PRACTICE WITH WORKSHOP MANUAL

sss

University of Northampton
BA (Hons) Business and Management (Top Up)
Strategic Management
Contents

Introduction ............................................................................................................................................................................................................................. 3
Task One Essay (50% of marks will be awarded) .................................................................................................................................................................. 3
Task Two - Portfolio (50% marks will be awarded) ................................................................................................................................................................ 21
Useful Information ................................................................................................................................................................................................................. 79
Frequently Asked Questions .................................................................................................................................................................................................. 83
Introduction
The Practice with Workshop Manual aims to provide an overview of the key requirements of the assessments of the Strategic Management
module. However, candidates are also advised to refer to the assignment brief to understand the requirements of the examiner. The requirement
of the assessment has been divided into two main areas as shown below:

Assignment 1: Essay (50% of marks will be awarded)

Assignment 2: Portfolio (50% of marks will be awarded)

Task OneEssay (50% of marks will be awarded)

Assignment Answer Process

Understand the key requirements of the Assignment question thoroughly:

Select an industry where dynamic innovation is taking place. Use appropriate, research and
Step 1 international examples to explain how the external environment has influenced innovation
(positively or negatively) in this industry.( 50 marks, 2500 words maximum)

Step 2 Provide a brief overview of the chosen industry articulating the strategic landscape

Analyse the external landscape and its effect on the industry in terms of innovation and development.
Step 3
Justify the theories and frameworks used to support the answer
Critically evaluate the key points made to draw sensible conclusions on the most important aspects
Step 4
affecting the development of the chosen industry
Outline of the Answer for Task One

Format and Structure

The following format and structure can be followed when drafting the essay. However, you are free to adopt a suitable essay format to present the answer.

The assignment needs to be presented in essay format.

A title denoting the key words innovation, external environment and influence
Introduction
-Background (set the scene to the chosen industry)
-Signposting (highlight the choices and justify same i.e. can the main innovations that have taken place be highlighted and justified through the
external environmental changes. These are called the themes in your essay)
The content using paragraphs with relevant headings/sub-headings (explain the themes in detail)
Conclusion
-Summarise the main points
-A broad conclusion
List of References
Maximum word count allowed is 2,500 words with 1.5 line spacing
Font type and size should be Verdana, 11 pt

Choose an appropriate Industry

Before attempting the assignment the candidates must select an appropriate industry. Here the requirement is to select an industry where dynamic
innovation is taking place. Also, the candidates are advised to select a global industry without restricting only to an industry in their home country. This will
help to draw effective comparisons in order to develop a balanced answer that considers the issues at a global level.

While the candidates may use company level examples to support their arguments focus should be made on the dynamics of the industry as a whole.
Provide a brief introduction (Background of the industry and the themes)

Candidates must provide an introduction to the chosen industry which should not exceed 400 words. The introduction must effectively articulate the strategic
landscape of the industry by highlighting and explaining some of the dynamic innovations taking place in the industry. The innovations explained can be
briefly justified through the environmental changes/ trends etc.

Justify the theories and frameworks used

Candidates should portray a good understanding of the theories and frameworks that are relevant to address the assignment question. The requirement of
the assignment here, is to explain how the external environment has influenced (positively or negatively) the industry to innovate and develop. For this
purpose the candidate is required to identify and state the appropriate macro and micro environmental factors (with the use of appropriate analytical tools,
quoting research and international examples), why they are appropriate for the analysis of the particular industry and how they will contribute to address the
key requirement of the question.

Critically evaluate the external environmental factors and their influence on industry innovations

The candidates are required to evaluate how the external environment has influenced (positively or negatively) the industry to innovate and develop. In other
words, have these trends/ opportunities/ challenges/ barriers had positive or negative impacts on the industry to innovate? Was the objective of each to
address a threat/ challenge/ barrier or to reap benefits from an emerging trend/ theme/ opportunity? This is discussed in more detail under the detailed
guidelines.

Conclusion

In the conclusion you are required to summarise the main points such as the dynamic innovations that are taking place in the selected industry and the
environmental influences that have driven such innovations and development in the industry.
 List of references/bibliography

This is mandatory and should be done following Harvard referencing guidelines. Candidates must demonstrate the use of a range of high quality sources and
further reading throughout the discussions following correct Harvard referencing guidelines. Marks will be awarded for candidates who demonstrate a
consistent, high standard of writing by making reference to quality sources. It is advised for students to refer and reference both digital and non-digital
sources.

Detailed Guidelines
Choosing an industry and providing a brief summary of the industry

The candidates are required to select a global industry (without restricting themselves to the home country) where dynamic innovation is taking place. For
example, the Transport industry is going through breakthrough innovations and so are industries such as Travel and Tourism, Aviation, Telecommunication,
Communication & Media (I.e. 3D technology for product placements) and Education etc.

When selecting an industry the candidates should consider that particular industrys landscape in terms of its break-through/ dynamic innovations, global
presence, the significance of its global operations and the level of influence on the market demand and supply due to the influences of significant external
environmental factors.

1.0 Choosing an appropriate industry

As a candidate of BA (Hons) Business and Management (Top up), it is important to ensure that the chosen industry is relevant for a strategic management
assignment. For example selecting the Bio Chemical Industry (study of the structure and biological function of cellular molecules such as proteins and DNA, and
how these molecules interact to form living cells) or Genetic Engineering for the analysis is not related to strategic management.
Selecting an appropriate industry for your assignment is essential in developing a quality answer for this question. When selecting an industry the candidates
should do a brief evaluation of the particular industry, explore its dynamic innovations taking place, see its past trends, demand-supply mechanics and future
outlook. The industry analysis will shed light on the economic health of the companies operating in that particular industry and help the candidates to make
appropriate recommendations and/or corrective actions on how to capitalise on external environmental changes.

Following are a few steps the candidates could follow in selecting an appropriate industry for the purpose of this assignment.

How to select an industry

Review available reports

Read all the available but relevant industry reports and statistics to see whether it makes sense to dig deeper. Some of the reports you will find may already
contain in-depth information and the need for new industry analysis will be eliminated. However, it is unwise to depend on existing industry analysis reports as
the market is always volatile and industry factors change constantly. And innovations take place every day. Therefore, it is essential that the candidates refer to
a current report and envisage its relevancy in the current market.

Approach the correct industry

An industry has sub-parts. For example, if you look at the Tourism industry, you will find sub-industries which include transportation services, such as airlines,
cruise ships, and taxicabs; hospitality services, such as accommodation, including hotels and resorts; and entertainment venues, such as amusement parks,
casinos, shopping malls, music venues, and theatres. Therefore, it is important to focus on the relevant industry. Without this, it will be impossible to carry out
an accurate industry analysis. For example, where are innovations taking place? Is it something relating to an entire industry or a particular segment? Always be
specific.
Demand & Supply of the particular industry
Demand and Supply are the primary factors governing any market. Hence, it becomes relevant to look into the demand-supply scenario for a particular product
or industry by studying its past trends and forecasting future outlook. You can do comparative analysis with other companies competing in the same manner to
find out the economic health of the industry under consideration.

2.0 Provide an introduction (Background of the industry and the themes)

The introduction of the industry background should be approximately 300 to 400 words. After choosing an appropriate industry, candidates are required to
provide a brief introduction/background of the industry.

In the industry background the candidate should include:

Most important the innovations in the industry taking place briefly justified through the external environmental factors

What is your total industry-wide sales volume? (In currency or in units)

What are the trends in sales volumes within your industry?
Who are the major players and your key competitors? What are they like?
What does it take to compete? What are the barriers to entry?
What technological trends affect your industry?
What are the main modes of marketing?
How does government regulation affect the industry?
In what ways are changing consumer tastes affecting your industry?
Identify recent demographic trends affecting the industry.
How sensitive is the industry to seasons and economic cycles?
What are key financial measures in your industry (average profit margins, average revenue per customer etc.)?
The magnitude of the introduction is to ensure that it informs the reader about the industry situation and the context the candidate is interested in. The aim is
to provide the reader a glimpse of the subject matter the researcher is trying to convey. The candidate should attempt to develop an introduction that is brief,
concise and effective in providing a snapshot of the relevant industry and its dominant features with particular reference to innovations.

3.0 Justify the theories and frameworks used

Candidates are expected to provide a rationale for the relevant theoretical models and frameworks that need to be used for the industry analysis. Candidates
should familiarise themselves with the relevant frameworks and theory before attempting to answer the assignment question, by referring to relevant text
books and module specific material made available through the Learning Platform.

Candidates are requested to avoid detailed elabouration of the theoretical models under this section and to summarise the reasons behind using the relevant
models in conducting the industry analysis and the justifications for their effectiveness in helping to address the key requirements of the question.

For example, to analyse the macro external environment the PESTEL framework can be used and to analyse the micro external environment Porters five forces
framework can be used.

4.0 Critically evaluate the external environmental factors and their influence on industry innovations
The candidates are required to evaluate how the external environment has influenced (positively or negatively) the industry to innovate and develop. In other
words, have these trends/ opportunities/ challenges/ barriers had positive or negative impacts on the industry to innovate? Was the objective of each to
address a threat/ challenge/ barrier or to reap benefits from an emerging trend/ theme/ opportunity? This is discussed in more detail under the detailed
guidelines
External environment influences

Macro environment -
Many events can emerge in the external macro environment and affect/ influence an industry powerfully. These factors can be analysed using the PESTEL
framework. The macro environmental factors analysed in the PESTEL framework are Political, Economic, Socio-cultural, Technological, Ecological and Legal
factors which influences the industries in that particular country.

Candidates may also use George Yips framework to identify the international drivers that influence an industry/ organisations. As the candidates are required
to choose a global industry for the purpose of this assignment this would enable a more in depth understanding of the industry dynamics at a global scale.

George S. Yip (1992) in his book Total global strategy: Managing for worldwide competitive advantage identifies four sets of industry globalisation drivers
These drivers represent conditions in each industry that create the potential for that industry to become more global and, as a consequence, for the potential
viability of a global approach to strategy. Some are unique and specific to a particular industry situation, but most drivers of change fall into one of the following
categories.

Market drivers define how customer behaviour distribution patterns evolve, including the degree to which customer needs converge around the world,
customers procure on a global basis, worldwide channels of distribution develop, marketing platforms are transferable, and lead countries in which most
innovation takes place can be identified

Cost driversthe opportunity for global scale or scope economics, experience effects, sourcing efficiencies reflecting differentials in costs between
countries or regions, and technology advantagesshape the economics of the industry

Competitive drivers are defined by the actions of competing firms, such as the extent to which competitors from different continents enter the fray,
globalise their strategies and corporate capabilities, and create interdependence between geographical markets

Government drivers include such factors as favourable trade policies, a benign regulatory climate, and common product and technology standards.

Thompson et al. (2008) In their book Crafting and Executing Strategy: The Quest for Competitive Advantage identifies the following as some of the most
common Driving Sources of an industry.
 Growing use of the internet and emerging new internet technology applications
Increasing globalisation of the industry
Changes in the long-term industry growth rate
Changes in who buys the product and how they use it
Product innovation
Technology changes and manufacturing process innovation
Marketing innovation
Entry and exit of major firms
Diffusion of technical know-how across more companies and more countries
Changes in cost and efficiency
Growing buyer preferences for differentiated products instead of standardised commodity products
Reductions in uncertainty and business risk
Regulatory influences and government policy changes
Changing societal concerns, attitudes and lifestyles

Candidates can use the above frameworks in critically evaluating the major factors/ forces that influence their chosen industry. When assessing the impact of
the selected factor/ force to critically evaluate if they make the business environment more or less attractive. The candidates should evaluate the particular
force by answering the following three questions;

Are the factors/ forces identified causing the industry (its key players) negative effects?
Are the factors/ forces identified causing the industry (its key players) positive effects?
What are the strategic choices made by the industry to address the negative effect/ reap benefits from the opportunities? Can these be linked to any
decisions made in terms of driving innovation/ industry development?

Micro environment -

These are industry barriers/ forces/ factors that make it difficult for new firms to enter the industry. The character, mix and subtleties of competitive forces are
never the same from one industry to another. Michel Porters Five Forces framework is a useful framework in assessing the principal competitive pressures in a
market and their relative strength or weakness. The framework analyses competitive pressures or barriers in five areas of the overall industry taking into
consideration a range of sub factors as illustrated in the below figure. These factors too influence industries to innovate and explore mechanisms to develop.
Barriers to Entry-

Barriers to entering a particular industry depend on the extent and height of the entry barriers the new entrants to an industry have to overcome if they are to
compete successfully (Johnson et al., 2008). High barriers of entry are good for the existing competitors as they are protected from new competitors who enter
the industry. However, to enter an industry which is dominated by strong players a new entrant will have to innovate breakthrough technology.

