MBA - Strategy Management

MMEJ - PROFESSIONAL MASTER IN BUSINESS ADMINISTRATION
MBA
STRATEGIC MANAGEMENT
Student Name: TONG JUN HUI
Course: MBA
Module Title: STRATEGIC MANAGEMENT
Learning Center: LC6001 - IE-JOHOR BAHRU
Exam Question
I acknowledge that the use of work of others (Plagiarism) is regarded as a dishonest practice and will be dealt
severely.
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TABLE OF CONTENTS
1. Abstract…………………………………………………………………………4
2. Introduction…………………………………………………………….……….5
3. Question 1
a) Whats Make A Good Strategy?…………….....…………….…………………………….6
b) Impact of “Mission” to a Company…………………………………………………...….7
c) The Emergent and Intended strategies…………..…………………………….……....…..8
d) Reason to Understand a Firm Strategy………………………………………….…..….…9
4. Question 2
a) The Three Elements, S-C-P model…………………………………….………….……..10
b) Four Types of Competition………………………………………………………………13
c) Difference of Competitor & Complementor…………………………………….……….16
d) The Four Generic Industry Structures…………………………………………….……...18
5. Question 3
a) Understanding of Resources and Capabilities in Firms: Categories and Differences.…..21
b) VRIO Framework………………………………………………………………..…...….22
c) Two forms of Imitation and Four sources of Costly Imitation……………………..……24
d) Competitive Dynamics and Barriers to Responding to Competitive Advantage…….….26
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6. Question 4
a) The Product Differentiation…………………………………………….…………….….28
b) The Broad Categories of Product Differentiation……………………………..…………29
c) The Opportunities of Product Differentiation……………………………………………31
d) Strategy of Product Differentiation in Different Industry………………………………..32
7. Question 5
a) Definition of Strategic Alliance………………………………………….………..……..34
b) Economic Value of Strategic Alliance………………………………………….….…….35
c) The Cheat in Strategic Alliances……………………………………………….….…..…36
d) Deal with the Threat of Cheating………………………………………………………...38
8. References……………………………………..……………………39
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Abstract
In an era where technological advancements and the rise of artificial intelligence threaten
traditional low-skilled work, the understanding of strategy management becomes essential, not
just for senior management but for all. This study endeavors to evaluate the critical role of
strategy management in guiding businesses through a new wave of industrial evolution.
The primary goal of this work is to categorize and comprehend the mainstream strategies of
management based on economists' past researches. The aim is to equip businesses with the
necessary insights to make appropriate decisions.
Leveraging the vast resources available on the internet, this research sifted through and identified
relevant resources to define the concept of strategy and its management. Analyzing various
market scenarios—from perfect to imperfect competition with monopolistic, oligopoly, and
monopoly market structures. The methodology also incorporates strategic analysis tools such as
SWOT analysis, Porter's Five Forces model, and the Structure-Conduct-Performance (S-C-P)
model. Furthermore, it delves into four typical industry structures, the VRIO framework, and the
role of product differentiation in fragmented, emerging, mature, and declining industries.
Moreover, it explores the era of strategic alliances, uncovering both their potential benefits and
associated threats.
The findings acknowledge the indispensable nature of strategy management in support

businesses to navigate through complex decision-making processes. Through strategic analysis
and insights, this study concludes that strategy management is not just a business function but a
reflection of a company's identity, values, and beliefs, potentially shaping the future landscape of
businesses.
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Introduction
Before we commence, I'd like to discuss into what strategy means and how it applies to the
scenarios we encounter in this modern era.
Strategy is a methodology adopt to address specific matters—a response to a person, an event, or

