Name: Masum Ahamed Rasel

ID: 91908030

Chapter 1 – Closing Case - The Evolution of Wal-Mart of

Wal-Mart
1. What was Sam Walton’s original strategic vision for Wal-Mart? How did this enable the company to
gain a competitive advantage?

Answer: Sam Walton applied one very significant strategy that the competitors had always overlooked
which is focusing on small towns. He also discovered that rural people will not drive long to come to
major city if Wal-Mart gives them enough facilities. By the time Wal-Mart’s competitors started to
realize that many small towns could be a reason to have huge profits. Since Wal-Mart was focusing on
southern small towns, it kept a minimum price of the products so that they could easily consume it. On
the other hand its rival, K-Mart and Target only focused on urban and suburban areas. But Wal-Mart had
already spread out across the whole America. And that was the reason Wal-Mart gained a huge
competitive advantage from its rival.

2. How did Wal-Mart continue to strengthen its competitive advantage over time? What does this teach
you about the source of a long term competitive advantage?

Answer: To strengthen its competitive advantage this company became the innovator in information
systems, logistics and human resource practices. Wherever it took the action in these areas, the profit
margin had been increasing with such lower cost and which enabled the company to gain higher
revenue than the competitors. Developing and implementing bar-code technology took them one step
ahead. To keep long term competitive advantages, a company should analyze the strength, weakness,
opportunity and threat of its own company. A company needs to follow up the consumers’ needs and
demands and keep inventing new things, using new technology charging low price than the competitors.

3. By the early 1990s, Wal-Mart was encountering limits to growth in the US. How did it overcome its
limit to growth? Explain how the expansion moves that Wal-Mart made in1990s made economic sense
& helped to create value for the company’s shareholders.

Answer: They solved the problem by branching out into new sectors of retailing. Wal-Mart was moving
into grocery business. This is an example of success - it exemplifies Sam Walton's vision of being the best
retailer around. Hundreds of supercenters were opened during the 1990s and that’s how they solved
the barriers of growth in the US. Supercenters raised the market share and therefore the shareholders
became interested to buy their share more in Wal-Mart. They all increase in sales at stores open for at
least one year. So it automatically helped in economic sense as well as maximized the shareholder’s
value.

4. Wal-Mart is once again encountering limits to growth. Why do you think this is the case? What might
Wal-Mart do to push back these limits?
Answer: Wal-Mart is encountering limits to growth within their chosen industries, as there are only so
many consumers within America. Wal-Mart should consider diversifying into more profit lines such as
whole food stores in order to push back at these limits. This is the case because the U.S. market is
saturated, and the growth overseas has proved to be more difficult. The moved into the suburban
markets where they faced significant competition that didn't allow them to grow like they did before.
They were forced to exit Germany and South Korea after losing money there. They are also struggling in
several developed nations. I think this is the case from the saturation and possibly because of customers
wanting an improvement in quality and become unfocused on the high profitable areas from stretching
their empire and footprint into so many areas, countries and markets. Refocus their strategic vision and
positioning, focusing on the highly profitable areas. They may have stretched too far and been too
greedy with expansion and planning with these different markets and businesses they become involved
in.

5. How much of Wal-Mart’s strategy do you think was planned at the outset, and how much evolved
over time in response to circumstances?

Answer: I think some of the strategy was planned at the outset, specifically expansion into other
countries and markets. After dominating the U.S. market, they could use some of those strategies to
help penetrate the markets in those other countries like Mexico to successfully expand their footprint
and maintain that competitive advantage. Also the grocery business may have been a result from
evolution over time but with their sophisticated product-tracking and “everyday low prices”, they could
use that information to easily implement new products through the grocery business. It revealed how
strategies can continuously be improved and altered in order to sustain the success and competitive
advantages a company currently has. It also showed how strategy is what you actually do rather than
what you want to do. Wal-Mart failing in some areas could have also been a result of the staging and
timing. They could have an inefficient strategy developed for these overseas markets that led to losing
money and having to pull out. This would force Wal-Mart to redevelop or update their strategies.

Summary: In the case Wal-Mart showed the unique strategies to develop the new opportunities to take
the business higher. To achieve the aim they also focused on the competitors and made plans for
smooth operation. Their outstanding business strategy inspire to think about the future aspects to run a
business.

