Homework answers / question archive / HI6006 Competitive Strategy final assessment Question 1 (7 marks) With reference to the Popchips case study, explain the concept of ‘focussed differentiation strategy’ and how it has been effectively applied

HI6006 Competitive Strategy final assessment Question 1 (7 marks) With reference to the Popchips case study, explain the concept of ‘focussed differentiation strategy’ and how it has been effectively applied

Business

Share With

---

HI6006
Competitive Strategy
final assessment

Question 1 (7 marks)

With reference to the Popchips case study, explain the concept of ‘focussed differentiation strategy’ and how it has been effectively applied.

The Case

Popchips was founded in 2007 by Keith Belling, a serial entrepreneur, and Pat Turpin, a former Costco snack executive. Their idea was simple: Take advantage of high-income purchasers’ growing desire for tasty, low-fat snacks. Using an innovative cooking method, they found a way to halve the fat content in potato chips while preserving flavour. Popchips has a differentiated product. But its real point of differentiation is its brand and distribution strategy. Most potato chips have mass distribution and a broad buyer base. Belling and Turpin decided from the outset to narrow their distribution and narrow their targeted buyers. They hoped that focusing on a market niche would allow their product to stand out from the bags of Lays and cans of Pringles in aisles all over America. Popchips target upper-income, health-conscious urban and sub-urban consumers. To that end, the firm has signed distribution deals with Whole Foods, Target, and, reflecting Turpin’s roots, Costco. Popchips’ marketing emphasizes social marketing and word-of-mouth recommendations. The company sends out samples to key tastemakers who tweet, blog, or recommend the product in traditional media. Ashton Kutcher, MTV’s former Punk’d host, was so impressed with the chips that he volunteered to promote them. As with Punk’d, Popchips’ advertising is similarly irreverent, with taglines like “love. without the handles.”

 

Please answer in less than 400 words

ANSWER:  ** Answer box will enlarge as you type

 

 

Question 2                                                                                                                                    (7 marks)

Use the Goretex case to explain how the P.R.O.F.I.T. supports the assertion that it’s managerial practices and organisational culture make it ‘a great place to work’

 

The Case

When Goretex developed the core technology on which most of its more than 2,000 worldwide patents is based, the company’s unique culture played a crucial role in allowing Gore to pursue multiple end-market applications simultaneously, enabling rapid growth from a niche business into a diversified multinational company. The company’s culture is team-based and designed to foster personal initiative. It is described on the company’s website as follows: There are no traditional organizational charts, no chains of command, nor predetermined channels of communication. Instead, we communicate directly with each other and are accountable to fellow members of our multidiscipline teams. We encourage hands-on innovation, involving those closest to a project in decision making. Teams organize around opportunities and leaders emerge. Personal stories posted on the website describe the discovery process behind a number of breakthrough products developed by particular teams at W. L. Gore & Associates. Employees are encouraged to use 10 per- cent of their time to tinker with new ideas and to take the long view regarding the idea’s development. Promising ideas attract more people who are willing to work on them without orders from higher-ups. Instead, self- managing associates operating in self developed teams are simply encouraged to pursue novel applications of Gore technology until these applications are fully com- mercialised or have had their potential exhausted. The encouragement comes both from the culture (norms and practices) of the organization and from a profit- sharing arrangement that allows employees to benefit directly from their successes. This approach makes Gore a great place to work and has helped it attract, retain, and motivate top talent globally.

 

Please answer in less than 400 words

ANSWER: 

 

 

Question 3                                                                                                                                    (7 marks)

Use the Ansoff matrix to discuss the strategic choices relevant to Pepsico’s competitive rivalry

 

The Case

PepsiCo was the world’s largest snack and beverage company, with 2013 net revenues of approximately $66.4 billion. The company’s portfolio of businesses in 2014 included Frito-Lay salty snacks, Quaker Chewy granola bars, Pepsi soft-drink products, Tropicana orange juice, Lipton Brisk tea, Gatorade, Propel, SoBe, Quaker Oatmeal, Cap ’n Crunch, Aquafina, Rice-A-Roni, Aunt Jemima pancake mix, and many other regularly consumed products. The company viewed the line-up as highly complementary since most of its products could be consumed together. For example, Tropicana orange juice might be consumed during breakfast with Quaker Oatmeal, and Doritos and a Mountain Dew might be part of someone’s lunch. In 2014, PepsiCo’s business line-up included 22 $1 billion global brands. The company’s top managers were focused on sustaining the impressive performance through strategies keyed to product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. New product innovations that addressed consumer health and wellness concerns were important contributors to the company’s growth, with PepsiCo’s ‘better-for-you’ and ‘good-for-you’ products becoming focal points in the company’s new product development initiatives.

 

Please answer in less than 400 words

ANSWER: 

 

 

Question 4                                                                                                                                    (7 marks)

With respect to Microsoft’s acquisitions, Skype and Nuance, discuss the strategic benefits expected to accrue under the following sub-headings:

• product development
• speed to market
• risk
• market power
• competitive scope
• barriers to entry
• diversification

 