Typical entry barriers to an industry are as follows:

Scale and experience -

For some industries, such as automobile, economies of scale are extremely important. Once existing players achieve economies of scale through large scale
production it is very expensive for new entrants to match them until they themselves achieve economies of scale through such large production. Experience
curve effects also give the existing players a cost advantage as they grasp how to do things more efficiently than an inexperienced new entrant. However,
changing business models can alter scale effects or make some experiences redundant (Johnson et al, 2008).
 High investment requirements-
Some industries require higher (initial) investment costs which are difficult for new entrants to bear. Examples for such industries are pharmaceuticals
where the investment in research is high and capital intensive industries, such as automobile.
Access to supply or distribution channels -
In industries where existing players control supply and/or distribution channels it is difficult for a new entrant to have access to these. For example, the
dominance of Coca-Cola can be attributed to the product being available in multi channels and can be purchased conveniently by anyone. However, with
the advent of new technologies new entrants have become successful in bypassing traditional retail distribution structures and selling directly to consumers.
Dell Computers and Amazon are examples of such companies. (Johnson et al, 2008).
Expected retaliation
If there is a high level of retaliation from the existing players this would inherently prevent new entrants. Retaliation could take the form of a price war or a
marketing blitz (Johnson et al, 2008).
Legislation and government action
Legal restraints, such as, patent protection (for example, pharmaceuticals), regulation of markets (for example, pension selling), direct government action
(for example, tariffs) can discourage new entrants.
Differentiation
When a product or service is offered with a higher perceived value than competitors the new entrants are required to enter the industry setting new
standards for perceived value.

Threat of substitutes-

Substitutes are products or services that offer a similar benefit to an industrys products or services, but by a different process. For example, aluminum is a
substitute for steel in automobiles, and trains are a substitute for cars. Substitutes can reduce demand for a particular class of products as customers switch to
alternatives; even to the extent that this class of products or services becomes obsolete. However, there does not have to be much actual switching for the
substitute threat to have an effect. The simple risk of substitution puts a cap on the prices that can be charged in an industry.

Bargaining power of customers-

The number of buyers, the importance of each individual buyer to the business, the cost of switching from your products and services to those of competitors,
etc. determines the bargaining power of customers in a particular industry. If the industries comprise few, powerful buyers, then they are often able to dictate
terms to you. This is particularly visible with large retail customers like Tesco and Carrefour who are able to dictate terms to their suppliers, such as, Unilever
and Nestle.
Bargaining power of suppliers-

The number of suppliers available for each key input, the uniqueness of the product or service they supply, their strength and control over the firms, and the
cost of switching from one supplier to another will determine the bargaining power of suppliers in an industry. The fewer the supplier choices an organisation
has and the more dependent it is on the supplier to continue its operations, the more powerful the supplier is, with the ability to capture all of the buyers
profits by simply raising prices.

Competitive rivalry-

What is important here is the number and capability of the competitors. If there are many competitors and they offer equally attractive products and services,
then the organisation is likely to have little power in the industry, because suppliers and buyers can easily switch to another firm. The more competitive the
rivalry is, the worse it is for incumbents within the industry.

Industry analysis is important because it allows organisations in an industry to estimate how much profit they can generate from business operations.
Businesses rarely enter industries at the plateau stage or those which have begun an economic decline. Industries under these conditions do not usually
generate enough profits for new business ventures. Organisations also assess the number of competitors currently selling consumer goods or services in their
industry. High levels of competition often create lower than desired profits.

Conducting a very detailed and intense industry analysis is essential for the candidates to obtain good marks in the final assessment. Marks will be awarded for
selecting an attractive industry at a global scale where dynamic innovation is taking place and then using a variety of sources (e.g.: books, journals, web
resources, industry journals and publications that provide specific knowledge regarding the industry). This information will benefit the candidate with a
significant advantage in addressing the key requirements. In presenting the analysis it is important that candidates support the argument using relevant
academic and other references and evaluate the content in a critically argumentative manner that moves beyond simple description.

Candidates are also required to present the information in an organised and logical flow using the required structure, clear headings, subheadings, paragraphs
and professional language.

5.0 Conclusion
Every essay should carry a conclusion at the end. The purpose of including a conclusion is no different to highlighting the points discussed in the main body of
the essay in a brief manner and providing a broad summary of what the essay has attempted to address.
6.0 List of references/Bibliography
Academic writing involves using sound evidence to support and strengthen your own arguments. Your answer should demonstrate how widely you have read
and also that you have understood what you have read and can interpret it in relation to the essay question you are answering and the argument you are
making. Use references to support your arguments, not to replace them.

To maintain accuracy and completeness of the references, candidates are required to follow Harvard referencing guidelines in the body of your text and at the
end of the assignment. (E.g. books, articles, past findings, online resources, etc. should be properly cited using Harvard referencing guidelines.)

Citing references help to:

support your arguments and give your work a factual basis

protect yourself against charges of plagiarism

demonstrate to assessors or critics that you have carried out the necessary research

allow the reader to locate the material you consulted.

Helper Questions

What is an Industry Analysis?

All industries that operate in a competitive market environment are impacted by influences emanating from the economy at large, the population,
demographic, societal values and lifestyles, governmental regulation and legislation, technological changes and in the home country by industry and the
competitive arena in which the company operates. The reason for conducting a sound industry analysis for the purpose of this assignment is to understand
the strategic relevance of the key drivers and barriers in the selected industry that shapes its direction, and the strategic decisions of the organisations
operating in this industry.

What should be included in the introduction of the industry background?

Industries differ widely in their economic features, competitive character and profit outlook. Thus the analysing of an industry begins with identifying their
dominant features and forming a picture of the industry landscape. The dominant features of an industry includes but is not limited to factors such as its
overall size, market growth rate, the geographic boundaries of the market (which can extend from local to worldwide), the number and sizes of competitors,
what the buyers' needs and requirements are, and the attributes that drives them to select one seller over the others, the pace of technological
change/innovations, degree of product differentiation, economies of scale, and learning and experience effects etc. The candidates are required to provide a
brief synopsis capturing these key features in the introduction to their chosen industry background.

How much should I write for the conclusion?

The candidates are required to provide a summary of this assessment using 300-400 words.
Is it compulsory to list the references in the body of the text and at the end of the assignment?

Yes, it is mandatory to cite references using the Harvard Referencing guidelines both in the body of your content (in-text references) and then provide a
detailed list of references at the end of the assignment.
Sample Answer Industry Analysis

Note: Please note that these are sample answers for similar requirements. However, candidates are required to develop their own answers that correspond
with the detailed guidelines provided above.

Title: Global Telecommunication Industry and its innovation footprint

Introduction cable and fibre, and within this, there is a growing preference for the high
speed capability provided by cable and fibre.
The telecommunications industry traditionally was comprised of a club of
big national and regional operators. Over the past decade, the industry has
been swept up in rapid deregulation and innovation. In many countries
Environmental changes
around the world, government monopolies are now privatised and they
face a plethora of new competitors. Traditional markets have been turned Telecommunication today is less about voice and increasingly about text
upside down, as the growth in mobile services out paces the fixed line, and and images. High-speed internet access, which delivers computer-based
the internet starts to replace voice as the staple business data applications such as broadband information services and interactive
entertainment, is rapidly making its way into homes and businesses around
The fixed communications market is valued at around US$500 billion (IBIS
the world. The main broadband telecom technology - Digital Subscriber Line
World Industry Report, 2015). Over the last three years, revenue from voice
(DSL) - ushers in the new era. The fastest growth comes from services
services has declined as the demand for traditional fixed line calls has
delivered over mobile networks.
remained static at around one billion users. Plain old telephone calls
continue to be the industry's biggest revenue generator, but with the The mobile industry alone has seven billion users, generating over US$960
advances in network technology, this is changing. billion of annual service revenue every year. The majority of revenue comes
from traditional calls and texts (for example, last year 7,800 billion texts
In contrast, revenue from fixed broadband or internet usage on the PC is
were sent around the world last year). However, over the last few years the
growing with an estimated 650 million customers worldwide an increase
demand for data services, such as internet browsing on a smartphone, has
of nearly 30% over the last three years (IBIS World Industry Report, 2015).
accelerated, and today around 28% of mobile revenue is from data, up
This growth has been spread across all forms of broadband DSL (copper),
from 13% in 2009.
In customer markets residential and small business markets are arguably
the toughest. With literally hundreds of players in the market,
competitiveness relies heavily on price and success rests largely
on brand name strength and heavy investment in efficient billing systems.
The corporate market, on the other hand, remains the industry's profitable
segment. Big corporate customers - concerned mostly about the quality
and reliability of the telephone calls and data delivery - are less price-
sensitive than residential customers. Large multinationals, for instance,
spend heavily on telecom infrastructure to support their global operations
and pay for premium services like high-security private networks and
videoconferencing.
Telecom operators also generate revenue by providing network
connectivity to other telecom companies that need it, and by wholesaling
circuits to heavy network users like internet service providers and large
corporations. Interconnected and wholesale markets favour those players
with far-reaching networks.
The telecommunication industry is very heavily regulated by national and
supranational authorities. Regulators continue to lower mobile termination
rates (MTRs) which are the fees mobile companies charge for calls
received from other companies networks, and to limit the amount that
operators can charge for mobile roaming services.
Key Ratios
It is hard to avoid the conclusion that size matters in telecom. It is an
expensive business; contenders need to be large enough and produce
sufficient cash flow to absorb the costs of expanding networks and services
that become obsolete seemingly overnight. Transmission systems need to
be replaced as frequently as every two years. Big companies that own
extensive networks - especially local networks that stretch directly into
customers' homes and businesses - are less reliant on interconnecting with
other companies to get calls and data to their final destinations
Following are some of the key ratios used in the telecommunication
industry in measuring their performance.
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA):
An indicator of a company's financial performance calculated as revenue
less expenses (excluding tax, interest, depreciation and amortisation).
Churn Rate: The rate at which customers leave for a competitor. Largely
due to fierce competition, the telecom industry boasts - or, rather, suffers -
the highest customer churn rate of any industry. Strong brand name
marketing and service quality tends to mitigate churn.
Average Revenue per User (ARPU): Used most in the context of a telecom
operator's subscriber base, ARPU sometimes offers a useful measure of
growth performance. ARPU levels get tougher to sustain competition, and
increased churn exerts a downward pressure. ARPU for data services have
been slowly increasing. .
Porters Five Forces Analysis
Threat of New Entrants
It comes as no surprise that in the capital-intensive telecom industry the
biggest barrier to entry is access to finance. To cover high fixed costs,
serious contenders typically require a lot of cash. When capital markets are
generous, the threat of competitive entrants escalates. When financing
opportunities are less readily available, the pace of entry slows. Meanwhile,
ownership of a telecom license can represent a huge barrier to entry. For
example, in the U.S., for instance, fledgling telecom operators must still
apply to the Federal Communications Commission (FCC) to receive
regulatory approval and licensing. There is also a finite amount of "good"
radio spectrum that lends itself to mobile voice and data applications. In
addition, it is important to remember that solid operating skills and
management experience is fairly scarce, making entry even more difficult.
Bargaining Power of Suppliers:
At first glance, it might look like telecom equipment suppliers have
considerable bargaining power over telecom operators. Indeed, without
high-tech broadband switching equipment, fiber-optic cables, mobile
handsets and billing software, telecom operators would not be able to do
the job of transmitting voice and data from place to place. But there are
actually a number of large equipment makers around. There are enough
vendors, arguably, to dilute bargaining power. The limited pool of talented
managers and engineers, especially those well versed in the latest
technologies, places companies in a weak position in terms of hiring and
salaries.
Bargaining Power of Buyers
With increased choice of telecom products and services, the bargaining
power of buyers is rising. Telephone and data services do not vary much,
regardless of which companies are selling them. For the most part, basic
services are treated as a commodity. This translates into customers seeking
low prices from companies that offer reliable service. At the same time,
buyer power can vary somewhat between market segments. While
switching costs are relatively low for residential telecom customers, they
can get higher for larger business customers, especially those that rely
more on customised products and services.
Availability of Substitutes.
Products and services from non-traditional telecom industries pose serious
substitution threats. Cable TV and satellite operators now compete for
buyers. The cable guys, with their own direct lines into homes, offer
broadband internet services, and satellite links can substitute for high-
speed business networking needs. Railways and energy utility companies
are laying miles of high-capacity telecom network alongside their own track
and pipeline assets. Just as worrying for telecom operators is the internet: it
is becoming a viable vehicle for cut-rate voice calls. Delivered by ISPs - not
telecom operators - "internet telephony" could take a big bite out of
telecom companies' core voice revenues.
Competitive Rivalry
Competition is "cut throat". The wave of industry deregulation together
with the receptive capital markets of the late 1990s paved the way for a
rush of new entrants. New technology is prompting a raft of substitute
services. Nearly everybody already pays for phone services, so all
competitors now must lure customers with lower prices and more exciting
services. This tends to drive industry profitability down. In addition to low profits, the telecom industry suffers from high exit barriers, mainly due to its
specialised equipment. Networks and billing systems cannot really be used for much else, and their swift obsolescence makes liquidation pretty difficult.

