Case 5

case
ATTACHED FILE(S)
This is what you need to do:
1) Evaluate the strategy alternatives for the case company.
2) Address this task on one PowerPoint slide:
Present your strategy evaluation. What are the most important assumptions you made? Which strategy alternative is best and why is it the best alternative?
Course structure
716
Identifying
problems
Analysing
customers
Analysing
context
Analysing
distribution
Analysing
resources
Strategy
develop

ment
Strategy
evaluation
Implement

ation
Introduc

tion
Today
Learning objectives
1.
Reviewing
strategic alternatives
2.
Identify techniques for evaluating
which strategies
are likely to work best
3.
Understand the reasons
for making a conscious
decision about strategy
5
Strategy Evaluation

Very important part of your report

please check the
rubric.

Before you evaluate a strategy, check if you have
described and defined it well?

Are both strategic alternatives directly addressing the
problem identified?
Quick recap
One problem

alternative solutions
Problem effect
Problem 1
Alternative 1
Alternative 2
Alternative 3

Address the problem that causes
most problem

Come up with
competing
alternatives
to address problem
One problem and strategies

W
hich
problem first?

Prioritise and select

Opportunity for your specialisation knowledge

Problem

strategy link?

Only a clear set of strategy alternatives can be
evaluated

using a set of criteria.
Strategy
versus
Tactics
A strategy
helps a firm to achieve its
goals

in a way that is consistent
with the firm’s vision and mission

deliver a unique (mix of) value.
Tactics are relatively smaller and
specific steps to achieve that
strategic goal
; they can occur in
different departments (with shorter
time frames), best practices, etc
.
So,
tactics form the core components of
a
strategy.
E.g., Differentiation Strategy Vs Tactics
Strategy: Assume a company wants to implement product differentiation strategy
Tactics: There could be many supporting tactics – (i) product ingredients, (ii) functionalities, (iii) product design, (iv) packaging, (iii) customer support, and (iv) sales strategies etc.
Note:
Tactics could vary to achieve the main strategic goal of product differentiation.
Strategy description: Your description of strategic alternatives should cover both.

716 strategies types – broad categories
Promotion/Branding – promotion, advertisements, engagement, social media networks or collaborate with partners
Distribution – identifying channels, distributors – large retailers versus boutique, direct – online retailers or collaborate with partners
Product/value proposition – refining position, highlighting uniqueness, finding a niche in competition, aligning with the target market
These are just ideas – you will have to justify how they are relevant
Problem: “Get to Wellington”
Auckland
Wellington
Budget (financial resources)
Urgency (time resource)
Weight of luggage (other resources)
Other decision constraints
Tradeoffs
between alternatives:
Trade

offs between alternative strategies
STRATEGY
ADVANTAGE
DISADVANTAGE
Plane
Fast (3 hrs, incl. boarding)
Safe
Regular
schedule
Expensive
Limited luggage
Car
Take passengers at no extra cost
Carry up to 500kg
Transport in Wellington
Takes 9

hrs to drive
10
Tiring to drive
Dangerous
Train
See the countryside
Comfortable
Takes 12 hrs to get there
Moderate price
Bus
Low cost
See the countryside
Takes 12 hrs to get there
Uncomfortable
Cycle
Low cost
See the countryside
Adventure
Very
s
low (1 week?)
Dangerous
Tiring
, w
et & cold
Back to the problem
· You need a clear, one-sentence problem statement so you can check which strategy “solution” best solves it (but you need to give reasons justify it) [a couple of sentence is also fine – think of how to expand later]
· If your strategy does not solve the problem, you need a different strategy (or to modify your problem; then check the environment analysis)
Alignment between problem and strategy is a must
Problem Strategy Strategy definition formulation evaluation
Problem from environment analysis
Strategies that are clear can be evaluated objectively
Evaluation criteria
1.
Environmental consistency
:
makes sense in relation
to
context
and
external analysis

and expected
changes
2.
Consistent with available resources
:

VRIO
analysis;
aligned with
core competencies
and
capabilities
Evaluation criteria
continued
3.
Acceptable
degree of risk
:
ongoing value of resources;
investment length; size of commitment
a)
Internal

linked risks (preventable, if possible)
b)
External

linked risks (events outside firm’s control)
c)
Strategy risks
(
in order to generate high returns
)
Evaluation criteria
continued
4.
Appropriate
time (planning) horizon
Two years for the case
company
Evaluation criteria
continued
5.
Workable: practical
implementation;
performance
metrics
6
. Financial analysis of ‘
alternatives


FIRST: Need some sense of market / segment size and
growth
(
$$$s
)

Need some sense of
implementation costs

Present financial evidence

show sales revenue and costs
for two years

income statement
(
estimates only
)

Indicate one or more of the following

Return on investment (ROI)

Net present value (NPV) analysis

Breakeven analysis

Years to pay back investment (Payback period)
Estimating sales revenue and costs

Selling 1000 units of shampoo for US$20 = US$20,000

Is
it
per
month
or
year? (20,000 X 12 = US$240,000)

What is cost of sales?
How
many
revenue
streams?
Estimating sales revenue and costs
Month

wise figures can capture both growth, promotions and seasonal impacts
Estimating sales revenue

determinants

Sales
revenue:

Size of
the
target market

Price
that
you
would
recommend

Distribution channel that you would use

Margins
that
you
need
to
pay
to
the
channel
s

Area

whole
country
or one/two states

Any
other?

Cost of goods
sold:

Depends on how much you sell (the more you sell, more
the
cost)

Payment to advertising or partners

Promotion strategy/types

What are the fixed costs? Are they significant?

What are the variable costs? (production costs + shipping costs)

Any other?
Probability

based returns

example

Return on investment of alternative strategies weighted
by probability of outcome occurring:

Cashflow and probability “data” based on many, many
guesses

a very loose estimate only
Strategy
NPV of outcome
(
000)
$
Probability of
outcome
Risk

weighted
return
A
500
50
%
250
B
300
70
%
210
C
800
25
%
200
Problem

Strategy Development: A sequence
Strategy
formulation
Strategy
evaluation
Strategy
implementation
Performance
evaluation
Problem
definition
Choice
A
B
C
Now
make a decision

what is your
choice?
Example of Choice justification

Choice of strategy:
must be justified with both
numbers and arguments (5 marks in the final
report)
Strategy A
Strategy B
Why is a
choice
so important?

Must make a conscious
(
recorded) choice
, even if the
decision is to continue with the
current strategy

Otherwise you do not know
in a
year’s time
whether your
strategy was
successful
or
unsuccessful

Cannot learn
(
& so cannot
gain
experience)
This is what and how you are
learning now
Summary

Consider multiple alternative strategies

Evaluate which alternative “best” solves problem
(
importance of defining problem clearly
)

Strengths & weaknesses

Judged on a set of criteria

Must make a clear, conscious, recorded decision about
strategy choice (for future evaluations)

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more