Lesson-2

Discussion Questions(DQs) 

1. Read: "Strategic Management in Action: Hulu”

a. What do you think Hulu's owners should do now?

b. What is it about this situation context that is so challenging?

c. What type of resources does Hulu have? Are they unique? Explain.

Be sure to support your work with specific citations from this week's Learning Resources and any additional sources.

Hulu, as one of the pioneering internet TVs, is most-watched online properties in the US. Halu features video from more than 225 content providers such as TV shows from ABC, Fox,and NBC,  cable channels, and film studios through a website (Coulter, 2013). It offers these contents either by free after 8 days of its broadcast debut or premium subscription, also called Hulu plus, before the broadcasting. It is owned by entertainment and broadcasting powerhouses which has currently 26 million visitors a month. However, Hulu is currently facing a plight due to the fact that there are growing numbers of competitors who provide the same services (Coulter, 2013). The challenge for the Hulu is that whether to continue its business by mitigating its problems or sell it out.

a)      Strategic decisions recommended to Hulu’s owners

I agree that Hulu is currently facing more competitions than ever before but it does not mean that it should sell it out now. It has to continue its business even more fiercely with the help of proactive and interactive strategies to wipe out its competitors and conquer the customers’ needs and demands effectively than its competitors do. As said in the case, there are already 26 million visitors in a month which means that more and more customers are willing towards Hulu’s products or services. Thus, with this evident, I really think that Hulu should continue its business, regardless of selling it out, and the best strategy that would be perfect for Hulu is to look and provide the services which should be unique and innovative than what its competitors are offering. It is true that Hulu cannot compete with giant companies such as Youtube, Netflix and the like but what it can do is that it should try to come up with new customer-centric strategies to attract new customers and retain the existing customers.

b)     Factors responsible for making the situation context so challenging

The situation context is becoming so challenging not because of anything else, but more of ever changing environment in which more competitors are growing in numbers and customers are getting more options to access the content they ideally want to watch for. In addition, there is question of whether the company will survive or not in the days to come. However, it all depends on how it responds to its customers, competitors and video TV industry as a whole. My personal view is that it should research its customers’ needs or market changing dimension in terms of video streaming, taste and preferences of customers and the like, and come up with new services that perfectly fit with their needs. Furthermore, it can be said that the situation context has become more challenging due to some responsible factors such as growing competitors and customer choices, free video content providers, and ever changing customers’ taste and preference.

c)      Types of Hulu’s resources

It is true that Hulu is owned by its entertainment and broadcasting powerhouses such as NBC universal, NewsCorp and Walt Disney. Talking about the resources the Hulu has, In terms of value, Hulu has been adding a greater value to its customers by offering a flexible option to choose for; for example, two kinds of service are being offered by Hulu such as limited Commercial for $7.99 per month and no commercial for $ 11.99 per month. In addition, Hulu has been offering one week trial for free which could add more value to be a member of the Hulu. In regard to rarity, Hulu has been working relentlessly to come up with rare services to its customers. For example, it has a unique offering style than other channels which provides different series and programs even thee are not available in the markets (Coulter, 2013). It is quite hard to imitate because viewers can watch whatever they want to watch at any time they choose to see. It is also true that it is exploiting market opportunities by providing all types of series, movies and programs to almost all ages-people-children, teenagers, adults and old-aged.  With all these resources, Hulu can stand out in its online TV industry as a market leader but it has to attract new customers and retain existing ones by adding more values, offering unique services, making replicable capabilities and exploiting the market opportunities,

References

Coulter, M. (2013). Strategic Management in Action (6 ed.). New Jersey, USA: Pearson Education, Inc.

David, F. R. (2011 (13th ed.). Strategic Management: CONCEPTS AND CASES. New Jersey: Pearson Education,Inc.