an object resulting from a particular occurrence. It is called as 'strategy' rather than a mere
reaction or response is because the thoughtful consideration, understanding, detailed planning,
and analysis undertaken before acting. It involves careful consideration and analysis before
taking action.
Where do we need to employ strategies in our daily lives? In nearly every scenario. The
existence of everything is a reaction to established or specific factors. Whether it related to the
smallest matters of daily life or extends to a company's strategic plan for the upcoming 3-5 years,
understanding the purpose and utility of strategy is crucial for making the most suitable
responses to achieve our desired outcomes.
Now, let's approach this from the standpoint of business management and explore diverse
scenarios that call for strategic analysis.
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Question 1.a
Whats Make A Good Strategy?
Strategy can be defined as a well considered plan, when discuss about the strategy for companys,
is stand to mean a set of managerial decisions and actions decided by management, it usually
determines 3-5 years and above long-run performance for a corporation. There is a few necessary
basic element to be consider based on the theory of Albert Humphrey and Francis Aguilar if
management want to set a good strategy.
First, management must be able to do a scanning for both internal and external environment.
This mean that by reviewing the position of company in a macroeconomic and microeconomics.
From macroeconomic, management of company is required to identify whole industry and world
economic situation, is the world economic friendly to the company in 3-5 years time? Or the
position of this industry in economic growth rapidly? From microeconomics, is company
positioned itself the leading in current industry? How will the rapid growth of technology bring
changes to current industry? These statement must be clear cut in order for management to plan a
long term strategy for company to survive.
Second, the formulation of strategy. The formulation of strategy can be form by understanding
the mission & vision of the company, applying SWOT analysis to review company strength,
weakness, opportunity and threat, a clear and measure objective that indicate what is the action,
when will be execute, how much does it cost to make strategy work as expected. Furthermore,
policy of company is needed to be well considered during the form of strategy.
Third, implementing the decided strategy to company. This is the step where company started to
roll out and apply its long term plan from top management to the bottom level of company. This
has to go through certain way of information such as group meeting to further explain the aims
and objective of strategy to middle managements, standard operation procedure as training
program to operating core, and official notice to employees to ensure the delivery of information.
Lastly, evaluation and control will be the stage where management is required to keep monitor
and evaluate from the performance and result of running strategy. This will effective help
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management to keep strategy run on its track and take necessary action along strategy after
reviewing the feedback and performances from different department & different position.
Overall, a good strategy is to be form by management through the process from review &
evaluate current company strategy and understanding current company governance to generate
the performance of current strategy. Then discuss about company external & internal
environment, using SWOT analysis to defined company position to generate potential good
strategies. Thus, implementing the selected best strategy for company to run. The strategy
decision making process is always a cycle, from old to new, new got aged and review, then
management to decide a new strategy again.
Question 1.b
Impact of “Mission” to a Company
The mission of a company is the fundamental reason of it existence. Mission serve as a guide
line on how the company runs, a clear mission included company's purpose, core value, and
company's goals to its stakeholder and public. A well-crafted mission can have both positive and
negative impacts on a firm's performance.
Positive impact: A clear-cut and instructive mission can help influence a company's
environment both internal and external. Firstly, it provides the employee a guideline on how they
should perform during their daily operation, a positive mission can eventually improve
employee's performance and productivity. A clear mission can positively impact on company
while the company is in the process of evaluating strategy, a clear mission will also help build its
company reputation in the long run.
Negative impact: In another way, a confused or blurred mission can be critical and destructive
to the company. The confused mission was unable to help identify the company's position and its
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critical to the employee for their daily operation. Employees will not perform well and stay out
of the company's strategy thus causing ineffective and affected company performance. In a worst
case, company may cease to operate when it face any problem that caused by internal or external
factor.
In conclude, mission stand as an important fundamental for company guideline, its the anchor of
company in this competitive industry. A good anchor ensures that the ship survives from storms
and is always ready to moor the ship in its place.
Question 1.c
The Emergent and Intended Strategies
When comes to strategy management, there are two fundamental approach of strategy that
company or organization will adopt and apply in operation, which is intended strategy and
emergent strategy. We can differentiate between the strategy according to strategy perspectives.
Intended strategy, a strategy that its require a lot of discussion, usually time consume and will be
implement after top management has considered all aspect of company. Intended strategy
implemented from top to bottom levels. Intended strategy will usually focus on a long term plan
with 3-5 years or more for company to operate and achieve company goals.
In contrast, emergent strategy is a more dynamic and responsive approach that runs in a short
term and a strategy that apply with bottom to top, it usually evaluate from operation. Main reason
that company will adopt emergent strategy is because employee who run the daily operation will
understand the problem on the spot and deciding a more accountable decision than whom not
directly involve in daily operation such as top management. Emergent strategy is also a strategy
that often apply while waiting for the final intended strategy from top management.
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Intended strategies offer a well-considered, long-term vision, while emergent strategies provide
nimble and adaptive responses to immediate challenges. Both strategy is alternate and
interchange to better serve the company operation.
Question 1.d
Reason to Understand a Firm Strategy
It is important to understand a company's strategy, even if you are not in a senior managerial
position. This understanding is as vital as wanting the company you work for to endure, thrive,
and provide job security until your retirement. A company's strategy serves as a roadmap,
offering employees a view into its long-term plans and the direction where the company is
heading.
Consider the case of Jack, an assembly line supervisor at a video player machine manufacturing
company. Jack is dedicated and reliable but doesn't pay much attention to the company's goals
and announcements. However, the technology landscape is constantly evolving, and consumer
habits are changing. In the age of readily available digital content, the demand for physical video
player machines has declined, affecting the company's revenue and profits.
In response, the company's leadership decided to shift its strategy from physical product output
to digital media producer. Jack, lacking the skills that matched the new strategy, found himself in
a delima position where he can’t a suitable position after the changes of company strategy, and
ultimately losing his job.
Had Jack paid more attention to and understood the company's strategy, he might have
recognized the impending changes and had an opportunity to acquire new skills aligned with the
company's evolving strategy, thus securing his position.
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This example highlights the importance of understanding the company's strategy not only for
personal skill development but also for long-term job security. It empowers employees to adapt
to changes and stay valuable contributors to the company.
Question 2.a
The Three Elements, S-C-P model
The three letter of S, C and P in the S-C-P model stand for Structure, Conduct and Performance,
this three element can be define as the fundamental operation of business and how the business is
from to standout of norm.
Structure
The Structure is referring to the market or industry that business is in, its representing the size of
a business, the differentiate of the degree of product, and the concentration level of market that
business exist.
Conduct
The Conduct can be define as the behavioral of a business. This include the strategy that a
business has adopted, on pricing, operation, and level of advertising to its consumer and others
competitive strategies.
Performance
For the Performance, it stand as a outcome of the business operate in a period of time and the
strategy that company has adopted after screening through with Porter's five model, PESTEL
analysis and SWOT analysis.
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Upon reaching a mutual understanding with the S-C-P model, we may further discuss with
applying the S-C-P model into different sector. The model usually apply from a different
perspective that include; Market Analysis, Competitive Strategy, Regulatory Policy, Consumer
Welfare, Economic Research, Mergers and Acquisitions, and on Teaching, Education purposes.
Market Analysis;
The S-C-P model is often use to define and assess the fundamental structure of a particular
market or industry. This help in identifying the status of market/industry such as Perfect
competition market, Monopolistic competition, Oligopoly competition market, and Monopoly
market. How the business can survive through different competitive market/industry.
Competitive Strategy;
Applying S-C-P model into Competitive Strategy represented the different approach that a
company has adopt after screen through the analysis. The type of strategy can be categories into
Cost leadership strategy, Differentiation leadership strategy, Cost focus strategy and
Differentiation focus strategy.
Regulatory Policy;
The government body and agencies may apply the S-C-P model in order to evaluate the effective
of various rules and regulation to the industry competition. It help the authority to have a better
understanding about the current situation of industry thus design a more comprehensive policy to
move the overall competitive industry toward the target.
Consumer Welfare;
The S-C-P model can be used to assess how market structure and conduct impact to consumer
welfare. This includes analyzing factors like pricing, product quality, and innovation to
determine whether the market serves the best interests of consumers, the so-called maximize the
value of money to the view of consumers.

