HI6006-Competitive Strategy & Patagonia Case Study – Management Assignment Help

Assignment Task

Task 

Purpose:
This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit. Any external resources used in your answers must be correctly cited in-text and listed at the end of the respective answer.     

Question 1    
With reference to the Patagonia case study, explain how a company’s success can be guided by its Mission and Values.

The Case
Patagonia, Inc., is an American outdoor clothing and gear company that clearly “walks the talk” with respect to its mission and values. While its mission is relatively vague about the types of products Patagonia offers, it clearly states the foundational ‘how’ and ‘why’ of the company. 

PATAGONIA’S MISSION STATEMENT – Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. 

PATAGONIA’S CORE VALUES Quality: Pursuit of ever-greater quality in everything we do. Integrity: Relationships built on integrity and respect. Environmentalism serves as a catalyst for personal and corporate action. Not Bound by Convention: Our success—and much of the fun—lies in developing innovative ways to do things.

The four core values individually reinforce the missionin distinct ways, charting a defined path for employees to follow. At the same time, each value is reliant on the others for maximum effect. The values’ combined impact on internal operations and public perception has made Patagonia a strong leader in the outdoor gear world. While many companies espouse the pursuit of quality as part of their strategy, at Patagonia quality must come through honorable practices or not at all. Routinely, the company opts for more expensive materials and labor to maintain internal consistency with the mission. Patagonia learned early on that it could not make good products in bad factories, so it holds its manufacturers accountable through a variety of auditing partnerships and alliances. In this way, the company maintains relationships built on integrity and respect. In addition to keeping faith with those who make its products, Patagonia relentlessly pursues integrity in sourcing production inputs. Central to its environmental mission and core values, it targets for use sustainable and recyclable materials, ethically pro-cured. Demonstrating leadership in environmentalism, Patagonia established foundations to support ecological causes, even defying convention by giving 1 percent of profits to conservation causes. These are but a few examples of the ways in which Patagonia’s core values fortify each other and support the mission. For Patagonia, quality would not be possible without integrity, unflinching environmentalism, and the company’s unconventional approach. Since its founding in 1973 by rock climber Yvon Chouinard, Patagonia has remained remarkably consistent to the spirit of these values. This has endeared the company to legions of loyal customers while leading other businesses in protecting the environment. More than an apparel and gear company, Patagonia inspires everyone it touches to do their best for the planet and each other, in line with its mission and core values.

Question 2    
Apply the VRIO model to the case of Amazon to give an account of the ‘uniqueness drivers’ contributing to their success.

The Case
The volume-based and reputational benefits of Amazon’s early entry into online retailing had delivered a first-mover advantage, but between 2000 and 2013. Bezos undertook a series of additional strategic initiatives to solidify the company’s number-one ranking in the industry. Bezos undertook a massive building program in the late-1990s that added five new warehouses and fulfillment centres at a total cost of $300 million. The additional warehouse capacity was added years before it was needed, but Bezos wanted to move preemptively against potential rivals and ensure that, as demand continued to grow, the company could continue to offer its customers the best selection, the lowest prices, and the cheapest and most convenient delivery. The company also expanded its product line to include sporting goods, tools, toys, grocery items, electronics, and digital music downloads, giving it another means of maintaining its experience and scale-based advantages. 2 Minimization of operational costs through the use of advanced computing and networking technologies for maximum operational efficiency lead to minimized cost. Amazon.com’s 2013 revenues of $74.5 billion not only made it the world’s leading Internet retailer but made itlarger than its 12 biggest competitors combined. 

The learning curve in Internet retailing was not an entirely straightforward process for Amazon.com. Bezos commented in a Fortune article profiling the company, “We were investors in every bankrupt, 1999- vintage e-commerce startup. Pets.com, living.com, kozmo.com. We invested in a lot of high-profile flameouts.” He went on to specify that although the ventures were a “waste of money,” they “didn’t take us off our own mission.” Bezos also suggested that gaining advantage as a first mover through the use of technology and skilled human resources as well as serving customers through website and apps that does not require the use of ‘brick and mortar’ and a mindset of ‘taking a million tiny steps—and learning quickly from your missteps’. Jeff Bezos stated in 2020 “to do well in business, a company needs to be both robust and nimble. To be nimble as a big company, you need to make decisions quickly, take risks, and be ready to fail – know the difference between experimental failure, which is good and operational failure, which is not. To create – and maintain – an edge you need innovative people and you need to empower them. 

Question 3    
Using the BCG Matrix, explain how Whirlpool Corporation’s diversification strategies are applied.

The Case
As the multinational company, Whirlpool Corporation has its technology and manufacturing research centres in 70 countries across the globe. Products include washing machines, dryers, dishwashers, refrigerator, freezers, cookers and ovens, range hood, microwave, ice makers, trash compactors and water filters. Its primary objective is to serve the consumers with best technology for making their life easier and comfortable. Its brands include Whirlpool, KitchenAid, Maytag, Consul, Brastemp,Amana, Bauknecht, JennAir, and Indesit. The company operates through the following segments: North America; Europe, Middle East & Africa; Latin America; and Asia.

Whirlpool was founded by Emory Upton, Fred Upton, and Louis C. Upton in 1898 and is headquartered in Benton Harbor, Michigan, United States. It is also listed in the Fortune 500, as it earns annual revenue of around $18.4 billion. The company employs over 70,000 people.

