Group Video (Youtube) Task

The link for our group video uploaded in Youtube:

http://www.youtube.com/watch?v=92yhVGLaMgQ&feature=youtu.be

Thank You.

Week 10

1. In your own words and using referenced quotes describe what is meant in strategy by 'Organizational Purpose' and describe what is meant by 'Corporate Social Responsibility'

 Organizational Purpose

Organizational purpose is very important for every firm and business organizations. Without organizational purpose, your business will surely fail because organizational purpose is the foundational bedrock that every great businesses must have.

Reasons for the existence of the business is given by the organizational purpose. For every strategy formulation and decision makings organizational purpose serves as a guiding force for them.Hence, we can say that organizational purpose has a significant influence and effect on strategy. It is basically a bedrock for the successful strategy formulation and implementation.

Corporate Social Responsibility

Corporate social responsibility refers to the overall positive impact that the business manages to produce on the society. It can also be describes as the organization's responsibility towards the community & environment where they are operating. This can be achieved by providing employment opportunities to the locals, doing contribution on educational and social programmes, minimizing the waste and pollution by doing proper waste management and also by organizing various campaigns to provide knowledge regarding cleaning and proper waste management, etc.

2.  Should organisations focus more on profit and shareholder satisfaction or responsibility and stakeholder satisfaction? Discuss your own thoughts but try to support your ideas with theory or examples 

 If we choose to focus more on profit and shareholders satisfaction then this will highlight that we care more about profitability over responsibility. Meanwhile, if we decided to choose responsibility and stakeholders satisfaction then this will highlight that we care more about our responsibilities over profitability.

It is very familiar with all of us about the fact that maximization of profit is the primary goal of all the business organizations. But that doesn’t mean that focusing on profit maximization is the best option for us. Earning long run goodwill is far more important for the business organizations than the wealth and profit. Its not easy for business organizations to create goodwill in the market, it takes long time and serious commitment and dedicated hard work to gain goodwill. There are various factors upon which goodwill depends, and contribution towards the community / society is one of them.
 

Business organization might get profit if they focus on profit and shareholder satisfaction, but this will not be a sustainable option for them because, it cannot survive for long time if the business organization only focuses on the profit and shareholder satisfaction. A business organization that focuses on responsibility and stakeholder satisfaction will have a very good chance of survival & sustainability in the long run because, it is the public who buys the products and services from the business organization and a business organization that has goodwill in mind of the public, and will ultimately have a good future. This will ultimately result in profit gain too in a long run.

Therefore, in my opinion business organizations shouldn't focus on profit and shareholder satisfaction.. They should be focusing on responsibility and shareholder satisfaction. Earning goodwill and brand is also considered as profit. If a business organization does contributions towards the community and society and, also completes its responsibilities towards the society and community then it will be able to earn goodwill and brand loyalty from  people. However, the business may not see huge amount of profit at the early period but in the long-run it will do very well. For example: Choudhary Group, which is the leading FMCG and Electronic manufacturing Industry of  Nepal contributes towards the society and community in different ways. It has established its own schools where it provides scholarships to poor, needy and  talented students, organizes and promotes various cultural  programs and activities all over the country, cleaning campaigns and many more. These all activities has helped Choudhary Group to earn goodwill and establish itself as a brand in Nepal and in south-east Asia, and people are very loyal towards this brand, which has helped it to become a leading industry in Nepal as well as south-east Asia too.

For all of these reasons, business organizations should focus on responsibility and stakeholders’ satisfaction rather than profit and shareholder’s satisfaction.

3. Write about your experience with today‘s case study. What answers did you give to the questions? What did you think of the CEO?

The overall experience with today’s case study was very good. It was a really great and fun experience learning about PepsiCo, its aspiring chairman & CEO Ms. Indra Nooyi. It was a learning experience because i got the chance to know about the success story of PepsiCo, its century long rivalry with Coca-Cola and  its current struggling phase to regain the market share.

 

(The answers that i have given to the questions are listed in another page with the questions.)

I think the CEO of PepsiCo, Ms Indra Nooyi, is a very talented and skillful personnel. We can justify this statement by listing the honors and recognitions that she has received from many reputed institutions, & magazines.

