Strategies for Business Success: Definitions, Approaches, and Case Study

Section A

Answer all questions in this section

1. Define strategy and briefly explain the levels at which it can exist. 

2. Compare and contrast the prescriptive and emergent approaches to strategy

3. What are the limitations of Porter’s Five Forces model? 

4. With reference to an example, what is a ‘cash cow’ in the BCG matrix? 

5. A major UK chain of betting shops has decided to establish an offshore operation based on the Channel Island of Alderney. Bets would be placed by telephone, email or over the internet. Describe three key resources that would be required to offer such a service. 

6. Explain how a producer of natural spring water could attempt to gain competitive advantage over its rivals giving specific examples. (3 marks) 7. Outline two benefits of corporate social responsibility (CSR) for companies. 

8. Distinguish a merger from an acquisition

9. When considering strategic change in an organisation, what causes resistance to change?

Section B Case Study

Read the following case study and answer the questions below. Please note the case study, names and places are fictitious and have been created for the purposes of the case study only. 

Dunn’s Dairy Limited is owned and directed by Michael and Thomas Dunn, who inherited the milk delivery business 30 years ago from their father. The business delivers fresh milk and basic every day grocery items such as eggs and bread. The vast majority of sales are in relation to the sale and delivery of milk. Michael and Thomas wish to sell the company in the next 10 years for maximum value.

History of the business

When the brothers inherited the business 30 years ago from their father, it operated out of a yard on the outskirts of a large town called Avondale in the South of England. It had grown steadily from a 3-man operation to employing 25 full time rounds staff. Growth during this time had been achieved through some expansion of the local population, expanding the range of delivery, and a positive attitude to marketing.

Shortly after inheriting the business, Dunn’s Dairy bought and developed a site for use as a depot on the then recently established Avondale Trading Estate. This was secured by a bank loan which has subsequently been paid off. The site comprises a cold store, parking area for the delivery vans, garage for repair of the vans and an office. Supplies of milk come from one of the national dairy companies, located 40 miles from Avondale. The bottles of milk are delivered to Dunn’s depot at night, except on Saturdays. Dunn’s Dairy delivers to customers every day except for Sundays.

Section B Case Study

The brothers continue the positive marketing attitude their father had instilled. As an example of the marketing effort, when a new resident to the area is reported back to the depot by one of the rounds staff, either Michael or Thomas visits the potential customer with a bunch of flowers and a bottle of milk to attempt to secure an order for delivery of milk and / or groceries. Dunn’s Dairy has the monopoly of door-step delivery in the area. What little locally based competition there once was, has gone out of business over the years. National door-step suppliers have been put off due to the remoteness of the area and fear of losing market share to Dunn’s Dairy.

Current status of the business

Over the past 12 years however, profits have fallen, and volumes have dropped by approximately 52%, compared with a 76% decline in door-step deliveries nationally over the same time scale. New customers are difficult to source, despite a continuing marketing policy of encouraging them. Many existing customers tend to have fewer bottles of milk delivered. Only by raising prices have the directors been able to make sufficient profits. Today, Dunn’s Dairy charges £0.95 for a pint of milk delivered. This price is typical of door-step delivery charges around the country. However, local supermarkets charge £0.50 for a pint of milk and the local convenience stores in the area charge between £0.60-£0.70 for the same container. Currently the business employs 11 full time rounds staff, a mechanic, a bookkeeper and Michael and Thomas. The company pays generous salaries and the two brothers have always invested in their staff. Regular employment opportunities in the area are few. The staff are known for their personal, friendly, and helpful service. The brothers continue to be the only shareholders and directors and form the only level of management. Michael devotes his time to dealing with the supplier and coordination of the rounds while Thomas is responsible for the administration and HR issues. They both undertake rounds to cover for absenteeism.

Requirements: 

(i) Analyse the effectiveness of the stated objective (To provide outstanding service to all our customers) as a basis for establishing a corporate strategy.

(ii) Undertake a detailed corporate appraisal of the company (SWOT analysis). Your answer should make reference to any further information you would need to obtain to enable you to complete your SWOT analysis.

(iii) Indicate how the resources and core competences of the company could form the basis of its future strategy. 

Section C

Answer one of the questions below:

1.Few people get to build successful companies, even fewer build one of the most successful companies in the world. Jeff Bezos, CEO of Amazon as led the company to be becoming the world’s largest online retailer, through his unique leadership principles that permeate the organisation.

Evaluate what makes a successful strategic leader in business.

2.For years, critics have said: Sure, Tesla has created very cool and exciting electric cars, but it sucks at manufacturing (www.cleantechnica.com). Elon Musk realises: the true difficulty, and where the greatest potential is – is building ‘the machine that makes the machine’. Tesla’s long-term competitive advantage will be manufacturing.

Analyse the ways in which competitive advantage may be gained and evaluate the extent to which achieving this is key to the success of a business.

3.Hotel Chocolat is focused on being a global brand after recently expanding into the US. The company has also entered into a joint venture in Japan, opening two locations in Tokyo. According to the company’s Annual Report 2019, in doing so, they are taking a ‘test, learn, grow’ approach.

Analyse the factors that need to be considered when developing a global strategy and in doing so, evaluate what makes for a ‘good’ global strategy.