Comment: This is an acceptable answer which covers the key requirements of the assignment. The candidate has used a proper structure in presenting the
answer. However, it could have been further improved by structuring the key trends under proper sub headings, provide justification of the theoretical
frameworks used and a proper conclusion summarising the overall direction of the industry. Although relevant sources have been used in supporting the
figures, more academic and other sources could have been used to enhance the significance of the discussion. Critical argument of the points discussed is
consistent throughout the discussion. References should have been listed to improve the answer further.
Task Two - Portfolio (50% marks will be awarded)
Assignment Answer process

Understand the key requirements of the assignment question thoroughly.

Select two companies from an industry of your choice. Summarise, compare and contrast the activities of the
Step 1
companies - paying particular attention to capabilities, core competences and how success in pursuing competitive
advantage has been achieved by strategic action.

Step 2 Provide a brief overview of the chosen companies and the industry they operate in

Step 3 Identify the key strategic issues faced by the two companies and their implications

Comparative analysis of the activities of the company in terms of capabilities, core competencies and how
Step 4
success in pursuing competitive advantage has been achieved by strategic action

Step 5 Conclusions & recommendations

Outline of the Answer

Format

The portfolio format does not need to be written as a report. Candidates could present their research and analysis material based on the overall title.
Candidate may choose to group the information into themes with subheadings that is supported by company examples or academic themes. Whichever way
you choose to present your research and analysis you must remain focused on the over-arching title of the assessment. It is this that must influence your
analysis and conclusive discussion.

Following is a suggested format and structure which can be followed to address assignment portfolio. The candidates may use their own structure and style in
presenting the answer as explained above.

1. Cover page
2. Table of contents
3. Abstract
4. Introduction
5. Situation analysis (Identification of key strategic issues)
6. Critical review of capabilities, core competences and how competitive advantage has been achieved
7. Conclusions and recommendations
8. References

Maximum word count allowed is 2,500 words with 1.5 line spacing

Font type and size should be Verdana, 11 pt

Cover page, Table of Contents and Abstract
1.0 Cover Page
This should include the assignment title, candidates name, ID, supervisors name and position, University, school, and department.

2.0 Table of Contents

List of all major parts and divisions along with page numbers.

3.0 Abstract
250-300 word summary of your own research analysis summarising the key strategic issues, strategic choices and their implications on the competitive
advantage of the two companies.

Introduction (Background of the study)

Candidates are required to provide an introduction of the two companies selected for the assignment and the industry in which they operate. To start with, it
is suggested to introduce the topic and clarify the significance of what the candidate is trying to present. A brief background to the chosen industry can also
be provided. This section should cover:
Brief description of the industry
Brief description of the two companies in terms of current vision, mission, objectives, broad level strategy and competitive position
Key strategic issued faced by the two companies
How the discussion will be structured

Comparative Analysis of how competitive advantage has been achieved by strategic action

Under this section, candidates are expected to observe where decisions taken by your chosen companies have failed and to what extent this has impacted
on the company, as well as observing successful outcomes. Also, the way the organisations utilise key resources to create an advantage needs to be
considered. Here, candidates should ask the question where do the key strengths lie within the selected organisations. For the purpose relevant analytical
tools to analyse the internal strengths/ capabilities/ innovation capabilities and core competencies need to be used.

Also, decisions made by the company that affect the products, markets and structure of the organisation need to be taken into consideration. It is also
important to explain to what extent have these decisions aided/ disrupted the pursuit of competitive advantage.

Various sources must be reviewed to critically analyse and support the arguments brought in. This section will demonstrate candidates understanding of the
prior established knowledge on the chosen companies and make a critical link with the key requirements of the assignment question to be addresssed. The
literature that is used to support own research and arguments should mostly rely on published academic and industry journal articles. research publications,
valid on-line sources etc. in the research area.

Conclusions and Recommendations

Based on the comparative analysis the candidates are required to draw valid conclusions summing up the discussion, and recommend suitable strategies,
actions and best practices that should be adopted to overcome the current strategic issues and challenges facing the two companies. The recommendations
made should be practical and relevant for the chosen company/product and industry.

Reference List

Reference List
The reference list must include all the sources that were cited and consulted in writing your research and analysis. The Harvard referencing guidelines must
be accurately followed to cite both in-text and bibliography references.

Bibliography
This is a list of sources not cited in the proposal, but which helped the candidate to understand the research topic and carry out the research.
Detailed Guidelines

Assignment Portfolio

The assignment portfolio should be maximum 2,500 words (excluding the abstract, table of contents, references and bibliography).

Candidates may choose their own structure and style in presenting the information and findings. However, the chosen structure should address the key
areas of the of the assignment question in an analytical and conclusive manner.

The following areas must be covered within the task

Cover Page
Table of contents
Abstract
Introduction
Situation analysis( Identification of key strategic issues)
Critical review of current strategy and its impact on the strategic position ( competitive advantage) and strategic purpose
Conclusions and recommendations
References

1.0 Cover page

The candidates are required to provide a cover page to include the following:

The assignment title

Name of the candidate
Candidates ID
Supervisors name and position,
University, school, and department
2.0 Table of Contents
An outline of the whole project in list form, setting out the order of the sections, with page numbers. It is conventional to number the preliminary pages
(abstract, table of contents) with lower case Roman numerals (i.e. (i), (ii), (iii) etc.) and the main text pages (starting with the first chapter) in Arabic numerals (1,
2, 3, etc.) as shown:

Contents Page
List of Tables i
List of Figures ii
List of Abbreviations iii
Acknowledgements iv

Chapter 1 (Title) 1
(First Section heading)
(Second etc.)
(Third)

List of tables and figures

The student can present a list of the tables and figures used to support the argument at the beginning of your portfolio. Tables and figures should be clearly and
consistently numbered, either above or below the table or figure. Each table and figure should have a separate heading (caption). The reader should be able to
understand what the table or figure is about from this heading/ caption without referring to the text for explanations. The numbers of the tables and the figures
you use in the body of the content and in the lists at the beginning should correspond exactly.

3.0 Abstract
Set out on a page of its own immediately after the title page. The abstract is likely to be the last section to be written. It is a short description (250-300 words
maximum).
It is important to include an abstract of your own research. An abstract should provide a summary of the whole research including:

The key assignment requirement or purpose of the research

Key issues and areas that will be addressed through the research
Brief description of the conclusions and recommendations

4.0 Introduction (Background of the study)

This is an important section in your analysis as it sets a preface to what is been discussed in the rest of the report. The introduction should be compiled in a way
that readers can swiftly become acquainted with the key information without having to read it completely. Some of the areas that could be included under the
introduction for the purpose of this assignment are;

An overview of the chosen organisation/industry

This can include a brief description of each companys size, revenue/profits, market share and growth, market capitalisation, competition, key
products/markets, customer/business segments, structure, leadership style, business model, industry trends and key success areas required to compete
effectively in the industry
The purpose of their own research
Overview of the approach that will be adopted to address the key requirements of the question

5.0 Key Strategic issues and their implications

A strategic issue is a fundamental policy question or critical challenge affecting an organisation's mandates, mission, values, stakeholders, resources, structure,
processes, management, or product or service level and mix. Strategic issues require careful decisions and clarifications to resolve, and have a critical impact on
the course and direction of the business.

How to identify key strategic Issues?

Strategic Issues are unique from company to company. They may change from year to year as some issues are resolved and new ones emerge. There are
however, some general areas that tend to be sources of Strategic Issues in many companies. These include,
 Strategic focus

Strategic competencies

Culture modification/organisational change

Resource limitations

Strategic alliances/acquisitions/mergers/joint ventures

On- line business strategy

Strategic Issues may also be linked to the process step that defines the future role of your chosen organisation (Mission Statement) and the process step that
defines the general and continuing intended results necessary and sufficient to the satisfaction of your organisations concept of success (Goals). The linkage
may flow in two directions. Strategic Issues may arise because the chosen company is not fulfilling the commitments they had made previously in their Mission
Statement and Goals. Conversely, the content of their Mission Statement and Goals may result indirectly from the resolution of Strategic Issues and their impact
on your Strategies.

Candidates are required to make a comparison between the two companys present course and direction, role and performance, and their Strategies, Mission
Statement and Goals will probably reveal some misalignments. These lead to the identification of those strategic initiatives required in the next year or so that
will not happen in the normal course of business. In Simplified Strategic Planning these initiatives are called Strategic Objectives.

The candidates could use McKinseys 7S framework as a guideline in identifying the key strategic issues faced by the two companies. All sources used to gather
information for the Strategic Issue Analysis must be cited properly using Harvard referencing style.
6.0 Comparative Analysis of the capabilities, core competences and determining success in pursuing competitive advantage
Strategic capabilities, competences and core competences

Strategic capability can be defined as the resources and competencies of an organisation needed for it to survive and prosper. (Johnson et al.,2011)

It is a set of business processes strategically understood. For example, Wal-Mart's expertise in inventory replenishment, Honda's skill at dealer
management, or Banc One's ability to "out-local the national banks and out-national the local banks

Such capabilities are collective and cross-functional

Competing on capabilities requires strategic investments in support systems that span traditional SBUs and functions and go far beyond what traditional
cost-benefit metrics can justify

To succeed, a company must weave its key business processes into hard-to-imitate strategic capabilities that distinguish it from its competitors in the
eyes of customers (Stalk, Evans & Shulman, 1992)

Competencies are the skills and abilities by which resources are deployed effectively through an organisations activities and processes (Johnson et
al,2008)

Competencies combine knowledge and skills and represent the set of skills required to perform useful actions and capture the sum of knowledge across
individual skill-sets and individual organisational units

In order to be a source of sustainable competitive advantage a resource or competency must be valuable, rare, difficult or costly to imitate and direct or
easy substitutes for the competency should not exist

For example, Southwest Airlines developed knowledge and skills that enable it to operate at a much lower cost that other major airlines. Competitors
that tried to imitate Southwest were not as successful because Southwest built a system of reinforcing competencies that continue to provide the
airline with competitive advantage over time
 A core competence is the collective learning in the organisation, especially the capacity to coordinate diverse production skills and integrate streams of
technologies. It is also a commitment to working across organisational boundaries (Hamel & Prahalad,1990)

Core competencies are "aggregates of capabilities, where synergy is created that has sustainable value and broad applicability (Gallon, Stillman, and
Coates, 1995)

According to this definition core competencies are harmonised, intentional constructions and are more than the traits of individuals.

Core competencies require complementary knowledge and skills and when combined they should be able to produce a superior product or service
(Coyne, Hall, and Clifford, 1997). For example, Google has a core competency in managing information. Similarly, Fedex has a core competency in
Information Technology

Strategic Position (Competitive Advantage)

Basically, strategy is about two things: deciding where you want your business to go, and deciding how to get there. A more complete definition is based on
competitive advantage, the object of most corporate strategy:

Competitive advantage grows out of value a firm is able to create for its buyers that exceeds the firm's cost of creating it. Value is what buyers are
willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than
offset a higher price. There are two basic types of competitive advantage: cost leadership and differentiation.

- Michael Porter, Competitive Advantage, 1985, p.3

The above definition defines the choices of "generic strategy" a firm can follow. A firm's relative strategic position within an industry is given by its choice of
competitive advantage (cost leadership vs. differentiation) and its choice of competitive scope. Competitive scope distinguishes between firms targeting broad
industry segments and firms focusing on a narrow segment. Generic strategies are useful because they characterise strategic positions at the simplest and
broadest level. Porter maintains that achieving competitive advantage requires a firm to make a choice about the type and scope of its competitive advantage.
There are different risks inherent in each generic strategy, but being "all things to all people" is a sure recipe for mediocrity - getting "stuck in the middle".