  ·   Forbes magazine ranked her #3 most powerful women in 2008, &  6^th  most powerful women in the world on 7th  October 2010.

  ·   Fortune named her the #1 most powerful women in business in 2009 & 2010.

   ·       Time listed her in 100 most influential people in the world in 2007 & 2008.

   ·    Wallstreet Journal put her in the list of 50 women to watch in 2007 & 2008.

After she started to work in PepsiCo as the CFO in 2000, the annual revenue of PepsiCo had rised to 72%, and the net profit were more than doubled (to $5.6 billion) in 2006, which is very remarkable. Since her joining with the PepsiCo, the Soda makers which were only recognized by Pepsi brand has progressed very well. Nooyi was the one who took the lead in Tropicana acquisition in 1998, and merger with Quaker Oats Company, which also lead to the inclusion of Gatorade to PepsiCo. Now, PepsiCo has got 19 different product fleets which amounts for more than $1 billion in annual retail sales, which is huge.

This all justifies that she is one of the great CEO at present.

Image Source : http://www.southdreamz.com/wp-content/uploads/2010/09/Indra-Nooyi.jpg

 

 

 Case Study (Indra Nooyi - PepsiCo)

What are Pepsico‘s strategic objectives? Why does the firm exist?

PepsiCo is a huge multinational company that produces beverages and snack foods, some of the strategic objectives of PepsiCo are as follows:-

1. International expansion
2. Achieve synergies
3. Strategic acquisition
4. Product reformation

·  Making beverages and snack foods that are less unhealthy

·  Producing better-for-you (BFY), and good-for-you (GFY) products, that can help in creating growth opportunities.

            5.  Maintaining close relationships with distribution allies.

            6.  Maintaining efficient distribution system.

·         By applying Direct store delivery

·         Broker warehouse

The firm exists because of its Mission, Vision and Values.          

      Mission:

Mission can be described as the factor which help the employees and stakeholders to know clearly about the organization’s over-riding purpose. It aims to give them the idea about:-

“what business are we in?”

“how do we make a difference?”

“why do we do this?”

      Vision:

Vision majorly concerns with the organization’s desired future state. It is simply an aspiration that helps to stretch performance, gain commitment & enthuse. It provides the firm with the idea concerning “what do we want to achieve?”

      Value :

Some of the examples of how values are developed in firms are as follows:-

“how customers & stakeholders will be treated?”

“how employees will be treated and how they will treat each other?”

“how the values will relate to organizational success?”

“which values people will use to govern how they work?”, etc

These all are the reasons why firm’s exist.

What are the possible strengths and benefits of the strategy? Do you think the organisation has the right balance between profitability and responsibility?

Being a global and huge industry has its benefits too. PepsiCo is a globalized and internationally expanding organization which has a market in over 200 countries worldwide. Since PepsiCo manages 19 different product fleets, therefore it has a very large number of consumers / customers and market share. This is the possible strength and benefit of the strategy to the PepsiCo.

What are the possible weaknesses and disadvantages of the strategy?

Existence of all the products under the same brand can be considered as the main weakness for PepsiCo. Although, PepsiCo has got 19 different product fleets under its management but, the consumer sometimes don’t even know that the products that they are consuming are from PepsiCo. And also, because it has a wide range of product lines which doesn’t belong to same brand, it faces challenges from several competitors which is not good for the organization.

After observing the case study, i think that PepsiCo doesn’t believe in making profits only, but it also cares about its customers. PepsiCo has tried its level best to perform its responsibilities towards its customers / community in different ways. PepsiCo is taking it very seriously to make snacks and beverages more healthier, it is also trying to contribute towards the environment by investing in recycling programs in developing countries in Africa.

PepsiCo does a very huge soda advertisements during super bowl, but In 2010, it decided to skip the soda advertisement at the super bowl and rather use that money for other social causes by helping orphanages and homeless shelters.

This shows that the organization has a perfect balance between profitability and responsibility.

Week 9

1. In your own words and using referenced quotes describe what is meant in strategy by the ‘Resource-Based View’?

Resource-based view is a way of viewing the firm and in turn of approaching strategy. This theory believes that a firm is a bundle of resources. All these resources and their way of combination makes each firms different from another. The internal environment is the starting point of the analysis, because it considers taking an inside-out approach while analyzing the firm.

