Transcript ADMS1000D – Lecture 11

Week 12 – Final Exam Review
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Date and time:
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April 11th : 2pm – 5pm
Make sure you arrive by 1:40am
Make sure you sit with your section
Location:
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Sections Q and W and X
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Rexall Centre
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Week 12 – Final Exam Review
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Exam format:
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Closed book: no notes, no dictionaries, no phones
or electronic devices of any kind
3 hours
3 case questions (50 marks)
2-5 short answer questions (25-30 marks)
20-25 multiple choice questions (20-25 marks)
Covers all the post-midterm material
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Textbook chapters 6, 7, part of 8, 9 and 10
60% of final grade
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The Industry Lifecycle (Chapter 3)
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The Competitive Context
Industry Lifecycle Stages
 Emergence
 Growth
 Maturity
 Decline
Characteristics and key success factors and
strategies for each stage
You should be able to identify the stage of an
industry lifecycle based on an article or case or give
examples of industries and their lifecycle stage
Textbook chapter 3 (pp. 43-56) (Case: Beer
brewing)
Industry Sales
Industry Lifecycle
Introduction
Growth
Maturity
Decline
Time
Main drivers of industry evolution:
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Demand growth
Creation and diffusion of technology and knowledge
Stage
Introduction
Growth
Maturity
Decline
Market Growth
Slow
Very rapid
Moderate
Negative
Customers
Affluent, early technology
adopters
Niche markets, increasing
penetration
Price conscious mass
market, repeat
buyers
Rivalry
Low; technological
competition
Increasing; entry and exit;
shakeout
Intense; increased
concentration; exit
Price wars; exit; mergers
and acquisitions;
asset liquidation
Critical Functional Areas
Research & Development
Sales and Marketing
Production and
Manufacturing
General Management and
Finance
Products
Very wide variety of
designs
Standardization
Commoditization
Continued commoditization
Rapid product innovation
Product and process
innovation
Incremental innovation
Very little innovation
Organizational Structure
Organic
Organic
Mechanistic
Mechanistic
Generic Strategies
Product differentiation
Product differentiation
Cost Leadership
Cost Leadership / Focus
Key Objectives
Increase awareness;
achieve legitimacy;
specify dominant design
Create demand; capture
market share
Cost efficiency; extend
lifecycle
Market or niche leadership;
cost reduction;
consolidation; exit
Characteristic
Technological
Development
Late adopters,
knowledgeable
users, residual
segments.
Globalization (Chapter 6)
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What is it?
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Multinational Corporations
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Integration of markets and economies
Free flow of goods/services, capital and labour
Benefits / threats
International trade
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Mercantilism / protectionism
Tariffs, quotas, subsidies (see handout on tariffs)
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Trade Agreements and International bodies
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What are the problems with protectionism?
GATT, WTO, IMF, World Bank…
Regional Trading Blocs (EU, APEC, ASEAN)
NAFTA
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Objectives
Impact on trade, employment and business; on Canadian culture;
on competitiveness…
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Benefits – Threats of MNCs
BENEFITS
THREATS
Economic development
e.g. creates employment
No allegiance to host
country
Brings management
expertise
Mobile profits
Introduces new technology
& relevant training
Power held in home country
e.g. R & D investments
International trade
Difficult to control
Unites cultures & nations
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Trade Protectionism and Tariffs
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What are the problems with trade
protectionism? [Opposite of Globalization]
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Trade retaliation
Increased costs to consumers
Limits competitiveness of domestic firms
How tariffs affect the economy handout:
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Impact on exporting country:
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Lower production, job losses, economic decline…
Impact on importing country:
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Less competition for domestic firms, rising sales, prices,
employment, spending, government revenues…
Increased costs to consumers, less spending on other industries,
economic decline, costs of imposing + collecting tariffs, possible
costs of retaliation and trade wars…
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Impact of NAFTA
Culture
Business
Consumers
Trade
Employment
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Chap. 6 Textbook Case Discussion
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Amazon in Canada p. 138
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Why is this about Globalization/Protectionism?
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Foreign ownership restrictions are protectionist
measures and counter to globalization i.e. they
prevent the free flow of $$...
Potential risks/benefits?
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+ More competition = better prices, selection,
innovation…
- Foreign competition and greater control by large
foreign firms = fewer jobs in Canada? Canadian
culture will be lost…
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The Ethics of Globalization
(Chapter 8: 188-195)
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How to ensure that developing countries
benefit from free trade & globalization?
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Allow time for their domestic industries to adapt
to multinational competition – don’t remove
trade barriers too quickly!
Remove tariffs and subsidies protecting
industries in developed countries too – free
trade must be fair
Ensure governments in developing countries
provide a social safety net to its needy citizens
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The Role of Government (Chapter 7)
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Taxation: Revenue – Restrictive Taxes
Crown Corporations
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Why do we have them?
What are the benefits and disadvantages of
crown corps?
Which sectors of the economy should be
controlled by the Government and which should
be left to the private sector?
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Health Care
Education
Military/Defense/Law & Order/Corrections
Retail distribution of beverage alcohol (i.e. LCBO)
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The Role of Government (Chapter 7)
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Regulation
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Bailouts and Subsidies
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Modify Behavior – Imperfect Competition – Public
Interest
See Exhibit 7.6 p. 156
Which activities should the government subsidize
and why?
Should the government bail out large
corporations that are failing? Why?
Government Subsidies in a Global Context
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Government Subsidies in a Global Context
Maintaining domestic
labour force
Keeping
a trade
balance
Protecting
against unfair
trade
GOVERNMENT
Nurturing
young industries
Subsidizing
global business
activity
Encouraging
FDI
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Current Trends and Issues
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Should the Canadian government protect Canadian
corporations from foreign ownership? (See Toronto
Star Article handout)
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Arguments For:
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Core assets and industries should be protected
National security, cultural industries, servicing unprofitable and
remote communities
Head offices in Canada will ensure that jobs, R&D, spending on
suppliers and related services (law, consltg & acctg firms, IBs…)
also remains
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Arguments Against :
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Corporations are driven by profit not nationalistic motives
Protected firms are less efficient, productive, innovative,
competitive… and costs to consumers are likely increased
Violates spirit and letter of free trade laws and agreements and
may invite retaliation
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Current Trends and Issues
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Deregulation
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Why?
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More competition, lower prices, better service…
Deregulation in transportation and electricity
industries (see textbook p.162)
Privatisation
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Why?
Benefits and Challenges (see next slide)
Should the government privatize some crown
corporations or sell government assets? Why or
why not?
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The Benefits & Challenges of Privatization
ADVANTAGES
CHALLENGES
More competition
Shareholder stakeholders
More efficiency
Employee stakeholders
Evolution of business
sector
Money from sell-off
Community stakeholders
Need to regulate
carefully
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Chap. 7 Textbook Case Questions
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Pratt and Whitney (p.171)
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Should the Government continue to subsidize
Pratt and Whitney? Why or why not?
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No: see Corporate Welfare arguments p. 156
Yes: see Guardian of Business in a Global Context ex.
7.4 on p. 156
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Strategic Management (Chapter 9)
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The Five Forces Model
The VRIO Model
SWOT Analysis
Business-Level Strategies (3 Generic)
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Cost Leadership
Differentiation
Focus
Corporate-Level Strategies (Diversification)
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Types: Related – Unrelated – Vertical Integration
How: Internal – Mergers & Acquisition – Alliances
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Strategic Management (Chapter 9)
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You should be able to analyze an industry
according to the 5-forces model
Can you identify resources that are valuable,
rare and difficult to imitate in a given firm?
Can you distinguishes the three generic
strategies and apply them to a case with
examples?
Can you recognize the different types of
corporate diversification and methods? And
provide examples?
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The Five-Forces Model
7/18/2015
The VRIO Model
+ Organized
to Exploit?
=
Competitive
Advantage
Valuable? +
Rare? +
+ Difficult to
Imitate?
Yes
Yes
Yes
Yes
Sustainable
Yes
Yes
No
Yes
Temporal
Yes
No
Yes
Yes
Temporal
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Chap. 9 Textbook Case Discussion
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Starbucks – Tim Hortons p. 220
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5 Forces analysis of coffee shop industry
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VRIO of SBUX, THI
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Type of business/corporate strategy pursued by
the SBUX (geographic expansion) and THI
(selling lattes…)
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Organizational Change and Learning
(Chapter 10)
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Forces for change
Types of organizational change
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Developmental, transitional, transformational
Structural inertia, bureaucracies, cognitive
scripts
Methods and strategies for managing change:
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IBM: Who says elephants can’t dance?
3M and Google’s encouraging exploration and
innovation
Creating separate autonomous spin-offs
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FORCES FOR CHANGE
Societal
Economic
Global
Political
Organizational
Structure
Strategy
People
Competitive
Technological
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Organizational Change and Learning
(Chapter 10)
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Organizational learning
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Single vs. double loop learning
Exploration vs. exploitation tradeoff
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Chap. 10 Textbook Case Questions
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Netflix and Blockbuster p.246
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Forces driving change in movie rental industry
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Why has Blockbuster not adapted to the new
environment?
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Technological, competitive, societal…
Inertia, bureaucracy, cognitive scripts…
Is Netflix a learning organization?
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Yes, shift from mail order to online streaming
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Sample non-case questions
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Explain the limitations of Porter’s fiveforces model. Which other model helps to
provide a more complete picture of a firm’s
sources of competitive advantage?
Bombardier (the Canadian Aerospace firm)
is seeking $500 million in government
support to help finance the research and
development for a new line of regional jets.
Provide arguments in support of
government subsidies in this case and
arguments against.
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Exam Tips
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Read the questions very carefully
Make sure you understand what theoretical
concepts you need to draw on to answer
Explain the concept accurately if necessary
Use case facts or examples to illustrate the
concepts – be specific.
ANSWER THE QUESTION!!!
The more in-depth and insightful your
analysis, the better your grade
No point-form answers
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THE END
I hope you learned something
and had fun – I did!
Best of luck for the final.
Peter Modir
[email protected]
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