I will answer the exam as follows:

1- I’ll not answer the questions separately but I’ll arrange them in a
sequential manner then answer them as a story with mention
every question in its position in the story.
2- I will do the financial analysis with all the ratios that will give me
a good indicator about the company financial position.
3- External Factors Analysis (external audit) opportunities and
threats then EFE (if the numerical data are provided in the case).
4- Internal Factors Analysis (Internal audit) strengths and weakness
then IFE (if the numerical data are provided in the case).
5- Matching tools: SWOT Matrix and IE matrix OR SPAC matrix
6- BCG if there are data about the product portfolio (Relative market
share + Market growth)
7- Strategies and recommendations
8- Marketing plane:
a- Marketing Strategies
b- Segmentation, Targeting & Positioning
c- Marketing Mix (4P’s)
Strategies
1- Pull (Target End users)
2- Push (Target Intermediates)
3- Profile (Promoting Co. Name)

I hope I can cover them all

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(Start writing after app. 1 hr.)
Introduction & Company profile: (1 page from the case)
Type of business - Company History - Geographic domain - Company Profile – Market -
Type of Industry - Products & Services - Company main competitors - Management and
ownership

Introduction
1- In this analysis, I will consider the case of company " xxxxx" and
will go through the case to analyze the current situation and the
effect of internal factors (strengths and weaknesses) as well as
external factors (opportunities & threats) on the organization. From
this analysis, I will try to recommend the best strategic direction
for the company to follow in order to achieve better results in the
future. In light of the recommended strategy, I will go through the
steps to implement these strategies

2- In this paper, I present the strategic plan for XXX Company, the
famous ----------- manufacturer. I will develop vision and mission
statements, scan the environment, assess external and internal
factors, realize major problems and pitfalls and show solutions and
recommended strategies that can illuminate these problems and
enhance the organization performance.

Three Phases of the Answer:

A) INPUTS: (includes all types of analysis) (takes 2 hr)

1) Vision and Mission: (it is either given in the case so you evaluate or you propose
them) (15 mins)

Vision (What do we want to become)

1-Future Oriented
2-Challenging
3-Clear and Short

Decision:
1. I will keep the vision statement because it matches the strategic direction of the
company (expand, survive (stability), close)
2. I will change it and write a new one

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Mission (What is our business?)
Start with an indication about the business the company is in
Components of a Mission Statement:
1. Customers: Who are the firm’s customers?
2. Employees: Are employees a valuable asset of the firm?
3. Products or Services: What are the firm’s major products or services?
4. Markets: Geographically, where does the firm compete?
5. Technology: Advances in technology the company uses
6. Concern for Survival, Growth, & Profitability: Is the firm committed to growth and
financial soundness?
7. Philosophy: What are the basic beliefs, values, aspirations, & ethical priorities of
the firm?
8. Self-Concept: What is the firm’s distinctive competence or major competitive
advantage?
9. Public Image: Is the firm responsive to social, community & environmental
concerns?

Decision:
1. I will keep the mission statement if I keep the vision and just add the missing
components
2. I will change it and write a new one if the vision statement is changed

Examples for modification:

Pfizer Emerging Markets: We will… develop bold and innovative partnerships

provide medicines and services in an affordable manner become a leading
biopharmaceutical company in Emerging Markets reach patients we have never
reached before be recognized for having the best talent in healthcare

Toyota: Toyota will lead the way to the future of mobility, enriching lives around
the world (3) with the safest and most responsible (6) ways of moving people (1).
Through our commitment to quality, constant innovation (4,7) and respect for the
planet (8), we aim to exceed expectations and be rewarded with a smile. We will meet
challenging goals (5) by engaging the talent and passion of people (9), who believe
there is always a better way. (6)

Microsoft Case – Int. business group – Mahmoud Karim //Mission: Developing

our business and society by investing in our employees, partners and technologies to
deliver real value to our clients and reshape the future of South Africa

PepsiCo: to provide consumers around the world with delicious, affordable,

convenient and complementary foods and beverages from wholesome breakfasts to
healthy and fun daytime snacks and beverages to evening treats

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2) External analysis: (Write in bullets (5 factors in each point, input mainly from
case)

PESTEL model:

Political
 Political stability,
 Government regulations & deregulations.
 Changes in tax laws
 Special tariffs
 Pressure groups
 Level of government subsidies(‫)الدعم‬
 Global relationships
 Trading policies& Import-export regulations
 Political conditions in foreign countries/ stability
 Terrorist activity, severity if government protest )‫(االرهاب واالحتجاجات‬
 Facilities for the entrance for new foreign investment,
 Size of government budgets
 The relations with other countries

Economic forces
 The GDP and income level (which directly reflects on consumer spending power)
 Interest rates
 Inflation rates
 Unemployment Availability of credit and saving
 Exchange Rate
 Monetary policies
 Investment laws and regulations Level of disposable income
 Propensity of people to spend (standard of living)
 Wages level
 Price elasticity of demand
 Stock Market trend
 The currency depreciation or appreciation)‫(انخفاض قيمة العملة‬

Social, Cultural, Demographic:

 Childbearing rates
 Immigration & emigration rates
 Avg. disposable income
 Consumer behavior
 Attitudes toward saving
 Avg. educational level

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  Attitudes toward quality
 Attitudes toward customer service
 Buying habits
 Marriages, divorces, death and birth rates
 Number of women and minority workers
 Social Security programs.
 Lifestyle.
 size, structure, and regional distribution of the population
 Cultural fear or freedom level
 Population changes by race, age, sex and religion
 Cultural symbol (status)
 What’s socially acceptable?
 The attitudinal changes towards business (product / services) produced

Technological forces:
 Internet availability and usage
 E-commerce
 The rate of development
 Spending on R&D
 The presence of skilled persons
 Presence of technological capabilities.
 Substitute might replace the organization’s product.

Environmental Forces:
 Governmental regulation
 Waste management
 Air & water pollution
 Ethical concerns
 Ozone depletion
 Endangered species ‫األنواع المهددة باالنقراض‬

Legal Forces:
 Contract Law
 Competition Law
 Customer Protection Law (Law of Negligence)
 Environmental Protection Law

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Porter 5 Force Model: (only if required, stated specifically, advice CEO to enter the
market or not, choose between two markets) (30 mins)

1. Rivalry among existing firms:

Conditions That Cause High Rivalry Among Competing Firms
 High number of competing firms
 Similar size of firms competing
 Similar capability of firms competing
 Falling demand for the industry’s products
 Falling product/service prices in the industry
 When consumers can switch brands easily
 When barriers to leaving the market are high
 When barriers to entering the market are low
 When fixed costs are high among firms competing
 When the product is perishable
 When rivals have excess capacity
 When consumer demand is falling
 When rivals have excess inventory
 When rivals sell similar products/services
 When mergers are common in the industry

Overall result for intensity of competitive rivalry: Attractive/not attractive

** Focus on competitive advantage of strategies

2. Barriers to entry:
 The need to gain economic of scale quickly
 Product Differentiation
 Switching Costs
 The need to gain technology and specialized knowhow
 The lack of experience
 Strong customer loyalty
 Strong brand preference
 Large capital requirements
 Lack of adequate distribution channels
 The potential saturation of market.
 Government regulatory
Overall result for threats of new entry: Attractive/not attractive
** Quality, pricing, and marketing can overcome barriers.

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3. Threats of substitutes:
 Availability of substitute products
 Relative price of substitute products declines
 Consumers’ switching cost

Overall result for threat of substitute products: Attractive/not attractive

** Firm’s plans for increased capacity & market penetration

4. Bargaining power of suppliers:

 Number of suppliers to buyers (few suppliers higher power)
 Supplier product is unique (higher power)
 High switching cost (higher power)
 Substitutes are not easily available (higher power)
 Product is critical for the business (higher power)
 The target industry is NOT important to the supplier (higher power)
 Real threat of forward integration from supplier (high power)

Overall result for bargaining power of suppliers: Attractive/not attractive

** Backward integration can gain control or ownership of suppliers

(This strategy is especially effective when suppliers are unreliable, too
costly, or not capable of meeting a firm’s needs on a consistent basis)

** However, in many industries it is more economical to use outside

suppliers of component parts than to self-manufacture the items, who
specialize in such components and have huge economies of scale.

5. Bargaining power of Buyers:

Consumers gain increasing bargaining power under the following circumstances:
 If they can inexpensively switch to competing brands or substitutes
 If they are particularly important to the seller
 If sellers are struggling in the face of falling consumer demand
 If they are informed about sellers’ products, prices, and costs
 If they have discretion )‫ (تقدير‬in whether and when they purchase the
product.
 A buyer purchase a large proportion of the seller’s product or
service.
 A buyer has the potential to integrate backward by producing the
product itself.
 Alternative suppliers are plentiful )‫ (وافر‬because the product is
standard or undifferentiated.
 Changing supplier’s costs very little.

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  The purchase product represents a high percentage of a buyer’s
costs, thus providing incentive to shop around for a lower price.
 A buyer earns low profits and is thus very sensitive to costs and
service differentiation.
 The purchased product is unimportant to the final quality or price of
a buyer’s products or service.
 When customers are concentrated, large and buy in volume
 Availability of sellers

Porter’s five forces Attractiveness of the market

Internal rivalry Not Attractive
New Entry (relative to existing co. Attractive
in the market)
Substitutes/complements Not Attractive
Buyer power Not Attractive
Supplier power Attractive

Final conclusion, the porter’s five forces model shows that the -----
industry in Egypt/market is “attractive/not attractive” to enter this
market with “high/ moderate/low” level competition.

External analysis Summary:

Write the opportunities and threats in points and give them numbers (O1 T1) write from
(5-10) points in each.
Organize them from most importance to least
1- Corporate level (government restriction)
2- Business level (competition)
3- Functional level (operations, head hunting). (Consumer purchase power,
competition, market size, market growth, new trends, government regulations)

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 3) Internal analysis: (Write in bullets (5 factors in each point, input
mainly from case)

A. Financial Analysis: (30 mins)

Calculate the ratios in the below table

Financial Ratios Analysis and Interpretation

Liquidity Remarks
Formula
Ratios
*Overall Decreased Trend (2010 < 2008): -
Current Current If the result is less than industry average or is
Ratio Assets/Current decreased from last year, So The comment will be:
Liabilities The firm has a great risk in related to its ability to
(Times) satisfy its short-term obligations which is critical
indication for both creditors & shareholders.

* Overall Increased Trend (2010 > 2008): -

If the result is greater than industry average, then:
From shareholder standpoint, a high current ratio could
mean that the firm has a lot of money tied up in non-
productive assets.
From creditors point of view, an encouraged indicator
that the claims of short term obligations are covered by
assets that expected to be converted to cash fairly
quickly.

Note: -
Current ratio = 1 – 1.4 …… Bad
Current ratio = 1.5 – 2 …… Slightly bad to Good
Current ratio > 2 …….. ….. Strong situation

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Profitability Remarks
Formula
Ratios
*Decreased Trend (2010 < 2008): -
Gross Profit Gross Limited chain value and needs to minimize the cost of raw
Margin (%) Profit materials by suppliers, production process and logistics. (Cost
/Total Leadership Strategy is a must and optional integration strategy).
Sales (%)
*Increased Trend (2010 > 2008): -
Efficient performance of production & logistics (good
performance of supply chain department
*Decreased Trend (2010 < 2008): -
Operating EBIT / High operational risk that indicates to poor operation management
Income Total Sales and needs some advancement. (Retrenchment strategy)
Margin OR (%)
EBIT Margin *Increased Trend (2010 > 2008): -
(%) Efficient operation management performance.
*Decreased Trend (2010 < 2008): -
Net Profit Net Income The company is using more debt to finance operations which
Margin NOI / Total leads to increased interest rates.
(%) Sales (%) We recommend: -
1- The firm should change its financial strategy to
depend more on equity rather than debt.
2- Firm should change its marketing strategy to increase sales in
less operations cost to increase its net income.

*Increased Trend (2010 > 2008): -

High combined performance of liquidity, assets and debt
management on operating results.
*Decreased Trend (2010 < 2008): -
Return on Net Profit This means poor management performance due to utilizing its
Assets(ROA) (Income) assets in inadequate way. also, means that the firm is paying more
(ROI) After interest expenses which decrease the net income.
Taxes / We recommend: -
Total 1. Avoid inadequate inventory or insufficient
Assets (%) production capacity.
2. The firm should change its financial strategy to be
more effective in managing its assets

*Increased Trend (2010 < 2008): -

High performance in managing Assets that facilitates planning for
expansion.

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Leverage Remarks
Formula
(Debt) Ratios
*Overall Decreased Trend (2010 < 2008): -
Debt to Asset Total Creditors prefer low debt ratios because the lower the
Ratio (Total Liabilities ratio, the greater the cushion against creditors' losses in the
Debt Ratio) (Debt) event of liquidity.
/Total assets Stockholders, on the other hand, may want more leverage
(%) because it magnifies expected earnings.

* Overall Increased Trend (2010 > 2008): -

According to the ratio value > 30%, Financial department
needs to re-configure company "Finance Plan" depends
more on "Equity"

Note: -
If the ratio = 30%, it means that 30% of the company
assets are financed by "Debt" and the other 70% comes
from "Equity"

Write a paragraph to conclude and summarize the overall financial

situation of the company. (It is good overall then rewrite the comments
above 4-5 lines)

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 B. Organization Structure: (If not mentioned disregard it)

Look at the current organizational structure and describe it. The organization structure
must be adjusted to cope with the new strategy and achieve its goals.
The organization's strategy to grow and go more international must be reflected on the
organization structure to achieve the required result.
Decision:
1- I recommend that this structure is good and will not change it then write the
advantages of the structure. OR
2- I recommend to change this structure and write disadvantages of structure (then
propose new structure).and write the advantages of the new structure.
Select one of the following 4 types:
1. FUNCTIONAL STRUCTURE:
The company rather being led by an entrepreneur; he is replaced by as
team of managers who have functional specializations. The entrepreneur
must learn now to delegate his responsibilities; otherwise, the new
structure will yield no benefit
ADVANTAGES
 Centralized control of operations
 Promotes in-depth functional expertise
 Enhances operating efficiency where tasks are routine
DISADVANTAGES
 Functional coordination problems
 Inter-functional rivalry
 Overspecialization and narrow viewpoints
 Hinders development of cross-functional experience
 Slower to respond in turbulent environments

2. DIVISIONAL STRUCTURE:
It occurs especially when the organization is managing diverse product
line or when the organization is expanding to cover wider geographical
areas

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 ADVANTAGES:
 Decentralized decision making
 Each business is organized around products
 Puts profit/loss accountability on manager
 Facilitates rapid response to environmental changes
 Allows efficient management of a large number of units
DISADVANTAGES
 May lead to costly duplication of functions
 Inter-divisional rivalry
 Corporate managers may lose in-depth understanding
 New competitive moves to enhance its position

3. MATRIX STRUCTURE
The matrix structure (sometimes called the matrix organization) it
combines the functional and divisional structure. It is designed to
gain the advantage and minimize the disadvantages of the
functional and divisional structures.
The matrix is formed by using permanent cross functional teams to
integrate functional expertise in support of a clear divisional focus
on project, product or program.
ADVANTAGES:
 The matrix structure in the multinational organizations
offers a flexibility to deal with the regional differences as
well as the multi products, programs or regional needs.
 The matrix structure is the common solution for the
organizations that pursues the growth strategies in a
dynamic and complex environment
 Functional & product form is combined simultaneously at
the same level.

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 Employee have 2 superiors, functional superior &

horizontal product manager
WHEN TO USE?
 Scarce resources
 Ideas need to be cross fertilized across projects
 External environment is very complex and changeable
** Distinct phase exists in the DEVELOPMENT OF matrix structure
1. Temporary cross functional task forces: Project manager is
in charge as the key horizontal link
2. Product or brand management: The functional is still the
primary organizational structure, product manager act as
integrator of semi-permanent product or brand.
3. Mature matrix: A true dual authority structure, functional
& product structure is permanent

4. NETWORK STRUCTURE
• many activities are outsourced
• series of independent firms or business units that are linked
together by computers in an IS
• Used when the environment is unstable
Nike, Reebok, Benetton use the network structure on their
operation functions by subcontracting manufacturing to other
companies in low cost location around the world.
ADVANTAGES:
• Rapid response time
• Firm’s emphasize their own core competencies
• Very flexible
• Reduces capital intensity

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Management Audit Checklist of Questions
1. Does the firm use strategic-management concepts?
2. Are company objectives and goals measurable and well communicated?
3. Do managers at all hierarchical levels plan effectively?
4. Do managers delegate authority well?
5. Is the organization’s structure appropriate?
6. Are job descriptions and job specifications clear?
7. Is employee morale high?
8. Are employee turnover and absenteeism low?
9. Are organizational reward and control mechanisms effective?

Marketing Audit Checklist of Questions

1. Are markets segmented effectively?
2. Is the organization positioned well among competitors?
3. Has the firm’s market share been increasing?
4. Are present channels of distribution reliable and cost effective?
5. Does the firm have an effective sales organization?
6. Does the firm conduct market research?
7. Are product quality and customer service good?
8. Are the firm’s products and services priced appropriately?
9. Does the firm have an effective promotion, advertising, and publicity strategy?
10. Are marketing, planning, and budgeting effective?
11. Do the firm’s marketing managers have adequate experience and training?
12. Is the firm’s Internet presence excellent as compared to rivals?

Finance/Accounting Audit Checklist

1. Where is the firm financially strong and weak as indicated by financial ratio
analyses?
2. Can the firm raise needed short-term capital?
3. Can the firm raise needed long-term capital through debt and/or equity?
4. Does the firm have sufficient working capital?
5. Are capital budgeting procedures effective?
6. Are dividend payout policies reasonable?
7. Does the firm have good relations with its investors and stockholders?
8. Are the firm’s financial managers experienced and well trained?
9. Is the firm’s debt situation excellent?

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Production/Operations Audit Checklist

1. Are supplies of raw materials, parts, and subassemblies reliable and reasonable?
2. Are facilities, equipment, machinery, and offices in good condition?
3. Are inventory-control policies and procedures effective?
4. Are quality-control policies and procedures effective?
5. Are facilities, resources, and markets strategically located?
6. Does the firm have technological competencies?
7. Does the firm have R&D facilities? Are they adequate?
8. If outside R&D firms are used, are they cost-effective?
9. Are the organization’s R&D personnel well qualified?
10. Are R&D resources allocated effectively?
11. Are management information and computer systems adequate?
12. Is communication between R&D and other organizational units effective?
13. Are present products technologically competitive?

Management Information Systems Audit

1. Do all managers in the firm use the information system to make decisions?
2. Is there a chief information officer or director of information systems position in
the firm?
3. Are data in the information system updated regularly?
4. Do managers from all functional areas of the firm contribute input to the
information system?
5. Are there effective passwords for entry into the firm’s information system?
6. Are strategists of the firm familiar with the information systems of rival firms?
7. Is the information system user-friendly?
8. Do all users of the information system understand the competitive advantages
that information can provide firms?
9. Are computer training workshops provided for users of the information system?
10. Is the firm’s information system continually being improved in content- and
user-friendliness?

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 C. Organization Culture: (usually doesn’t come, disregard it)

Are shared beliefs, expectations and values well defined? And do the firm has diversity of
cultures? How the corporate culture perceives quality and adaptability to change in
conditions?
It is the collection of beliefs, expectations and values learned, shared by a corporation's
members, and transferred from one generation of employees to another.
It might be changing or elaborating but hardly completely fades away. It gives the
corporation its identity.
Managing workforce diversity (if the organization is going internationally)
Enhance employee participation: in implementing our strategy, all employees from
different organizational levels must make a meaningful contribution in decision-making.
This will increase employee's involvement and enhance their working life balance.
Enhance employee organizational commitment: by increasing job involvement, which
results in lower levels of absenteeism and turnover.
Implementing employee recognition programs: starting with personal attention and
ending with appreciation for a job well done.

Develop effective staffing plans supporting the organizational strategies by allowing to fill
job openings proactively (in terms of number and the quality of the workforce for the
short and long term) (if the company is multinational)

Criteria Strong culture:

 Clear/ well defined
 Widely shared among members
 Encourage positive work behaviors
 Performance oriented
 Emphasize teamwork
 Allow risk taking
 Encourage innovation
 Changing a firm’s culture to fit a new strategy is usually more effective than
changing a strategy to fit an existing culture.

The following elements are most useful in linking culture to strategy:

 Role modelling
 Leader reactions to critical incidents
 How the organization is designed and structured
 Criteria used for recruitment, training……
 Reward and status system

Culture should support the following objectives:

 Relevance: support key performance objectives

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  Pervasiveness: known by all members in the organization
 Strength: accepted by everyone involved.

Culture types:
1. People oriented
2. Risk taker
3. Profit center culture

Evaluate organization culture?

After study the case the company culture can be one or more of the
following:
a. If company made investment, delegation and promotes people
inside company and training for people so this is a people oriented
culture.
b. If company made diversification, new market development and
new product development so company is risk taking culture.
c. If the company generate high profit so it is a Profit center culture

Internal analysis Summary:

Write the strength and weakness in points and give them numbers (S1 W1) write from (5-
10) points in each. Organize them from most importance to least

1. Corporate level
2. Business level
3. Functional level includes HR, Marketing, R&D and other internal functions.
(Company, employee and managers, product)

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 B) DECISION MAKING: (Matching Models) TOWS and BCG

Objectives:
organization objectives in the following fields long term 1-3 years
Financial Objectives: profit, ROI, liquidity, EPS, decrease expense
Marketing Objectives: market share, RMS, awareness, sales, customer satisfaction,
loyalty
Operational Objectives: production, new branches, recruitment, headhunting, cost
reduction

As the objectives, should be SMART, but the following objectives must be more
elaborated to clearly describe the operating objectives of the company
To increase product X profit by 20% by end of year 2017
To increase product X market share by 5% by end of 2017
To increase product X awareness by 30% by end of year 2017
To increase TV sales by 20k at end of year 2017
To increase product X customer satisfaction from 5-10% by end of year 2017
To increase production of product X from 10000-15000 units by year 2017

TOWS Model:

Internal Organizational strengths Organizational weaknesses

(list all strengths) (list all weakness)
S1 W1
S2 W2
External S3 W3
Environmental SO: Strengths can be used WO: The strategies
opportunities to capitalize or build upon developed need to
O1 existing or emerging overcome organizational
O2 opportunities. weaknesses if existing or
O3 (min 2 solution in each emerging opportunities are
quad) to be exploited
(in form of actions)
Environmental ST: Strengths in the WT: The strategies pursued
threats organization can be used must minimize or overcome
T1 to minimize existing or weaknesses and as far as
T2 emerging threats possible cope with threats
T3

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 S-O Strategies

1. Expand XXX(company) segment to popular countries where they have

strong economy and have positive image for US products and services
2. Increase advertising and promotion to young generation (coupons and
rebate cards) through social networks such as Twitter and Facebook
3. Expand into international market more where the economy is stronger
4. Aggressively promote the XXX(company) by offering deep discounts
to local and surrounding counties / cities
5. Penetrate the market (non-locals) by offering discount / membership
cards if purchased in advance (% off after so many visits), student or
state or employee discounts, corporate / school event discounts, etc.
6. Implement a vertical or horizontal integration (forward or backward)
of a company that has global presence
7. Increase advertising spending by additional 10 percent on fee based
segments
8. Cutback prices on advertising and fee-based segment by 2 percent
9. Increase R&D on products related to YYY(products)
10. Invest additional funding in R&D, improving new product
introduction
11.
12. Acquire additional companies that are innovative and have pending
patents on popular health related products
13. Expand into S. American and European countries by offering better
incentives and financing
14. Produce more fuel efficient and smaller models and promote them
with lower financing options (in case of cars)
15. Continue purchasing new companies in segments that the company is
losing product sales or market share
16. Continue international expansion
17. Develop a new product line, focusing on organic ingredients
18. Acquire a small competitor that sells to restaurants and / or
intermediary channels
19. Develop a lower price / light weight bike, efficient in fuel
consumption for individuals who are interested in riding a bike but
can’t afford or ride the current models
20. Create a new line for female riders to be promoted in US and foreign
markets

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 W-O Strategies

1. Sell off low revenue generating segments / products to raise cash and
pay off debt
2. Sell off low profit segments and pay down the long-term debt
3. Sell off business units to improve cash infusion to the company Form
joint ventures with companies who are not in direct competition with
drug companies but are within health-related businesses for
developing/introducing non-competing products
4. Increase franchising and licensing to improve cash flow and income
5. Improve security implemented on products to reduce / limit
intellectual property and licensing violations
6. Develop new products for small kids based on cartoon characters
7. Sponsor more athletics programs, mostly for young generation
8. Try buying new equipment and rides by long term financing or by
establishing loyalty agreement for reserving more cash for working
capital
9. Acquire innovative technology/Internet- related businesses using a
combination of cash and debt
10. Increase marketing efforts through social networks and the Internet on
consumer YYY(products) specific to young generation
11. Develop new health related products such as vitamins and dietary pills
/ drinks for health-conscious consumers
12. Improve operations by being more lean and cutting back excessive
executive spending
13. Increase quality control to improve reducing product recalls
14. Promote “healthy” snacks and drinks
15. Improve the quality by educating the workers on how to test and
sample products before they are shipped
16. Offer a better discount for retailers to sell / promote Harley
merchandise such as clothes, mugs, etc.
17. Offer better financing rate to new / first time buyers