Chapter 2 – Closing Case - The Market for Large Commercial Aircraft

1. Explain why the wide-bodied segment of the large commercial jet aircraft industry can only profitably
support two players are present. What are the implications of your answers for barriers to entry into
this segment?
Answer: The large-scale segment of the industry has a high degree of capital intensity which needs
several orders to be evened out by firms. It would take a great deal of time. Due to the time and
expense associated with investment threats, only the incumbents can take risks to this nature and
expect to stay sustainable and, as such, they cannot advance in the segment. Because of these strong
and extreme hurdles, only incumbents would likely remain highly profitable and price-intensive in this
market.

2. Are the entry barriers into the narrow-bodied segment the same as those into the wide-bodied
segment? Explain your answer.

Answer: The barriers to the entrance of the narrow-bodied segments are much lower than the inclusion
in this portion of three new teams. The three companies, Comac from China, Bombardier and Embraer,
have strong customer orders and believe the category to help more than two players. In the two
operating categories of aircraft, entry barriers are not identical. The high cost is an obstacle to entry into
a large-bodied segment, but this is not an obstacle to entry into a narrow-bodied segment.

3. Given the future projections for demand how do you think the industry as a whole will do over the
next twenty years? How might you're forecast for the wide-bodied and narrow-bodied segments.

Answer: The industry is expected to expand at approximately 5 percent with new demand forecast at
approximately 37,000 new aircraft. With less competition and higher rates, the broad-based market will
prove to be more profitable. In addition to the existing players, the narrow-bodied division would see
stronger rivalry from 3 new players. There cannot be any future growth in demand on this market
because of increased competitiveness and decreased prices arising from innovation and sustainability.
The narrow-bodied segment is undergoing an intense rivalry than the large-bodied segment,
contributing to lower prices for aircraft.

4. If you were a new entrant into the bottom part of the narrow-bodied industry as our comic and
bombardier what would be your long-term development strategy?

Answer: The long-term development approach as a potential entrant can be a cost leader and still add
consumers progressively. As a cost leader, in the event of a market war between established
competitors, it will be important to deter competitive pressure by incumbents. In order to become more
profitable and win market share in the long term, it is therefore important to distinguish the product
features gradually.

5. What can Boeing and Airbus do to deter further entry into this industry, and/or keep new on entrants
boxed into the bottom end of the market (that is, smaller, narrow-bodied jets)?

Answer: Boeing and Airbus will participate in implicit collaboration for cheaper costs to discourage
potential competitors from rendering companies profitable. If rates remain low long enough, the
competitors will not be paying for the acquisitions and will have to exit the market and then the
incumbent players will be able to recover the rates and restore their earlier rent ability.
Summary: The case discussed about different sorts of challenges and the suitable possibilities to make
the things on the track. By choosing the right strategy can turn the company more profitable. Identifying
the actual need and lack of market scope can be a good move to implement the strategy.

Chapter 3 – Closing Case - Verizon Wireless

1. Does Verizon have a distinctive competency? If so, what is the source of that competency?

Answer: Out of all of the competitive competencies provided in the article, perhaps the most distinctive
competency of Verizon wireless would be its customer care. The biggest problem plaguing the Telecom
industry is that of customer churn. Verizon's customer care has had a direct impact over the problem
and hence it can be identified as a distinctive competency.

2. How do Verizon’s customer service capabilities and coverage affect the quality of its service offering?
How do you think they affect Verizon’s cost structure? "What are the implications for Verizon’s long-run
profitability and profit growth?

Answer: Both of Verizon's customer service capabilities and coverage together impact the overall quality
of its final service offering. Both customer servicing and coverage are areas that cost the company but
have significant returns. Based on these 2 core competencies, Verizon has managed to achieve the
lowest churn rates in all of the industry and are more likely to recover the costs incurred on servicing
their customers and ensuring a better coverage. Customer servicing capabilities and coverage provide
Verizon an opportunity to maintain a longer run of profitability in an industry where sustainable
advantage is absent.

3. How would you characterize Verizon’s business-level strategy (note, we discuss business-level
strategy in detail in the next chapter'? How do the company’s functional strategies enable it to
implement its business-level strategy?

Answer: Verizon's business-level strategy can be categorized as a differentiation strategy. Its distinct
advantage in the customer service capabilities and coverage have differentiated it from the rest of the
competitors. The 'Test Man' campaign utilized by the company helped them differentiate from the
competition as it highlighted better range and coverage. Hence, a marketing strategy helped reinforce
the business strategy of the organization.

