Strategic Management in a Global Environment
1. Overview The Group Project (GP)1 involves students making operational and strategic decisions. Students will act as a team of top managers when making these decisions. The strategy project is an integral part of a strategic management course that is offered in Summer Term to the postgraduate students as part of their studies. This project has proved to be one of the best experiential learning experiences for the COBA students, where they should develop strategic management skills. During the project, students should carry out a rigorous analysis of a real-life company. The GP is the final deliverable of the MGT523 Strategic Management in a Global Environment Course and allows you to immediately apply everything you have learned in the classroom. It is a comprehensive and demanding exercise that is carried out over the summer term. The goal of the project is to address and analyse an issue of particular strategic importance of a company from an executive management viewpoint. 2. Learning Objectives The most important learning objectives of the group project are as follows: To give students an opportunity to apply concepts and theories of strategic management in “real world”. To introduce students to practical matters of strategy formulation and implementation. To give students an opportunity to establish concrete relationships between the concepts and methods studied during the program and current real-life strategic and managerial issues. To expose students to the complexity, serendipity and artistic side of strategic management and competition. To help students to analyze, evaluate and create strategies (including green strategies). To help students to develop both written and oral skills when presenting the results of their work. 1 A Capstone Project is an assignment designed specifically to apply and showcase the skills you learned in the course. Page 4 of 13 3. Proposed Assignment Strategy PHASE 1: CHOOSE ONE CASE COMPANY 1. Choose one company of the list below: According to Forbes Middle East (https://www.forbesmiddleeast.com/list/top-50-private-companies-in-the-uae) very few countries across the globe can boast of the achievements that the UAE has to its credit in such a short span. The Gulf Arab country is a preferred regional business hub, with over 90% of the companies that feature on the Forbes Global 2000 list basing their regional headquarters in the UAE. With infrastructure rivaling those from some of the most developed economies, it is also a hub for regional trade. With its first UAE 100 ranking, Forbes Middle East recognizes 100 companies that have played a key role in making the country the thriving business center that it is today. In this issue, Forbes ranked 50 private companies that are having an impact in the region. Private businesses have contributed significantly to the economies, with reputed local families investing their time, capital and expertise to shape the country into what it is today. Methodology As financial information is not available for private companies, Forbes ranked the companies on publicly available information that includes but is not limited to the company websites, official social media platforms and other studies and documents. Forbes ranked the companies on the basis of the number of employees in the company, number of countries that they operate in, the type of businesses as well as the number of sectors that they operate in and the age of the company and editorial points. Each criterion was assigned weights to evaluate the final score. The list below presents the top 50 private companies in the UAE (https://www.forbesmiddleeast.com/list/top-50-private-companies-in-the-uae). The List: Top 50 private companies in the UAE Rank Name Sector Date of Establishment 1 Majid Al Futtaim Diversified 1992 2 Al Ghurair Group Diversified 1960 3 Al-Futtaim Group Diversified 1930 4 Lulu Group International Retail 1966 5 Landmark Group Retail 1973 6 Al Ghurair Group Diversified 1960 7 Saeed & Mohammed Al Naboodah Group Diversified 1958 8 Juma Al Majid Group Diversified 1950 9 S.S. Lootah Group Diversified 1956 Page 5 of 13 10 Khalifa Juma Al Nabooda Group Diversified 1963 11 Al Habtoor Group Diversified 1970 12 BRS Ventures Investments 2016 13 A. A. Al Moosa Enterprises Real Estate 1971 14 A.W. Rostamani Group Diversified 1954 15 GEMS Education Education 2000 16 Al Jaber Group Diversified 1970 17 Al Tayer Group Diversified 1979 18 Sharaf Group Diversified 1975 19 Al Rostamani Group Diversified 1957 20 KBBO Group Investments 2004 21 Al Ahli Holding Group Diversified 1977 22 Albatha Group Diversified 1950 23 Albwardy Investment Diversified 1970 24 Al Falah Holding Diversified 1992 25 Delma Emirates Group Diversified 2008 26 Al Fahim Group Diversified 1958 27 Ghassan Aboud Group Diversified 1994 28 AL Nasser Holdings Diversified 1977 29 Thumbay Group Diversified 1998 30 Easa Saleh Al Gurg Group Diversified 1960 31 Galadari Brothers Diversified 1960 32 Ghobash Diversified 1981 33 Ali & Sons Diversified 1979 34 Gargash Corporate Partners Diversified 1958 35 Al Yousuf Group Diversified 1953 36 Al Abbar