Executive Summary
At the beginning of XXI century leading Japanese electronics manufacturer Sony Corporation faced operational and financial stagnation. Reported losses were huge even for such a big conglomerate as Sony, net income in 1999 fell to 121.83$ billion from 179$ billion in 1998 and following decrease continued till record 16.75$ billion in 2001. Shareholders worried as the stock price was falling down even though top management made some structural changes: assets were sold, work force was reduced by 17,000. Sony had the only choice to do some reformations in structure, strategy and innovative products because it was losing the war to its competitors in the market. Therefore, “Transformation 60” was launched as a restructuring plan for further 3 years. However, issues were bigger than Sony predicted, neither of goals were achieved. Moreover, restructure planned to create divisionalized companies but instead just cut the connection inside. Planned convergence seemed to be leading to divergence while competitors were further developing power in the market. All the considered efforts to achieve 10% operational margin were ruined, while investors became impatient and pressured CEO. This dissatisfaction and fail of reformation led to resign of current CEO who was replaced by Welsh-born Howard Stringer, whose fame came from Hollywood where his restructuring plan resurrected movie market of Sony. Stringer stuck to its well-known policy of job cutting and replacement of executives along with integrating new management structure of centralized-decision making to avoid further progress of “silo” problem and reestablish lost connection between divisions. Furthermore, Stringer had to create further path for the company as it was no...
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...ng conditions for other companies.
Appendices
Appendix 1
Strength:
-supply of own resources for manufacturing products
-strong and well-known over history brand name
-divisionalized structure to deal with different scope productions Weaknesses:
-lack of vision and motivation
-ignore of innovations and usage of altered technologies
-non-synchronized divisions which is known as “silo” problem, lack of communication
Opportunities:
-newly chosen CEO and his strategy
-supply of all resources to meet demand
-integration of centralized decision making
-possibility to be more dynamic due to new strategy and structure Threats:
-focusing on movie and music business, which can lead to losses due to piracy
-lack of vision leads to blurred future and strategy
-still non-dynamic management with late decisions
-non-synchronized divisions may lead to non-controlling circumstances
When hard-nosed Harold Geneen drove the growth of ITT during its heyday in the 1960s and '70s, he had a blunt management philosophy: "In business, words are words, explanations are explanations, promises are promises, but only performance is reality." In 2001, when Jim Kilts arrived at Gillette as the first outsider to run the Boston-based company in over 70 years, he found a business with great brands that were losing market share. The company's acquisitions of Duracell and Braun were not delivering, sales and earnings were flat, and the company had missed its earnings estimates for 15 straight quarters. The stock had plummeted, and Wall Street had lost patience. Yet, two-thirds of the top managers were receiving top ratings.
Leading Change was named the top management book of the year by Management General. There are three major sections in this book. The first section is ¡§the change of problem and its solution¡¨ ; which discusses why firms fail. The second one is ¡§the eight-stage process¡¨ that deals with methods of performing changes. Lastly, ¡§implications for the twenty-first century¡¨ is discussed as the conclusion. The eight stages of process are as followed: (1) Establishing a sense of urgency. (2) Creating the guiding coalition. (3) Developing a vision and a strategy. (4) Communicating the change of vision. (5) Empowering employees for broad-based action. (6) Generating short-term wins. (7) Consolidating gains and producing more changes. (8) Anchoring new approaches in the culture.
This paper will compare and contrast two CEOs that led technology companies through difficult times. Michael Dell CEO and founder of Dell Computers and Andy Grove former CEO and cofounder of Intel each provided quality leadership as their companies faced challenges in the fast-paced computer technology industry. This paper will introduce each man and describe their contributions to their company and the field of management, resistance they encountered, similarities in their professional lives and how they differed. The information about these two success CEOs comes from Jeffrey Krames (2003) book What the Best CEOs Know: 7 Exceptional Leaders and Their Lessons for Transforming Any Business.
However, during the 1990s, Philips and Matsushita both faced major challenges to sustain their position in the market. Changing profile of the industry and globalization forces made Philips and Matsushita’s organizational models and competitive advantages obsolete, and brought up the need for drastic actions. At the brink of a new century, the battle of two giants unraveled with CEOs from both sides implementing another round of strategic initiatives and restructurings. The pressure put on new CEOs was enormous – wrong st...
...strategy when the initial downsizing failed to take them out of the red or gain back lost market share.
Change strategies are part of every organization’s design. In order for an organization to have success with implementing persistent change all or the majority of institutionalization factors outlined must be present. The most compelling aspect of Hewlett-Packard’s interventions was emphasis on targeting the level of change at both the organization and department level. Finally, the aggressive structural changes Hewlett-Packard initiated during the course of its existence reflects the strategic planning and risk associated with sustaining a competitive advantage in the highly volatile information technology industry.