Treacy and Wiersema (1995) offer another popular generic framework for gaining competitive advantage. In their framework, a firm typically will choose to
emphasise one of three value disciplines: product leadership, operational excellence, and customer intimacy.
How is competitive advantage created?

At the most fundamental level, firms create competitive advantage by perceiving or discovering new and better ways to compete in an industry and bringing
them to market, which is ultimately an act of innovation. Innovations shift competitive advantage when rivals either fail to perceive the new way of competing
or are unwilling or unable to respond. There can be significant advantages to early movers responding to innovations, particularly in industries with significant
economies of scale or when customers are more concerned about switching suppliers. The most typical causes of innovations that shift competitive advantage
are the following:

new technologies
new or shifting buyer needs
the emergence of a new industry segment
shifting input costs or availability
changes in government regulations

How is competitive advantage implemented?

Frameworks vs. Models

Candidates need to make themselves familiar with different strategy frameworks and strategy models before attempting to understand the present strategic
position of a company. Strategy models have been used in theory building in economics to understand industrial organisation. However, the models are difficult
to apply to specific company situations. Instead, qualitative frameworks have been developed with the specific goal of better informing business practice.

It may be helpful to think of strategy frameworks as having two components: internal and external analysis. The external analysis builds on an economics
perspective of industry structure, and how a firm can make the most of competing in that structure. It emphasises where a company should compete, and
what's important when it does compete there. Porter's 5 Forces and Value Chain Analysis comprise the main externally-based framework. The external view
helps inform strategic investments and decisions.

Internal analysis, like core competence for example, is less based on industry structure and more in specific business operations and decisions. It emphasises
how a company should compete. The internal view is more appropriate for strategic organisation and goal setting for the firms, and building competencies,
resources, and decision-making into a firm such that it continues to thrive in a changing environment.
 The internal and external views would assist the candidates mostly to frame and inform the problem regarding the competitive advantage. The actual firm
strategy will have to take into account the particular challenges facing a company, and would address issues of financing, product and market, and people and
organisation. Some of these strategic decisions are event driven (particular projects or reorgs responding to the environment and opportunity), while others are
the subject of periodic strategic reviews.

At the level of strategy implementation, competitive advantage grows out of the way firms perform discrete activities - conceiving new ways to conduct
activities, employing new procedures, new technologies, or different inputs. The "fit" of different strategic activities is also vital to lock out imitators. Porters
"Value Chain" and "Activity Mapping" concepts help you think about how activities build competitive advantage.

Value Chain

The value chain is a systematic way of examining all the activities a firm performs and how they interact. It scrutinises each of the activities of the firm (e.g.
development, marketing, sales, operations, etc.) as a potential source of advantage. The value chain maps a firm into its strategically relevant activities in order
to understand the behaviour of costs and the existing and potential sources of differentiation. Differentiation results, fundamentally, from the way a firm's
product, associated services, and other activities affect its buyer's activities. All the activities in the value chain contribute to buyer value, and the cumulative
costs in the chain will determine the difference between the buyer value and producer cost.

A firm gains competitive advantage by performing these strategically important activities more cheaply or better than its competitors. One of the reasons the
value chain framework is helpful is because it emphasises that competitive advantage can come not just from great products or services, but from anywhere
along the value chain. It's also important to understand how a firm fits into the overall value system, which includes the value chains of its suppliers, channels,
and buyers.

Activity Maps

With the idea of activity mapping, Porter (1996) builds on his ideas of generic strategy and the value chain to describe strategy implementation in more detail.
Competitive advantage requires that the firm's value chain be managed as a system rather than a collection of separate parts. Positioning choices determine
not only which activities a company will perform and how it will configure individual activities, but also how they relate to one another. This is crucial, since the
essence of implementing strategy is in the activities - choosing to perform activities differently or to perform different activities than rivals. A firm is more than
the sum of its activities. A firm's value chain is an interdependent system or network of activities, connected by linkages. Linkages occur when the way in which
one activity is performed affects the cost or effectiveness of other activities. Linkages create tradeoffs requiring optimisation and coordination.

Porter describes three choices of strategic position that influence the configuration of a firm's activities:
 variety-based positioning - based on producing a subset of an industry's products or services; involves choice of product or service varieties rather than
customer segments. Makes economic sense when a company can produce particular products or services using distinctive sets of activities. (i.e. Jiffy Lube
for auto lubricants only)
needs-based positioning - similar to traditional targeting of customer segments. Arises when there are groups of customers with differing needs, and when a
tailored set of activities can serve those needs best. (i.e. Ikea to meet all the home furnishing needs of a certain segment of customers)
access-based positioning - segmenting by customers who have the same needs, but the best configuration of activities to reach them is different. (i.e.
Carmike Cinemas for theaters in small towns)

The major contribution with "activity mapping" is to help explain how different strategies, or positions, can be implemented in practice. The key to successful
implementation of strategy, he says, is in combining activities into a consistent fit with each other. A company's strategic position, then, is contained within a
set of tailored activities designed to deliver it. The activities are tightly linked to each other, as shown by a relevance diagram of sorts. Fit locks out competitors
by creating a "chain that is as strong as its strongest link." If competitive advantage grows out of the entire system of activities, then competitors must match
each activity to get the benefit of the whole system.

Porter defines three types of fit:

simple consistency - first order fit between each activity and the overall strategy
reinforcing - second order fit in which distinct activities reinforce each other
optimisation of effort - coordination and information exchange across activities to eliminate redundancy and wasted effort.

How is competitive advantage sustained?

Porter (1990) outlines three conditions for the sustainability of competitive advantage:

Hierarchy of source (durability and imitability) - lower-order advantages such as low labour cost may be easily imitated, while higher order advantages like
proprietary technology, brand reputation, or customer relationships require sustained and cumulative investment and are more difficult to imitate.
Number of distinct sources - many are harder to imitate than few.
Constant improvement and upgrading - a firm must be "running scared," creating new advantages at least as fast as competitors replicate old ones.
Strategic Choices

Whether a business succeeds or fails depends in large on the strategic choices made by the organisation. For example, spending large amounts of time and
money introducing a product that turns out to have a very limited market is an example of a bad strategic choice. Anticipating a change in consumer tastes and
introducing a service to take advantage of that change before competitors do is an example of a good strategic choice.

The development of business strategy takes into account that all companies must cope with limited resources to some extent. The most successful companies
can allocate scarce resources to the projects that have the greatest positive impact on revenue growth or improvements in productivity and efficiency that can
increase profit margins. When conducting their own research and analysis the candidates should focus on identifying such projects in the two companies and
make critical evaluation.

Typical strategic choices of an organisation involve:

The choices as to how an organisation positions itself in relation to competitors (Generic Strategies)
The choices of products and markets available to an organisation ( Growth strategies)
The choices about how strategies are pursued (Mergers, Acquisitions, Joint Ventures etc.)
Corporate Level Strategies

Corporate level strategies detail actions taken to provide value to customers and gain a competitive advantage by exploiting core competencies in specific,
individual product or service markets. A business level strategy can be competitive-battling against all competitors for advantage (competitive strategies) and or
cooperative (cooperative strategies) with one or more competitors to gain an advantage over other competitors

Porters Generic Competitive Strategies

There are countless variations in the competitive strategies that companies employ, mainly because each companys strategic approach entails custom-designed
actions to fit its own circumstances and industry environment. Candidates should bear in mind that the custom-tailored nature of each companys strategy to
face the future change conditions and outmanoeuvre its rivals in a particular industry makes the chances remote that any two companies even companies in
the same industry will employ strategies that are exactly alike in every detail. These differences must be evaluated in depth and the key features of the generic
strategy followed by the two companies should be highlighted.

Although there are many variations of the competitive strategies employed by companies they can be broadly divided based on two broad and important
differences:

a) whether a companys target market is narrow or broad

b) whether the company is pursuing a competitive advantage linked to low costs or product differentiation

Based on these two criteria FOUR distinctive competitive generic strategies can be identified.
 A Low-cost provider strategy-appealing to a broad spectrum of customers by being the overall low-cost provider of a product or service
A Broad differentiation strategy seeking to differentiate the companys product or services from rivals in ways that will appeal to a broad spectrum of
buyers
A Focused (or market niche) strategy based on lower cost concentrating on a narrow buyer segment and outcompeting rivals by serving the niche
members at a lower cost than rivals
A Focused (or market niche strategy) based on differentiation-concentrating on a narrow buyer segment and outcompeting rivals by offering nice
members customised attributes that meet their tastes and requirements better than rival products
Example

Generic Competitive Strategies-Examples

Low Cost Provider Strategy-Wal-Mart

Wal-Mart is one of the foremost practitioners of low cost leadership, and employs sophisticated state-of-the art information and
communication technology throughout its operations, automated distribution facilities, online systems for supplies and inventory management,
cutting edge sales tracking and check-out systems and a private satellite communications system that daily sends point-of-sale data for 4,000
vendors, to maintain its low cost leadership.

Broad Differentiation Strategy- BMW

BMW uses performance as an attribute to differentiate its brand from competition. BMW makes great use of this concept by positioning their
cars as The ultimate driving machine. Cervelos dedication to designing and building aerodynamic bikes is what helped the brand carve a
distinctive niche in the super competitive race bike segment dominated by much bigger players such as Trek, Specialised and Giant. The slogan,
Speed. Engineered. is a great reflection of BMWs philosophy

Focus Cost Strategy-Motel 6

Motel 6 caters to price conscious travellers who want a clean, no-frills place to spend the night. The company reduces its investment costs by
selecting relatively inexpensive sites, building only the basic facilities, incorporating standard inexpensive materials and low-cost construction
techniques and simple room furnishings and decorations. It reduces its operational costs by not including any restaurants, bars and other
guests' services, using only front desk personnel and skeleton staff for room, building and ground maintenance.
 Focus Differentiation Strategy-Rolex

Rolex is a brand of Swiss wristwatches and accessories renowned for their quality and exclusivity, as well as their cost (from a few thousand to
more than one hundred thousand U.S. dollars). The watches have become status symbols of the rich and famous as well as the upwardly
mobile career-minded individual. It takes more than a year to assemble over 220 minute pieces. This is done systematically by hand and is
extremely detailed oriented. In fact about 400 operations are conducted only on the main plate. The assembly is put through rigorous testing
and retesting. Due to high standards and excellent quality control, Rolex will continue to be the leader in luxury wristwatches.

Growth Strategies

Growth strategies are pursued by organisations to achieve growth in sales, assets, profits or a combination of these. Organisations that compete in expanding
industries must grow to survive. Continuing growth means increasing sales and a chance to take advantage of the experience curve to reduce per unit cost and
increase profits. An organisation can grow internally by expanding its operations both globally and domestically, or it can grow externally through mergers,
acquisitions and strategic alliances

Ansoffs Product/Market Framework

The most commonly used model for analysing the possible strategic directions that an organisation can follow is the Ansoff Matrix. This matrix shows potential
areas where core competencies and generic strategies can be deployed. There are four broad alternatives:

Market Penetration
Market Development
Product Development
Diversification
Market Penetration-

Market penetration strategy involves focusing on selling your existing products or services into your existing markets to gain a higher market share. This is the
first strategy most organisations will consider because it carries the lowest amount of risk. A successful market penetration strategy relies on detailed
knowledge of the market and competitor activities. It relies on you having successful products in a market that you already know well. An organisation uses a
market penetration strategy when the organisation wants to increase the market share of its current products, restructure a market by driving out competitors
and increase usage.

Market Development:

Market Development is based on entry into new markets or new segments of existing markets while employing existing products. Entering new markets is likely
to be based on leveraging existing competences but may also require development of new competencies. Entering new segments of existing markets may
require the development of new competencies that serve the particular needs of customers in these segments. The major risk of market development is that it
centres on entry into markets in which the business may have only limited experience.

Product Development:

Product Development centres on the development of new products for existing markets. As with market development and, the intention is to attract new
customers, retain existing ones and increase market share. Providing new products will be based on exploiting existing competences but also require that new
competences are built as in product research. For example, Apple has a ritual of periodically, launching cutting-edge technology products (iPod, iPhone, iPad
and MacBook Air), and does so by continually exploiting its core competency in technology and innovative design.

Product development offers the advantage to a business of dealing with customer needs of which it has some experience because they are within the existing
market. In a world of shortening product life cycles, product development has become an essential form of strategic development for many organisations.