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 S-T Strategies

1. Negotiate with employees and union representative for pay cut to

eliminate laying off staff and improve cash flow. Use the savings and
offer better discounts to customers
2. Improve security measure in theme parks and hospitality locations by
using surveillance cameras
3. Develop a new moderately priced product line
4. Expand distribution by selling to stores other than their own retailers
5. Struck a deal with the county or local government for getting
additional funding for renovation of historic building and re-building
the local area. This would attract more businesses to the area and will
be a revenue enhancing venture for the city / county
6. Form partnership with other related businesses (restaurant or hotel
chain, car rental, etc.) for opening stores close by and share some of
the mass advertising cost
7. Offer new marketing data collection for advertisers
8. Create additional bundling partnership for sound or video streaming
9. Form a partnership/ joint venture (minority interest) with generic drug
manufacturers on promoting and educating the health benefits of
specific products
10. Outsource some of R&D procedures and processes in order to reduce
R&D cost but ensure the intellectual property remains secure and
confidential
11. Improve promotion on selected lower priced models with zero or very
low rate financing to younger generation through Internet using
Facebook, Twitter, and other networking channels
12. Offer “Free” extended warranty for additional 2 years to gain
customer loyalty and brand image
13. Use the excess cash by acquiring biotechnology or other health related
businesses
14. Work with the government and the U.S. Congress in developing a
medical program, discounting product pricing
15. Sponsor programs to teens and younger generation to through virtual
Facebook, Twitter, and such
16. Improve distribution in European market with new and innovative
organic products
17. Increase current promotional campaign (product placement,
advertising, Online
newsgroup / press releases, media ads, etc.) both in the U.S. and abroad

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 W-T Strategies

1. Sell off non-producing product lines and then pay off the long term
2. Consolidate or reorganize the organizational structure for additional
cost savings and to improve financial performance
3. Make low priced footwear made in the U.S. and promote it as “Made
in America”
4. Acquire a less expensive brand of accessories and sportswear and
promote them as an off brand of Nike
5. Rebrand the XXX(company) by being under new management and
further promote local hiring and the benefits to the locals
6. Improve innovation to protect the company’s technology, patent rights
and information security
7. Increase advertising and promotion by educating the consumers on the
benefits of using brand versus generic products
8. Create a social network area for consumers to discuss their concerns
and side effect of products so the company can have better track
records of issues and be able to improve public image before the
issues escalates legally
9. Since dealers are not able to turn around their inventory fast enough,
offer co-op advertising with more incentives for moving the
YYY(products) faster
10. Reorganize further and use the excess cash to buy companies with
healthier products
11. Implement a better-quality control internally and with suppliers to
reduce YYY(products) wastes or defects
12. Discontinue products in YYY(products) division that are not selling
(Introduce a new product line – Harley2 suitable for female riders,
light weight and priced lower to be marketed to a new segment

At the end choose 2-3 actions from the options (SO, WT) and justify the
choice and make sure these strategies match vision and mission of
company. (safest strategy to use is intensive strategy)

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 Guideline to choose the strategy

1) Integration Strategies (Gain Control Over: Distributors, Suppliers, and

Competitors)
a) Forward Integration (Gain Control over ---Distributors, Retailers)
(Supplier becomes producer) (Producer becomes distributor)
Guidelines
 Current distributors – expensive or unreliable
 Availability of quality distributors – limited
 Firm competes in industry expected to grow markedly
 Firm has both capital & HR to manage new business of distribution
 Current distributors have high profit margins
b) Backward Integration (Ownership or Control -- Firm’s suppliers)
(Producer becomes Supplier) (Distributor becomes Producer)
Guidelines
 Current suppliers – expensive or unreliable
 Number of suppliers is small; Number competitors is large
 High growth in industry sector
 Firm has both capital & HR to manage new business
 Stable prices are important
 Current suppliers have high profit margins
c) Horizontal Integration (Ownership or Control --Firm’s competitors) (merger and
acquisition)
Guidelines
 Gain monopolistic characteristics w/o federal government challenge
 Competes in growing industry
 Increased economies of scale – major competitive advantages
 Faltering due to lack of managerial expertise or need for particular resource
2) Intensive Strategies: Improve competitive position with existing products (best to
choose)
a) Market Penetration (Increased Market Share)
 Present products/services & Present markets
 Greater marketing efforts
Guidelines
 Current markets not saturated
 Usage rate of present customers can be increased significantly
 Shares of competitors declining; industry sales increasing
 Increased economies of scale provide major competitive advantage

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b) Market Development (New Markets -- Present products/services to new geographic
areas)
Guidelines
 New channels of distribution – reliable, inexpensive, good quality
 Firm is successful at what it does
 Untapped/unsaturated markets
 Excess production capacity
 Basic industry rapidly becoming global
c) Product Development (Increased Sales -- Improving present products/services,
Developing new products/services)
Guidelines
 Products in maturity stage of life cycle
 Industry characterized by rapid technological development
 Competitors offer better-quality products @ comparable prices
 Compete in high-growth industry
 Strong R&D capabilities
3) Diversification Strategies (Less Popular -- More difficult to manage diverse business
activities) (avoid choosing)
a) Concentric Diversification (New & related products/services)
Guidelines
 Compete in no/slow growth industry
 New & related products increase sales of current products
 New & related products offered at competitive prices
 Current products—decline stage of product life cycle
 Strong management team
b) Conglomerate Diversification (New & unrelated products/services)
Guidelines
 Declining annual sales & profits
 Capital & managerial ability to compete in new industry
 Financial synergy between acquired and acquiring firms
 Current markets for present products – saturated
c) Horizontal Diversification (New & unrelated products/services for current customers)
Guidelines
 Adding new products/services would significantly increase revenues
 Highly competitive and/or no-growth industry; low margins & returns
 Current distribution channels can be used
 New products have counter cyclical sales patterns