In 1984, Michael Dell invested $1,000 in start-up capital to register his business as Dell Computer Corporation, which was known as PC's Limited. The company becomes the first in the industry to sell directly to end-users by passing the dominant system of using computers resellers to sell mass-produced computers. Dell Computer also pioneers the industry first thirty-day money back guarantee. It became the cornerstone of Dell's commitment to expand its service offerings, superior customer satisfaction, and the industries first on site service program. It also established its first international subsidiary in the United Kingdom, and raised $30 million in its initial public offering.
This paper will explore how the company is fairing under the leadership of its current CEO, Andrea Jung. There are two opposing views regarding the company's current and future success. One group feels that the firm has a promising future with Jung at the helm while the other group does not. This paper will analyze the pros and cons uncovered by each team member and discuss which view prevailed in the debate and why.
Apple, Inc is a well known name in the computer technology world; Apple, Inc leads the computer industry in innovation thanks to the award winning desktop and notebook computer known as OS X operating system (Yoffie & Slind, 2008). This paper will focus on Apple Inc., strategic management and why is it critical to the success of the organization in meeting its goals and mission. It is therefore important to define strategic management, according to Certo, Peter & Ottensmeyer, (2005), strategic management is a continuous process that directs an organization to be appropriately suited to its internal and external environment. Strategic management benefits organizations by providing personnel, capital, helps to set standards and most importantly activates people. For an organization to have a successful strategic management plan, the mangers must learn to think strategically and have the ability to evaluate their environment and develop new ideas. Steve Jobs one of the founding fathers of Apple Inc used strategic planning to his advantage by making Apple’s mission a simple one- bringing easy to use computers to the general market, revolutionizing the computer market.
Hamel introduces the topic of revolutionary strategy by explaining the differences between contemporary strategy and revolutionary strategy. Contemporary strategy in his opinion coincides with the “Age of Progress”. The Age of Progress tries to improve current processes and production techniques and attempts to squeeze every last penny from the same strategy that has always been used at a given company. In Hamel’s opinion, this will not work in his “Age of Revolution”. The revolutionary strategy will try to turn an industry upside down. He pounds home his point by illustrating the differences between companies that still try to improve and companies that revolutionize an industry, by stating the differences in the new wealth that revolutionaries create for their stockholders. At first, I felt that he would only be describing internet companies, but he pointed out examples such as Midwest Airlines , who has a higher income percent than the rest of the industry. He talked about companies such as the Body Shop, Virgin-Direct, Dell, Sony and IBM. Hamel shows how even stodgy companies (IBM and Sony) can become revolutionaries.
Competitive strategy is the approach that an organisation takes in order to gain advantage over its competitors. According to Porter, there are two major sources of competitive advantages: costs and differentiation. Cost-based competitive advantage involves reducing production costs so that an organisation can earn higher profit margin or offer products at lower price compared to competitors. Differentiation-based competitive advantage involves offering unique properties that are not offered by competitors’ products. Differentiation allows an organisation to charge a premium for their products because they offer additional benefits to buyers.
Dell Computer have recently announced changes to their business strategy and supporting supply chain. They will no longer focus on a made to order direct sales model for their personal computers. Nor will they continue to refine their renowned supply chain model that supported their sales model. Instead, they will be looking to produce personal computers with fixed configurations at lower prices. This essay looks at why Dell have changed their strategy, and then considers the customer value proposition of the new strategy, as well as lessons that other organisations can learn from the Dell experience.
For these outcomes, the team has chosen three possible options for alternatives (1) recall, (2) no recall or (3) delay of release. As for the aforementioned list, the group examined there values alongside the fixtures of corporate social responsibility and the consumer sovereignty test. The team analyzed the alternatives with the former under the following four criteria; economic, legal; ethical, lastly philanthropic responsibilities. For the latter concept, the following criteria was utilized, consumer capability, information and choice.
The article raises the issue of revenue growth stalls that affect even the most successful companies. The article focuses on four major causes of the crisis. The first cause is the premium-position captivity that is”the inability of a firm to respond effectively to new, low-cost competitive challenge or to a significant shift in customer valuation of product features” (p.54). The second reason is the innovation management breakdown that is”some chronic problem in managing the internal business process for updating existing product and services and creating new one” (p.56). Third reason is the premature core abandonment that means “the failure to fully exploit growth opportunities in the existing core business” and “acquisitions of growth initiatives in areas relatively distant from existing customers, products, and channels”(p.56). Finally, the fourth cause is the talent bench shortfall that is “a lack of leaders and staff with the skills and capabilities required for strategy execution” (p.58). Authors emphasize that these causes are mainly within management control since they result from “a choice about strategy or organizational design” (p.54).
Strategic Planning results in a written document that serves as a blueprint to guide the organization towards its future goals, but far more important than the strategic plan document, is the strategic planning process itself.