4. Do you think that Verizon has a sustainable competitive advantage in the wireless business?

Answer: The wireless business, like all other technological businesses, cannot have anyone player with a
sustainable advantage. The core competencies of Verizon, though seemingly unique at the moment, can
be copied by any of its competitor’s given time. Another problem is that of the incumbent's curse, that is
the incumbent does not involve itself in any radical innovations. So if there are any radical innovations at
some point in the future, Verizon stands the most to lose from such a scenario. Hence, it is tough to say
that these competencies provide Verizon with a sustainable competitive advantage in the wireless
business.

Summary: When the term profitability considered along with this term there are more concerns to be
checked out. If the business can’t define it to be sustainable in the long run then must have to make a
proper strategy to set the vision.

Chapter 4 – Closing Case - Amazon.Com

1. What functional-level strategies has Amazon pursued to boost its efficiency?

Answer: In 2012, Amazon purchased Kiva, a manufacturer of robots that service warehouses, enabling
Amazon to embrace automation. This means that the staff needed per distribution center decreased by
30 to 40%, increasing productivity simultaneously.

2. What functional-level strategies has Amazon pursued to boost its customer responsiveness?

Answer: Amazon intends to reduce inventory-holding cost while having product in stock by investing in
network and distribution centers that count on a software that analyzes customer purchasing habits and
informs what to order, where to store it, and what to charge for it and when to mark it down. In this
way Amazon achieves delivery at a more rapid pace at a lower cost.

3. What does product quality mean for Amazon? What functional-level strategies has Amazon pursued
to boost its product quality?

Answer: Quality would mean how well the services or products meet customer’s expectations. To boost
product quality, Amazon would need to control or oversee the quality of products sold by 3rd parties’
vendors/sellers/merchants/retailers.

4. How has innovation helped Amazon improve its efficiency, customer responsiveness, and product
quality?

Answer: Amazon has been able to succeed over physical stores by offering a wide variety of
merchandise at a lower price and by eliminating customers’ travel time to stores or other efforts implied
in the process of obtaining the desired product.

5. Do you think the Amazon has any rare and valuable resources? In what value creation activities are
these resources located?

Answer: Amazon’s early investment in cloud-based infrastructure to build Amazon Web series is a rare
and valuable resource because that is believed to match Amazon’s online business in sales volume, in
the near future.

6. How sustainable is Amazon’s competitive position in the online retail business?

Answer: Amazon appears to be ahead of the curve. It started as a retailer of books to later on be the one
digitalizing them for a more convenient usage in this new era where electronics are increasingly being
used. Amazon has implemented new technology to increase efficiency, and customer responsiveness to
improve product quality by investing in Kiva, resulting on better productivity. Furthermore, Amazon
invested on a cloud based infrastructure to develop AWS. These decisions and actions solidifying
amazon’s competitive position in the online retail business.

Summary: No company can survive without ensuring proper service and quality. To maintain the
reputation in the long run one company must have to set strategies to improve on timely basis. I think
this is very key point to succeed in the long run.

Chapter 5 – Closing Case – Nordstrom

1. What is Nordstrom's segmentation strategy? Who does it serve?

Answer: Nordstrom’s segmentation strategy focus on niche market and make let target on relatively
affluent customers who are always looking for affordable luxury, and excellent service.

2. With regard to its core segment, what does Nordstrom offer its customers?

Answer: Nordstrom provides exceptional customer service, selection, quality, and value. For example,
Nordstrom’s philosophy is that the customer is always right which is a kind of legendary excellence in
customer service. Like providing personalize service, refund without reasons, luxury shopping
experience, it provides customer enjoy in the shopping mall that no other shopping mall could compete
with.

3. Using the Porter model, which generic business-level strategy is Nordstrom pursuing?

Answer: A niche-oriented company; they focus on wealthy and affordable luxury customers with a high-
end, expensive-decorated storefront that emphasizing quality and luxury and excellence in customer
service, emphasizing the importance of customer service. It takes advantage of this specific market
segment to differentiate its products and services.

4. What actions taken at the functional level have enabled Nordstrom to successfully implement its
strategy?

Answer: (1) Superior efficiency: improve the efficiency of human resources strategy, take employees as
the core, and use the proportion of sales as the basis for rewards to raise the efficiency of employees at
work.

(2) Superior quality: Use the product reliability and value position, bringing value and increased pricing
to customers with high quality and fashion. Value creation in marketing: Nordstrom is always Customer
focus. In human resources values: employees become the quality teams, Nordstrom's employees are
able to interact with customers well and will have a professional image to serve customers.
(3) Superior innovation: Nordstrom focus on service innovation, such as a return policy, that does not
require a receipt for return.