Resources of a firm includes all the assets, information and knowledge, firm attributes, organizational processes, and capabilities. All the inputs that helps the firm to operate its activities can be considered as resources.
 A resource should have the following important features to be strategically important:

i)  Valuable - a resource will become a source of competitive advantage only if it is able to bring value to the firm.
ii) Rare - a resource should also be rare and provide unique strategy to be able to give competitive advantages to firms.
iii) Inimitable - resources should be inimitable for competing firms to obtain so that the firm can sustain competitive advantage.
iv)  Non-substitutable - a resource should be non-substitutable because if it is substitutable and can be replaced by another alternative & equivalent resource then it will be very difficult for the firms to sustain competitive advantage.

"The resource-based view (RBV) as a basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable interchangable and intangible tangible resources at the firm's disposal" - (Mwailu & Mercer, 1983 p142, Wernerfelt, 1984, p172; Rumelt, 1984, p557-558; Penrose, 1959[1]). 

2. How might you undertake ‘Internal Strategic Analysis’? What models would you apply and why? Where would you go to find the information you need? 

Internal analysis is done by first evaluating the organization's capabilities and resources. I would undertake 'Internal strategic analysis' by first collecting all the necessary data and information regarding the company's resources ( as people, intellectual property & assets), the capabilities (functions) of the company and, knowing what is the best our company does? Only after getting all of these data and information, I would undertake 'Internal strategic analysis'.

There are many models available to do the 'Internal strategic analysis' and, we can apply them according to our requirement and convenience. We can apply VRIN model, Financial analysis, McKinsey Seven S analysis, Value chain analysis, and resource & competence analysis because we can get a detailed information about the organization from all of these models.

              VRIN gives us all the required information regarding increasing / improving the competitive advantages by taking advantages of opportunities  and also it helps in threat reduction because it helps us to develop inimitable and unique characteristics.

·                     All the finance-related activities like evaluating budgets, projects and businesses for determining their suitability for investment, these all activities are referred as Financial analysis. It helps a company to find out whether an entity is profitable enough to be invested in, or is it liquid, solvent or stable.

·                     Meanwhile, Mckinsey seven S model provides us with the detailed information regarding the structure, skills, system, staff, strategy, style and shared values. It helps in improving the performance of a company. It also helps us to evaluate the potential effects of future changes to the company and within it. And, it helps us in determining the best way to implement strategies within the company.

·                     Value chain analysis provides us the information regarding various value-adding activities that are superior to that of their competitors which can be used to gain competitive advantage over the competitors.

·                     Resource and competence analysis, as the name suggests, it gives us the detailed information about the resources that the company possesses and also shows us the best way they should be implemented, so that competitive advantage can be gained over the competitors.

All the information can be found from the related department / individuals or we can use the experts that are within the organization to get the required informations. For example: to get any information regarding the staffs, we should contact the Human Resource Management  (HRM) department / personnel.

  
3. Talk about your group video work. How is it going so far? Do you have a plan? What are you most worried about at the moment? What is going well?! 

Actually, it is going well. Our group has decided to do a comparative analysis between two of the leading global names in electronics, Apple & Samsung. We are 5 members in our group, and each individual is assigned to do a particular task, this will help to do the work more effectively and efficiently too. We are using many analytical tools like SWOT analysis, PESTLE analysis, Financial analysis and various other tools to evaluate the competitive advantages for each of them.

The only thing that we are most worried about is the video shoot and its deadline for submission and upload. We are assigned to do a lot of analysis using various tools,  which needs a lot research and consumes a lot of time too. So, the challenge to do a good research and complete it on time is the main problem that we all are worried about at the moment.

Since, both of these companies are very big and global companies, the only thing that is going well is the availability of data and informations related to these companies in internet and journals. This is helping us to minimize the time-duration required for the research.

REFERENCE

About Strategy, [Online] http://www.mindtools.com/pages/article/newSTR_91.htm Accessed on 2013/01/04

About Financial analysis, [Online] http://www.investopedia.com/terms/f/financial-analysis.asp#axzz2Hqwf9n7L Accessed on 2013/01/04