Economic Research;
When we have discussed about how the S-C-P model may apply to Market Analysis, some may
confused about the difference in analyzing Economic Research with S-C-P model. Rest assure,
the dividing range is clear and cut, when applying S-C-P model to Market Analysis, the business
is brainstorming to decide a strategy in the microeconomics, where the threat of new player,
bargaining power of supplier and customer. But when business is is applying the S-C-P model
from the Economic Research the business is viewing to a macroeconomic environment, where
the trend of whole industry is heading to, did the advance of technology bring impact to current
industry etc.
Mergers and Acquisitions;
The S-C-P model is valuable in evaluating the potential effects of mergers and acquisitions on
market structure and competition, when authority apply the S-C-P model to analysis a case of
mergers and acquisitions this help in determine whether the deals is obeying to anti-trust law or
the purpose is default. When a business intend to file for merger or acquisitions, the S-C-P model
help to justify the action and strategy of adopt lead to a win-win situation or not.
Teaching and Education;
The S-C-P model is frequently taught in economics and business courses to help students have a
better understanding related to the principles of industrial organization, competition, and market
dynamics. It applied to my case as it is the fundamental theory of understanding the business in
administrative.
In conclude, applying the S-C-P model has established the structure of an organization, it is
essential for an organization to develop a S-C-P model analysis in developing a strategy whether
in a short-term or long-term, and execute the strategy to real-world.

Question 2.b
Four Types of Competition
Perfect competition market
Based on the research from various available resources, the four type of competition that
majority recognizing can be understand as perfect competition market, monopolistic competition
market, oligopoly market, and monopoly. But I did like to first explain it with perfect
competition market and imperfect competition market, and under the section of imperfect
competition market there will be the position of monopolistic competition follow by oligopoly
market and monopoly market.
The perfect competition market is the best scenario to consumer in a comprehensive way.
So why it the best scenario to consumer? The condition and requirement of perfect competition
market is the market where there is no dominant of a business, instead of one, there are many
buyers and sellers in the market it can be understand as highly competitive condition. Beside, the
product of each different business deliver or provided is highly similar with no differentiation,
which mean the so-called homogeneous product. Another condition that exist only in the perfect
competition market is the completeness of information this mean that each of the business
information is open and share.
For example;
In the toy industry, we have companies A, B, and C. Company A decides to raise the price of a
product that is essentially the same as what company B and C offer. Now, when B and C get
wind of this, they have two options: either match A's new price or stick to their current prices.
possible outcomes will be;
Company A Makes No Sales: If B and C decide to match A's price, consumers may not see a
reason to spend more on the same product. In this case, company A might end up with no sales
because consumers would naturally choose the lower-priced option from B or C.

No Change in Company A's Sales Revenue: If B and C decided to keep their prices unchanged,
company A's sales revenue may stay the same. This assumes that consumers are willing to pay
the higher price for A's product, despite similar offerings from B and C.
The last condition of a perfect competition market is that every competitor can enter and exit the
market easily with no barrier and no cost to shift from one to another. This stand to mean that
changing a company's strategy doesn't incur costs when transitioning from one industry to
another, from operating a bread factory to manufacturing smartphones, from a candy retailer
swift to become a real-estate developer. It is impossible to cost nothing thus the concept of enter
and exit the market easily with no barrier and no cost, technically only exist in perfect
competition market scenario.
The imperfect competitive market
Plans are wonderful, reality is bone-chilling. The opposite of a perfect competitive market is the
case of an imperfect competitive market, and that is the world we live in. Imperfect Competitive
Markets can be categorized into monopolistic market, oligopoly market and monopoly market.
Monopolistic competitive market
A monopolistic market situation can be described as one in which there are many competitors,
many differentiated products, and these differentiated products allow the many competitors to
take turns in dominating the market over time. A typical example is the competitive market for
smartphone companies, with Apple, Samsung, and Huawei in the top tier, and Oppo, Xiaomi,
and Google in the second tier. These smartphone companies are launching the latest flagship
products in their respective segments of the world and are taking turns to dominate the
smartphone industry.
The performance of company that is in this market is expected to keep deliver a more advance
product, user-friendly and centric product in order to attract as much consumer as it can. This

will eventually benefit all consumer over time. The customer does not have a very high loyalty to
a company due to the new develop differentiate product may better fulfill the needs of various
consumers.
Oligopoly competitive market
The situation of an Oligopoly market, where only a few oligopolies hold the majority market
share and have a very high moat, which can be interpreted as the company's core survival
technology, whether it is a very high switching cost or a proprietary of advanced technology.
These are the reasons that the norms company cannot entry the market and compete for market
share in a short period of time.
In general there is few industry that is in the oligopoly competition market situation. These are
the company that comes with years history record this is because these company manage to
captured the market share in early century and they build a high barrier in their industry over the
time and this has allowed these company to further established their position in the industry
today. For example there is company such as Exxon Mobil, Chevron and shell company in the
oil industry and their market is beyond just the country itself, and it's require a huge cost to entry
and exit the market.
The performance of those company in this competitive market may expected to have a more
stable profit in each annual financial reports, due to the established of brand, and its customer
based usually stay within the company unless there's a structure change of industry.
Monopoly competitive market
Monopoly market is the scenario that will hurt the economic fundamentally, because the
company hold high bargaining power to both supplier and consumer, no threat of New entry with
a high level of barrier, and no threat of substitute as any rise of opponent will be acquisitive by
the key player. These factor will naturally allow the key player to have a low industry rivalry.
Company like Apple Inc, Microsoft can be and will be potentially monopoly player in the
competitive market. That is reason the Federal Trade Commission (FTC) has sought to monitor

