...what is Strategic Business Unit? What are conditions required for creating an SBU? How is performance of SBU measured? What are the advantages and disadvantages of creating SBUs? Ans. Strategic business units are self-contained divisions formed within an organization for dealing with specific business concerns. These units pull together the diverse parts of the concerned organization while cutting across the geographical and diverse lines for serving a specific market in a more efficient manner. These strategic business units are also referred to as independent business units or strategic planning units. The main philosophical concept behind the formation of strategic business units is to serve a clear and defined market segment along with a clear and defined strategy. These business units have to contain all the needs and corporate capabilities of the respective organization. The entire portfolio of the concerned business has to be managed by allocation of managerial and capital resources for serving the overall interest of the entire organization. This helps in developing a balance in the earnings, sales and the assets at a level which is controlled and acceptable for taking the right amount of risks. The strategic business unit (SBU) is created with the application of set criteria which consist of the competitors, price models, customer groups and the overall experience of the company. It is also sometimes seen that a number of different verticals present in the same organization...
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...CHAPTER I INTRODUCTION 1. Background of Case Study Selection Differentiated strategy is the strategy pursued by the company to produce products that are different or unique compared to competitors' products. Researchers are interested in doing research on the company because researcher wanted to learn more about controls for differentiated strategies, both theoretical and practical. Minnesota Mining & Manufacturing Corporation (3M) is one of the companies that have successfully implemented differentiated product strategy that gives priority to innovation as a competitive advantage offered. This company believes that innovation to be the cornerstone of 3M’s future success. Current management has continued to embrace and expand these policies and philosophies. That is why researchers interested in evaluating policies and 3 M that philosophy is based on the innovation in the implementation of the strategy of differentiation 2. Motivation Motivation researchers conducted a study of control for differentiated strategies in Minnesota Mining & Manufacturing Corporation (3M) because the researchers wanted to know more about the factors that influenced the design of the system and also the policies and philosophy rooted in the innovations made by 3M Corporation. By studying and examining the existing policy and philosophy that is rooted in innovation from the company, researchers can get a clearer picture of how to do a proper evaluation and what steps...
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...different perspectives in relation to what value really is. CIOs are not able to understand that IT investments might actually be strategic for the company and the CEO does not care either. d. They have different perspectives in relation to what value really is. CEOs believe that their IT investments create value but are not able to tells CIOs how those investments actually translate into real profits, and that creates misunderstandings. Question 2 Why should we plan for, institute and execute a serious post project audit policy? Options: i. Because there is a law of nature that tells us that just by measuring something we increase the likelihood of success ii. Because that allows our IT Center to be more like a Profit Center iii. Because that allows the Management Team to find the strategic business value of IT iv: Because it uses valuable resources, namely time Select one: a. i, ii, iii b. i, ii, iii, iV c. ii, iii Question 3 IT-Business Alignment demands a strategic process to be in place. According to the Strategic Process we learned in class from the Institute for CIO Excellence, IT initiatives should be ranked in terms of: Select one: a. Payback Period b. Other c. Internal Rate of Return d. Net Present Value Question 4 The main point of this case is to show that there are always advantages from standardizing the IT Function across business units. Select one: a. False, the purpose of the case is to highlight that while...
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...Case Study Analysis 8 Nestlé: Sustaining Growth in Mature Markets Strategic Management Instructor Dr. David J. Rambow Associate Professor of Management Summer Term 2011 Anchorage Campus Wayland Baptist University Nestlé: Sustaining Growth in Mature Markets Introduction Dated back to 1866, the Nestlé company had acquired profound knowledge of markets all over the world over the previous 130 years. Nestlé is the leading position in the global food industry with operated factories in 77 countries and sells its products on all six continents. Nestlé has a broadly diversified business portfolio and with leading global market shares in numerous product categories including coffee, mineral water, dairy products, nutrition and baby food, ice cream, confectionary, pet food, and chocolate. Nestlé is also committed to providing quality brands and products that are essential to good health. In doing so, Nestlé incorporated nutritional elements into vast array of product categories to promote food that are safe of high quality (Raisch & Ferlic, 2006). Peter Brabeck-Letmathe took the job as CEO of Nestlé in June 1997; he faced the challenge of having to improve the company’s profitability. In order to generate the financial means required to invest in growth initiatives, Brabeck launched a suite of process innovation initiative in an effort to maximizing existing assets, maximizing capacity utilization, and maximizing distribution logistics...
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...Strategy 2 Organizational Structure 2 Strategic Business Unit/ Background 4 Mission & strategies of the Strategic Business Units 5 Actual Proposal 6 Proposed Portfolio Process 6 Proposed Selection Criteria 6 References 8 Company Raytheon is a major, US defense contractor specializing in defense, homeland security, and other governmental markets around the world. They hold the leading position in innovation of specialized defense technology. They provide state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing, effects, command, control, communications, and intelligence systems (C3I) as well as a wide range of mission support services. Raytheon serves both domestic and international customers. As a defense contractor in the defense industry, Raytheon depends on the US government for a substantial portion of its business which accounted for approximately 88% of net sales in 2009 and 2010. Vision and Strategy To be the most admired defense and aerospace systems company through our world class people and technology. Their four strategies are: * Focus on key strategic pursuits, technology, and mission assurance to sustain and grow our position in our four core defense markets: sensing, effects, C3I, and mission support. * Leverage our domain knowledge in all markets, including homeland security and cyber-security. * Expand international business by building on our relationships and deep...
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...E www.hbr.org The Core Competence of the Corporation by C.K. Prahalad and Gary Hamel Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 The Core Competence of the Corporation 15 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications Product 6528 The Core Competence of the Corporation The Idea in Brief The Idea in Practice Diversified giant NEC competed in seemingly disparate businesses—semiconductors, telecommunications, computing, and consumer electronics—and dominated them all. CLARIFY CORE COMPETENCIES How? It considered itself not a collection of strategic business units, but a portfolio of core competencies—the company’s collective knowledge about how to coordinate diverse production skills and technologies. COPYRIGHT © 2003 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. NEC used its core competencies to achieve what most companies only attempt: Invent new markets, exploit emerging ones, delight customers with products they hadn’t even imagined—but definitely needed. Think of a diversified company as a tree: the trunk and major limbs as core products, smaller branches as business units, leaves and fruit as end products. Nourishing and stabilizing everything is the root system: core competencies. Focusing on core...
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...company’s competitiveness. Summary The most dominant companies in the world have been shown to have two major characteristics which are strategic planning and core competence. A company’s strategy simply means its master plan for the future while its core competence is its strategic advantage. Most companies that have a strategic intent and a strategic architecture to develop those intent always end up being more dominant than companies that do not project towards the future. The managers of different strategic business units (SBU) in a company or organization must be aware of the common strategic intent being pursued, and collaborate towards it rather than compete against each other for short term benefits. This will enable competences to be easily identified and clarified. Access to diverse markets, distinct customer benefits and distinctiveness are the three major characteristics of a core competence. It is necessary to focus on the core competence in order to capture an emerging market. A core product developed from a core competence, derives an end product which can be sold to a customer at the consumer or manufacturing level. The core products are the components that add to the quality of the end products. Reflection To capture an emerging market, an industry must strive to forecast emerging customer needs. Both strategic intent and strategic architecture must be articulated by top management for SBU managers as a point of convergence. This will make each unit strive towards...
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...share with, according to Thomson one banker, a total net income of £ 2,161.00 for the year 2009. It is also the third largest global retailer group in term of revenue after the American group Wal-Mart and the French group Carrefour. With a main activity of food global retailer, it has diversified his activity into clothing, home, financial services, car insurance, health, telecoms and internet services and software. However in this report we are focusing on its clothing unit which operates online. So to better know this Tesco clothes retailing, this report will bring an overview of the company and will analyse its current strategic position, the same as its fitness with the other business units. This report will also analyse the Tesco clothes retailing’s macro environment, the competitive environment, the strategic capability and also the future strategic options. Tesco clothes retailing’s brief overview: The Tesco clothes retailing company is among the biggest clothing retailer by volume in the United Kingdom as it was ranked at the third place in 2008 and had to juggle this place with Asda Direct online retailer behind Mark & Spencer and Primark (Hall, J.). Tesco clothes retailing is committed to bringing a wide range of clothes to men, women and kids. Its website has grown very fast and sales have risen by nearly 47% in 2009 compared to sales at the same period in 2008 and Asos.com retailer which offers clothing online has suffered from Tesco clothes retailer’s entrance...
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...our customers’ first choice in every market we serve by exceeding commitments, providing new technology solutions, leveraging our diverse brands, driving operational excellence, and committing to the highest standards of business practices all of which will drive Tyco’s long-term growth, value and success" (Tyco. 2011 para 1) The best way for Tyco to obtain the goals for the company is for management to distinguish the superior between strategic planning, tactical planning, operational planning, and contingency planning that best serves the needs of the company. While keeping in mind the Influence of legal, ethical, and social responsibilities. Strategic planning or strategic goals is the making of choices concerning the organizations long and short-term goals. These goals can be the supporting element for one or more of the following company growth and profits, return on investments (ROI), market shares, productivity, quantity, quality, and customer satisfaction. Short and long-term goals can range from a week to years to complete. In 2007 Tyco faced adversity when “Kozlowski and Mark H. Swartz, the company's former chief financial officer, were convicted of grand larceny, falsification of business records and conspiracy and are now serving sentences of up to 25 years in New York state prisons. A former director, Frank Walsh, who received a secret $20 million payment for arranging a merger, pleaded guilty to securities fraud but was not sentenced to prison” (Floyd Norris...
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...Haier Case Study 1. Discuss the primary reasons why Haier moves from a single and dominant business strategy to a diversified strategy. The single and dominant business strategy, which denote relatively low levels of diversification, more fully diversified firms are classified into related and unrelated categories. A firm is related through its diversification when there are several links between its business units; for example, units may share products or services, technologies, or distribution channels. The more links among businesses, the more constrained is the relatedness of diversification. Unrelateness refers to the absence of direct links between businesses. 참고 : http://wenku.baidu.com/view/6a080e260722192e4536f624 2. A.Describe how Haier uses activity sharing and the transfer of core competencies to create value. (related diversification strategy) Haier uses both related and unrelated diversification strategies. Haier catapulted in the last two decades producing consumer products that are sold in similar fashion. They all shared distribution channels, outbound logistics, and sales forces. Haier was able to develop core competencies through effective activity sharing of primary activities resulting in a superb competitive advantage, ultimately creating value. CEO Zhang Ruimin realized that using both strategies’ can work in Haier’s favor with the ultimate goal of getting name recognition globally. His related diversification strategy used both operational...
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...The Case Study for PROJ587 will place the student in the role of a senior manager in charge of one of your company’s Strategic Business Units (SBU). Your first task in this new position is to develop a project portfolio management process and then use this process to select projects for your SBUs portfolio. The Case Study will involve the application of the tools and techniques of multi-project/program management and will deal with the analysis and establishment of project management systems based on the structure of the project. The expected outputs from this Case Study will be in the form of a two part written report due week five. Background The senior management of your company has already made the strategic decisions to allocate annual funding to each of the Strategic Business Units (SBU) within the company. You have been hired to manage one of the companies SBUs. Your new company is a mid cap company with revenues of approximately $350 million dollars a year. This company, like many others, is struggling in today’s economy. It realizes in order to survive it needs to both expand and control costs at the same time. You are new to this industry. This company’s vision is to become the “go to” support or the “provider of choice” for the cruise ship industry throughout the world. This company currently is in the travel and hotel support industry. As such, you supply support services to the travel and hotel industry such as linen services to...
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...Nestle's Growth Strategy and Business Development Nestle's Growth Strategy and Business Development 1.) Does it make sense for Nestle to focus its growth on emerging markets? As it can be derived from the text, Nestle generates operates worldwide with a focus on European markets, which make up 70 percent of its sales. These markets are in the mature state of life cycle of that industry and additionally demographic changes such as the stagnation of population growth rates make it very hard companies like Nestle to generate higher profits through higher sales. As a matter of fact the western economies are actually facing a downturn in output and growth, thus influencing the consumption patterns of customers, especially in the retail business. Consumer are becoming more price aware and tend to spend less while demanding at the same time for customisation, product differentiation and specialization. Another trend is the shift away from branded food and beverages towards cheap non-branded foods and beverages. Nevertheless, the introduction of non-brand own labelled products such as Food Lion offers only makes sense in a large scale in order to achieve economies of scale. As a result of increasing non-brand cheap products offered by rivals, Nestle find itself in an even more embattled market and needs to develop a new strategy either away from branding or towards a higher degree of international market penetration. Since Nestle stands for high quality and has distinctive competencies...