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4) Defensive Strategies
a) Retrenchment: (Regrouping, Cost & asset reduction to reverse declining sales &
profit)
Guidelines
 Failed to meet objectives & goals consistency; has distinctive competencies
 Firm is one of weaker competitors
 Inefficiency, low profitability, poor employee morale, pressure for stockholders
 Strategic managers have failed
 Rapid growth in size; major internal reorganization necessary
b) Divestiture (Selling a division or part of an organization)
Guidelines
 Retrenchment failed to attain improvements
 Division needs more resources than are available
 Division responsible for firm’s overall poor performance
 Division is fit with organization
 Large amount of cash is needed and cannot be raised through other sources
c) Liquidation: Selling Company’s assets, in parts, for their tangible worth
Guidelines
 Retrenchment & divestiture failed
 Only alternative is bankruptcy
 Minimize stockholder loss by selling firm’s assets
5) Porter Competitive Strategies:
a) Cost Leadership
 Type 1
 low-cost strategy that offers products or services to a wide range of
customers at the lowest price available on the market
 Type 2
 best-value strategy that offers products or services to a wide range
of customers at the best price-value available on the market
b) Guidelines
 In conjunction with differentiation
 Economies or diseconomies of scale
 Capacity utilization achieved
 Linkages with suppliers & distributors
 Low Cost Producer Advantage
 Many price-sensitive buyers
 Few ways of achieving differentiation
 Buyers not sensitive to brand differences
 Large # of buyers with bargaining power

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c) Differentiation Guidelines
 Greater product flexibility
 Greater compatibility
 Lower costs
 Improved service
 Greater convenience
 More features
d) Focus
 Type 1
 low-cost focus strategy that offers products or services to a niche
group of customers at the lowest price available on the market
 Type 2
 best-value focus strategy that offers products or services to a
small range of customers at the best price-value available on the
market
Guidelines
 Industry segment of sufficient size
 Good growth potential
 Not crucial to success of major competitors

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I will select 2-3 strategies while taking into consideration the financial situation of the
company and match them with vision and mission. The most expensive strategy is
(Integration Strategy)
If the financial situation of company is bad, then I will choose 1 defensive strategy
(close 1 bad branch or cost reduction to get money to invest in growing) and 1 growth
strategy.

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BCG Model: (don’t use it except if clearly stated to use)

It is used to conduct product portfolio analysis and analyze the company divisions or
products.

SPACE MATRIX:

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Financial Stability (FS) Environmental Stability (ES)
Return on assets Taxation
Growth in revenue Competitive price
Leverage Technological Changes
Liquidity Currency exchange rate
Working Capital Competitive Pressure
Cash Flow Inflation
Competitive Stability (CS) Industry Stability (IS)
Market share Growth potential
Product quality Profit potential
Product life cycle Financial stability
Customer loyalty Technological know-how
Competition’s capacity utilization Resource utilization
Technological know-how Ease of entry into market

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Hany Seadawy Page 31 of 43 Comprehensive template
Strategy Implementation:

Action plan and Gantt Chart (to avoid overlapping of activities)

Strategy Evaluation:

KPIs
Lead KPIs: short term vs. Lag KPIs: long term
Quantitative KPIs: reported in terms of numbers vs. Qualitative KPIs: qualitative
statements and measure attitude and behavior.
Sales KPIs
People per day
Transactions per day
Items per Sale
Average $ per transaction
Finance KPIs
Profit or Net Income Before Tax (% or $)
Current Ratio – Assets to Liabilities
ROA - Return on Assets
GMROI
Operation costs as % of sales
Operations KPIs
Operation costs as % of sales
Inventory on hand
R.O.I. – Total Inventory
COGS - Cost of Goods Sold
Customer Service KPIs
VIP Contacts
Number of complaints
Lead time to get the service
Time to respond to complaints
Mystery shopper score
Customer online review

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 HR plan
Human Resource
Human resource management is one of the most important key success factors
in organization, and its improvement will greatly improve the organization
performance

A. Human Resource Objectives

The human resource objective reflects the intention of the senior
management (strategy) with a balance to the related topics such as HR
functions, society, governing rules, etc.
There are four major objectives for the Human resource management;
1. Organizational objectives: to achieve the required
organization effectiveness and objectives and ensure that the
organization always has people with the right abilities available
to do the right work
2. Functional Objectives: maintain the department’s contribution
at a level appropriate to the org. needs
3. Societal Objective: respond ethically and socially to the
challenges of the environment while minimizing the negative
impact of such demands on the organizations
4. Personal objectives: to assist retain and motivate the
employees for achieving their personal goals and guide them to
better achievement (most important)

B. Human Resource Strategy:

The human resource Strategy addresses the issue of whether to recruit
a low skill, low paid, high turnover employees or higher a high skill,
high paid, low turnover employees. The organization policy to go
international must be a highly paid high skill, low turnover employees
to improve creativity of the employees and the turnover must be kept at
its minimum levels.

C. Human Resource Policies and Programs

 Preparation and selection: Review of the employees' job description,

job specification and job performance standard to match the change of
the organization.

 Succession Planning: the preparation of the company succession plan

will enable the organization to stand any future challenges.

 Career Path and development: the preparation of the career path for
the employees will help the stability and minimize the turnover of the
employees.

 Recruitment: designing a good recruitment process (Selection,

interviews) with a high level of orientation to ensure the compatibility

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 of the new recruited employees with the existing culture to achieve
organizational objectives.

 Training and development: on-the- job” training, Off-the-Job training

and Provide career planning assistance for employees.

 Incentive system will ensure the motivation of the employees to better

performance (linking incentive to production)

 Compensation Policies and protection: What employees get in

exchange for their contribution to the organization”,  maintain,
retain productive workforce, achieve the org. objectives

 Testing: Will ensure the qualification of the candidates and their fit in
the organization culture.

 Managing workforce diversity (if the organization is going

internationally)

 Enhance employee participation: in implementing our strategy, all

employees from different organizational levels must make a
meaningful contribution in decision-making. this will increase
employee's involvement and enhance their working life balance.

 Enhance employee organizational commitment: by increasing job

involvement, which results in lower levels of absenteeism and
turnover.

 Implementing employee recognition programs: starting with

personal attention and ending with appreciation for a job well done.