(4) Superior customer responsiveness: First, Nordstrom focuses on customers, shaping employee
service attitudes, allowing employees to think like customers, and the good interaction between
employees and customers can bring them closer together; Second, Nordstrom provides a return service
that not needs the receipt for satisfying customer needs.

5. What is the source of Nordstrom's long-term, sustainable competitive advantage? What valuable and
rare resources does Nordstrom have that its rivals find difficult to imitate?

Answer: The source of Nordstrom's long-term competitive advantage is their excellent customer service.
They ensure that the customer is always satisfied with their "the customer is always right" philosophy.
This commitment to the customer could also be looked as a valuable and rare resource and the rivals
could not compete it. The personal touches such as a luxury shopping environment, thank you cards,
appointments, great customer experience at Nordstrom could help them differentiates from their rivals.

6. Is Nordstrom organized for success?

Answer: Yes, Nordstrom is one of the most successful retailers and consistently makes higher-than-
average returns on invested capital. Its return on invested capital (ROIC) has consistently been in the 15
to 20, and was 16.3% in 2014–a strong performance for a retailer. It can be attributed to the excellence
shopping experience provided by a combination of their customer satisfaction and shopping
environments. Nordstrom is working hard on providing quality products and let their employees could
attain great working environment include the salary and welfare, it means it could retain great talents
and the employee who is willing to work hard on sales.

Summary: Nordstrom became very successful because of its accurate strategy taking decisions towards
customers and its operation. They are also focused for their long term competitive strategies to hold
their position significant in the market place.

Chapter 9 – Closing Case - Outsourcing and Vertical Integration at Apple

1. What are the advantages and disadvantages to Apple of outsourcing its production to factories in
China?

Answer: The advantages to Apple outsourcing its production to factories in China include superior
responsiveness, superior scale, flexibility, diligence, and access to industrial skills. Disadvantages could
include quality control, low quality materials, overcoming language issues and mainly, Apple’s criticisms
about failing to support employment in its home country.

2. What factors influence the choice of countries to which a firm might outsource its production?

Answer: Some factors are availability of resources like land, manpower, technology, and high demand in
the home country for that foreign company's products/services.
3. Is there anything that might cause Apple to eventually shift production back to the United States?

Answer: Yes, there are some situations in which the production of apple can go back to United States.
One situation would be government posing high taxes on export of apple materials to china so that
prices of I phone’s would increase in the Chinese market.

4. Why is Apple more vertically integrated than many other computer makers?

Answer: Apple is vertically integrated because in this integration the control over all the business
activities comes from the top management irrespective of the many production plant operating in many
countries. These integrations are vertical because the production operations of its products & services
are all same which are directed from the United States Headquarter of apple.

5. What factors will help or impede Microsoft in matching the advantages Apple gains from its vertical
integration strategies?

Answer: Factors that will help Microsoft in matching the advantages Apple gains from its vertical
integration strategies; continue to imitate Apple insofar as to its strategic outsourcing and producing its
own hardware and software. Commitment for upfront investment might impede Microsoft in matching
Apple and its vertical integration strategies because of the billions of dollars needed to buy production
equipment used to outfit new and existing Asian factories. Another factor that impedes Microsoft in
matching Apple is its underdeveloped ecosystem.

Summary: Apple is a giant tech company in this era. They are very confident on their strategies
otherwise that can’t be the leading company in this present year. Apart from that they took different
strategies like outsource the production and many more but they really maintain their strategic plan on
point.

Chapter 10 – Closing Case - Citigroup: The Opportunities and Risks of Diversification

1. What advantages did Citigroup's managers think would result from creating a "financial
supermarket”?

Answer: They thought one advantage would be that they would have more cross-selling opportunities to
pitch to their customers like merging their services of banking, insurance and investments. They thought
it would be easier and more manageable for their clients because everything is done in one place. By
doing this they could promote their other financial products and services and it would help cut down
their internal costs and help increase their revenue and help the growth of their business.

2. Why didn't the "financial supermarket" concept pay off the way Citi's managers had anticipated?

Answer: The concept of the “financial supermarket” did not pay off in the way Citi’s managers had
anticipated because they failed to predict, prepare, and plan for what would happen in the future in
terms of technological advancements. The internet made the services they offered more easily available
to customers, customers found it more convenient to use these services through the internet rather
than going to Citi. As a result of this, the concept of the “financial supermarket” became an obsolete
one.