Diversification:

Diversification is business growth through new products and new markets. It is an appropriate option when current markets are saturated or when products are
reaching the end of their lifecycle. It can produce important synergies and can also help to spread risk by broadening the product and market portfolio.
Diversification can take two main forms depending on just how different the products and markets are to existing ones.

Related Diversification is said to have occurred when the products and or markets share some degree of commonality with existing ones. This closeness can
reduce the risk of diversification. In practice, related diversification usually means growth into similar industries or forward or backward in a business's existing
supply chain. For example, the Walt Disney company has concentrated its growth around entertainment and has diversified in to theme parks, movie
production, toys, games and broadcasting.

Unrelated Diversification is growth into product and market areas that are completely new and with which the business shares no commonality at all. It is
sometimes referred to as conglomerate diversification. For example, Virgin Group is a prime example of unrelated diversification where the business operates
in space tourism, travel (air and train), hospitality, entertainment, finance, mobile telecommunication etc. to name a few of the diversified areas.

6.0 Portfolio Strategies

A business portfolio is the collection of strategic business units that make up the corporation. The optimal portfolio is the one that fits into the strengths, and
helps exploit the most attractive industries or markets. A Strategic Business Unit (SBU) can either be an entire mid Size Company or a division of a large
corporation that formulates its own business strategy or has separate objectives from the parent company.
Portfolio planning is a process that helps executives assess their firms prospects for success within each of its industries, offers suggestions about what to do
within each industry, and provides ideas for how to allocate resources across industries. The aims of a portfolio analysis is:
a) Analyse its current business portfolio and decide which SBUs should receive more or less investment (Invest/Maintain)
b) Develop growth strategies for adding new products and businesses to the portfolio (Grow)
c) Decide which products or businesses should no longer be retained (Divest/Harvest)

BCG Growth Share Matrix

The Boston Consulting Group (BCG) matrix requires a firms businesses to be categorised as high or low along two dimensions: its share of the market and the
growth rate of its industry.

Each of the corporations product lines or business units is plotted on the matrix according to both the growth rate of the industry in which it competes and its
relative market share. A units relative competitive position is defined as its market share in the industry divided by that of the largest other competitor. By this
calculation, a relative market share above 1.0 belongs to the market leader. The business growth rate is the percentage of market growth that is the percentage
by which sales of a particular business unit classification of products have increased. The matrix assumes that, other things being equal, a growing market is
attractive.

A product line or business unit must have relative strengths of this magnitude to ensure that it will have the dominant position needed to be a star or cash
cow". On the other hand a product line or business unit having a relative competitive position less than 1.0 has dog status. The area of the circle represents
the relative significance of each business unit or product line to the corporation in terms of assets used or sales generated.
A star is a business unit which has a high market share in a growing market. The business unit may be spending heavily to keep up with growth, but high market
share should yield sufficient profits to make it more or less self- sufficient in terms of investment needs

A question mark (or problem child) is a business unit in a growing market, but not yet with high market share. Developing question marks into stars, with high
market share, takes heavy investment. Many question marks fail to develop, so the BCG advises corporate parents to nurture several at a time. It is important to
make sure that some question marks develop into stars, as existing stars eventually become cash cows and cash cows may decline into dogs.

A cash cow is a business unit with a high market share in a mature market. However, because growth is low, investment needs are less, while high market share
means that the business unit should be profitable. The cash cow should then be a cash provider, helping to fund investments in question marks.

Dogs are business units with a low share in static or declining markets and are thus the worst of all combinations. They may be a cash drain and use up a
disproportionate amount of company time and resources. The BCG usually recommends divestment or closure.

Underlying the BCG Growth share matrix is the concept of the experience curve. The key to success is assumed to be market share. Firms with the highest
market share tend to have a cost leadership position based on economies of scale, among other things. If a company is able to use the experience curve to its
advantage, it should be able to manufacture and sell new products at a low enough price to garner early market share leadership. Once the product becomes a
star, it is destined to be very profitable, considering its inevitable future as a cash cow.
Having plotted the current positions of its product lines or business units on a matrix, a company can project the future positions, assuming no change in
strategy. Present and projected matrices can thus be used to help identify major strategic issues facing the organisation. The goal of any company is to maintain
a balanced portfolio so it can be self-sufficient in cash and always work to harvest mature products in declining industries to support new ones in growing
industries.

GE Directional Policy Matrix

General Electric, with the assistance of McKinsey and Company consulting firm developed the GE Matrix. It is a more complicated matrix and includes 9 cells
based on long-term industry attractiveness and business strength/competitive position.

The GE matrix includes much more data and is more complex than the BCG matrix. For example, in the GE matrix industry attractiveness is measured through
market growth rate, industry profitability, size and pricing practices, among other possible opportunities and threats. Business strength or competitive position
includes market share as well as technological position, profitability and size, among other possible strengths and weaknesses.
The individual product lines or business units are identified by a letter and plotted as circles on the GE Business screen. The area of each circle is in proportion to
the size of the industry in terms of sales. The pie slices within the circles depict the market share of each product line or business unit.

The plot product lines or business units on the GE Business screen follow the 4 steps:

Step 01: Select criteria to rate the industry for each product line or business unit. Assess overall industry attractiveness for each product line or business unit on
a scale of 1 (very unattractive) to 5 (very attractive)

Step 02: Select the key factors needed for success in each product line or business unit. Assess business strength/competitive position for each product line or
business unit on a scale of 1 (very weak) to 5 (very strong)

Step 03: Plot each product lines or business units current position on a matrix as shown in the above figure

Step 04: Plot the firms future portfolio assuming the present corporate and business strategies remain unchanged. Is there a performance gap between
projected and desired portfolios? If so, this gap should serve as a stimulus to review the corporations current mission, objectives, strategies and policies.

8.0 Conclusions & Recommendations

In concluding the analysis candidates are required to draw valid conclusions on the current strategic position and competitiveness of the two companies and to
what extent they have achieved their strategic purposes and direction in terms of vision and mission. In addition candidates are advised to provide valid
recommendations to support their argument.

9.0 Reference List

References
The acknowledgement of the source of the information is called a reference or citation.

Referencing aims to:

Help the reader to distinguish between their own ideas and those from other sources;
Enable readers to check and follow up for themselves the authors you have read;
Avoid the accusations of plagiarism.

The reference list at this stage need not be lengthy but only sufficient to inform your proposal. The list must include all the sources that were cited and
consulted in writing the research proposal. Candidates must use the Harvard Style of referencing.
Helper Questions

What is the structure that should be followed to present the Portfolio?

There is no specific format and the candidate can adapt their own format for the answer. However, it should address the key requirement of the assessment
brief adequately and need to be within 2,500 word count.

How much should I write for the Introduction?

There is no exact amount of words for Introduction of the two companies. It is advised to restrict the introduction of the company and industry background to
500-600 words and allocate more room for the analysis of strategies, conclusions and recommendations. This may vary depending on the format and style
you may adopt for the presentation of the portfolio. For example, if you use a power point presentation to present your answer then you may use the
speaker notes and highlight only the key points in the slide.
Sample Answer

Note: Please note that these are sample answers for similar requirements. However, candidates are required to develop their own answers that correspond
to the selected research topic and scope.

Strategic Analysis Portfolio

British American Tobacco (BAT) vs. Philip Morris International (PMI)

A sample answer from the similar requirement

 Strategic Management

Assignment 2: Strategic Analysis Portfolio

Tobacco
Industry
 Contents Page
Contents Page1
Introduction2
Industry Overview........3
PMI: Aims and Objectives4
BAT: Aims and Objectives..5
Porters (1980) Generic Strategies6
PortersGeneric Strategies Analysis.7
Blue Ocean..8
BAT: The Blue Ocean..9
Competitors Attempting Blue Ocean10
E-cigaretteMarket Share Analysis.11
MichaelPorters (1980) Generic Strategies.12
Rivalry:Strong13
Threat of New Entrants: Moderate14
RiskElement: Smuggling..15
PMIGuilty of Smuggling.16
BAT set example in smuggling.17
Ansoff Matrix18
Marketing and Advertising: BAT.19
Marketing and Advertising: PMI.20
Conclusion.21
Reference.22-30 1
 Introduction

Competitive advantage has been a cornerstone concept in the field of strategic management, which explains the differences in
performances among organisations, carried out to achieve organisational goals (South, 1981, p.15).

Competitive advantage are distinctive concepts that give superior performance to an organisation, gained by offering consumers
greater value, either by means of lower prices or by providing greater benefits and services (Sigalas, 2015, p.2013).

Organisations are continuously making changes within the organisation, making different strategic choices with the implications to
gain competitive advantage (King and Lawley, 2013, p- 41).

This portfolio will focus heavily on the tobacco industry, in regards to the competitive position of British American Tobacco (BAT)
and Phillip Morris (PMI). Using different tools and models both organisations will be explored in comparing and contrasting.

The models and tools used will be the following:

1. Porters Generic Strategies

2. Blue Ocean
3. Porters five forces
4. Ansoff Matrix

From the analysis of the tools and models, the aim is to identify what strategic choices each organisation has made, how it affected
their competitive position and lastly how the strategic choices support the organisation in meeting its aims and objectives.

2
 Industry Overview

From the table it is apparent China National Tobacco Corporation is the number 1 leading tobacco industry. The global tobacco industry is
estimated to be worth $750 billion in 2014, with 1.3billion tobacco users worldwide (global.tobaccofreekids.org, 2014). The tobacco industry
is dominated by 5 organisations with BAT and PMI included in the five. BAT is currently positioned 3rd in the leading global tobacco industry
with PM ranked at 2nd. Bat holds 12% global market share with annual profits at $4.2 billion, on the other hand PM hold 17.4% global
market share with $7.5 billion annual profits (Rehn, 2014).
3
Phillip Morris International: Aims and Objectives

Phillip Morris International is driven by four key goals that guide them to grow as a business in a responsible manner, the
four goals are:

1. Meet expectations of adult smokers offering innovative tobacco products of highest quality available in their preferred
price category
2. Generate superior return to their stockholders through revenue, volume, income and cash flow growth and a balanced
program of dividends and share repurchases.
3. Reduce harm caused by tobacco products supporting comprehensive regulation and by developing products with the
potential to reduce the risk of tobacco-related diseases
4. To be a responsible corporate citizen and to conduct our business with the highest degree of integrity.
(PMI, 2016)

Csrimlovinit (2016). 4
British American Tobacco: Aims and Objectives

British American Tobacco vision is to achieve leadership of

the global tobacco industry, not just in volume and value
but also in the quality of the business, focusing on four
aims:

1. Growth: Developing brands, innovations and new

products to meet consumers evolving needs, with
less risky alternatives to regular cigarettes

2. Productivity: Effectively deploying resources to

increase profits and generate funds for investment

3. Winning organisation: Ensuring great people, great

teams and a great place to work

(Bat, 2011)
4. Responsibility: Ensuring a sustainable business that
meets stakeholders expectations, committed to
operating to the highest standards of corporate
conduct and transparency
(BAT, 2015, p.9)
5
 Michael Porters (1980) Generic Strategies
Michael Porter identified 3 approaches to generic strategies, the 3 approaches are cost leadership, differentiation and focus. This model was
chosen as it can be applied to products and services in all industries, therefore it will be used to identify what strategy BAT and PMI use to
gain competitive advantage.