 Develop effective staffing plans supporting the organizational

strategies by allowing to fill job openings proactively (in terms of
number and the quality of the workforce for the short and long term)
VIP in case of international operations. (if the company is
multinational)

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 Marketing Plan
Q6- Design a marketing strategy that could enable the company to
increase its market share worldwide?
Q7- Recommend segment which is suitable with your product and
which segment factors you used to make segmentation?
Q8- Define the marketing objectives of the company?

Marketing Plan:
1. Executive Summary
2. Situation Analysis Macro, Micro and Financial analysis "Summary from
Strategy formulation"
3. Marketing Annual Objectives
4. Marketing Strategy
A- Competitive: -
i- Cost leadership (High demand, Economy of scale), need
less skill in marketing. EX: According to financial analysis,
Cost leadership to achieve lowest production and
distribution costs that can underprice competitors and win
market share
ii- Differentiation (Using competitive advantage), seek quality
leadership and effectively communicate their quality
iii- Focus (Niche) (Localized Differentiation), business focuses
on one or more narrow profitable market segment
B- Growth (Ansoff): -
i- Market penetration: (convert non-user to user, Increase the
consumption of actual users)
ii- Product development: Partial or complete development of
new product
iii- New Market Development: (New Geographic coverage,
Globalization)
iv- Diversification: (Related or Unrelated)
5- Segmentation, Targeting, Positioning (STP)
6- Marketing Mix: - 4 Ps (Product, Place, Price, Promotion)

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 A- Business Strategy using Porter's Generic Strategies:

Type of strategies Ways to achieve the strategy Benefits Possible problems

Cost Leadership Size and economies of scale Globalization The ability to: Vulnerability to even lower cost
Relocating to low-cost parts of the world outperform rivals operators
Modification/simplification of designs erect barriers to entry Possible price wars
Greater labor effectiveness resist the five forces The difficulty of sustaining it in the long
Greater operating effectiveness term
Strategic alliances
New source of supply

Focus Concentration upon on or a small number A more detailed
of a strong and specialist reputation understanding of particular
segments
The creation of barriers to
entry
A reputation for
specialization
The ability to concentrate
efforts
Differentiation The creation of strong brand identities A distancing from others in
The consistent pursuit of pursuit of those the market
factors which customers perceive to be The creation of a major
important competitive advantage
High performance in one or more of a Flexibility
spectrum of activities
Limited opportunities for sector growth
The possibility of outgrowing the market
The decline of the sector
A reputation for specialization which
ultimately inhibits growth and
development into other sectors
The difficulties of sustaining the bases
for differentiation
Possibly higher costs
The difficulty of achieving true and
meaningful differentiation

B- Ansoff’s Matrix: (Company's growth path to build Demand)

Products
Markets Existing Modified New
Existing Sell more of our Modify our current Design new
existing products to products and sell products that will
our existing types of more of them to our appeal to our
customers. (Market existing customers. existing customers.
penetration) (Product (New product
modification) development)
Markets Enter and sell our Offer and sell Design new
Modified products in other modified products to products for
geographical areas. new geographical prospects in new
(Geographical markets. geographic areas.
expansion)
New Sell our existing Offer and sell Design new
products to new modified products to products to sell to
types of customers. new types of new types of
(Segment invasion) customers. customers.
(Diversification)

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 1- Executive Summary
2- Situation Analysis "Summary from Strategy formulation"
3- Marketing Annual Objectives
Sales and Marketing objectives:
1. Increase Profitability by 15% at end of year 2017
2. Increase sales 20% at end of year 2017
3. Increase Market share 10% by end of 2017

4. Increase (4-6) new outlets "according to financial situation"

and re-arrange its distributed network to widen brand
coverage & customer accessibility
Scope Business Strategy Marketing Strategy Common Decisions for TOWS
 Market Penetration (Existing product,
 Increase Economy of scale
existing market)
Horizontal Integration  Increasing market share
 Market Development (Existing product, new
 Divisional structure
market)
 Increasing market share in a growing
 Cost Leadership
industry
Backward Integration  Market Penetration (Existing product,
 Market penetration pricing St. Or
existing market)
Cost Plus
 High growing industry – increase
 Market Penetration (Existing product,
market share
Forward Integration existing market)
 Control Retail
 Differentiation
 Create Market Monopoly (if possible)
 Increasing market share in an
Growth growing industry
 Market penetration pricing St. Or
 Cost Leadership
Cost Plus
 Market Penetration (Existing product,
Vertical Integration  High growing industry – increase
existing market)
market share
 Differentiation
 Control Retail
 Create Market Monopoly ( if possible
)
 Market Penetration ( Existing product ,  Increasing market share
Market Penetration
existing market )  Penetration pricing
 Increase market share ( unsaturated
 Market Development ( Existing product ,
Market Development market)
new market )
 Increase sales
 Product Development ( New product ,  New Brand ( 4Ps)
Product Development
existing market )  Increase no. of customers
 Increase revenue
 Market Penetration ( Existing product ,
Market Penetration  Enhance operational quality
existing market )
 Penetration pricing
 Product Development ( New product ,  Enhance operational quality
Stability Product Development
existing market )  Target a non-user
 Diversification ( New product , new market )
 Increase profit & Sales
Diversification (Related)  Product Development ( New product ,
existing market )
Retrenchment  Cost Leadership  Reduce Cost internally & Externally
Decline  Divest a Brand
Divestiture  NA
 Divest a Department

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 4- Marketing Strategy
5- Segmentation, Targeting, Positioning (STP)

1- Market segmentation:
Division of market into groups of buyers who have different needs,
characteristics, behavior or might acquire separate product
Segmentation will be based on the following: -
Geographic
 Region - County size - City size – Density - Climate
Demographic
 Age - Gender Male/female or both Female for makeup, jewels –
Income – Education - Family life style ((Example: - people who prefer
Jeep Cherokee for outdoor, adventure-some and fun)) - Social class -
Real State Compound, clubs

Psychographic
 Social Class – Lifestyle - Personality

Behavioral
 Benefits expectation - Brand loyalty - Price sensitivity

After segmenting market into groups then create profile for each group
according to behaviors, preferences, demographics, shopping styles
Evaluate each market according to size, growth rates, price sensitivity, brand
loyalty and check which segment group is or are attractive to work on
2- Targeting:
Next, you decide which segments to target by finding the most attractive ones.
There are several factors to consider here: -
a. Which segment is profitable
b. Size and potential growth of each segment
c. If there any barriers to serve any group, conduct PEST analysis to
understand the opportunities and threats that might affect each segment
3- Positioning:
We need for repositioning due to: -
 Current position became very competitive
 Change in customer needs