3. Why do you think it was so hard to integrate the different companies that were merged?

Answer: The merging process involves the combining of the business operations of two related or non-
related organizations so that the operations of each firm becomes interdependent and generates
beneficial business opportunities for each other. Looking at Citigroup, the merging process has made the
firm very large and complex which made it difficult to manage the overall business operations and the
merging process became a failure. The integration of two companies is a hard process because it is
difficult to make both companies change their plans to fit what they both want and need and the merge
of employees from both companies is hard too. The vision, mission, policies, procedures etc. will be
different which generates tension after the merging process. The challenges like the diversification of
the product, employee resistance to change etc. can be the reasons behind the difficulty in the
integration of two companies.

4. What are some challenges involved with managing a very large, diverse financial services company?

Answer: Having a very large, complex organization had made it more difficult to provide sufficient, and
effective oversight within the firm. This in turn, allowed problems to grow very threatening before being
detected. Citis’s managers knew they would have to think more carefully about their business choices in
the future, and about how to manage the interdependencies between those businesses.

Summary: Citi group is a very versatile company. As they seek for a particular plan with great and
sustainable strategy and mean while they did it on the right way. No matter they took the action plan
based on the situation which is very common on very business but the focus is how they deal the
situations and how much they earned.

Chapter 12 – Closing Case - Organization at Apple

1. Describe as best you can the organizational architecture at Apple, and specifically, its organizational
structure, control systems, incentives, product development process, and culture.

Answer: Apple’s organizational structure is effective in supporting business performance to ensure

leadership in the industry, especially with regard to competing against Google, Microsoft, IBM, Intel,
Amazon.com, Sony, PayPal, and many other firms. The Porter’s Five Forces analysis of Apple Inc.
determines that these competitors impose the strong force of competitive rivalry in the company’s
external environment. Still, through the effective use and evolution of its corporate structure, Apple
continues to improve its capabilities and competitive advantages, especially in the area of rapid and
creative innovation and product design for competitive products in the international market.

2. What do you think is different about the way Apple is organized compared to most high-tech firms?

Answer: Steve Jobs helped build a culture where all products were created with thought leadership in
mind. The leaders at Apple have always thought out of the box and tried to stay ahead of the market
whether it was Touch ID or wireless air pods, Apple has always been at the forefront of innovation and
creation new products. The way Apple is managed is an important feature that has helped Apple to sets
itself on top of its competitors. The manner in which the organization is run and controlled is so unique.
It has one chief executive board that operates together flawlessly to design brands and make verdicts on
how the corporation moves forward.

3. What is apple trying to achieve with its current organizational architecture? What are the strengths of
this architecture? What are the potential weaknesses?

Answer: Organization Design is a formal, guided process for integrating the people, information and
technology of an organization. The organization designs matches people, technology, vision and strategy
to achieve the company’s goal and its focus to accomplish desired outcomes. Apple collaborative
structure is a key part of how the organization is designed. The collaboration of members of the
company helps determines what best design and strategy needs to be elaborated to achieve the goals,
reach more customers and increase profits. Their collaboration structure allows apple to match people,
information and the technology that customers are seeking. Overall Apple is a very successful company
globally. It has had major success since founded in 1984 and every day it expands more worldwide.

4. Are there changes that you think apple should make in its organizational architecture? What are these
changes? How might they benefit apple?

Answer: Moving away from pure functional organization would, obviously, carry some real costs. In the
past, functional structure has allowed Apple to retain much of the nimbleness of a startup. The iPod was
originally launched as a Mac accessory, but Steve Jobs rapidly changed course and made it a cross-
platform hit — a feat that was much easier to pull off because there was no “Mac division” to wage
bureaucratic warfare against the idea. Launching new products like the iPhone and iPad without fear of
cannibalizing resources or market share has helped Apple stay ahead of the curve, while the more
divisional Microsoft was never able to plunge headfirst into mobile. But Apple’s market exits are a clear
sign of severe growing pains inside the existing structure. Apple is already huge, but it wants to be
bigger. To get there, it may need to finally start acting like a big company.

Summary: The giant tech company Apple hold the craze among people with their best organizational
function and operation. They are very confident on their strategies otherwise that can’t be the leading
company in this present year. Apart from that they took different strategies like outsource the
production and many more but they really maintain their strategic plan on point.