The Case

From humble beginnings in Gates’s family garage, Microsoft has grown to exceed $77.85 billion of revenue in 2013 and offer a product line extending from gaming (Xbox) and Internet services (Internet Explorer and Bing) to mobile devices (Windows Phones). In 2011, Microsoft diversified its product line yet again through acquiring Skype Global for $8.5 billion in cash. Although Microsoft had previously ventured into the Internet communications industry with Windows Live Messenger, Skype offered Microsoft broader device support, mobile video calling, and access to over 170 million Skype users, potential new clients for Microsoft’s existing products. Microsoft considered Skype a valuable acquisition due to the strategic fit between the value chain activities of the two companies. Moreover, Skype’s communication expertise combined with Microsoft’s market reach offered an opportunity to generate new competitively valuable resources and capabilities. With the communications industry gradually shifting toward more face-to- face calling, Skype gave Microsoft an already established visual communications platform to complement its existing Xbox Live services, Office Suite, and new Windows8 software. In turn, as the leading operating system (OS) software developer in the world, Microsoft could expand Skype’s scope and reach by pre-packaging future Windows OS releases with Skype software. In addition to offering cross-business collaboration and value chain–supporting opportunities, Skype also offered several immediate resources. Skype CEO Tony Bates possessed extensive knowledge of the Internet communications market and could ensure the long- term operational and strategic continuity of Skype. Recognizing Bates’s specialized expertise and experience, Microsoft retained Bates as head of its newly formed Microsoft Skype Division. Additionally, Microsoft gained access to over 50 Skype communications patents and the already established relationships with many of Skype’s previous partners (and Microsoft competitors), including Facebook, Sony, and Verizon. Moreover, by keeping the Skype name and opting to replace its Windows Live Messenger client, Microsoft could exploit the well-known Skype brand for its history of reliability and quality. With such a rich set of opportunities for the cross-business sharing and transferring of resources and capabilities, Microsoft believed that its acquisition of Skype would generate synergies and increase its competitiveness.

 

Only time will tell, but given Skype’s growth and Microsoft’s plans to incorporate Skype in its Windows8 platform and Xbox Live services, the outcome of this related diversification move seems promising. To date Microsoft announce its acquisition of Nuance - a pioneer and a leading provider of conversational artificial intelligence (AI) and cloud based clinical intelligence for healthcare providers. Nuance provides AI expertise and customer engagement solutions across Interactive Voice Response (IVR), virtual assistants, and digital and biometric solutions to companies around the world across all industries. This expertise will come together with the breadth and depth of Microsoft’s cloud, including Azure, Teams, and Dynamics365, to deliver next-generation customer engagement and security solutions. Therefore, Nuance’s acquisition represents the latest step in Microsoft’s industry specific cloud strategy. Nuance’s solutions work seamlessly with core healthcare systems, including longstanding relationships with Electronic Health Records (EHRs), to alleviate the burden of clinical documentation and empower providers to deliver better patient experiences. Therefore, Nuance’s strength in providing healthcare AI and building on top of the existing partnerships Nuance has with core healthcare system providers. The acquisition represents the latest step in Microsoft’s industry specific cloud strategy (Forbes, 2021).

 

Please answer in less than 400 words

ANSWER: 

 

 

Question 5                                                                                                                                 (11 marks)

Discuss the lessons evident from Solazyme’s cross border alliances with resepect to co-operative

strategies under the following headings:

• motivations for strategic alliances
• types of strategic alliances
• risks of strategic alliances
• management of strategic alliances

 

The Case

Solazyme cross-border alliances with Sephora, Qantas, Roquette and Unilever. Solazyme, a California-based company that produces oils for nutritional, cosmetic, and biofuel products from algae, was named “America’s Fastest-Growing Manufacturing Company” by Inc. Magazine in 2011. The company has fuelled its rapid growth through a variety of cross-border strategic alliances with much larger partners. These partnerships not only have facilitated Solazyme’s entry into new markets but have also created value through resource sharing and risk spreading. Its partnership with Unilever, a giant British-Dutch consumer-goods company, initially focused on collaborative R&D. Projects were aimed at meeting the growing demand for completely renewable, natural, and sustainable personal care products through the use of algal oils. By further developing Solazyme’s technology platform, the partnership has taken off; with the ability to produce Solazyme’s oils and other biomaterials efficiently and at large scale, Unilever is now taking the next step of marketing and selling those products as part of its ambitious goal to use only sustainable agricultural raw materials by 2020. Solazyme has entered into a variety of marketing and distribution agreements with French cosmetics company Sephora (now part of LVMH). In March 2011, Solazyme launched its luxury skin care brand, Algenist, with Sephora’s help. Sephora has also agreed to distribute Solazyme’s antiaging skin care line, making it avail-able in Sephora stores and at Sephora.com. In 2011, Solazyme also signed a contract with Australian airline Qantas to supply, test, and refine Solazyme’s jet fuel product, SolaJet. Solazyme stands to gain valuable input on how to design and distribute its product while receiving media attention and the marketing advantage of a well-known customer. Likewise, Qantas hopes to better understand how it will achieve its sustainability goals while building its reputation as a sustainability leader in the airline industry. However, not every partnership ends successfully, regardless of the strength of the initial motivations and relationship. Because its algae require sugar to produce oil, Solazyme developed an interest in securing a stable supply of this feedstock. For this purpose, Solazyme created a 50-50 joint venture with French starch processor Roquette to develop, produce, and market food products globally. By working with Roquette, Solazyme hoped to lower its exposure to sugar price fluctuations, trading the use of its innovative techno-logical resources in return for Roquette’s manufacturing infrastructure and expertise. But in 2013, the joint venture dissolved—both parties felt that after the exchange of ideas, technologies, and goals, they would be better off going it alone on the algal food product frontier.

 

Please answer in less than 700 words

ANSWER: 

 

 

Question 6                                                                                                                                 (11 marks)

Your CEO has requested that you lead a cross-functional management team with the aim of recommending 5 key strategic initiatives to be implemented concurrently over the next five years. He requests you outline the exact strategy models you will utilise and the sequence in which you will use them and how they will be integrated to converge upon 2 exploit-type strategies, 1 conquer, 1 ‘shine-up’ and 1 avoid. Write a comprehensive memo to the CEO outlining each of the models you will apply and how you will manage the strategy development process.

 

[no case study needed for this question]

 

You may use as many words and diagrams as you need for this answer

ANSWER: