FACULTY OF BUSINESS AND MANAGEMENT ___________________________________________________________________________

BBPS4103 STRATEGIC MANAGEMENT ASSIGNMENT 1 ___________________________________________________________________________

Name: MariammahSuprumaniam Matric number: 820116065716-001 NRIC: 820116-06-5716 Telephone number: 017- 6151 840 E-mail address: sanma_forever@hotmail.com

In this assignment Im going to discuss about three small businesses which differentiate in the aspect of the strategies, Vasu Mini Market, MULTI Restaurant and Evergreen Spa. Firstof all let me start with Vasu Mini Market which nearer to my place, Senawang. The owner of the mini market is Mr. Vasu,even though he is the owner but it is managed by the whole family also can say as smallfamily business. Many customers from far and nearer came to purchase at Vasu Mini Market. The main reason why many customer purchase in Vasu Mini Market even though nearer have many Mini market and supermarket because the prices for many products at Vasu Mini market are even cheaper and reasonable than others nearby. In the statement that given clearly we can defined that Vasu Mini market using cost leadership strategy. Cost leadership is about organizing all your resources around producing goods and services at the lowest cost possible. By having the lowest costs associated with providing your products, you put your business in the unique position of being able to charge your customers the lowest price in the market for those products. Just to keep things straight, Im referring to cost leadership (meaning the costs the business incurs to provide goods and services, not necessarily price leadership though the two usually go together. Vasu Mini market has been successful using its strategy of everyday lowprices to attract customers. The idea of everydaylow prices is to offer products at a cheaper rate than competitors on a consistent basis, rather than relying on sales. They source products from cheap domestic suppliers and from low-wage foreign markets. This allows the Mini Market to sell their terms at low prices and to profit off thin margins at a high volume. Secondly let medescribe about RestaurantMulti. The owner of the restaurant is Syed Kassim. This restaurant about more than 10 years nearer to my premises at Senawang.The restaurant is stand out from the other restaurants in the area because of the unique design and decor. No other restaurants in Senawang have this concept and atmosphere. Describe about the food quality, not only great food but great service and atmosphere. The menu is wide and varied clientele. It is multistyle dishes offering genuine traditional recipes of Malaysian and our Negeri Sembilan style too. Malay, Indian and Chinese style food is available. The food with full of tasty, properly prepared and affordable food. The workers in Restaurant Multi very friendly and provide excellent service for customers, they will beside us and assist us once we enter inside the restaurant and until we exit from the restaurant, which make many customers feel comfortable and have a positive experience. The most important things is cleanliness of the Restaurant Multi is presentable and maintain a rigorous standard of cleanliness and sanitation. RestaurantMulti one successful restaurant due to be utilized
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differentiate strategy in their business. Every organization would like to think that it stands apart from the competition in the eyes of its customers. Restaurant Multi that does a differentiation strategy with the intention of creating a product and service that is valued and perceived by its customer as unique as and better than the competition, productand also service characteristics. One of the advantage of differentiate strategy is that Lastly is Evergreen Spa. Evergreen Spa is located at Senawang nearer to my place. The owner of the Spa is Alice. She have employee five Staffs. They provide a comforting, yet stimulating, atmosphere in which customers will able to relax both their body and mind, reconnecting their daily lives to their true purpose through a wide range of holistic methods including massage, body works, energy works, and hair styling. Evergreen Spa will establish itself as a dependable destination to which they can always come to escape the stresses of life, and rejuvenate their energies, their souls, and their lives.The main customer they focus here are woman. Surveys say that, woman isgiving more priority to their health and beauty compare to Man.What special about Evergreen Spa with others? Evergreen Spa provide quality and professionally trained staffs which familiar with energy work and oriented to a soothing spiritual disposition andonce we enter inside, the environment of the Spa make us feel comfortable, clean and safe atmosphere . They presented the Spa clean, comfortable and relaxing and most important is safe. They having a comfortable couches and furniture in waiting area and offer magazines for reading. The towels are trimmers and the equipments look clean and fresh always. I can say the success of Evergreen Spa is their ability to satisfy their customers. They retain existing customers that to have they leave happy on every visit and word of mouth can be extremely effective form of organically marketing of their Spa. Clearly can say that Evergreen Spa utilized focus strategy. The focus strategy has the potential of creating profitability for a firm as well as protecting the firm from several competitive forces. Firms that focus on one particular segment like Evergreen Spa can devote a great deal of attention to serving this segment well. Many times that leads to superior products in the market segment that are not usable in the general market due to the segment limitations.The focus strategy is the best choice for small businesses as they customarily lack the resources for competing industry-wide. Furthermore, the targeted approach is also beneficial to a small business since large companies usually disregard small niches. The other reason why the focus strategy benefits small businesses is that the certain needs are very special such that other large companies opt not to cater for them.Through adopting the focus strategy, a firm ideally focuses on specific target markets. These are ordinarily distinct groups
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that have specialized requirements. It is believed that through focusing a companys marketing efforts towards a narrow market segment and also tailoring the marketing to the specialized market, the company will better meet all the requirements of that specific market. Better marketing translates to better services that consumers will enjoy.

SUMMARY Refer to above statement has discussed the three generic strategies that firms can have for a products or services. Thus, it is extremely important for a firm o wisely chooses a businessstrategy and implements that strategy well. A business level strategy is the plan an organization uses to conduct business in a particular industry or market. Porter suggests that businesses may formulate a differentiation strategy, an overall cost leadership strategy, or a focus strategy at this level. According to Miles and Snow, organization may choose oneof three business level strategies: cost leadership strategy, differentiation strategy or Focus strategy. Business level strategies may also take into account the stages in the product life cycle.

REFERENCES 1. Prof Datuk Dr Md Zabid Abdul Rashid, Strategic Management,Open University Malaysia (OUM),First Edition, January 2005, Second Edition, December 2013 (Rs). 2. Teece, D.J. 2010. 'Business Models, Business Strategy and Innovation.' Long Range Planning, 43:2-3, 172-94. 3. Adrian Haberberg and Alison Rieple, The Strategic Management of Organisations, Prentice-Hall, 2001. 4. Garth Saloner, Andrea Shepard and Joel Podolny, Strategic Management, Wiley 2001.

FACULTY OF BUSINESS AND MANAGEMENT ___________________________________________________________________________

BBPS4103 STRATEGIC MANAGEMENT ASSIGNMENT 2 ___________________________________________________________________________

Name: MariammahSuprumaniam Matric number: 820116065716-001 NRIC: 820116-06-5716 Telephone number: 017- 6151 840 E-mail address: sanma_forever@hotmail.com

In this assignment i have choose two organizations which depict their corporate level strategies. First organization is AirAsia, let me explain detail about this organization. AirAsia Berhad is a Malaysian low-cost airline headquartered in Kuala Lumpur, Malaysia. It has been named as the worlds best low cost airline, and a pioneer of low-cost airline, and a pioneer oflow-cost travel in Asia. a) Identification and discussion on the strategy used by AirAsia Market Penetration and Consolidation Market penetration occurs when a company penetrates a market with its existing product range and strategic capabilities and obtains increased market share (David, 2009). For example, AirAsia, with its relatively lowmarket share, succeeded at attacking MASs market share in the domestic airline industry. This strategy begins with the existing customers of the organization and is used by companies to increase sales without drifting from the original product-market strategy (Ansoff, 1989). AirAsia penetrated the aviation industry by gaining the competitors customers, improving the product quality and its level of service, attracting non-users of the products or convincing current customers to use more of the companys products through its RM0.99 promotions and obtaining substantial media coverage due to its fairytale success. This strategy was important for AirAsia because retaining existing customers is cheaper than attracting new ones and engaging in relationship marketing activities is pertinent to retain its high lifetime value customers (Pearce & Robinson, 2009)

Product Development The product development strategy is implemented when an organization delivers modified or new products or services to an existing market (Johnson, Scholes & Whittington, 2008). However, an organization needs to be wary on new strategic capabilities such as mastering new technologies and project management risks (delays of aircraft orders) before employing this strategy. As maximizing revenue is the core objectives of AirAsia, the organization recognized that passenger seat revenue was not sufficient to sustain and grow the business. With the execution of this strategy, AirAsia was able to countercompetitive entry, maintain the companys reputation as a product innovator, exploit new technology, and to protect overall market share (David, 2009)

Market Development Market development refers to the strategy of introducing the current product, services to a new market. By strictly adhering to a proven business model, AirAsia maintained profitability in its Malaysian operation, despite limited operations and financial resources. AirAsia used its expertise and experience in Malaysia to expand into Thailand and Indonesia, and now presently to Vietnam. This further entails exploration of new segments of a market, new users for the companys products and services, or new geographical areas in order to entice new customers (Pearce & Robins on, 2009).

Diversification Diversification strategy is distinct as an organization essentially moves out of its current products and markets into new areas. AirAsias related diversification strategy was mainly in the form of backward, forward, and horizontal integration. The airlines backward integration strategy was executed as the company extended its operations towards its growth of its ancillary products and services of secondary cities which would eventually leads to the growth of many related and supporting industries. Additionally, airports in secondary cities are usually less congested than national gateway airports and may offer near term aeronautical charge incentives to attract new air service. The rapid air passenger growth that AirAsia has generated has encouraged some government and airports to liberalize bilateral aviation agreements and develop new airport capacity to accommodate the increased demand. Additionally, travel restrictions have been relaxed, particularly in china, encouraging its citizens to travel by increasing the number of exit visas it issues for independent and group travel (AirAsia, Annual Report, 2009). To maintain its competitive position within the region, the AirAsia Group uses it hubs as platforms to operate high-volume, short haul routes to cities within a three and a half hour flighttime,. Additionally, the group focused on routes that were underserved or not served by other airlines. Furthermore, the key driver for AirAsia to be competitive within the ASEAN region is by offering domestic and international air travel services in other Asian markets, such as Thailand, Indonesia and Vietnam and by identifying suitable local partners and forming joint ventures (AirAsia, Annual Report, 2009). The business strategy implemented by AirAsia was by forming strategic alliances with local partners in the respective country. By identifyingsuitable local partners and forming joint ventures
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within the region, AirAsia was able to share its investment risk with its chosen partner, leverage on the combined resources and knowhow of its partner and fulfilled the respective governmental conditions to expand the growth of its airlines (Johnson, Scholes & Whittington, 2008). However, AirAsia need to be mindful on identifying and managing relationship with future partners, as it could lead to a loss of competitive advantage through imitation and it couldlimit its ability to integrate and coordinate activities across national boundaries . b) Strengths and Weaknesses of The Strategy Used

Strengths of the Strategy Used by AirAsia A low cost operation which has made AirAsia brands a leader in the low cost carrier segment. AirAsia management is made of fewer level which helps in faster and effective, focused and aggressive management and with management consisting of members having strong links with government in south pacific Asia, it makes it easy for their business developmentwith least government interference and more concessions. AirAsia staffs is made up of workforce which are multiskilled and efficient, AirAsia follows the model of incentives for the hardworking and smart workforce, this model helps to return talent and grow along with the company. Management strong focus on cost reduction to position AirAsia groups as industrys lowest cost producer. AirAsia group have strong balance sheet and cash flow this helps to weather short terms unforeseen difficulties. AirAsia management decision to move to a single type fleet paid well it helps in minimizing maintenance fees. It utilization to the maximum has enabled AirAsia to increase efficiency helping it track its fleet, staffs and seat management in case of no show customers on ASAP basis, It also helps inpromotional activities and in lean management based on e-ticketing model online checking. Fuel Burn & Emissions - Single type fleet of Airbus A320 helps AirAsia stick to its efficient fuel usage police to go by their GO green and cost reduction strategy. Airbus A320s low noise level improves operational flexibility and lowers surcharges for airports with noise constraints. Ancillary services In the current year from January to April, AirAsia achieved ancillary income of RM45 per passenger. AirAsias ancillary service includes products and services such as baggage supersize, in-flight food and beverage, merchandising and duty-free, courier, airspace advertising and AirAsia RedTix. AirAsia RedTix is a unique Ancillary income system
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which is related with non-airline ticketing system focusing on tickets to events, sports and music. Ancillary income not only contributes to the airlines bottom line, but it also provides a buffer against rising fuel prices.

Weakness of the Strategy Used by AirAsia AirAsia do not have their own Maintenance Repair and Overhaul (MRO) facilities. Being a young fleet with young staff at times makes it difficult to handle unforeseen situation at both physical location and over the customer service management mainly related with change of flight and over refunds. AirAsia have faced difficulties with government interference mainly at level where AirAsias main competition happens to be directly with the national carrier. Being a young brand makes it a challenge to catch the attention of frequent and first time fliers for Branding is vital for market position. AirAsia depends on service based on outsourcing which at times can lead to delivery delays and hindrance of long duration on two segment IT and MRO. Young fleet at times shows lack of contingency plan on irregular situations.

c) Recommendations for Improvement AirAsia should improve from four perspectives which is financial performance customer knowledge, internal business processes and learning and growth. Financial Perspective To ensure long-term shareholder value is achieved, AirAsia should ensure the following initiatives are implemented to achieve the stipulated targets n the next five years. Customer Perspective In the customer perspective of the strategy map, the organization should identify the targeted customer segments in which the business unit operates and measure its performance. Internal Perspective The internal perspective examines the methods of executing the relevant strategies for the organization. The internal process business units and geographies will reveal both opportunities for cost reductions and areas in which the organization should increase its investments to capitalize on growth opportunities. Identifying measuring and controlling the organizationskey drivers would increase transparency and eliminates all data disputes within the organization. In addition to its present service oriented corporate culture, AirAsia should alsonurture a strong project culture by making productdevelopment and innovative thinking a priority within the organization. This would further encourage employees to constantly increase
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productivity within the organization. In line with the Malaysians government objective of strengthening air links with the Middle East, AirAsia should focus on expanding its range of destinations in the Middle East and capitalize on the enormous economic potential of the Middle Eastern countries. Within the next five years, AirAsia should also focus on strengthening its country base in Vietnam, due to its close proximity to China by obtaining liberal traffic rights, no restriction on passenger capacity and increase its flight frequencies between the two countries. Furthermore, AirAsia should strive on becoming the partner of choice by building relationship with other brands. Additionally, the organization should get the support staff to be involved in the sales channel, and actively involved through branding merchandising. Furthermore, in the next five years, AirAsia should strive to become a partner of choice through education, training centers and with the possibility of building an AirAsia. Second organization that I choose is ACER Company. ACER has turned its focus to IT product marketing, and in turn developed our one-of a kind new channel business model. At present, ACER has a full grasp of branding, marketing, technology, and products, as well as a comprehensive control of our global operations and service capabilities tomeet he demands of our customers. ACER is the third largest PC Company in the world (9.5% market share) with growth being experienced outside the mature USA market, predominately in emerging nations. a) Identification and discussion on the strategy used by ACER The ACER strategy is to remain the third largest PC manufacturers in the globe in this highly commoditized and competitive industry. The strategy includes acquisitions, development of new technology, growing the emerging EMEA and Japanese regions and solidifying strategic alliances with firms such as Microsoft and McAffee. Acers overall competitive strategy is to be a low cost provider, undercutting rivals to maintain cost leadership to a large range of buyers (Tylor & Nichols, 2010, p.27). However, while this is true for the EMachines and ACER brands, more premium offerings, such as Gateway and Ferrari, are targeted at other competitive strategies. Gateway has a focused low-cost strategy while Ferrari has a niche market strategy based on differentiation (Porter, 1980. Pp. 35-40). ACER has also adopted at transnational strategy (Hill, 2009, pp. 439), selling their product anywhere in the globe and sourcing the components and production from the least cost source. This
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unlike DELL which has taken an international strategy to source form a narrow range of producers and then to manufacture close to the market. While this provides efficiencies to DELL, it also allows ACER a competitive advantage to source product at lower price. This is especially evident n laptops where the ACER product equivalent is considerably cheaper than DELL. The ACER business model is to provide low cost, premium PCs that suit the local conditions. This is appealing to the public and is successful due to clearly defined vision to have cost leadership, but allows customers to trade upon down according to their needs or requirements. This allows emerging markets consumers to afford a quality and trusted PC while in mature markets the consumers can choose to upgrade. Distribution, using known retailers to grow market share. Manufacture, sourcing premium product from the globe where a price advantage can be leveraged.Innovation, pushing the boundaries to find new markets. Difference ar offering consumersthe choice to buy a product that suits their needs based on three tiered model. Market ACER competes within the PC and peripherals industry providing a personal computing solution for consumers and businesses. Unlike competitors ACER offers alternate brands for different customer segments rather than one brand with many variables. This allows ACER to maintain margin for each brand without cannibalization. Most bands within PC industry offer one brand. However, as demonstrated in the strategic group map out of the top 5 brands only ACER offers different brands for different segments. While ACER takes a middle ground in terms of pricing and reputation (but also covering the premium and low end of market), other brands trade on a lower or higher pricing offers dependent upon their mrketsegment. For example, DELL takes a price leadership position, whereas HP and Lenovo take a higher price position. The key aspectis that ACER stands alone as compared to competitors in offering a range of brands that target various segments. There are also substitute players such as Apple introducing devices such as the iPhone and iPad that will challenge the need for PC for some consumersegments. There is also a lot ofpower in suppliers with 85% of all laptopsbeing produced by Taiwanese manufacturers in Chinese factories who supply the entire industry. If these suppliers decide to forward integrate intothe value chain, especially by using internet to sell their products, this could mean a serious competitor to al PC companies.