(n.d.) Retrieved from http://www.hulu.com/

2. Read: Strategic Management in Action Cases: Case #1 Out of Focus

a. Explain Kodak's driving forces, implications, and critical success factors of the business environments.

b. Discuss two organizational elements that guide Kodak's strategic decision makers in managing strategically in today's context.

c. Discuss the roles of ethics and social responsibility in Kodak's strategic management.

d. Describe the different perspectives on competitive advantage relative to Kodak. Present I/O view, RBV, and guerilla view.

Eastman Kodak Co. founded in 1884, has struggled to cope up with changing technologies. While it is true that Kodak invented a digital camera in 1975, they were reluctant to introduce it into the market due to the fact that they became the fear of cannibalizing photographic film sales (Coulter, 2013). It was too late for Kodak to introduce the digital technology, while other companies soon began introducing the digital cameras and at the same time, cell phone cameras had become the capable for providing quality pictures.  In this paper, I would like to come up with Kodak’s driving forces, implications, success factors, organizational elements, ethical roles, and different perspectives on competitive advantage.

a)      Kodak’s driving forces, implications, and success factors of the business environment

Driving Forces: The drivers for Kodak are rapid growth of photographic firm industry, technology-driven markets, innovative digital cameras and globalization.

Implications: The implication for Kodak are, pressure for continual change, customer-centric needs, reduced needs for physical assets for Kodak, and more vulnerable to cope with digital cameras.

Success Factors: Kodak’s success factors were ability to embrace change, creative and innovation capabilities and being a world-class photographic film. It is true that Kodak, being a world-class photographic company, invented the digital camera, but it was not able to embrace the change due to fear of losing the current market sales. That’s why Kodak’s sales plummeted from 786 million in the late 1990s to only some 20 million in 2011 (Coulter, 2013).

b)     Two organizational Elements for guiding the Kodak’s strategic decision makers

It cannot be denied that new innovation/ technology, and customer needs are two most important organizational elements for guiding Kodak’s strategic decision makers by managing strategically in today’s context.  Firstly, innovation and technology helps Kodak to address the market change and cope with it promptly so that it can lead towards sustainable competitive advantage. Secondly, understanding the customers’ changing needs plays a pivotal role for guiding the Kodak’s strategic decision makers because no company can survive without customers. In addition, the company has to provide the customers what they need and want to be satisfied by addressing their needs or problems.

c)      The roles of ethics and Social responsibility in Kodak’s strategic management

It is true that Kodak's strategic management is guided by high morale standard and their responsibility towards its society (Coulter, 2013). In addition, Kodak's management ensures that their strategic actions are complying with the social and ethical standard and are striving to exceed that limit. Further, Kodak's is seeking to integrate such standard in their culture, which will ensure that every step of their work follows the high ethical standard. Thus, the roles of ethics and social responsibility in Kodak’s strategic management are to maximize the its profit and growth by contributing to the performance of business and comparativeness along with honest and open communication system regarding the rewards to the employees, it should maintain strong stance on ethics and social responsibility by creating team works.

d)     The different perspectives (I/O view, RBV, & Guerilla view) on competitive advantage relative to Kodak

It is possible to look at Kodak’s competitive advantage from different perspectives as shown below:

·         I/O View:  I/O view tells that how a company is capable for achieving a competitive advantage form the industry perspective. Let’s look at Kodak’s industry environment; it has failed to understand an ever-changing market need, taste and preference of the customers, and it could not make strategic decisions to ensure the competitive advantage as market rapidly revolutionized and new technology came into existence.

·         RBV:  RBV tells that how a company is capable to use its organizational resources to achieve a competitive advantage. It seems that Kodak had all the necessary resources to utilize and come up with unique capabilities. However, the company did not properly utilize its organizational resources for maintaining its competitive position in the market.

·         Guerrilla View: Guerilla view proposes that an organization’s competitive advantage is temporary and can be gained only by peppering the competitive marketplace with rapid radical surprises. In case of Kodak, although it invented the first Digital camera in 1975, it did not surprise it’s the market so that it can be said that it was more of reluctant to recognize the market and sudden changes desired by the customers (Coulter, 2013). Thus, Kodak even invested a lot of money on its R&D to come up with innovative products but it did not able to quickly react to the market changes.