the mergers and acquisition activities of these large company to prevent them from become the
monopoly player in the market.
The performance of company that fall into this categorize will have a very strong ability in
bringing impact to the market. Company that in this market may high a high profit, strong cash
flow, and expanded all over the world, because there is a product only this company can provide
and everyone has to purchase from this company.
Question 2.c
Difference of Competitor & Complementor
A competitor can define as opponent, competitor is an business that competes to each other in a
same industry, competitor and complementor is the fundamental structure of perfect and
imperfect competition market and the different level of competition has lead to different market
such as monopolistic, oligopoly and monopoly. The position of competitor focus on who can
gain a larger market share, thus competitor always revolve around factors like price, quality,
differentiate features and value of money. In essence, the competition between competitor often
results in a win-lose zero-sum scenario, and this required competitor to keep growing and
bringing new innovation to stand out in the market.
The difference between competitor and complementor is instead of competing, they complement.
The role of complementor, may not be totally opposite of a competitor. A complementor
company can lead to a scenario that is win-win situation whereby the complementor company
exist as a service supplier that provide support activity to another company primary activity.
The key to understanding the role of complementor lies in the word "Synergy". In a competitive
marketplace, some companies recognize that they would be more specialized by focusing on
only one service, and therefore choose to pair up to survive together. The main factor leading to
a win-win situation is the intrinsic result of synergy, whereby one plus one can achieve more

than two when together. In many cases, the success of one complements the success of the other.
Examples of complementor include movies and popcorn, the combination of popcorn and
movies is a classic synergy phenomenon. Popcorn sales tend to be directly proportional to movie
box office sales, and there is no such thing as a poor box office performance where the popcorn
is still a big seller.
The Role of Complementor in an Industry:
Complementors play an essential role in a company's success, and their roles can be divided as
follows:
Value Addition: Complementors enhance the primary product by providing unique features or
additional value. This combination often results in the creation of a high-value product. For
instance, a butter company strives to supply premium-quality butter to a cake manufacturer,
enabling the cake manufacturer to create delicious premium desserts.
Economies of Scale: Some businesses aim to excel in their industry by utilizing all available
resources to become major players. Complementors play a vital role in leveraging their strengths
and weaknesses, enabling a cooperative approach that helps the product achieve economies of
scale. This maximizes profits and creates a win-win situation for all involved.
Expanding the Ecosystem: Complementors of companies like Apple Inc., including application
developers, chip manufacturers, and raw material suppliers, contribute to the expansion of the
ecosystem surrounding Apple's products, particularly the iOS operating system. This
collaboration widens the reach and impact of Apple's ecosystem.

Question 2.d
The Four Generic Industry Structures
Porter identified the four primary generic strategies, namely cost leadership strategy,
differentiation strategy, focus strategy, and differentiation focus strategy. These generic
strategies serve as approaches adopted by companies to assess their position within an industry.
By honing in on a specific generic strategy, management executives can focus on the
fundamental components of a collaborative business-level strategy, this allowed company to
have a clearer image of competition in the markets and prevent the case where alternative
generic strategies might be more suitable.
Cost Leadership Strategy
The cost leadership strategy is focusing on increase its profits by reduce the cost of product. To
achieve high profit, business require to keep monitor and control the cost of business at all time
low such as labors cost, facilities cost, raw material cost, business operating cost and all the
relevant cost that could affect the net profit gain when final product sold. The opportunity of
strategy is ensure that the cost of entire business is lower than opponent, this allows the business
to have a wider margin of safety when facing an unexpected incident and last longer than rivalry.
The company that adopted cost leadership strategy are like McDonald's, IKEA, and Walmart.
These giant company has achieve the economic scale of it product, they able to keep their cost at
all time low compare to its rivalry.
Differentiation Strategy
Differentiation strategy stand as the product provided by a business has a high differences from
other business that has product a same categorize product. By applying the differentiation
strategy, company have to produce a product that consumer willing to pay premium for it and

persuade consumer believe the value in its products. The high profit of the product will offset the
cost of product, this allow company to gain reasonable profit from it. In order to make sure this
strategy work as effective, business has to ensure that the product is leading the new trend at all
time. Beside, the marketing team play an essential role in persuade consumer to pay for the
unique of product.
For example, Apple Inc's flagship product, the iPhone series. The majority of customers are
willing to pay a premium for an iPhone compared to other smartphone brands, even though there
may be only a slight difference in product quality. This demonstrates the power of Apple's
differentiation strategy, as they have successfully created a brand and product that consumers
perceive as unique and valuable, justifying the premium price.
Cost Focus Strategy
The third generic strategy is the Focus Strategy, where a business concentrates on a particular
market segment or a niche market and strives to provide the most suitable products to its
customers. This strategy is characterized by focusing on a specific geographic area of consumers
or offering a unique product tailored to a specific customer group and this product is that
customer cannot obtain others than the company itself.
For example, consider the luxury car manufacturer Rolls-Royce Motor Cars. Rolls-Royce aims
to provide its customers with the most luxurious and top-of-the-line automotive products. Due to
its positioning in the market and the premium pricing of its products, Rolls-Royce naturally
attracts a unique customer base. The company doesn't need extensive advertising or marketing
strategies such as price wars to stimulate product sales. Instead, Rolls-Royce focuses on
delivering the best services and high-quality products to its customer base, ensuring the
sustainability and success of its business. This niche approach allows Rolls-Royce to maintain its
exclusivity and cater to a select group of discerning customers who appreciate the brand's
amazing craftsmanship and luxury.

Differentiation Focus Strategy
Differentiation Focus Strategy, similar to Cost Focus Strategy, concentrates on delivering

products and services to a narrower group of customers within a niche market. However, the key
difference between the two strategies lies in their business models.
In a Differentiation Focus Strategy, the business model relies on customer loyalty to the brand
achieved through the development of innovations and product uniqueness. The focus is on
creating a strong emotional connection with the niche market consumers, making them highly
loyal to the brand. These customers are willing to pay premium prices for the distinctive features
and qualities of the products or services offered.
For example, the key player of high-end luxury sports car - Ferrari, Ferrari capture the attention
of rider and investor through produce a leading sport car. Their product line includes limited
production, high-performance vehicles with unique designs and advanced technology to better
consume the market share of niche market.

Question 3.a
Understanding of Resources and Capabilities in Firms: Categories and Differences
The difference between resources and capabilities are resource are tangible assets, and
capabilities are intangible assets. Tangible resources assets such as real property, cash,
employees and the physical assets that the company possessed. For intangible capabilities assets
that is referring to the assets like skills of the employees, knowledge of employees, and the
culture of an organization.Tangible resources assets and intangible capabilities can be classified
into Four essential board categories, which is financial resources, physical resources, individual
resources, and organizational resources.
Financial Resources
Observing the cash flow of a business is a key element for a business to survive, a company's
credit expansion, loan amount, and financing level are all tangible financial assets. Most
businesses rely on basic tangible financial assets to survive, except for some specific examples
such as financial organization like banks, and securities brokers. They have very strong tangible
financial assets to survive and rely on them to create other tangible assets.
Physical Resources
Except from financial organization, most of the business is to produce a physical product and
earn a profit by selling it at a reasonable price. Business operating with physical resources is
creating value of something and provide it to another business. For example, the real property
developer developed an area with building an office tower thus it can provide a physical location
for a business to operate.

Individual Resources
Individual resources typically refer to the skills, knowledge, and expertise of employees within
an organization, the ability of an employees that may contribute benefit to the company. For
instance, the senior management of a company must possess certain ability that can provide
benefit to business such as accounting skills, marketing skills, and the understanding of specific
knowledge in the industry that related to business.
Organizational Resources
Organizational resources, such as organizational culture, brand reputation, and relationships with
business stakeholders, play a critical role in a company's success. A company with a strong
reputation finds it easier to obtain resources like bank loans, refinancing from the market, and the
issuance of company bonds.
Question 3.b
VRIO Framework
The VRIO framework is an evaluation of the tangible resources and intangible capabilities, while
identifying the four board of categories, VRIO framework indeed assist in deciding the resources
or capabilities in Value (V), Rarity (R), Imitability (I) and Organization (O).
Value
Value often stand as whether the resources or capabilities will effectively provide advantage to
the business. In another way, does the value derived from these resources or capabilities
positively or negatively impact the business? This help business to identify the right value of
resources or capabilities.

Rare
Rarity has will assist in deciding how easy to the access of resources or capabilities. Should a
business take the risk of acquiring these resources and capabilities, or are they readily available
in the market? Does the rarity of resources or capabilities contribute the uniqueness to business
in order to stand out from the market?
Imitability
Imitability is a critical component of the VRIO framework and focuses on the difficulty of
replicating or imitating the resources or capabilities. If the resources or capabilities are highly
challenging to imitate, they can act as a barrier, contributing to the sustainability of the business
protected by these barriers.
Organization
Even if the value is identified as a potential benefit, the resources or capabilities are rare, and
imitability is challenging, an effective organizational structure is crucial for successful execution.
Identify an effective and solid business structure that may fully utilize all available resources or
capabilities is an essential part to a business when analyzing VRIO framework.
In conclude, the VRIO framework has further established the concept of Four board categories in
resources and capabilities. This is a must go through screening to assist a business in identifying
the strategy management.

Question 3.c
Two forms of Imitation and Four sources of Costly Imitation
The two form of imitation can be categories into direct imitation and indirection imitation.
Direct imitation
Direct imitation is a strategy where a business found the current succeed competitor business
model is worth duplicated. Business will consider to provide a highly similar product to the
market and its business operation. The goal of this form of imitation strategy aims to replicating
the proven successful business model and apply to its own business.
Indirect imitation
The differences with indirect imitation business model is by adopting a selected elements or the
general principle of a successful business model. This business strategy is strive to improve its
own business model by adopting a specific element of successful from competitor business
model. It is abstract the essential of successful of competitor to better serve its own business
model.
Based on the research and understanding of imitation, the four sources of costly imitation are
recognize as Mass Economic Scale, Intellectual Right of Property, Network Effect and
Reputation and Brand. These categories representing as the high barrier to entry to an industry.
Four Sources of Costly Imitation
Mass Economic Scale
The point where a corporate maximize profit is when the companies reached the level of
marginal revenue equals to marginal cost, the principle of MR=MC. Achieving of this economic
scale requires a significant upfront investment of capital and a period of time, this is why
imitation of this business strategy can be a costly endeavor.