PMI Cost Leadership BAT Differentiation

PMI focus on the Cost leadership On the other hand BAT focus on
approach. This strategy enables an using the Differentiation approach.
organisation to increase profits by This involves creating products or
reducing costs, while charging industry- services different from and more
average prices to increase market share, attractive than those of your
while still making a reasonable profit on competitors. This strategy allows BAT
each sale because of reduced costs. to enter many different markets,
PMI use low cost strategy focusing on where they are able to meet the
winning though efficiency, their objective needs of different consumer
is to be the low-cost leader, which allows preferences.
(Seekingalpha, 2013) (Tobacco-news.net. 2016)
them to have higher margins than
competitors (Ciolino, 2014). This With 200 brands in its portfolio more
strategy is to ensure they are able to than any of its competitors (British
achieve profits for their stockholders as American Tobacco, 2013,p.4), this
it is one of the objectives they focus on. strategy directly links to BATs aim in
However, this strategy is believed to be developing brands to meet
easily imitated with the risk of no long consumers evolving needs where
term advantage by Wensley (1981, they sell in over 200 markets.
p.177).
6
 Porters Generic Strategies Analysis

(Statista, 2015)

It can be evident from the table above that PMI has been beneficial in focusing on Cost Leadership, as they are the leading tobacco
organisation with the most net sales at $29.7 billion. BAT are positioned at 3rd place with net sales at $23 billion, although with the
differentiation strategy with many different brands they have strong market presence in many different markets, which will be explored
further on. Also with over 200 brands they sell the most cigarettes worldwide and have the largest network in most countries than their
competitors, due to differentiation strategy (Mackay and Erikson, 2002, p.50).
7
 Blue Ocean
Organisations heavily focus on red oceans in concentrating on
beating competition in existing markets, which are often over
crowded with limited growth opportunities. The blue ocean on
the other hand is about creating new markets instead of
competing in existing ones to stand apart from competitors.
This model was chosen to identify market decisions made by
both organisations, in order to classify what markets they are
targeting either existing or looking for new markets.
BAT is based in the UK, it would be expected for them to have the
most market share, but they only have 8% market share while PMI
based in the US have 7% market share (Ash, 2015). The UK
tobacco market is dominated by Imperial Tobacco with 45%
market share, BAT wanted to increase market share in the UK, so
decided to develop a product for the UK.
(Acceleratedgrowth, 2015) 8
 BAT: The Blue Ocean

With the cigarette market crowded and with the diseases caused by smoking, BAT
have spent 480 million in Research and Development to develop a product less
harmful. To increase market share in the UK, BAT were able to create a blue ocean
by capturing new demand in introducing the e-cigarette into the UK called Vype to
increase market share (Manning, 2013). They are the first international company to
launch an e-cigarette, designed to reduce the impact of tobacco use.

This strategic decision BAT made was successful in capturing the UK

market with 75% increase in vaping sales from 2013 to 2015 owning
56% of the e-cigarette, also British consumers increasingly using e-
cigarettes, whilst nicotine replacement therapies such as gum and
patches fell by 3% (Davidson, 2015).

The introduction of Vype allow BAT to meet their aim in productivity, in using their
resources to innovate and increase profits and again relating to meeting different
profiles of adult smokers. Vype disrupted the cigarette market with competitors
looking for new ways to compete with BAT and also looking to enter the e-cigarette
market as market analyses established (Forbes, 2016).

(Electrictobacconist, 2015)
9
 Competitors Attempting Blue Ocean

For instance PMI invested $2 billion in fundamental research with over 430
scientists, experts and staff to develop non-combustible alternatives to
1 cigarettes, referred to as Reduced Risk Products (Morgan, 2015). PMI learnt that 2
people are trying to quit smoking but are addicted with 68% of current smokers
want to quit smoking (Ash, 2014). Therefore they wanted to create a product
which is an alternative to traditional smoking to gain competitive advantage,
instead of creating another e-cigarette product like BAT.

(Vaperanks, 2014) It came to PMIs attention that Reynolds

This product reflects on their aim
introduced a heated tobacco product in the
in developing products with the
1980s but they failed to be successful with
potential to reduce risk of
it, as it was withdrawn from the market
tobacco related diseases. PMI
shortly after its introduction (Zerbe and
want to capitalise on the growing
Kirkwood, 2012, p. 176). They failed due to
appetite for alternatives to
not getting consumer acceptance from the
traditional smokes with the
product and also because they allegedly
IQOS.
made false health claims.

Thus from the idea of Reynolds, in 2014 PMI launched IQOS a smokeless cigarette
that is a hybrid between analogs and electronic cigarettes. Unlike e-Cigarettes
that use liquid nicotine, the IQOS device uses real tobacco which is heated,
instead of burning it producing hazardous smoke and tar (Hernando, 2014).
Smoking is the cause of many different illnesses and premature death, accounting 3
4
for approximately 100,000 deaths a year in the UK (Ash, 2015) products like
IQOS have the potential to reduce the risk of smoking-related diseases.
10
 E-cigarette Market Share Analysis

(Forbes, 2015)

BAT had an early mover advantage in the e-cigarette market with 56% market share in the UK, however from the
statistics in the graph it proves the blue ocean lasted 2 years as competitors Reynolds gained the most market share with
the product Vuse at 30%. BAT dropped to 18% with PMI ahead at 21%.

11
 Michael Porters (1980) Five Forces

Porters (2008, p.15) five forces was chosen as it allows analysis of the level of competition within an industry, enabling
understanding of where power lies and from where you can take advantage. Out of the five forces, rivalry and threat of
new entrants will be concentrated on.

(Cgma.org, 2013)

12
 Rivalry: Strong

Competition is fierce in the tobacco industry with IQOS in the

market competitors such as Imperial Tobacco take a swipe at it
with negativity. Imperial tobacco researchers tested the heat not
burn product IQOS and found evidence that some of the processes
within a burning cigarette are still occurring (Chambers, 2015).
Imperial tobacco turn its back on the product as they focus on e-
cigarettes and do not want PMI to gain more market share in the
UK as they are the leaders. PMI hit back in stating it is
disappointing Imperial tobacco try to disparage a very promising
technology for tobacco harm reduction, which they do not have in
their portfolio.
(Cigarettesguide, 2013)

With the introduction of Vype by BAT in 2013, it lead to direct competition with Imperial
tobacco. Imperial tobacco brought out the E-cigarette brand called Blu in 2014 where it
had analysts shocked as it was doing so well (Robinson and Bond, 2014). The
introduction of Blu affected BAT mostly as its profits fell (Robinson, 2014).
(Imperial-tobacco, 2016)
1
 Threat of New Entrants: Moderate

1) BAT hold robust market positions in each of 2) Market analysts have established that growth rates are far higher in Asia than
its regions and have been successful in gaining in the rest of the world therefore, BAT decided to focus on Asian Markets
leadership in more than 60 markets (British (Stephens, 2015). BAT have been successful in Asian markets with 3% increase
American Tobacco, 2016). BAT are very in revenue profits at 1.5bn, overtaking their profit from America at 1.4bn
profitable in emerging markets unlike its (Russell, 2012). Market share leaders accomplish this distinction of strong
competitors, which is a key differentiator. presence in markets, through the strategy of differentiation rather than through
cost-leadership as established by Gale (1992, p.11). Moving into emerging
markets helps BAT meet their aim in growth strategy, where they want to
develop in as many places as possible.

3) With the growth rates to be higher in Asia other tobacco

organisations wanted to enter the market to increase revenue, as
there is potential to grow and earn huge profits. For instance PMI
targeted to enter the Asian Market just as BAT did, but they failed
to be successful as they wanted to cheat their way in. PMI were
held for contraband importing and exporting illegally, resulting in
$1.1 billion sales loss (Forbes, 2014).

(Pinterest, 2016) 14
 Risk Element: Smuggling

Tobacco smuggling is a huge threat all around the world to tax revenues and to the public with cigarettes being the
most widely smuggled consumer product (WHO, 2002, P.2). Smuggling is also a major concern for tobacco
organisations as with this it can curtail profits for the organisation and they could be held accountable for it. With duty
not being paid on around 9% of cigarettes and around 36% of hand rolling tobacco in the UK, revenue losses are
estimated at 2 billion (House of Commons, 2014, p4). Research also indicates 600 billion cigarettes a year are illegal,
smuggled, counterfeit or tax-evaded in other ways.

(Smokersnews, 2012)
 PMI Guilty of Smuggling

1) PMI has been engaged in smuggling and drug

money-laundering to avoid taxes and boost sales
of its cigarettes in Columbia (Beelman, 2000). PMI
conceived, directed, controlled and implemented
an international conspiracy to defraud plaintiffs
and deprive them of money in order to increase
their profits and market share. In some cases
PMIs employees themselves laundered money as
3) However they learnt
part of a smuggling operation.
from their mistakes and
are working with a
number of governments
2) In other instances the organisation created a around the world to
labyrinthine network of third party payments and defeat illegal trade in
Swiss bank accounts in order to mask the illegality cigarettes (PMI, 2016).
of their actions. It can be clear looking at the
international level in operating PMI have abused
the law. From this scenario PMI received a bad
reputation, which effected their operations.

16
BAT Set example in Smuggling

BAT on the other hand set a better example in regards to

smuggling as they developed research methods to help
tobacco organisations and governments to understand this
illegal trade better. BAT see the illegal tobacco trade as a
major threat to its business, so invest up to 40 million each
year in the fight against smuggling (BAT, 2016). It can be
evident from PMIs experience that employees within the
organisation can also be a part of smuggling therefore, BAT
carry out checks and measures in its operations to ensure
their employees are not a part of it. This directly links to
their aim in being a winning organisation in ensuring they
look after their employees building trust as one team. They
also fully support regulators and governments in seeking to
eliminate all forms of illicit tobacco trade. This brought a
positive image and reputation for BAT.

(Dakers, 2014)
BAT want to earn profits and market share legitimately on the other
hand PMI wanted to take a shortcut in trying to illegally gain income,
which resulted in a heavy fine of $1.25 billion and a bad reputation, a
decision they regret (Tran, 2004).
17
 Ansoff Matrix

The Ansoff matrix is a tool that helps a business determine its products and market growth strategy. Using the Ansoff
matrix PMI use market development in using existing brands into new markets, whereas BAT use diversification in
creating new products in new markets.

Existing Products New

E
xi
st

N
e

(Flairng, 2015)

1
 Marketing and Advertising: PMI

Due to bans on tobacco advertising it is very difficult for tobacco organisations to create a brand through marketing
because it is prohibited in what they can and cannot do. It makes it extremely difficult for tobacco organisations to put
their products out there and gain attention for it with the advertising bans.

1) PMI have been able to create 2) However, with the

a renowned brand Marlborough advertising bans on tobacco it

through successful advertising restricted tobacco organisations

and by using a formula which to advertising through print

delivered a speedier and sharper media, billboard direct

kick to tobacco, which had marketing and sponsorships etc.
competitors intrigued in trying to (Ipezone, 2015) (Ash, 2015) Therefore PMI could
figure it out (newrepublic, 2008). 3) Before the advertising laws were introduced not advertise on formula one
PMI used many forms of PMI used different techniques of advertising cars with pictures of their brand.
advertising types, one unique which they benefited from as they own top Although PMI tackled this with
type is using formula one cars to selling brand Marlborough which has a strong F1 being the worlds most
advertise their brand, which their edge over its competitors. Marlborough has watched annual sport series
competitors BAT have not done. (Sylt, 2015) PMI did not want to
made annual ranking for the worlds most
PMI have been able to create a lose this source of advertising,
valuable brand 10th year in a row published by
partnership with formula 1 team so they ensured red and white
BrandZ (BrandZ, 2015, p.59). The brand is
Ferrari, where they were able to squares on the formula one
valued at $80billion more than any of its
advertise their brand
competitors (Petroff, 2015) which is why they vehicles to resemble the brand
Marlborough (Dewhirst, 2002,
are able to use market development strategy Marlborough (Duff, 2015).
p.146).
from the Ansoff matrix.
19
 Marketing and Advertising: BAT

1) BAT on the other hand have not been able to create a brand like PMIs Marlborough but they
create new products for new markets and have been successful in many markets with this. For
instance their annual report shows brand Lucky Strike introduced in America the leading brand and
also Pall Mall introduced in Poland is also market leader (British American Tobacco, 2015, p.14). BAT
create new products for a certain market, whereas PMI are able to use their established brand
Marlborough to enter new markets.

(Proactiveinvestors,
2) With the advertising bans on tobacco BAT 3) With the renowned brand Marlborough
tend to target less developed countries PMI have the advantage in going into new
where there are no advertising bans on markets with that brand, than its
tobacco or where it is not as strict and they competitors brands due to its value. In
can get away with it (Dagli, 1999, p.117). In achieving the well established brands it
targeting less developed countries they have helps PMI accomplish their aim in
been successful in countries such as generating profits for its stockholders.
Bangladesh and India where they are market
leaders (Stevens, 2014).
2
 Conclusion

This portfolio focused on Phillip Morris International and British American Tobacco in the aspect of strategic choices each organisation has
made and the implications of these choices.

Looking at the aims and objectives of both organisations it can be apparent they have similar aims and objectives in delivering different
products to different consumers and being a responsible organisation etc.

Although with similar aims and objectives both organisations make different strategic decisions for their respective competitive advantage.

Using the differentiation strategy BAT have 200 brands in its portfolio more than any of its competitors, being able to target a wide variety of
people. On the other hand PMI using cost-leadership have been able to achieve the leading organisation with the most net sales.