Group Industrials 1968 37 Al Ghandi Auto Group Automobiles 1968 38 Bin Harmal Group Diversified 1985 39 Al Ansari Exchange Services 1966 40 Al Mazrouei Group Diversified 1974 41 Danube Group Diversified 1993 42 Al Maskari Holdings Diversified 2008 43 Salem Ahmad Almoosa Enterprises Diversified 1975 44 Saleh Bin Lahej Group Diversified 1988 45 Emcor Facilities Management (EFS) Services 1996 46 Al Abbas Group Diversified 1967 47 Almulla Group Diversified 1985 48 Ahmed Seddiqi & Sons Retail 1950 49 Kingston Holdings Industrials 1996 50 Petrochem Middle East Petrochemicals 1995 Page 6 of 13 2. Each group should analyse and present a different company. Based on that, you need to email the name of the company to me – do some information research before you select the company. Sometimes spending 30 minutes doing research will save you a degree. Companies are available on a first-come, first-served basis with NO repeats! 3. After selecting your company, you should visit its web site to get market reports of this company. Secondly, go to article databases such as Infotrac. Emerald, Proquest and etc to find articles on the company. Vast majority of articles will not be usually academic, but practical. Lastly, do some Google search, BBC news and, of course, visit the company’s web site. 4. When writing a company-based report you would usually be expected to concentrate on practical side rather then on theory. Good solution may be for you to give practical analysis – but refer to the theory on the appendix. 5. Also, please remember, that each company has its history, therefore when, for example, suggesting a new strategy for the company – always firstly analyse previous strategies on that organisation, because it is possible, that whatever you suggest may have already been used by the company. PHASE 2: ANALYZING FIRM’S PERFORMANCE AND ISSUES Firm and Industry Performance: Analyze focal firm’s performance against industry average and its key competitors. Has the company done well? Has it done better than industry average? Has it done better than the key competitors? External Analysis: Analyze external environment of the firm over a period covered in the case. How did the industry and its attractiveness evolve? Why so? Identify key external challenges/factors that industry faced over time. How did they affect industry? What has been the nature of rivalry? Internal Analysis: Analyze firm’s internal environment. Identify key challenges facing firm in the past. Why are these key challenges? How did they affect Firm? What are the firm’s key resources/activities/functional expertise? How have these resources/activities/functional expertise affected firm’s relative performance? Critical assessment of Strategy: Critically analyze firm’s strategy and competitive advantage? What has it been? Has it enjoyed competitive enjoyed? Suffered from disadvantaged? Has it been sustainable? Why so? Has it planned strategy implementation well? Has it been doing a good job of evaluation and control? Page 7 of 13 Key lessons learnt from the past: What are the key sources of competitive advantage in this industry? What are the key factors likely to affect industry and firm’s performance in future? PHASE 3: DEFINING THE CURRENT ISSUE(S) AND PROBLEM STATEMENT What are the main strategic issues company is likely to face going forward? The problem statement should be a clear, concise statement of exactly what needs to be addressed. This is not easy to write! Asking your team the following questions may help: What appears to be the problem(s) here? How do I know that this is a problem? Note that by asking this question, you will be helping to differentiate the symptoms of the problem from the problem itself. Example: while declining sales or unhappy employees are a problem to most companies, they are in fact, symptoms of underlying problems which need to address. What are the immediate issues that need to be addressed? This helps to differentiate between issues that can be resolved within the context of the case, and those that are bigger issues that needed to addressed at a another time (preferably by someone else!). Differentiate between importance and urgency for the issues identified. Some issues may appear to be urgent, but upon closer examination are relatively unimportant, while others may be far more important (relative to solving our problem) than urgent. You want to deal with important issues in order of urgency to keep focused on your objective. Important issues are those that have a significant effect on: 1. Profitability, 2. Strategic direction of the company, 3. Source of competitive advantage, 4. Morale of the company’s employees, and/or 5. Customer satisfaction. The problem statement may be framed as a question, e.g.: What should we do? or How can we improve market share? Usually the problem statement has to be re-written several times during the analysis of a case, as you peel back the layers of symptoms. Page 8 of 13 PHASE 4: ANALYZING INFORMATION In analyzing the case data, you are trying to answer the following: 1. Why or how did these issues arise? You are trying to determine cause and effect for the