venues such as theme parks, shopping centres and public events. Through further research and development, Coca-Cola is also working to ensure that packaging requires less glass and plastic. In 2007, over 25 million kilograms of plastic will be eliminated through packaging redesigns. As the Australian market leader in bottled water, Coca-Cola strives to be a responsible corporate citizen, balancing triple-bottom line objectives of market success, environmental sustainability and social enterprise. Required: Explain Corporate Social Responsibility by means of applying the CSR Pyramid to the case study. Please answer in less than 400 words ANSWER: Question 3 (7 marks) The Case In 1975, still the early dawn of the computer era, Kodak invented the first digital camera. At that time, Kodak had 85% of the U.S. market share for cameras and 90% market share for film. By the late 1980s, 1-hour film processing shops were delighting customers who hated waiting days to get their photo prints, and Consumer Reports ranked stores using Kodak chemicals and technology as having the best picture quality. Amid this market domination built on a century of chemical-based photography innovations, Kodak failed to successfully pivot from chemicals to computers even after investing over USD 2 billion in digital technology research and development. Kodak’s investments were focused on how digital photography could strengthen its traditional photography business, not replace it. Sony, Hewlett-Packard, and other companies embracing digital technology entered the photography industry with a new proposition for consumers while Kodak simply continued to protect its vast investments in chemical technology. Required: A firm takes on an entrepreneurial orientation (EO) when it adopts the processes, practices, and decision-making styles that are associated with an entrepreneur. Use the case study to apply the three dimensions of Entrepreneurial Orientation, namely Innovativeness, Proactiveness, Risk-taking and the Four Types of Innovation model. Please answer in less than 400 words ANSWER: Question 4 (7 marks) The Case Coles is part of Wesfarmers, the Western Australian cooperative that has become a highly successful corporation. It owns Coles, Bunnings (which retails home-improvement goods and has 223 warehouse stores and 63 smaller-format stores and is the market leader in a fast-growing market), Officeworks (retails office equipment and has 150 stores, with a high market-share in what is regarded as a low-growth market) and Kmart (an ‘also-ran’ general retailer in market that is fairly consistent). Coles itself operates over 750 full-service supermarkets, competing head-on with Woolworths, with approximately equal market share. Aldi’s recent entry into Australian Supermarkets is of concern to the group. In addition, Wesfarmers also own around 810 Liquor Outlets (Vintage Cellars, Liquorland, and 92 hotels) that still generate a lot of profit in a fairly mature market, and over 600 smaller Convenience Stores that compete in an over-traded market with questionable future growth potential. In 2015, Wesfarmers employed around 205 000 people and generated A$62 billion in revenue. It has been highly successful over a long period, cleverly allocating resources around the business units to improve overall performance. Required: Apply a BCG Matrix to Wesfarmers Corporation, which includes Coles, Bunnings, Officeworks, Kmart, Liquor Outlets and Convenience Stores, using the information in the case study to correctly position the businesses within the 4 quadrants. Please answer in less than 400 words ANSWER: Question 5 (11 marks) The Case In 2008, competition in the coffee business was heating up, and Starbucks’s performance had become disappointing. The firm’s stock was worth less than $10 per share by the end of the year. Anxious stockholders wondered whether Starbucks’s decline would continue or whether the once highflying company would return to its winning ways. Riding to the rescue was Howard Schultz, the charismatic and visionary founder of Starbucks who had stepped down as chief executive officer eight years earlier. Schultz again took the helm and worked to turn the company around by emphasizing its mission statement: “to inspire and nurture the human spirit—one person, one cup and one neighborhood at a time”. Food offerings were revamped to ensure that coffee—not breakfast sandwiches—were the primary aroma that tantalized customers within Starbucks’s outlets. By the time Starbucks’s fortieth anniversary arrived, Schultz had led his company to regain excellence, and its stock price was back above $35 per share. In March 2011, Schultz summarized the situation by noting that “over the last three years, we’ve completely transformed the company, and the health of Starbucks is quite good. But I don’t think this is a time to celebrate or run some victory lap. We’ve got a lot of work to do”. Schultz retired a second time in 2017 and was replaced by the COO, Kevin Johnson. Required: Assume you are Kevin Johnson, taking over Starbucks from Howard Schultz in 2017. Outline how you intend to lead Starbucks strategically by ensuring continued growth and success, whilst simultaneously avoiding any organisational pathologies. Please answer in less than 700 words ANSWER: Question 6 (11 marks) The Case Opportunities and threats fall out of this analysis of Sydney Symphony Orchestra: Demographics: Sydney is a very large city with good income levels and indications of excellent education (5 universities) The socio-cultural segment is difficult for classical music. It is an old-world type of music with old-world patterns of listening. The demographic and/or generation of people who prefers this music is dying out, and new recruits are needed. On the plus side, classical music has elite status in society and thus attracts a well-to-do audience Technology is fast moving; there are many alternatives to live music and there are alternative ways to spread classical music The political–legal segment is good for the classical music group because they received the vast majority of government assistance given to the arts (around $55 million, compared to theatre at around $3 million) Classical music is global in nature, as is the sourcing of musical labour Physical – not really significant in this industry Economic – the upper end of the society is reasonably steady in terms of income. The classical music industry is stable but there is little to offer in terms of revenue, making long term survival difficult. Substitutes include any other art, but particularly other music forms such as pop music and jazz that operate in the broad industry. New entrants are unlikely as entry barriers are high and the industry has a small profit pool. Buyers – a declining group, which is a major concern. In terms of suppliers, musicians are the key. There are numerous musicians and it is easy to obtain new staff, but difficult to get first class staff. There is little rivalry. In Sydney there is negligible symphony competition, but for recordings there are some great competitors which don’t affect the basic operations of the SSO. Outside Sydney there are numerous competitors.
The tangibles are strong: access to the Opera house, good donor lists, solid financial reserves. Intangibles are excellent: terrific players, great conductor, good following in Sydney, good brand. Core competencies include: • Ability to play world class symphonic music
• Ability to raise private finance (65 per cent of total funding)
• excellent links with the city • Ability to attract government funding
• Ability to record world class music on a variety of technology platforms
• Ability to attract fine soloists In the Sydney context these are all core competencies. In the Australian and world contexts none of them are, since all major symphony orchestras possess them.
Required: As a Management Consultant to Sydney Symphony Orchestra, you are expected to justify and recommend 5 key strategic initiatives to be implemented concurrently over the next five years, e.g. 2 exploit-type strategies, 1 conquer, 1 ‘shine-up’ and 1 avoid.
Write a comprehensive memo to the CEO outlining how you have used each of the following models: PROFIT, VRIO, SWOT, and CIA. You may use as many words and diagrams as you need for this answer ANSWER:
