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At the opening of the session you should be prepared with team assignments, and with your selection
of Judges (one of the teams). The Judges will listen to the team presentations and select those most likely
to succeed. Teams should be assigned and their work initiated as quickly as possible after the start of the
class session.
While the competing teams are developing their concepts (Step 1), you should give the Judges their
sustainable competitive advantage. Some
factors to consider:
Market knowledge To what degree does the team demonstrate that they have given thoughtful
consideration to the key success factors in the local restaurant market? Do they accurately
describe the market?
Strength of Concept To what degree has the team persuasively made the case for their concept?
Self-Assessment
STRATEGY QUESTIONNAIRE
In-Class Use
Give students 5 7 minutes to complete the inventory.
Scoring
Remind your students that people tend to think they are less competitive than they really are. We
association. That is unfortunate to a certain degree, because the positive aspects of competition like
planning, preparation, clear and forward thinking, and practiced execution are nearly nonexistent in our
raw scores, take a minute to ask them if they
agree with their score. That is, do your students agree that they are competitive, or do they consider the
Chapter 5: Organizational Strategy P a g e | 15
Management Workplace
Management Workplace videos can support several in-class uses. In most cases you can build an entire
50-minute class around them. Alternatively, they can provide a springboard into a group lesson plan.
VIDEO: THEO CHOCOLATE
Strategy Formulation and Execution
Summary:
At first, Theo Chocolate offered an exotic line of dark-chocolate and milk-chocolate bars and truffles.
These early treats had unusual names such as the 3400 Phinney Bar, and they were wrapped in artistic
Discussion Questions:
1.
threats.
A SWOT analysis for Theo Chocolate begins by recognizing that Theo has a mission to be the
most loved and most ethical chocolate company in the world. Internal strengths that help the
knowledge of sustainable business practices, and control over much of its supply chain. Whinney
2. Using the BCG m Classic line of chocolate bars after
having limited success with Fantasy Flavor chocolates.
Theo began as an organic chocolate maker with an exotic product line that appealed to Fair Trade
generating high volume sales. On the BCG m question
mark a risky business unit with small market share in a fast-growing organic foods marketplace.
However, managers eventually decided that they wanted a product line that could become a cash
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3. Which of the three competitive strategies differentiation, cost leadership, or focus do you
think is right for Theo Chocolate? Explain.
Answers will vary, but students should recognize that Theo is banking on its organic and fair-
trade expertise to differentiate itself from other chocolate makers and brands (differentiation
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Management Workplace Video Quiz
Students are able to take the following video quiz on CourseMate. The video is broken into segments, and
each segment has related questions to make sure students understand how the clip connects to the chapter
concepts.
Video Segment 1
Video segment title Strategy Formulation and Execution
Start time (in sec) 0:00
Stop time (in sec) 2:13
Quiz Question 1 Which of the following statements from the clip best describes Theo
a.
b.
Quiz Questions Which statement is true of strategy?
a. The strategy failed to align with the wants and demands of mainstream
consumers
b. The strategy failed to excite and motivate employees
c. The strategy aimed to distribute chocolate bars to grocery stores
d.
Quiz Question 3 Leaders at Theo Chocolate took the right steps to fix their misdirected
strategy when they:
a. Decided to enter the confectionary industry
b. Resolved to have an ethical business model
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Video Segment 2
Video segment title Strategy Formulation and Execution
Start time (in sec) 2:13
Stop time (in sec) 3:51
Quiz Question 1 egy more effective and profitable, managers
at Theo Chocolate had to do all the following except:
a. Lower the price of candy bars
b. Wrap chocolate bars in less exotic packaging
Quiz Question 2 -oriented
business model and instead pursue mainstream customers and high volume
sales is consistent with this grand strategy:
a. Stability strategy
b. Growth strategy
Quiz Question 3 its strategy around more familiar
mainstream chocolate bars has the following drawback:
a.
other chocolate companies
b. Theo will have difficulty matching the low prices of chocolate bars mass
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Video Segment 3
Video segment title Strategy Formulation and Execution
Start time (in sec) 3:51
Stop time (in sec) 5:09
Quiz Question 1 ive advantage within the chocolate
industry?
a.
b. The company has expertise in manufacturing chocolate
Quiz Question 2 s business strategy is:
a. Not enough consumers like chocolate
b. The company has control over its factory and entire supply chain
c. The organic fair–
Quiz Question 3 Which of the following strategy assessment tools would not apply to a
small company like Theo Chocolate, which has a single division and only a
few chocolate bar products?
a. SWOT analysis
b. five competitive forces
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Video Segment 4
Video segment title Strategy Formulation and Execution
Start time (in sec) 5:10
Stop time (in sec) 7:09
Quiz Question 1 Which of the following hypothetical new-
a.
b. Create a line of educational videos about sustainable, fair-trade
manufacturing processes
Quiz Question 2
marketing department activities including factory tours, chocolate
sampling, and brand ambassadors that help the company set itself apart
from competitors. Strategies planned and executed at this level of the
organization are called:
a. Corporate-level strategy
b. Industry-level strategy
Quiz Question 3 Theo Chocolate differentiates its products from competitors by:
a. Offering factory tours
b. Offering fair-trade, organic products
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Additional Assignments and Activities
Review Questions
1. Identify the components of a sustainable competitive advantage.
A competitive advantage is the advantage that a firm has when it uses its resources to provide greater
2. Outline the steps of the strategy-making process.
The strategy-making process has three steps:
Assess the need for strategic change: Managers must determine if strategic change within the
3. What is a corporate-level strategy? Describe the major approaches to corporate-level strategy.
A corporate-
business -level strategies are:
4. What are the elements of the BCG matrix?
The BCG (Boston Consulting Group) matrix is a type of portfolio strategy that managers can use to
categorize their products by growth and market share. The four categories of products are:
Star: a product with a large share of a fast-growing market. Stars would receive a
disproportionately large percentage of resources due to their future promise.
Question mark: a product with a small share of a fast-growing market. The amount of
resources given to question marks would depend on how much promise they have for the
Chapter 5: Organizational Strategy P a g e | 22
5. Identify three grand strategies and give examples of each.
The three kinds of grand strategies are:
Growth strategy: a strategy that focuses on increasing profits, revenues, market share, or the
number of places in which the company does business.
Stability strategy: a strategy that focuses on improving the way in which the company sells
6. What is an industry-level strategy? What tools can companies use to develop successful industry–level
strategies?
An industry-level strategy is a corporate strategy that addresses the question,
Depending on the results of the analysis, a company can choose between two types of industry-level
strategies:
7.
potential for long-term profitability. Together, a high level of new entrants, substitute products or
8. What is a firm-level strategy?
A firm-
Three types of firm-level strategies are:
Direct competition: the relationship between two companies offering similar products and
services that acknowledge each other as rivals and take offensive and defensive positions as
9. What are the basic elements of direct competition?
Market commonality and resource similarity determine whether firms are in direct competition and
the more markets in
which there is product, service, or customer overlap, and the greater the resource similarity between
two firms, the more intense the direct competition between them. When firms are direct competitors
Chapter 5: Organizational Strategy P a g e | 23
in a large number of markets, attacks are less likely because responding firms are highly motivated to
quickly and forcefully defend their profits and market share. Resource similarity also affects response
capability, meaning how quickly and forcefully a company responds to an attack. When resource
similarity is strong, attacks are much less likely to produce a sustained advantage because the
responding firm is capable of striking back with equal force.
Management Team Decision
A NEW STRATEGY FOR INDIA?
Purpose
In this case, students are asked to decide what a global company should do to increase its sales in a
foreign market. The most cost-effective way to do global business is to sell the same product line in all of
the different markets. This approach, however, can be risky, since different consumers in different
markets may not be attracted to the same products.
Setting It Up
A creative way to introduce this case to students would be to show them pictures of various products sold
in other countries. Examples might include food products or clothing that are generally unknown to
to do
Scenario
company called Micromax that is one of the fastest-growing cell phone companies in India. The company
star
been able to sell 1 million handsets per year, grabbing 4 percent of the Indian market. And much of this
n its market share in India dip from 64 percent to 52
percent.
specifically to the Indian market. Its first phone, which featured a small screen and a huge battery and
could run for five days, was inspired when Micromax executives saw a long line of people waiting to use
consumer tastes.
Chapter 5: Organizational Strategy P a g e | 24
Form a group with three or four other students, and discuss how you would approach this issue as
Questions
1. What do you think would be a more effective strategy for Nokia to respond to
Micromax differentiate itself from Micromax or replicate what it is doing?
2. How could a shadow-strategy task force help Nokia identify the best way to proceed?
3. What positioning strategy should Nokia use to gain an advantage against Micromax and other
competitors?
three positioning
strategies: cost leadership, differentiation, and focus. Cost leadership means producing a product
or service of acceptable quality at consistently lower production costs than competitors so that the
Chapter 5: Organizational Strategy P a g e | 25
Develop Your Career Potential
AN INDIVIDUAL SWOT ANALYSIS
Purpose
To allow students to practice the SWOT analysis technique in a contextually relevant way.
Setting It Up
Because this is a very personal exercise, it will probably not be a good in–class exercise. You will
probably have more success if this is done as a take-home assignment. In order to prepare students for the
activity, you will want to review Section 5-2b on SWOT analysis. It may be helpful to do an in-class
warm up, asking students to identify the elements of a SWOT analysis, the purpose of such an analysis,
and to envision how the situational analysis can apply to them personally.
After the assignment has been completed, you may wish to poll your class on how they found the
activity (difficult, challenging, probing, thought-provoking, etc.) and how they think the exercise can help
them as they work toward their degrees and in their careers.
Questions
1. In light of the SWOT analysis, what plans might you propose for yourself that will help you
Additional Activities
Out-of- Divide the class into small groups. Each group should
select a company that participates in an industry that has at least three other competitors. Groups should:
1) identify the strategic group in which the company participates; 2) conduct analysis of the five industry
forces; 3) determine which company uses which positioning strategy; and 4) determine which company
uses what adaptive strategy. The groups should present their findings to the class.
In- Divide the class into small groups (around 4 students). Give each group a
different organization and have them conduct a SWOT analysis of the company, considering its internal
and external environment. Some examples of organizations would be an airline (such as Southwest), a
movie studio, a university or college, a video game manufacturer, and a carmaker.