Intellectual Right of Property
Intellectual right property is a business law to protect the creators and prevent direct copying of
innovation. The development of new technology demands a considerable amount of work and
resources in order to contribute significant benefit to business. Therefore, it is unfair to allow
third party who have not contribute to the development process and use these innovations freely.
The law has protected the intellectual property and anyone that adopt the same idea will face a
lawsuit therefore this can add a significant cost to imitation.
Network Effect
The key component of a network effect is the database that a business possess. A classic example
is company like Facebook, Facebook has a tremendous database that contribute through it user
since 2004, thus this will require the new player to invest extra resources to collect as much as
possible data from all around the world to compete with Facebook, thus making it a costly
endeavor for potential entrants.
Brand and Reputation
The Brand and Reputation effect require a continuously contribute to deliver the up to date
standard services, quality and product in a range of history, this will establish its company
reputation and increase the loyalty of consumer over the period. For instance, the brand of a
century old wine producer, Chateau Lafite Rothschild. It has successfully established brands and
have customer loyalty, recognition thus the imitator must spend heavily on marketing to
overcome.

Question 3.d
Competitive Dynamics and Respond to Competitive Advantage
Competitive dynamic referring to the strategic interactions, moves, and countermoves among
competing firms within an industry. The strategy of competitive dynamic often including
identify the market structure that a business positioning and adopting various strategy to
encounter different rivalry, it require the strategy to be continuously evolve. Competitive
dynamic involve with analyzing the rivalry patterns, actions and respond, identifying competitor
collaboration with others, the innovation of competitor etc.
In a nutshell, the three reason that a firm might not respond to another firm’s competitive
advantage is due to; limitation of resources, the economic cycle of an industry and the nature of
insatiable of demands.
Limitation of Resources
In a recent example, consider the acquisition of Activision Blizzard by Microsoft. When

Microsoft announced this acquisition, Sony emerged as the primary opponent, instead of joining
the buyout but to resist it using their all of their strengths. Sony's decision stemmed from the
limitation of resources. Microsoft acquired Activision Blizzard for a staggering $68.7 billion,
while Sony's cash equivalent holdings were only $11.4 billion, making it financially unfeasible
for them to participate. Resource limitations are not solely financial; they extend to talent and
technology as well.
Economic Cycle of Industry
Beside, reasons that a business may not respond to competitor's competitive advantage relates to
the economic cycle of the industry. Every industry has its own economic cycle. Take the camera
industry as an example. While the camera industry still exists today, it will never return to its

peak in 2010 when it sold 120 million cameras annually. The most recent sales record in 2020
was only 8.88 million cameras worldwide. With the market contracting by nearly 94% from its
peak, the camera industry has transitioned from rapid expansion to a narrow, differentiation-
focused market. When an industry's economic cycle has passed its zenith, businesses may not
respond to competitive advantages as there's limited market share left to capture.
The Nature of Unlimited Demand
Another reason a business may not respond to a competitor's competitive advantage is linked to
the nature of unlimited demand in the market. With unlimited demand and limited supply, each
business can secure its share of the market. Firms typically adopt strategies such as thin margins
or penetration pricing because producing one more product guarantees profits due to the
insatiable demand. The population worldwide is consider unlimitation demand when it comes to
food industry.

Question 4.a
The Product Differentiation
The differentiation of product concentrate on provide a services or product that can be easily
differentiate from it opponents by consumer. Differentiation of product can be different from
quality, features, customization, design and price, with the goal of convincing consumers to
choose one product over another.
Role that of customer perceptions play in product differentiation include;
Needs Orientated Approach
The needs of specific consumer can drive the creation of differentiated products. For instance,
the needs of plant-based milk has increase overtime. This has prompted traditional dairy
producers to offer products that better cater to these needs. Consequently, the product such as
Oat milk, plant based milk, and soy milk is the potential differentiation product from the
producer.
Improving Customer Services Experience
Beyond the product itself, customer perceptions also extend to the overall customer experience.
Factors like customer service, user interfaces, and ease of use contribute to how customers
perceive a product's differentiation. For example, the rise of Haidilao Hotpot. Instead of
providing top-notch delicious ingredients, Haidilao differentiates itself by strive to provide a top-
notch customer experience, thus created a whole new kind of consumer experience.

Brand Image and Trust
Customer perceptions are deeply interfere with a brand's image. A well-established and trusted
brand tends to have an advantage in product differentiation. Consumers often consisted a positive
brand image with quality, reliability, and innovation. For example, Apple has built a brand image
that is authentic with innovation and high quality. When Apple releases a new product, customer
perceptions are already implant to expect something unique and different.
Question 4.b
The Broad Categories of Product Differentiation
Three board categories that product differentiation can be classified as Horizontal Differentiation,
Vertical Differentiation and Mixed Differentiation.
Horizontal differentiation
Horizontal differentiation is typically based on consumers preferences and cognition. The

differentiation of product may viewed differently from each customer. For example, chocolate,
strawberry and egg yolk taste of biscuit if relatively same cost of product. But the sales of biscuit
may differ due to each customer preferences.
Preferences bases, consumer will naturally purchase the item that they viewed as different due
to their preferences or other subjective factors.
Quality bases, consumers differentiate products based on their view of quality, which may be
influenced by brand and advertising.

Vertical Differentiation
The vertical differentiation has involve with different quality and levels, consumer will rank the
item based on price, quality and purchase the most related to them. For instance, the choice of
flagship smartphone between iPhone and Xiaomi, customer A will purchase the iPhone due to it
advance technology and function, and customer B will purchased Redmi because customer B
expect the product to be affordable.
Performance bases, product is ranked solely based on the quality and performance.
Price and Value bases, differentiation can be based on price, where some products offer better
value for the price, while others are considered more expensive.
Mixed Differentiation
Mixed differentiation is the complex of both vertical and horizontal differentiation. In this
categories, the differentiation of product offer is based on multiple dimension of view. The
laptop market as an example. Different brands offer a range of laptops with varying qualities,
features, and prices. Some customers may prioritize high performance (vertical differentiation),
while others might choose based on specific features or design preferences (horizontal
differentiation).
Quality and Performance bases, Products in this category trend to offer variations in quality,
performance, and features.
Branding and Marketing bases, Branding and marketing elements also play a role in
differentiating products. Certain products may use unique marketing strategies to stand out of
norms.