problems identified. You cannot solve a problem that you cannot determine the cause of! It may be helpful to think of the organization in question as consisting of the following components: a. resources, such as materials, equipment, or supplies, and b. people who transform these resources using c. processes, which creates something of greater value. Now, where are the problems being caused within this framework, and why? 2. Who is affected most by this issues? You are trying to identify who are the relevant stakeholders to the situation, and who will be affected by the decisions to be made. 3. What are the constraints and opportunities implicit to this situation? It is very rare that resources are not a constraint, and allocations must be made on the assumption that not enough will be available to please everyone. 4. What do the numbers tell you? You need to take a look at the numbers given in the case study and make a judgment as to their relevance to the problem identified. Not all numbers will be immediately useful or relevant, but you need to be careful not to overlook anything. When deciding to analyze numbers, keep in mind why you are doing it, and what you intend to do with the result. Use common sense and comparisons to industry standards when making judgments as to the meaning of your answers to avoid jumping to conclusions. PHASE 5: GENERATING ALTERNATIVES This section deals with different ways in which the problem can be resolved. Typically, there are many alternatives (the joke is at least three). Being creative at this stage helps. Things to remember at this stage are: 1. Make suitable assumptions: Managers often work with incomplete information by making assumptions about future. Assumptions relate to key external and internal factors. These assumptions are based on historical data and do not represent blanket wishful thinking, however. When you make assumptions, explicitly state them and offer rationale as to why these assumptions make sense. 2. Be realistic! While you might be able to find a dozen alternatives, keep in mind that they should be realistic and fit within the constraints of the situation. Page 9 of 13 3. The alternatives should be mutually exclusive, that is, they cannot happen at the same time. 4. Not making a decision pending further investigation is not an acceptable decision for any case study that you will analyze. A manager can always delay making a decision to gather more information, which is not managing at all! The whole point to this exercise is to learn how to make good decisions, and having imperfect information is normal for most business decisions, not the exception. 5. Doing nothing as in not changing your strategy can be a viable alternative, provided it is the best alternative. You will need to defend this like any other recommendation, based on the facts. 6. Avoid the meat sandwich method of providing only two other clearly undesirable alternatives to make one reasonable alternative look better by comparison. This will be painfully obvious to the reader, and just shows laziness on your part in not being able to come up with more than one decent alternative. 7. Keep in mind that any alternative chosen will need to be implemented at some point, and if serious obstacles exist to successfully doing this, then you are the one who will look bad for suggesting it. Once the alternatives have been identified, a method of evaluating them and selecting the most appropriate one needs to be used to arrive at a decision. PHASE 6: RECOMMENDED STRATEGIES, EVALUATION & CONTROL A very important concept to understand, they answer the question of how you are going to decide which strategy(ies) are the best one to choose. Moreover, how are you going to compete with other companies in the industry? Will you develop a BLS, CLS and/or sustainability/green strategy? To phrase it in a more conceptual way: which resources or capabilities are you going to use to pursue opportunities in the external environment so that you company attains sustained competitive advantage? How are you going to evaluate and control your strategy(ies) (KPIs & NEW Balanced Scorecard) Please go from general to specific. Start with a general strategy (e.g. cost leadership) and then talk about the specific tactics that you will use to implement that strategy (e.g. expanding production to lower unit costs). Page 10 of 13 PHASE 7: CONCLUSION, REFERENCES & APPENDICES Conclusion: The conclusion is intended to help the reader understand why your strategic analysis should matter to them after they have finished reading the report. A conclusion is not merely a summary of the main topics covered or a re-statement of your strategic analysis, but a synthesis of key points. Finish the strategy report with conclusions that support your recommended strategies. References: You should cite all external sources in your text by using APA format. It is a good idea to start your references section at the beginning of the writing process and add to it as you go along. It will be a tedious and time-consuming task if left until you have completed the main body of the text. If you do leave it until the