UNIVERSIDAD AUTÓNOMA DE NUEVO LEÓN
Facultad de Contaduría Pública y Administración
International Business Program
FUNDAMENTALS OF MANAGEMENT
Dr. Jorge G. Treviño Montemayor
“Evidence 1”
Group 1Ci
2079307 Martínez Galván, Andrea
2081597 Martínez Loera, Pedro Iván
2079329 Jaramillo Ramos, Larissa Fernanda
1970353 Medina Balderas, Marcos Isaí
Cd. Universitaria de Nuevo León, October 10, 2020
1
INDEX
INTRODUCTION 3
RELATIONSHIP BETWEEN AN ORGANIZATION AND ITS ENVIRONMENTS. 4
AMAZON’S COMPETITIVE ADVANTAGES AND DISADVANTAGES ESSAY 6
MCDONALDS VS BURGER KING COMPARATIVE ESSAY 8
PRESENTATION 10
KEY TERMS 11
CONCLUSIONS 18
REFERENCES 19
2
INTRODUCTION
Business in today's world is increasingly diverse, that's why it is very important to analyze the
competitive advantages and disadvantages we could face in the future. Competitive advantage refers to
all the attributes that allows a company to produce better products or services than its competitors.
Consequently, competitive advantage represents the factors that stop a company from generating income
above its competitors.
Amazon, Inc. is a multinational technology company, and it is the world's largest online retailer.
In this work, there is an explanation of how Amazon, Inc. stays ahead of its competition through factors
such as quality, speed, innovation, service, cost competitiveness and sustainability. In addition, the work
includes a SWOT (strengths, weaknesses, opportunities, and threats) analysis that the company has had
to experience through its success.
On the other hand, the battle between McDonald’s Corporation and Burger King Corporation is
one of the great rivalries of American business. Each company has influenced the other through its size
and global reach. They are constantly innovating its products and pushing its international presence. We
will analyze the advantages that each company represents over the other in order to give a real example
to the elements of competitive advantage and disadvantage.
.
At last, the work includes a glossary of the key terms seen during the period in order to find their
application in the analyzed cases. We hope to understand how the organization is influenced by its
competitive environment. Finally, we are expecting to be more prepared for the future of our professional
life practicing, investigating and comparing data of real life.
3
RELATIONSHIP BETWEEN AN ORGANIZATION AND ITS ENVIRONMENTS.
A. Prepare a graphic that represents the relationship among an organization and the administrative
elements in the competitive, general and macro environments.
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5
AMAZON’S COMPETITIVE ADVANTAGES AND DISADVANTAGES ESSAY
B. Select an organization of your choice and using an essay format, mention its competitive advantages,
competitive disadvantages, weaknesses, and strengths (SWOT analysis), as well as the factors that have
led them to obtain and keep those competitive advantages.
Amazon, Inc. is one of the first large companies to sell goods online. Founded in 1994, by Jeff Bezos,
Amazon has become world’s leading online retailer. Originally, the company was supposed to be a
bookstore. However, CEO Jeff Bezos soon realized the plenty of opportunities the business could have,
and then, it started to sell almost everything it’s audience could ask for, from a to z, just as it is shown in
the organization’s logo.
Currently, Amazon is positioned as one of the pioneers in online sales. The strength that its image
has acquired since its inception is just one of the many elements that make the corporation one of the
market favorites. Their customer focus, differentiation, and innovation soon made the company not only
grow, but become the first resource for many consumers. The wide range of its sales grew as the market
it impacted. This in complement with its leadership in costs and its strategies of global expansion and
local focus ensured the success of which could be one of the 500 largest US organizations.
However, not everything has been a bed of roses for this corporation. One of its biggest
weaknesses is its easily imitable business model which has been the cause for competition to arrive.
Another aspect of what Amazon is missing is consumer safety. As its offerings increase it is becoming a
new challenge for Amazon to vetch each product and guarantee the highest level of safety. Another detail
that the corporation has to take importance of is its lack of brick-and-mortar presence, that could lead
other businesses to take advantage over the online retailer. In addition, the organization had to face
several legal charges according to its use of information and its power to diffusion.
The weaknesses that Amazon had to face have been an open door for threats to appear. One
example of this are the few controversies that have caused a dent in the brand’s image. For example,
about consumer security, in 2010 people boycotted Amazon sites when they found that it’s selling the
book “The Pedophile’s Guide to Love & Pleasure: a Child-lover’s Code of Conduct.” a clear evidence of
lack in their ethic and moral control. Furthermore, there is a constant threat about cybercrime that could
affect the network security system of the company. At last, there has been an increase in aggressive
competition that the corporation must deal with, like big retail firms as Walmart and eBay that could
represent tough times for Amazon in the future.
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Although being a global leader in e-commerce hasn’t been easy, there are still a large amount of
opportunities that the organization could work on. As a multinational commerce, Amazon has the power
to penetrate and expand its operations in developing markets. Also, the organization could easily solution
one of its weaknesses by expanding physical stores and can improve competitiveness against big box
retailers and engage customers with the brand. Finally, more acquisitions of e-commerce companies can
increase the company’s market share and reduce the competition level.
Despite all the factors we already discussed, there is no doubt in the success that Amazon has
built. From its customer’s service to its global expansion the company has assured the heart and soul of
lots of people around the world. It’s phenomenal results have ended in an increase of the profit and sales
through years. Amazon expects to keep growing in the current years, forecasting first-quarter sales
between $47.75 billion and $50.75 billion, which would be up between 34% and 42% of the total,
respectively according to the Wall Street Journal.
Amazon is facing what could be its era. Involved into three key businesses (Amazon Marketplace,
Amazon Web Services AWS, and Amazon Prime) the company is penetrating the markets by
accomplishing their necessities. Their highly efficient logistics and distribution systems allow the
corporation to focus on their threats while still generating huge amounts of income. In the end, the
acquisitions that the organization has like Whole Foods, Zappos.com, woot.com, Junglee.com,
IMBD.com, and many others have produced significant revenues and profits for them. Amazon is one of
the perfect examples to describe the competitive environment and how it affects the decisions inside the
corporation, but also, the company is a role model by teaching the long and successful journey it has.
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MCDONALDS VS BURGER KING COMPARATIVE ESSAY
C. Write a comparative essay that describes the organizational strengths of two companies of the same
industry and mention the advantages that they represent over their competitors.
Today many companies have entered the fast food business, however, McDonald's is the pioneer
in the field of this type of restaurants. In 1940 brothers Richard and Maurice McDonald opened a small
hot dog restaurant in downtown San Bernardino. Fourteen years later in Miami, another company
employed a system similar to McDonald's, the company would be called Burger King. This essay
compares the two companies to see which one has the best strengths. The two variables to be analyzed
are internationalization and marketing.
McDonald's is a company with a presence in more than 110 countries but has been characterized
by implementing specific food for certain regions of the world, always looking to meet needs, tastes and
culture. From its culinary adaptations, products such as a Nürnberg have emerged in Germany, in the
Philippines the McSpaghetti and in India the McCurry Pan. In this way it is verified that, to turn a
company into an international business, it must be known and work in the social-cultural environment of
the market.
On the other hand, Burger King also has a presence in about 70 countries around the world, which is not
a bad number, however, many of its market penetrations are based on the experiences of other companies
like McDonald's. When Burger King entered the Indian market, it adjusted similar to what McDonald's
had previously made. Burger King also thinks about its customers and the satisfaction of them, however,
McDonald's is recognized for being the first fast food company to seek internationalization and to
achieve it without any reference, for Burger King it could be a little easier because it already had
visualized what McDonald's had done, however, they failed to have the same number of countries with
the presence of its brand.