From the analysis of the blue ocean it can be said that when an tobacco organisation creates a new market its competitors are quick to follow
or want to get involved, proving the competiveness of the oligopoly market. The competitiveness is so fierce within this industry that even
with strong brand value organisations try cheat their ways in markets, just as PMI did but failed to enter the Asian markets.

BAT having spent 480 million developing the E-cigarette it could be argued it was not worth spending that much, as they were only market
leaders for 2 years, alternatively they could have focused on using that money to create a brand like Marlborough.

Legislation plays a huge role in the tobacco industry making it harder for tobacco organisations to sell their products, but it can be evident
there are ways around it as PMI and BAT have proven. PMI took advantage of various advertising methods before the laws on advertising ban
were introduced, where BAT did not use those opportunities, therefore PMI was rewarded with a renowned worldwide brand.

Thus it can be apparent through this portfolio that different strategic choices work differently for each organisation.

21
 Reference

ACCELERATEDGROWTH (2015) Red ocean vs. blue ocean strategy.ACCELERATEDGROWTH [online] Available from:
http://www.acceleratedgrowth.com/red-ocean-vs-blue-ocean/ [Accessed 14th April 2016].

ASH (2014) Stopping smoking. ASH [online]. Available from: http://ash.org.uk/files/documents/ASH_116.pdf [Accessed
10th April 2016].

ASH (2015) Smoking statistics illness and death. ASH [online]. Available from:
th
http://ash.org.uk/files/documents/ASH_107.pdf [Accessed 14 March 2016].

ASH (2015) The UK tobacco industry. ASH [online]. Available from: http://ash.org.uk/files/documents/ASH_123.pdf
[Accessed 25th January 2016].

ASH (2015) UK tobacco advertising and promotion. ASH [online]. Available from:
th
http://ash.org.uk/files/documents/ASH_124.pdf [Accessed 10 April 2016].

BAT (2011) British American tobacco sustainability report- The Group. BAT [online]. Available from:
th
http://www.bat.com/groupfs/sites/BAT_8NXDKN.nsf/vwPagesWebLive/DO8QDL4K?opendocument [Accessed 14 April
2016].

British American Tobacco (2015) Delivering today investing in tomorrow. London: British American Tobacco.

Beelman, M. (2000) Philip Morris accused of smuggling, money-laundering conspiracy in racketeering lawsuit. ICIJ
[online]. Available from: https://www.icij.org/node/460/philip-morris-accused-smuggling-money-laundering-conspiracy-
racketeering-lawsuit [Accessed 10 April 2016].
22
 Reference

BrandZ (2015) Most Valuable Global Brands. London: Millward Brown.

British American Tobacco (2015) Delivering today investing in tomorrow. London: British American Tobacco.

British American Tobacco (2016) Illegal Tobacco Trade. BAT [online]. Available from: http://www.bat.com/theman#
[Accessed 1st April 2016].

British American Tobacco (2013) Delivering today investing in tomorrow. London: British American Tobacco.
Chambers, S. (2015) Philip morris device criticized by imperial researcher. BLOOMBERG [online]. Available from:
http://www.bloomberg.com/news/articles/2015-09-25/philip-morris-device-criticized-by-imperial-tobacco-researcher
[Accessed 14 April 2016].

CGMA (2013) Porters five forces of competitive position analysis.CGMA [online]. Available from:
http://www.cgma.org/Resources/Tools/essential-tools/Pages/porters-five-forces.aspx?TestCookiesEnabled=redirect
[Accessed 14th April 2016].

CIGARETTESGUIDE (2013) Imperial tobacco the fifth major international tobacco manufacturer. CIGARETTESGUIDE
[online]. Available from: https://cigarettesguide.wordpress.com/2013/05/13/imperial-tobacco-the-fifth-major-
international-tobacco-manufacturer/ [Accessed 14th April 2016].

Ciolino, M (2014) Philip morris international. PREZI [online]. Available from: https://prezi.com/jgxjlpeox0os/philip-morris-
international/ [Accessed 18 February 2016].

23
 Reference

CSRIMLOVINIT (2016) When corporate social responsibility goes up in smokes. CSRIMLOVINIT [online] Available from:
http://csrimlovinit.weebly.com/phillip-morris.html [Accessed 14th April 2016].
Dagli, E. (1999) Are low income countries targets of the tobacco industry?. The international Journal of Tuberculosis and
Lung Disease. 3(2), pp.113-118.

Stevens, B. (2014) British American Tobacco. BAT [online]. Available from:

http://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DO6FKEVZ/$FILE/medMD9L7CG7.pdf?openelement
[Accessed 15 February 2016].

Davidson, L. (2015) Vaping takes off as e-cigarette sales break through $6bn. TELEGRAPH [online]. Available from:
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11692435/Vaping-takes-off-as-e-cigarette-sales-
break-through-6bn.html [Accessed 15 February 2016].

Dewhirst, T. (2002) Tobacco sponsorship of Formula One and CART auto racing: tobacco brand exposure and enhanced
symbolic imagery through co-sponsors' third party advertising. Tobacco Control. 11(2), pp.146-150.

Dakers, M. (2014) British American tobacco settles asbestos and dividends legal action. TELEGRAPH [online]. Available
from: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11303021/British-American-Tobacco-settles-
asbestos-and-dividends-legal-action.html [Accessed 16 April 2016].

Duff, A. (2015) Philip Morris cant kick 20-year ferrari formula one habit. BLOOMBERG [online]. Available from:
http://www.bloomberg.com/news/articles/2015-05-13/philip-morris-can-t-kick-20-year-ferrari-formula-one-habit
[Accessed 10 April 2016].

2
 Reference

EC (2013) EC acts to stub out cigarette smuggling. EC.EUROPA [online]. Available at:
http://ec.europa.eu/unitedkingdom/press/frontpage/2013/13_51_en.htm [Accessed 4th April 2016].

ELECTRONICTOBACCONIST (2015) British American Tobacco announces closure of its interlacing e-cig brand.
ELECTRONICTOBACCONIST [online]. Available from: https://www.electrictobacconist.co.uk/blog/2015/05/bat-announces-
closure-of-its-intellicig-brand [Accessed 14th April 2016].

FLAIRNG (2015) British American tobacco calls for greater understanding of the illegal tobacco trade for world no tobacco
day 2015. FLAIRNG [online]. Available from: http://flairng.com/british-american-tobacco-calls-for-greater-understanding-
of-the-illegal-tobacco-trade-for-world-no-tobacco-day-2015/ [Accessed 4th April 2016].

FORBES (2016)E-Cigarette market in the U.K. part 2: big tobacco enters the fray. FORBES [online]. Available from:
http://www.forbes.com/sites/greatspeculations/2016/02/02/e-cigarette-market-in-the-u-k-part-2-big-tobacco-enters-the-
fray/2/#6db89e145f02 [Accessed 13th April 2016].

FORBES (2014) Impact of illicit cigarettes on Philip Morris In Asia. FORBES [online]. Available from:
http://www.forbes.com/sites/greatspeculations/2014/11/14/impact-of-illicit-cigarettes-on-philip-morris-in-
asia/2/#299a931365cc [Accessed 28th March 2016].

FORBES (2015) Who stands to gain from the E-cigarette phenomenon. FORBES [online]. Available from:
http://www.forbes.com/sites/greatspeculations/2015/06/23/who-stands-to-gain-from-the-e-cigarette-
phenomenon/#48dae8c64876 [Accessed 14th April 2016].

Gale, B. (1992) Quality comes first when hatching power brands. Planning Review. 20(4), pp.4-48.
25
 Reference

GLOBALTOBACCOFREEKIDS (2014) The global cigarette industry. GLOBALTOBACCOFREEKIDS [online]. Available from:
http://global.tobaccofreekids.org/files/pdfs/en/Global_Cigarette_Industry_pdf.pdf [Accessed 1st April 2016].

Hernando, H. (2014) New cigarette heats tobacco rather than burning it. DAILYMAIL [online]. Available from:
http://www.dailymail.co.uk/news/article-2671505/Philip-Morris-Intl-sell-Marlboro-HeatSticks.html [Accessed 14th April
2016].

House of Commons (2014) Tobacco Smuggling. London: House of Commons.

IPEZONE (2010) Barcode: Ferrari retains Marlboro advertising. IPEZONE [online]. Available
from:http://ipezone.blogspot.co.uk/2010/05/barcodegate-ferrari-retains-marlboro.html [Accessed 5th April 2016].

IMPERIAL-TOBACCO (2016) Responsibility - Case studies - Responsible with products. IMPERIAL-TOBACCO [online].
Available from: http://www.imperial-tobacco.com/index.asp?page=123 [Accessed 14th April 2016].

King, D and Lawley, S. (2013) Organisational Behaviour. 1st ed. Oxford: Oxford University Press.

Mackay, J and Eriksen, M. (2002) The tobacco atlas. Geneva: World Health Organisation.

Manning, S. (2013) British American tobacco enters electronic cigarette market in Britain with the Vype. INDEPENDENT
[online]. Available from: http://www.independent.co.uk/news/uk/home-news/british-american-tobacco-enters-electronic-
cigarette-market-in-britain-with-the-vype-8737286.html [Accessed 15 February 2016].

26
 Reference
Morgan, P. (2015) Introducing Phillip Morris International. MARKETREALIST [online]. Available from:
http://marketrealist.com/2015/09/philip-morriss-latin-america-canada-segments-low-volumes-2014/ [Accessed 14th April
2016].

NEWREPUBLIC (2008) How Marlboro became number one. NEWREPUBLIC [online]. Available from:
https://newrepublic.com/article/42605/how-marlboro-became-number-one [Accessed 10th April 2016].

Petroff, A. (2015) Marlboro's brand still one of world's best. MONEY.CNN [online]. Available from:
http://money.cnn.com/2015/05/27/news/companies/marlboro-brand-tobacco-cigarettes/#ref=infossible.com [Accessed
15th February 2016].

PINTEREST (2016) Explore these ideas and more. PINTEREST [online]. Available from:
th
https://www.pinterest.com/pin/275634439665326271/ [Accessed 4 April 2016].

PMI (2016) What is illicit trade. PMI [online]. Available from:

th
http://www.pmi.com/eng/tobacco_regulation/illicit_trade/pages/illicit_trade.aspx [Accessed 14 April 2016].

PMI (2016) Philip morris internationals goals. PMI [online]. Available from:
http://www.pmi.com/eng/about_us/company_overview/pages/philip_morris_international_goals.aspx [Accessed 23rd
March 2016].
Porter, M,E. (1980) Competitive Strategy. New York: The free press/Macmillan.

PROACTIVEINVESTORS (2016) British American tobaccos smoking. PROACTIVEINVESTORS [online] Available from:
http://www.proactiveinvestors.co.uk/columns/fat-prophets/24373/british-american-tobaccos-smoking-2015-24373.html
[Accessed 5th April 2016].
2
 Reference

Rehn. A. (2014) 6 Mega corporations control almost the entire global cigarette industry. MIC [online]. Available from:
http://mic.com/articles/81365/6-mega-corporations-control-almost-the-entire-global-cigarette-industry#.6xm20Mzx4
[Accessed 11 February 2016].

Robinson, D. (2014) BAT profits hit by strength of sterling. FT [online]. Available from:
http://www.ft.com/cms/s/0/9f78c6c0-17b8-11e4-b842-00144feabdc0.html#axzz45jnUGkdy [Accessed 13th April 2016].

Robinson, D. and Bond, S. (2014) Imperial tobacco powers ahead in e-cigarette market.FT [online]. Available at:
http://www.ft.com/cms/s/0/467664cc-0c25-11e4-a096-00144feabdc0.html#axzz44CmiSVzF [Accessed 28th March 2016].

Rose, D. (2009) Seizing 150m from criminals and giving it to the Treasury? The tough new laws changing crime.
DAILYMAIL [online]. Available from: http://www.dailymail.co.uk/home/moslive/article-1181248/Seizing-150m-criminals-
giving-Treasury-The-tough-new-laws-changing-crime.html [Accessed 5 April 2016].

Russell, J. (2012) British American tobacco profits jump on asian growth and blasts regulation. TELEGRAPH [online].
Available from: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9101258/British-American-Tobacco-
profits-jump-on-Asian-growth-and-blasts-regulation.html [Accessed 28th March 2016].

SEEKINGALPHA (2016). Philip Morris international: sales up, profit up, dividends up.SEEKINGALPHA [online]. Available at:
http://seekingalpha.com/article/1169811-philip-morris-international-sales-up-profit-up-dividends-up [Accessed 14th April
2016].