end, the time spent on compiling the reference section is time that would have been better spent on checking and amending your report. All in-text citations should be included in the reference list, and all references should have in-text citations. Important Note: You have to create a fully automatic bibliography list. ONLY a fully automatic bibliography list is acceptable. The references should be in APA Style using Microsoft Word or Mendeley (for more details see attached file). Appendices – Supplementary material at the end of a book, article, document, or other text, usually of an explanatory, statistical, or bibliographic nature. In general, appendices should be kept to the minimum. If they are so important that your reader’s understanding of the points you are making in the text makes their inclusion in the report necessary, then they should be in the main body of the text. If, on the other hand, the material is ‘interesting to know’ rather than ‘essential to know’ then it should be in the appendices. Page 11 of 13 4. Proposed Structure of the Written Report 1. Title page 1.1. Company name 1.2. Class code and class name 1.3. Full names and student ids of group members 1.4. Instructor name 1.5. Semester and year 2. Automatic table of contents 3. Executive summary 3.1. Summarize your entire report in one page or less 4. Analyzing firm’s past performance and issues 4.1. Firm and industry performance 4.2. External analysis 4.3. Internal analysis 4.4. Critical assessment of strategy 4.5. Key lessons learnt from the past 5. Identifying current issues 5.1. Phase 3: defining the current issue(s) and problem statement 5.2. Phase 4: analyzing information 5.3. Phase 5: generating alternatives 6. Recommended Strategies, Evaluation & Control 6.1. Phase 6: recommended strategies (BLS, CLS or Green Strategies), key decision-criteria, evaluation and control (KPIs, NEW Balanced Scorecard) 7. Conclusion 8. Bibliography-References 9. Appendices Page 12 of 13 5. Notes on Written Reports Always remember that you will be judged by the quality of your work, which includes your written work such as case study reports. Sloppy, dis-organized, poor quality work will say more about you than you probably want said! To ensure the quality of your written work, keep the following in mind when writing your report: 1. Proof-read your work! Not just on the screen while you write it, but the hard copy after it is printed. Fix the errors before submitting. 2. Use spell checker to eliminate spelling errors 3. Use grammar checking to avoid common grammatical errors such as run on sentences. 4. Note that restating of case facts is not included in the format of the case report, nor is it considered part of analysis. Anyone reading your report will be familiar with the case, and you need only to mention facts that are relevant to (and support) your analysis or recommendation as you need them. 5. You are highly encouraged to use tools, framework and theories covered in this course to conduct analysis and synthesis and develop arguments. Clearly identifying and correctly matching theoretical basis while building arguments will help in securing good grades. 6. If you are going to include exhibits (particularly numbers) in your report, you will need to refer to them within the body of your report, not just tack them on at the end! This reference should be in the form of supporting conclusions that you are making in your analysis. The reader should not have to guess why particular exhibits have been included, nor what they mean. If you do not plan to refer to them, then leave them out. 7. Write in a formal manner suitable for scholarly work, rather than a letter to a friend. 8. Common sense and logical thinking can do wonders for your evaluation! 9. You should expect that the computer lab’s printer will not be functioning in the twelve hours prior to your deadline for submission. Plan for it! 10. Proof-read your work! Have someone else read it too! (particularly if English is not your first language) This second pair of eyes will give you an objective opinion of how well your report holds together. ALL works MUST be TYPED and hard copy MUST be professionally presented – NO exceptions. Page 13 of 13 6. My Grading Criteria There’s no such thing as “the correct answer” to a case study question. Several answers. Generally, the instructors’ use the following criteria when assigning a grade to a response: 1. The overall quality of a response’s content a. Does your response actually address a question? b. How effective is your solution? c. How original is your response? d. Does your response contain sufficient details? 2. The degree to which a response shows understanding of concepts, frameworks and theories covered in the course a. Does your response actually use a concept, framework, or theory covered in this class? b. Does your response get into specifics of a concept, framework, or theory? 3. The degree to which a response is logically coherent a. Is there a line of thought that flows through your response? b. Are you claims supported/illustrated with facts, examples, or illustrations? c. Is your response well-structured?