References

Coulter, M. (2013). Strategic Management in Action (6 ed.). New Jersey, USA: Pearson Education, Inc.

David, F. R. (2011 (13th ed.). Strategic Management: CONCEPTS AND CASES. New Jersey: Pearson Education,Inc.

(n.d.) Retrieved from http://www.kodak.com/ek/US/en/corp/default.htm

The case Study of "McDonald's Corporation" 

Overview of the Case “McDonald’s Corporation”

As an attempt to highlight the strategic challenges faced by McDonald and opportunities it exploited, a depth analysis is being done in this paper. In the beginning of the 21^st century, the company went through big ups and downs such as untimely consecutive deaths of two CEOs (Jim Cantalupo in 2004, and Charlie Bell in 2005), economic crisis of 2008/9 and ineffective operations. However, the company then, in regardless of these challenges, would able establish as the best fast food company in the world with  the help of CEO, Jim Skinner and  it is now  doing better than ever before (Coulter, 2013).

Strategic Issues

         Some of the strategic issues confronted by McDonald are poorly executed strategic decisions, policies and programs, ineffective marketing pans, ever changing customer taste and preferences and the untimely deaths of two passionate, competent and experienced CECs (Coulter, 2013). Overcoming these issues needed lots of efforts for McDonald to win the market and could establish the company as the best fast-food company.

Analysis & Evaluation

      As a part of analysis and evaluation, I will discuss about the history of McDonald and the seven principles of its customer-centric plans to win the future, and then talk on how these seven principles are useful for aspiring entrepreneurs.

 The History of McDonald and Changes made during the turning period:

McDonald’s history is very old. In 1940, Dick & Mac McDonald opened its Bar-B-Q restaurant on E streets in San Bernardino, California. In 1948, McDonald was shut down for three months for changing its core structure, and then it reopened as a self-service drive-in restaurant in December. In 1954, Multimixer salesman, Ray Kroc visited the company in order to sell his brothers more multimixers. At that time, he learned that they were looking for a nation-wide franchising agent, and determined that his future would be in hamburgers. Then he opened his first McDonald in Des Plaines, Illinois on April 15, and it was later expanded over 700 McDonald’s restaurants throughout the US by 1965. At its 10^th anniversary, it issued the first public stock offering at $22.5 per share. It went international by opening its first restaurant in Canada and Puerto Rico in 1967 and by the end of 1978, its 5,000^th restaurant was opened in Kanagawa, Japan. Ray Kroc, founder of McDonald, passed away on January 14, 1984. McDonald’s plan to win is launched in 2003 through execution of initiatives focusing on its people, product, price, place and promotion. At the same year, Premier salads and McGriddles were added to the national menu by first global ad campaign. “I’m lovin’it. In 2008, it introduced its most comprehensive global packaging design in the brand’s history. By the year of 2011, McDonald operated its restaurants in 119 countries with improved nutritional choices to its customers.

Now McDonald’s plan is to win, with its strategic focus on “being better, not just bigger” for delivering even better restaurant experiences to customers and superior value to shareholders (Coulter, 2013).  It’s now clear that McDonald’s strategic efforts with more focused on the key business drivers-product, price, place, promotion and people- are foundations for its future strategic options. Thus, McDonald’s past history shows that it is the largest fast-food company with massive franchising strategies to expand its 33,000 outlets all over the world.

It seems that the company changed lots in its strategies to improve its profitability by being more efficient through economies of scales, labor saving equipments and streamline processes. As a result, it greatly helped the company to make a positive effect, and sales grew steadily from most of 2003 to early 2004. At the same time, Jim Cantalupo died due to heart attack and Chalie Bell became the CEO of the company but unfortunately he also died  after one month of being CEO due to cancel. After that, Jim Skinner, the company’s vice chairperson became the CEO who made the foundation to win the market strategically and now the company is doing far better than ever before.  Along with all these changes they also had taken some of challenging decisions in different times of journey to make a company as the best fast-food in the industry.