Top management at Whirlpool Corporation (with 59 manufacturing and technology centres around the world and sales in some 170 countries totaling $19 billion in 2013) has a vision of Whirlpool appliances in “Every Home . . . Everywhere with Pride, Passion, and Performance.” One of management’s chief objectives in pursuing this vision is to build unmatched customer loyalty to the Whirlpool brand. Whirlpool’s strategy to win the hearts and minds of appliance buyers the world over has been top reduce and market appliances with top-notch quality and innovative features that users will find appealing. In addition, Whirlpool’s strategy has been to offer a wide selection of models (recognizing that buyer tastes and needs differ) and to strive for low-cost production efficiency, thereby enabling Whirlpool to price its products very competitively. Executing this strategy at Whirlpool’s operations in North America (where it is the market leader), Latin America (where it is also the market leader), Europe (where it ranks third), and Asia (where it is number one in India and has a foothold with huge growth opportunities elsewhere) has involved a strong focus on continuous improvement, lean manufacturing capabilities, and operating excellence. 

Question 4   
Using the Four Seasons case, explain how the term ‘Think global; act local’ supports a transnational strategy.

The Case
Four Seasons Hotels is a Toronto, Canada–based manager of luxury hotel properties. With 92 properties located in many of the world’s most popular tourist destinations and business centres, Four Seasons commands a following of many of the world’s most discerning travelers. In contrast to its key competitor, Ritz-Carlton, which strives to create one uniform experience globally, Four Seasons Hotels has gained marketshare by deftly combining local architectural and cultural experiences with globally consistent luxury service. When moving into a new market, Four Seasons always seeks out a local capital partner. The understanding of local custom and business relationships this financier brings is critical to the process of developing a new Four Seasons hotel. Four Seasons also insists on hiring a local architect and design consultant for each property, as opposed to using architects or designers it’s worked with in other locations. While this can be a challenge, particularly in emerging markets, Four Seasons has found it is worth it in the long run to have a truly local team. 

The specific layout and programming of each hotel is also unique. For instance, when Four Seasons opened its hotel in Mumbai, India, it prioritized space for large banquet halls to target the Indian wedding market. In India, weddings often draw guests numbering in the thousands. When moving into the Middle East, Four Seasons designed its hotels with separate prayer rooms for men and women. In Bali, where destination weddings are common, the hotel employs a ‘weather shaman’ who, for some guests, provides reassurance that the weather will cooperate for their special day. 

In all cases, the objective is to provide a truly local experience. When staffing its hotels, Four Seasons seeks to strike a fine balance between employing locals who have an innate understanding of the local culture alongside expatriate staff or “culture carriers” who understand the DNA of Four Seasons. It also uses global systems to track customer preferences and employs globally consistent service standards. Four Seasons claims that its guests experience the same high level of service globally but that no two experiences are the same. While it is much more expensive and time-consuming to design unique architectural and programming experiences, doing so is a strategic tradeoff Four Seasons has made to achieve the local experience demanded by its high-level clientele. Likewise, it has recognized that maintaining globally consistent operation processes and service standards is important too. Four Seasons has struck the right balance between thinking globally and acting locally—the marker of a truly transnational strategy. As a result, the company has been rewarded with an international reputation for superior service and a leading market share in the luxury hospitality segment.

Question 5    
Your CEO has requested that you lead a cross-functinal management team with the aim of recommending 5 key strategic initiatives to be implemented concurrently over the next five years. He requests you outline the exact strategy models you will utilise and the sequence in which you will use them and how they will be integrated to converge upon 2 exploit-type strategies, 1 conquer, 1 ‘shine-up’ and 1 avoid. Write a comprehensive memo to the CEO outlining each of the models you will apply and how you will manage the strategy development process.

Question 6    
With reference to the Kraft Foods case, explain how Irene Rosenfeld applied the principles of Strategic Leadership in restructuring the company to ensure that North American Grocery and Global Snacks would benefit from focusing on their respective ‘drivers of success’.

The Case
In 2012, the 90 year old Kraft Foods moved to improve its long-term performance by restructuring the corporation—the latest move by CEO Irene Rosenfeld, who was brought in to turn around the company’s performance. In addition to trimming operations, the restructuring plan called for spinning off the North American grocery unit that included Kraft Macaroni and Cheese, Oscar Meyer, and other non snack brands from the $32 billion fast-growing global snacks business that included Oreo and Cadbury (the British confectionary acquired in 2010). 

While the grocery business would retain the name Kraft, the star of this strategic separation was the core snack business, renamed Mondelez. With this radical new operational structure in place, Kraft hoped to improve its ability to focus on new opportunities and pursue profitable growth. Managing these two large and very different businesses jointly had made it difficult for Kraft to act nimbly and adapt to changing market conditions. It also inhibited the company from executing new strategies free from significant portfolio-wide considerations. In announcing her intention to split the company in September 2011, CEO Irene Rosenfeld said, “Simply put, we have now reached a point where North American Grocery and Global Snacks will each benefit from standing on its own and focusing on its unique drivers for success.” She noted that as separate businesses, “each will have the leadership, resources, and mandate to realize its full potential.” As part of the restructuring effort, Rosenfeld reduced the number of management centres and sold off some underperforming brands. 

More recently, the new North American grocery business Kraft Foods Group has undertaken further restructuring to stream-line its organizational structure and brand identity. Although in refashioning the company, Rosenfeld sacrificed some of the operational benefits the company enjoyed as a single entity, managers and investors have already begun to see some of the positive effects of appropriately scaled focus.