Sigalas, C. (2015) Competitive advantage: the known unknown concept. Management Decision. 53(9).

2
 Reference

SMOKERSNEWS (2012) Over 26,000 cigarettes seized at Dublin airport.SMOKERSNEWS [online]. Available from:
http://www.smokersnews.net/over-26000-cigarettes-seized-at-dublin-airport/ [Accessed 4th April 2016].

South, S. (1981) Competitive advantage: the cornerstone of strategic thinking. Journal of Business Strategy. 1(4), pp.15-
25.

STATISTA (2015) Leading 10 tobacco companies worldwide based on net sales. STATISTA [online]. Available from:
http://www.statista.com/statistics/259204/leading-10-tobacco-companies-worldwide-based-on-net-sales/ [Accessed 13th
February 2016].

Stephens, P. (2015) Is it time to sell British American tobacco plc, standard chartered PLC and diageo plc?. FOOL [online].
Available from: http://www.fool.co.uk/investing/2015/09/15/is-it-time-to-sell-british-american-tobacco-plc-standard-
chartered-plc-and-diageo-plc/# [Accessed 14 February 2016].

Sylt, C. (2015) The economic benefit of hosting a F1 race. RACONTUER.NET [online]. Available from:
http://raconteur.net/business/power-behind-f1s-winning-global-drive [Accessed 10 April 2016].

Tobacco-news.net. (2016) Tobacco company to develop products without tobacco. [online] Available from:
http://www.tobacco-news.net/tag/british-american-tobacco/page/2/ [Accessed 14 April 2016].

Tran, M. (2004) Philip Morris reaches $1.25bn EU agreement. THEGUARDIAN [online]. Available from:
http://www.theguardian.com/business/2004/jul/09/smoking.europeanunion [Accessed 7 April 2016].

29
 Reference

VAPERANKS (2014) Phillip Morris launches new type of smokeless cigarette. VAPERANKS [online]. Available from:
http://vaperanks.com/phillip-morris-launches-new-type-of-smokeless-cigarette/ [Accessed 14th April 2016].

Wensley, R. (1981) Strategic Marketing: Betas, Boxes, or Basics. Journal of Marketing. 45(3), pp.173-182.

WHO (2002) Tobacco industry monitoring report. WHO [online]. Available from:
st
http://www.who.int/tobacco/media/en/tob-ind-monitoring02.pdf [Accessed 1 April 2016].

Zerbe, R. and Kirkwood, J. (2012) Research in law and economics. 1st ed. Bingley: Emerald Group Publishing.

30
Comment

Although an attempt has been made to cover the requirements the answer tends to be average. The presentation does not discuss in depth the current
product/market strategies. For example, the candidate has explained the generic strategies adequately by using relevant frameworks and academic
references. However, the product/market choices have not been addressed in depth. The candidate has introduced the topic briefly. The significance of the
study has also been briefly explained. However, more focus could have been made on identifying key strategic issues, current strategy followed and its
implications on the competitive position of the chosen organisation. The candidate has failed to establish this link in his/her answer in a logical manner.
Conclusions lack in depth and recommendations have been provided. The candidate has considered a certain number of literature and has attempted to
make a link with the topic and research question.
Useful Information

Additional References

Name Website
th
Books Grant, R.M. (2010) Contemporary Strategy Analysis.7 ed.London:John Wiley & Sons

Middleton, J. (2003) The ultimate strategy library: the 50 most influential strategic ideas of all time. Oxford: Capstone

Mintzberg,H., Lampel,J., Quinn,J.B. and Ghoshal,S.(2003)The Strategy Process Concepts, Contexts, Cases.4th ed, pp. 70-
88.New Jersey:Prentice Hall.

Spulber,D..F.(2007) Global Competitive Strategy . pp.21718.UK: Cambridge University Press

Wheelen, T.L. and Hunger, J.D. (2012) Concepts in Strategic Management and Business Policy. 12th ed. New Delhi: Pearson.

Worrell, L. (1998) Strategic Analysis: a scientific art. Wolverhampton: Wolverhampton Business School.

Mintzberg, H. (1987) The strategy concept I: Five Ps for strategy. California Management Review.Vol. 30, No. 1, pp. 11-24.
Journals
Mintzberg, H. and Waters J.A. (1985) Of strategies, deliberate and emergent. Strategic Management Journal. Volume 6,
Issue 3, pp.257-272.
 Porter, M. (1985)Competitive advantage: Creating and sustaining competitive performance. NewYork: London: Free Press

Porter, M.E. (2004) Competitive strategy: techniques for analyzing industries and competitors. New York; London: Free
Press.

Stalk,G.,Evans,P. & Shulman,L.E. (1992),Competing on Capabilities,The New Rules of Corporate Strategy. Harvard Business
Review, April 1992.

http://www.amaze.com/case-studies/
Business case studies http://www.bigmouthmedia.com/clients/case-studies/
http://www.brandingasia.com/cases/cases.htm
Websites http://www.innovations-report.com/
Format and Presentation

Format and presentation of the assignments is also an important element to be considered. It is not worthwhile to have an excellent mechanism of
conducting own research, analysis and building critical arguments, if the details are not presented in a structured and a legible manner. Hence,
format and presentation of the research proposal is crucial.

Following are a few steps that will enhance the quality of the final report prepared for the dissertation/research proposal.

Creating a clear and a concise cover page

Keeping uniformity in left and right margins throughout the document.

Maintaining the uniformity in font type, font size and line spacing throughout the report. ( Font Type: Verdana, Font size: 11, Line Spacing:
1.5)

Using a professional tone throughout the report and avoiding ambiguity when presenting data/judgements.

Arranging data in a logical manner where appropriate.

Making the report free from errors and grammatical mistakes.

Providing references appropriately and sufficiently.

Common mistakes of candidates

Failure to provide the proper context to frame the assignment question.

Failure to cite main and most important points.

 Failure to use relevant theory and theoretical frameworks to structure and support the arguments.

Failure to stay focused on the assignment question.

Failure to develop a coherent and convincing argument to address the assignment question.

Discuss mostly on minor issues and less focus on the major issue.

Too much incoherence going "all over the map" without a clear sense of direction.

Too many citation lapses and incorrect references.

Too lengthy or too brief- You MUST always stay within the word limit.

Harvard Referencing System

Note The University of Northampton Harvard referencing guidelines is available in your learning platform.
Frequently Asked Questions
General FAQs
Is there a core text that needs to be followed for this module?

Johnson, G., Whittington, R. and Scholes, K. (2011) Exploring Strategy: Text & Cases. 9th ed.London: FT Prentice Hall.
Where can I access the e-library?

You can access to the e-library via the Learning Platform.

From where can I get a general idea of the module and overall requirements?

If you are an online candidate you are recommended to contact your tutor.
Subject related FAQs
What is this module about?

The module provides a holistic view of an organisations strategic position, focusing on key central themes in the field, such as, analyses of
external and internal business environments, scenario planning, strategy formulation and selection, etc. Essentially, this module helps the
students to familiarise themselves with the techniques for identifying and evaluating strategic options available to an organisation by taking into
account also the modern approaches to strategy development in a globalised environment.

Do I need to do additional reading for this module?

Yes, additional reading is a must. You need to read relevant academic books and research articles to obtain an understanding about the topics discussed
under the assignment questions before attempting to develop your answers. A list of references for each of the topics is included in the module specification.
In addition, you can go through other supporting materials available in the Learning Platform.

What are the key sections included in an essay format?

The key sections of an Essay format are;

Cover Page
Introduction/ Background of the chosen company
The content using paragraphs with relevant headings/sub-headings
Conclusion
List of References

What are the key sections to be included when developing the Portfolio?

You could develop your own format and structure for the portfolio which addresses the key requirements adequately. Following is a guideline of the areas
that could be included.
 Cover Page
Table of contents
Abstract
Introduction
Situation Analysis( Identification of key strategic issues)
Critical review of current strategy and competitive advantage
Conclusions and Recommendations
Reference List

What is an Industry Analysis?

Industry Analysis is an examination of the economic, political, market, etc. conditions that influence a particular industry at a particular time.
An industry analysis helps a company to understand its position relative to companies that produce similar products or services to its
competitors. A better understanding leads to more informed and better quality business decisions to stay ahead of competition.

What aspects have to be addressed under an Industry Analysis?

Michael E. Porter developed the Five Forces framework which to analyses five competitive forces that work together in every industry and
affect an industrys structure and direction, highlight the strengths and weaknesses of firm, and show potential strategic changes.

What are the five competitive forces in the Five Forces Framework?
Barriers to new market entry
Threat from substitutes
Bargaining power of buyers
Bargaining Power of Suppliers
Intensity of Rivalry
What are industry drivers and barriers?
Industry Drivers are the major underlying causes of changing industry and competitive conditions. Some driving forces originate in the macro environment
and some originate within from within an organisations immediate industry and competitive environment.Industry Barriers are forces or factors that make it
difficult for new firms to enter the industry.

What is a strategic issue?

A strategic issue is a fundamental policy question or critical challenge affecting an organisation's mandates, mission, values, stakeholders, resources,
structure, processes, management, or product or service level and mix.

What is meant by organisation vision and mission?

An organisations vision is concerned with what the organisation aspires to be. Its purpose is to set out a view of the future so as to enthuse,
gain commitment and stretch performance to achieve the goals and objectives of your company

An organisations mission is the purpose or reason for the organisations existence. aims to provide employees and stakeholders with clarity
about the overall purpose and reason for existence of the organisation.

What are corporate values?

Corporate Values are the underlying principles that guide an organisations strategy. They define the way the organisation operates and is linked with what
the organisation wants to become in the future or its vision and the organisational aspects of corporate social responsibility.

What is a corporate strategy?

Corporate Level strategy is fundamentally concerned with the selection of businesses, which the company should compete, and the development and
coordination of the portfolio of businesses. Corporations are responsible for creating value through their businesses.They do so by managing their portfolio of
businesses, ensuring that the businesses are successful over the long term, developing business units and sometimes ensuring that each business is
compatible with the others in the portfolio.
What is business strategy?
At the business unit level, the strategic issues are more about developing and sustaining competitive advantage for the goods and services that are produced.
At the business level, the strategy formulation phase deals with:
Positioning the business against rivals
Anticipating changes in demand and technologies and adjusting strategy to accommodate them
Influencing nature of competition through strategic actions such as vertical integration and through political actions such as lobbying

Michael Porter identified three generic strategies (cost leadership, differentiation and focus) that can be implemented at the business unit level to create a
competitive advantage and defend against the diverse effects of Five forces.

What are Growth strategies? How does Ansoffs Growth Matrix help organisations to develop growth strategies?
Growth strategies are pursued by organisations to achieve growth in sales, assets, profits or a combination of these.
The Ansoffs product/market growth matrix assist organisation's to map strategic product and market growth. It provides a simple way of generating four
basic alternative directions for strategic growth-Market penetration/consolidation, Product development, Market development and Diversification

What do you mean by the sustainable competitive advantage?

A sustainable competitive advantage occurs when an organisation acquires or develops an attribute or combination of attributes that are unique and allows
the organisation to outperform its competitors.Developing a sustainable, competitive advantage requires customer loyalty, a great location, unique
merchandise, proper distribution channels, good vendor relations, a reputation for customer service, and multiple sources of advantage.

What is to be included under the reference list?

The list must include all the sources that were cited and consulted in writing the research proposal. It is compulsory to use the Harvard Style of referencing.

Assessment related FAQs

How many submissions are there for the module?
The module comprise of two assessment briefs Essay and Portfolio. Each assignment carries 50 marks. Total marks allocated for eth module is
100 marks.
What is the word count for the assignments?
For both assignments 01 and 02 it is 2500 words.

Is it important to be within the specified word limits?

Written assignments must not exceed the specified maximum number of words.

Can I submit answers for review before final submission?

Yes, there is a draft submission procedure.

What is the pass mark for this module?

To pass this module, you are required to achieve an overall mark of 50%.

Final submission related FAQs

How do I submit my assignments?
The assignments has to be submitted via the Learning platform.

Are hard copies required?

No, only soft copy submissions are required.

What is Turnitin?
You are required to check the plagiarism of your work by submitting your written assignments online via Turnitin/Grademark. Unless stated on
the assignment brief, all your assignments should be submitted online.
 Published by

London School of Marketing

10 Greycoat Place
London
SW1P 1SB

United Kingdom

l d h l f k ti