Question 4.c
Product Differentiation in Porter’s Five Forces
The five forces framework is a tool develop by Michael Porter use to identify the environment
threat in an industry to a business. These five forces are, competitive rivalry, threat of new
substitutes, threat of new entrants, bargaining power of buyers, and bargaining power of
suppliers.
Competitive Rivalry
The analysis of this framework is to identify the competition with the existing opponents, the
differentiation product play a vital role in established the loyalty of customer to business and
reduce the competition of rivalry.
Threat of New Substitutes
The advancement of technology literary can be seem as a threat of new substitutes, a strong and
highly differentiated product may reduce the threat of substitutes by keeping the consumer with
its business.
Threat of New Entrants
Join of new player into a market is consider as the threat of new entry to a business, the role of a
differentiated unique product may create a barrier for new entrance to your industry. New entry
has to invest more resources to complete with the unique differentiated product.
Bargaining Power of Buyers
With the high differentiated product, business is able to hold the bargaining power from
consumer, and customer willing to pay for the differentiated product due to the unique and
features of product.

Bargaining Power of Suppliers
If the product that provided from supplier is not highly differentiated, the bargaining power of
supplier will reduced, thus in order to maintain the business connection, suppliers will strive to
provide a more differentiated product.
In summary, the differentiation product play an essential role under the framework of Porter's
Five Forces model. Business should sought to provide a highly differentiated product in order to
maintain its unique and established business in leading the industry.
Question 4.d
Role of Product Differentiation in Different Industry
When discussing how product differentiation will impact businesses in different situations, we
need to understand the characteristics of fragmented industries, emerging industries, mature
industries, and declining industries, thus we may further discuss about in applying differentiation
strategy into different industry.
Fragmented Industry
A fragmented industry refers to an industry where there are no clear industry leaders, and the
barriers to market entry and exit are very low or virtually non-existent. Furthermore, there are
few market participants competing with each other. The differentiation product can help a
business stand in the sight of consumer and allowed business to better capture market share.
Attracting consumer with its unique product features.

Emerging Industry
An emerging industry is currently in a phase of vigorous development, with an unclear final

direction for industry growth. Companies take turns dominating industry technologies for a short
period. In this industry, company that adopting the differentiation strategy may further
established it position in the industry, this assist the business in becoming the dominant in the
industry and empower its growth.
Mature Industry
Mature industry generally have a few major companies that lead in terms of technology and
determine the direction of industry development. These major companies have created high
barriers to entry using their advantages to prevent new players from entering the market.
Company may make use of the differentiation strategy to maintain its market share and with the
develop of unique product that only available in this company, this unique product will
contribute with a premium profit to company, increase the boundary of safety of company.
Declining Industry
A declining industry can be understood as an industry where overall market share is gradually
shrinking. There are hardly any new entrants, and only a few companies that once led the
industry are struggling to survive in a contracting market share. Under the situation of this
industry, the product differentiation strategy is aims to extend company life cycle or either
focusing on a niche market.
In conclude, under different industry scenarios, the impact and role of differentiated products can
vary significantly from growth to expand, and to extend.

Question 5.a
Definition of Strategic Alliance
A strategic alliance is a collaboration between businesses with the goal of achieving synergies.
Companies can share resources with each other and leverage their respective strengths to
complement each other in order to create more advantageous business models. Strategic alliances
can be divided into three major types, namely Joint Venture, Equity Strategic Alliance, and Non-
equity Strategic Alliance.
Joint Venture
In a Joint Venture, both companies decide to raise funds and collaborate to establish a new
subsidiary company. This form of cooperation helps prevent the parent companies from being
directly affected by each other and allows them to share resources through the subsidiary
company. For example, Company A and Company B work together to create a subsidiary,
Company C, where both Company A and Company B each own 50% of the shares of Company
C.
Equity Strategic Alliance
For the Equity Strategic Alliance, companies invest in each other to align their long-term
interests. This is different from mergers and acquisitions, as both companies remain separate
entities but own a portion of shares in each other. For instance, Company A may invest in
Company B by purchasing 49% of Company B's shares, forming an equity strategic alliance.

Non-equity Strategic Alliance
Company that adopted Non-equity Strategic Alliance is defined as a legal contractual

relationship between both companies. It doesn't involve the exchange or ownership of company
shares. Instead, the contract specifies the cooperation between the two companies, including
sharing resources and leveraging each other's strengths.
Question 5.b
Economic Value of Strategic Alliance
To enhance the performance of a business's current operations and create economic value
through strategic alliances, there are several options, including but not limited to:
Bypassing Barriers to Entry
Businesses can effectively utilize their strategic alliance partners to enter new markets. This
allows companies to avoid the trial-and-error costs and friction associated with entering a new
market, as the strategic alliance already has an established operational model that works well in
that market.
Sharing Technology and Intellectual Property
Companies can enhance their current operations by sharing technology and intellectual property
with each other. For example, if Company A is a traditional car manufacturer and has formed a
strategic alliance with Company B, an IT technology software company, both companies can
collaborate on producing a new high-tech car product by sharing their expertise.

Effectively Improving Financial Status
The partnership through a strategic alliance can serve as a form of refinancing in the market.
When a business faces short-term financial challenges due to the natural business cycle, the
infusion of new capital can help the business weather this low point and maintain financial
stability.
These strategies can contribute to improving the current operations of businesses and generate
economic value through strategic alliances.
Question 5.c
The Cheat in Strategic Alliances
The three fundamental forms of cheating in strategy alliances are categories as Adverse Selection,
Moral Hazard and Holdup.
Adverse Selection
In the case where Adverse Selection occurs when one party bring less tangible resources and
difficult-to-describe resources to another party, thus resulting a higher risk for another party in
this strategy alliances.
Short-term effect; It damage the relationship of strategy alliance, and slow down the speed of
business decision making.