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...Strategic Marketing and Planning | Assignment # 2 | Umaima Jalal, ID # 6571 | CONCEPTS * Core Competencies: Collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies. * Core competence is about harmonizing streams of technology, it is also about the organizational work and the delivery of value. * Core competence is communication, involvement, and a deep commitment to working across organizational boundaries. It involves many levels of people and all functions. * Core competence does not diminish with use; they are enhanced as they are applied and shared. But competencies still need to be nurtured and protected. * Competencies are glue that binds existing businesses. They are also the engine for new business development. * Core Products: Tangible link between indentified core competencies and end products- the physical embodiments of one or more core competencies. Components or subassemblies that actually contribute to the value of the end product. E.g. compressor in a refrigerator. * Original equipment manufacturer (OEM): manufactures products or components that are purchased by a company and retailed under the purchasing company's brand name. OEM refers to the company that originally manufactured the product * Strategic Architecture: Road map of the future that identifies which core competencies to build and their constituent technologies. * Dramatically...
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...Strategic Choice & Evaluation Paper STR/581 March 17, 2014 Victor Rayneri Executive Summary The University of New Mexico Medical Group, Inc. (UNMMG) was created in 2007 under the University Research Park and Economic Development Act in Albuquerque, New Mexico. UNMMG is classified as a not-for-profit corporation. UNMMG currently employs 900 clinical practitioners, represents 152 specialties who are exclusive caregivers to the state’s only academic medical center – University of New Mexico Hospital (UNMH) ("Review Of University Of New Mexico Medical Group, Inc. Operations", 2013). UNMMG is a multi-specialty group practice that operates 11 clinics in addition to attending at the 76 clinics at UNMH in Albuquerque area ("UNM Medical Group", 2014). UNMMG reports to the UNM Health Systems, which is comprised of the UNM School of Medicine, UNM Hospitals, UNM Sandoval Regional Medical Center, UNM Cancer Center, UNM College of Nursing and the UNM College of Pharmacy. Being the only academic medical center, UNMMG has to compete with other healthcare facilities in the area and in the state to provide high quality and innovation academic medicine. In order to realize growth for any organization, they need to evaluate alternatives such as strategies to maintain a competitive edge among its competitors. Strategies such as the best value discipline, generic strategy, and grand strategy should be identified for the organization. Strategy recommendations and recognitions...
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...Team 7 Featuring- Jeffrey Tar Tar Nge Nge & Gu Gue Content Nestle’s Company Profile -Nestle Headquarter Location -Mission Statement -Objective -Management Style and Organizational Chart Nestle’s SBUs Profile Competitor Analysis Market Targeting Product Profile Application of Ansoff’s four Strategic Options Conclusion Bibliography Nestlé’s company Profile Nestlé is the world's leading Nutrition, Health and Wellness Company. We are committed to increasing the nutritional value of our products while improving the taste. Henri Nestlé who was the founder of Nestlé and developed the first milk food for infants in 1867, and saved the life of a neighbor’s child, the Nestlé Company has aimed to build a business as the world's leading nutrition, health and wellness company based on sound human values and principles. Henri Nestlé The key factor which drove the early history of the enterprise that would become The Nestlé Company was Henri Nestlé's search for a healthy, economical alternative to breastfeeding for mothers who could not feed their infants at the breast. In the mid-1860s Nestlé, a trained pharmacist began experimenting with various combinations of cow's milk, wheat flour and sugar in an attempt to develop an alternative source of infant nutrition for mothers who were unable to breast feed. His ultimate goal was to help combat the problem of infant mortality due to malnutrition. Nestlé’s Logo Henri Nestlé also showed early...
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