Your goal is to identify how you can position your product to target the most
valuable customer segments, this is achieved by being perceived by consumers
as: -
 being different – superior - providing greater value - Low price - Easy to use -
Best performance - Most prestigious

Look into the customers need and problems in the current select products and
identify how you solve and satisfy these needs in your product better than any
of your competitors' products, and then develop a marketing campaign

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 6- Marketing Mix (4 Ps)

By using 4P’s tools to implement the marketing strategy include

(product, price, promotion and place)
The Marketing Mix principles are based on controllable variables which
can be used by companies to meet the changing needs of the target
group. Typical controllable variables are product variety, quality, list
price advertising and channels. The function on the model is useful
helping companies to develop an optimal package (mix) of variables that
will not only satisfy the needs of their customers within the target
markets, but also simultaneously maximize the performance and profit
of the company

4Ps Component Customer Perspective

(4Cs)
Product Quality, Design, performance , availability , value , Solution
packaging, Features, Brand name , Sizes , Services ,
Warranties , Returns

Price List price , Discounts, Payment period (B2B), Credit Cost

terms (Credit Cards, B2B) , strategies

Place Channels ( direct or indirect [ retailers & wholesalers ] ) , Convenience

Coverage, Assortments, Location, Inventory, Transport (
trucks ( full container load or less container load)) ,
Strategy ( intensive , selective , exclusive )

Promotion Ad ,Mass media , Sales Promotion, Direct Marketing Communication

“SMS” ,Personal Selling , public relations ,

Q9- How to modify your marketing mix in order to communicate

prestigious profile of this product?
Product
1- The features and image of prestigious products is unique and
the quality of these products is one of the main reasons for such
high sales
2- The designs are innovative and the precise use of technology
has made the finished products very attractive and sophisticated
3- refined and elegant

Place
1- Distribution channels is very selective making the customers
feel special

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 2- All its stores are located in expensive and high profile street
locations that are exclusive and distinguished
3- The décor of every outlet is unique with classic tastes
4- sales persons are dressed smartly in all black.

Price
1- mostly gone with a policy of premium pricing because its
product quality is very superior
2- High prices are not a problem with such goods that are unique
in style, quality and designs as they are made for wealthy clients
3- The company does not compromise with the standards of
quality and hence major cost cutting in their prices is not
possible.
4- In order to increase its revenues, the company has followed the
policy of diversifying the various products and brands and
under this, they have tried to keep a reasonable pricing policy as
well as premium policy of prices.

Promotion
1- In order to create a special and separate entity for itself the
company went for high investments in the advertising area
2- Use celebrities on their ads

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 D) CONCLUSION:
Conclusion

Write overall conclusion of what you have analyzed in the case and the
benefits you expect from your recommendations covering

Boosting competitiveness
1. Customer satisfaction
2. Share holder satisfaction
3. Growth strategy &sustain growth
Recommendations: -
Company may need one or more of the following: -
1- restructuring (downsizing or rightsizing)
By reducing the size of firms in terms of employees, division,
number of hierarchal level
2- reengineering (process management, innovation or redesign)
Reconfigure or redesign work, job or process for the purpose to
improve quality, service, cost and speed

Q12- What is the tactics or strategies steps should be taken for

organic growth?
Or Select strategy to maximize growth?
Organic growth (healthy):
1- Mass production
2- market development
3- product development new products new branches

Inorganic: (loan, acquisition, merge)

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 Budgeting

Approaches:
1. Top down: Budgets are prepared by top management and imposed
on the lower layers of the organization. Top down budgets clearly
express the performance goals and expectations of top
management, but can be unrealistic because they do not
incorporate the input of the very people who implement them.
2. Bottom up: Supervisors and middle managers prepare the budgets
and then forward them up the chain of command for review and
approval. These budgets tend to be more accurate and can have a
positive impact on employee morale because employees assume an
active role in providing financial input to the budgeting process.
3. Zero-based budgeting: Each manager prepares estimates of his or
her proposed expenses for a specific period of time as though they
were being performed for the first time. In other words, each
activity starts from a budget base of zero. By starting from scratch
at each budget cycle, managers are required to take a close look at
all their expenses and justify them to top management, thereby
minimizing waste.
When your expenditures exceed the limit, you can do several things to get
back on track:
1. Review your budget. Before you do anything else, take a close look
at your budget and make sure that the assumptions on which it is
based are accurate and make sense in your changing market. If your
market is growing quickly, you may need to adjust up your estimates.
Sometimes, it’s the budget — not the spending — that is out of line.
2. Freeze spending. One of the quickest and most effective ways to
bring spending back in line with a budget is to freeze expenses such as
pay raises, new staff, and bonuses.
3. Postpone new projects. New projects, including new product
development, acquisition of new facilities, and research and
development, can eat up a lot of money. However, if you are too
zealous in curbing spending when you need to develop new products
or services to compete, the result can be disastrous for the future
growth and prosperity of the company.
4. Lay off employees and close facilities. This is the last resort when
you’re trying to cut expenses. Although these actions will result in an
immediate and lasting decrease in expenses, you also face an
immediate and lasting decrease in the talent available to your
organization. Productivity and morale of remaining employees may
also suffer.

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Q3- Analyze using value chain analyses how can Crystal Asfour
position the company? Or Based on your track what would you
recommend for Sykeys future projection among its competitors?

By using value chain Analysis Company can focus on the following

activities to position itself:
1- Primary activities
a. Inbound operation: -
By making backward integration for the most important raw
materials needed for the company, this will insure buying raw
materials with low cost, make sure raw materials availability
once needed and this will reflect in competitive advantage in the
market with price by following cost-leader ship strategy.
b. For operation, the company must follow the most recent
technology and apply it during manufacturing to achieve the
final product with high quality and well designed.
Using the most recent software like ERP and deal with good
consultant to make sure the work procedures done fast and
properly
2- Secondary activities
a. Excellent R&D team to study market well and prepare for new
product if required or modify the existing one (product
development)
R&D studies the market globally and checks if we need to
expand the market share (market penetration) or open new
market (market development)

Make product diversification related diversification like women

accessories and other accessories used anything else.

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