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b) Strengths and Weaknesses of The Strategy Used by ACER

Strengths of the Strategy Used by ACER ACER has many innovations like the aspire one laptop that let the user connect to the Net almost anywhere with 8 hours of batterylive. Acer presented the Tempo Smartphone series in 2009 to compete in the lucrative mobile phone market. Acer main factory is located in Taiwan which has low-cost labor and distribution advantage in the US market and Asian market. Acer prices its products with low competitive prices to compete with the strong rivals and acquire the low priced laptop market share. Also cheapest price when compared to competitors, wide range from basic model to high end models, offers good option for a reasonable price. Own the good enough market in emerging nations (Orit et al, 2007) and demonstrated ability to find new markets.

Weakness of the Strategy Used by ACER The PC, Laptop and mobile phone markets are extremely competitive and require frequent innovations to keep up or exceed the customers expectations. The laptop customers expect new functions and improved computing power at least once every year. Innovations and changing market demand needs strong and flexible supply chain to execute the successful innovations and deliver them to the market before the competition. Even the most expensive is considered poorquality, low brand equity. Market share is declining in established markets and too many brands in a stable can lead to cannibalization.

c) Recommendations for Improvement One the basis of the analysis it is recommended that ACER consider four recommendations to build competitive advantage against rivals. First is to find blue ocean within the PC and peripherals industry. For ACER this could be leveraging th value chain to reduce costs across the businessand to use these advantages to develop more premium brand PCs such as the Ferrari and BenQ LCD screens. Both are in industries that are attractive to ACER. This would create new market space that is hard for rivals to imitate and is the basis of blue ocean theory (Kim & Mauborgne, 2004). The second recommendation is use sustainability as a key driver of innovation and Blue Ocean. ACER has the ability to affect the entire PC value chain by only
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buying from responsible companies (Nidumolu et al, 2009). Once this achieved the next stage is to take strong leadership in the PC market (Lubin & Esty, 2010) becoming green; across the entire value chain. ACER can then design sustainable PC, preferably under the premium brands first, and then followed by the mid and low versions. Finally will help ACER to develop a new niche market in green products and hence differentiation for some period against rivals. The third suggestions are to adopt balanced scorecard with alliances such as BenQ, Ferrari, McAffee and the Taiwanese manufactures. If we agree that developing a blue ocean isthe strategy then building a balanced scorecard for all players in the alliance will assist in achieving this outcome. Determining the alliances objectives required from the relationships will assist ACER to find a new market for innovative technology and to adopt real time to market needs (Kaplan et al, 2010). Finally, it is recommended to assist distributors to develop an appropriates sales system to support the ACER product. With a three tiered strategy of premium, mid and lo w it is important that the sales force sells to the customer needs in their local market. The preferred method is to sell from the top down, offering the premium product first and if this doesnt secure the sale to then drop to lower offers. Another methods is to work with the distributor through the alliance balance scorecard to institute the Friedman selling process of the 7 steps to success to then drive premium sales and to move the focus from other brands onto the ACER product (Friedman, 1992)

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SUMMARY OF THE TWO ORGANISATIONS A corporate-level strategy is the plan an organization uses to manage its operations across several businesses. A firm that does not diversify is implementing a single-product strategy. An organization pursues a strategy of related diversification when it operates a set of businesses that are somehow linked. Related diversification reduces the financial risk associated with any particular product, reduces the overhead costs of each business, and enables the organization to create and exploit synergy. An organization pursues a strategy of unrelated diversification when it operates a set of businesses that are not logically associated with one another. Strategy implementation at the corporate level addresses two issues: how the organization will go about its diversification and the way that an organization is managed once it has diversified. Businesses accomplish this in three ways: developing new products internally, replacing suppliers (backward vertical integration) or customers (forward vertical integration), and engaging in mergers and acquisitions. Organizations manage diversification through the organization structure that they adopt and through portfolio management techniques.

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REFERENCES 1. Kaplan, R and Norton, D (2004) Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Boston HBS Press. 2. Kaplan, R and Norton, D (2001) The strategy-focused organization, Boston: HBS Press. 3. David Collis and Cynthia Montgomery, Corporate Strategy - Resources and the Scope of the Firm, Irwin/McGraw Hill, 1997 4. Cliff Bowman and David Faulkner, Competitive and Corporate Strategy, Irwin, 1997. 5. Prof Datuk Dr Md Zabid Abdul Rashid, Strategic Management,Open University Malaysia (OUM),First Edition, January 2005, Second Edition, December 2013 (Rs).

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