The Seven Principles of McDonald’s Customer-centric plan to win the future:

It is true that Customer-centric Plans play a vital role to win the future because these principles are derived by a thorough research about their needs, changing tastes and preferences and the like. The seven principles of customer-centric pan followed by McDonald are outlined as follows:

1) Develop Customer Service Strategy: It is true that for any company to succeed, they must follow the customer-oriented strategies to win their hearts. McDonald understood its customers’ needs, and respond as quickly as possible with appropriate product strategies. For instance, McDonald knew their customers’ demands and changes the food menu to fit their needs perfectly. As a result, the company is growing and becoming more successful than ever before.

2) Generate broad-based growth in business: It is true that when McDonald started to increase its businesses all over the US market then it realized that it had to go global for expanding its business through franchises. Furthermore, their franchises reached 115 countries around the world and now they are growing more rapidly than ever before

3) Retake the lead in marketing: The Company was consistently focusing on 5 P’s of Marketing: Products, Price, Place, Promotion, and its people so that they could reconnect the customers by creating a buzz and global marketing. It always strived to become a global leader in the field of marketing by creating a global message in advertising, packaging and promotion.

4) Stay sharply focused on the here and now: McDonald equally focused on its goal to stay here and now for understanding its core customer needs and act accordingly. It has to change its day-to-day’s operational structure to stay focused doing the things with optimal efficiency and productivity (Coulter, 2013).

5) Run daily operations with maximum efficiency and productivity: McDonald strongly believes that it should be operated with a view of excellence service towards its customers. For this, the Company focused on its detail operations, redesigning of restaurant format, and energy efficiency & efficient supply chain to improve its overall productivity and effectiveness.

6) Taking care of its people and processes: McDonald always focused on hiring the right people and it was committed to serve its people at the best level. Its belief is that “only satisfied people can satisfy our customers” (Coulter, 2013). In addition, it is highly motivated to train its employees to provide quality service, value and cleanliness to attract and retain its customers.

7) Develop innovations that can sustain and provide profitable growth over long haul: McDonald relentlessly refocused its efforts to be an innovator in the field of fast-food industry so that it strived to feature a variety of products options in terms of value, premium and wholesome products for delivering the right products at the right price to right customers.

Summary, Conclusion & Recommendations

     Having considered these seven principles of McDonald’s customer-centric plans to win the future, hence, it is known that aspiring entrepreneurs would obviously learn many things that ultimately drive them to succeed in their businesses. It is undeniable fact that when aspiring entrepreneurs realize the importance of these 7 principles then there is high possibility that they can translate their dreams into meaningful actions or results by adopting these as a winning strategy for all stakeholders. Not only that much, it helps aspiring entrepreneurs by providing insightful guidelines or a road-map to understand the market needs and preferences so they can attract new customers and retain existing customers in their product lines that ultimately lead them to be successful ones in the future.  Some of the important recommendations are:

·         McDonald has been doing an impressive progress with the help of 7 principles of customer-centric plan. However, along with these principles, it should also include other important stakeholders such as suppliers, competitors, shareholders, employees in formulating, implementing and controlling the strategic plans.

·         McDonald continuously focus on its R&D to come up with new changes in products, processes and services so that it can make new innovations derived from ever-changing customers’ needs, and satisfy them at the best level than its competitors do.

References

Coulter, M. (2013). Strategic Management in Action (6 ed.). New Jersey, USA: Pearson Education, Inc.

Pearce II, J.A.,& Robinson, R.B. (2014(14th Edition)). Strategic Management: Competing for Domestic and International planning. New York: McGraw-Hill Irwin.

(n.d.) Retrieved from http://business-reporter.co.uk/2015/05/05/mcdonalds-ceo-promises-more-customer-centric-approach/

(n.d.) Retrieved from http://www.aboutmcdonalds.com/content/mcd/our_company/mcdonalds-history.html