Long-term effect; Lead to the end of strategy alliance partnership due to erosion of trust,
promises no longer can be compromise.
Moral Hazard
The occurs of Moral Hazard is when one party has brings a lower quality and unusable skills to
the alliance than originally promised, essentially described as cheating on one's partner, this
typically happened after a strategy alliance is formed.
Short-term effect; It critically damage to relationship and increase the operation risk, and harms
the business's reputation.
Long-term effect; It can lead to the termination of strategy alliance partnership due to increased
business operation cost and lost of trust.
Holdup
Holdup often occurs in the scenario that a party is demands for a high return before any
significance contribution to another party or where the demanded of return is higher than
originally promised return when alliance is formed.
Short-term effect; Dispute between strategy alliance and damage trust of partnership.
Long-term effect; Lead to the termination of strategy alliance partnership and in the worst case,
party that holdup to another party may face legal action.
In a nutshell, the cheating in strategy alliances should be avoided and penalized, because it will
destroyed the reputation and operation structure of a business. Although the cheating party will

gain benefit in a short run, but the business who cheat may end up with losing huge number of
valuable exchange opportunities.
Question 5.d
Deal with the Threat of Cheating
The five tools that a business may adopt in order to prevent cheating occur in a strategy alliances
are; contracts, equity investments, firm reputations, joint ventures, and trust.
Trust
Trust is the cornerstone of any strategic alliance. It is essential in maintaining the cooperation
between each other alliance partners. Build an established trust between one another help
deterring cheating.
Contract
Contracts serve as formal agreements that give a clear outline for the resources to be exchanged
and share, the quality of services and term and conditions. All these are well written in the
contract, it is important to form a clear outline in the contract to to ensure effective functioning.

Joint Venture
Joint ventures are an effective way to prevent the cheating in strategy alliance. Joint venture has
bind the relationship of company together and linked the interest of both company in a long-run.
This help in prevent the cheat from occur.
Firm’s Reputation
Company reputation is an intangible intellectual property of a business. A well-respected

reputation of company is an valuable assets of company, not only enhances a company's
profitability but also discourages cheating in strategic alliances. Businesses with good
reputations are less likely to engage in deceptive behavior.
Equity Investments
Through equity investments, the partnership in the strategy alliance hold ownership stake in each
others company. The arrangement allows partners to monitor each other's performance and help
detect any potential cheat.
By utilizing these tools effectively, company can create a strong foundation for successful
strategic alliances and minimizing the risk of cheating.

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MMEJ - PROFESSIONAL MASTER IN BUSINESS ADMINISTRATION

Student Name: TONG JUN HUI

Module Title: STRATEGIC MANAGEMENT

Learning Center: LC6001 - IE-JOHOR BAHRU

TONG JUN HUI Page 1

a) Whats Make A Good Strategy?…………….....…………….…………………………….6

b) Impact of “Mission” to a Company…………………………………………………...….7

c) The Emergent and Intended strategies…………..…………………………….……....…..8

d) Reason to Understand a Firm Strategy………………………………………….…..….…9

a) The Three Elements, S-C-P model…………………………………….………….……..10

b) Four Types of Competition………………………………………………………………13

c) Difference of Competitor & Complementor…………………………………….……….16

d) The Four Generic Industry Structures…………………………………………….……...18

a) Understanding of Resources and Capabilities in Firms: Categories and Differences.…..21

c) Two forms of Imitation and Four sources of Costly Imitation……………………..……24

d) Competitive Dynamics and Barriers to Responding to Competitive Advantage…….….26

TONG JUN HUI Page 2

a) The Product Differentiation…………………………………………….…………….….28

b) The Broad Categories of Product Differentiation……………………………..…………29

c) The Opportunities of Product Differentiation……………………………………………31

d) Strategy of Product Differentiation in Different Industry………………………………..32

a) Definition of Strategic Alliance………………………………………….………..……..34

b) Economic Value of Strategic Alliance………………………………………….….…….35

c) The Cheat in Strategic Alliances……………………………………………….….…..…36

d) Deal with the Threat of Cheating………………………………………………………...38

TONG JUN HUI Page 3

The findings acknowledge the indispensable nature of strategy management in support

TONG JUN HUI Page 4

Strategy is a methodology adopt to address specific matters—a response to a person, an event, or

TONG JUN HUI Page 5

TONG JUN HUI Page 6

Impact of “Mission” to a Company

TONG JUN HUI Page 7

The Emergent and Intended Strategies

TONG JUN HUI Page 8

Reason to Understand a Firm Strategy

TONG JUN HUI Page 9

The Three Elements, S-C-P model

TONG JUN HUI Page 10

TONG JUN HUI Page 11

Mergers and Acquisitions;

Teaching and Education;

TONG JUN HUI Page 12

Four Types of Competition

Perfect competition market

possible outcomes will be;

TONG JUN HUI Page 13

The imperfect competitive market

Monopolistic competitive market

TONG JUN HUI Page 14

Oligopoly competitive market

Monopoly competitive market

TONG JUN HUI Page 15

Difference of Competitor & Complementor

TONG JUN HUI Page 16

The Role of Complementor in an Industry:

TONG JUN HUI Page 17

The Four Generic Industry Structures

Cost Leadership Strategy

TONG JUN HUI Page 18

Cost Focus Strategy

TONG JUN HUI Page 19

Differentiation Focus Strategy

Differentiation Focus Strategy, similar to Cost Focus Strategy, concentrates on delivering