Another important area to compare are the marketing strategies employed by the two companies
being compared. McDonald's is a company whose brand is known internationally, even the recognition of
the brand logo (the golden arches) has been compared with the recognition of the Christian cross. The
conclusion was that the McDonald's logo is better known. In addition to the good branding work that has
turned "golden arches" into a symbol that is part of most people's everyday lives, McDonald's has used
other marketing strategies such as “Happy Meal” , the clown Ronald McDonald and putting games for
kids. The implementation of the above strategies means that customers can develop brand loyalty since
they are children, so McDonald's can be part of an endless family tradition.
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Burger King has its marketing aimed at teenagers and young adults. This Miami-founded
company has struggled with branding, a study conducted by Young & Rubicam indicated that Burger
King was a well-known brand, but it was not a beloved brand. These results were alarming to managers,
mainly for Russ Klein. After several breakdowns they decided to bring back the motto "Have it your
way”, but currently they have been changing the motto because they have not worked as they would like.
One of them was "Taste is King" and the most current "Be your way", the latter is based on the
company's first motto, but with an intention of feeling closer to the customer. Burger King also
implemented a character called "The King", an image that was used in advertisements. Branding and
brand identification has been and remains very complex for Burger King, because the idea is not as
romanticized as McDonald's marketing that appeals to the nostalgia of parents who want to remember
their childhood and that their children pass something similar to what they did. As a matter of brand,
Burger King is a well-known brand, but they have not achieved the loyalty and love of their customers.
In conclusion, Burger King is a brand known for its sales and global market penetration, however,
McDonald's is known for its brand, for the loyalty of its customers, for being one of the main exponents
of fast food and for being the fast food restaurant in more countries around the world. McDonald's great
strengths are based on innovation, due to being one of the first to employ the fast service method;
logistics, because its franchises are mostly distributed in a specific way and marketing is also a very
important part of the company, because it is an important factor in achieving customer loyalty. On the
other hand, Burger King has always had the competition of McDonald's, it has been difficult for him to
fall in love with his customers, they have changed their motto on multiple occasions, for the same
problem of not getting stronger with a model. They remain two of the largest fast food companies,
however, there is a noticeable difference between the strength of each company.
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PRESENTATION
D. Executive presentation related to administrative decisions in a practical case.
Netflix, Inc. is an entertainment company that operates all around the world. Since its foundation
in 1997, Netflix has offered to its customers the distribution of media (TV series, movies, documentaries
and others) through an online platform or live streaming video-on-demand service. In this presentation
we analyze one administrative problem that the company must face. Also, there are few solutions to this
problem mentioned in order to preserve the success of the company.
This can be found in the attached document.
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KEY TERMS
E. Key terms from chapters 1, 2, 3, 4 and 5 of the textbook.
Chapter 1
Conceptual and decision skills: Skills pertaining to abilities that help to identify and resolve problems for
the benefit of the organization and its members.
Controlling: The management function of monitoring performance and making needed changes.
Cost competitiveness: Keeping costs low to achieve profits and be able to offer prices that are attractive
to consumers.
Emotional intelligence skills: of understanding yourself, managing yourself, and dealing effectively with
others.
Frontline managers: Lower-level managers who supervise the operational activities of the organization.
Innovation: The introduction of new goods and services; a change in method or technology; a positive,
useful departure from previous ways of doing things.
Interpersonal and communication skills: People skills; the ability to lead, motivate, and communicate
effectively with others.
Knowledge management: Practices aimed at discovering and harnessing an organization’s intellectual
resources.
Leading: The management function that involves the manager’s efforts to stimulate high performance by
employees.
Management: The process of working with people and resources to accomplish organizational goals.
Middle-level managers: Managers located in the middle layers of the organizational hierarchy, reporting
to top-level executives.
Organizing: The management function of assembling and coordinating human, financial, physical,
informational, and other resources needed to achieve goals.
Planning: The management function of systematically making decisions about the goals and activities
that an individual, a group, a work unit, or the overall organization will pursue; see also strategic
planning.
Quality: The excellence of your product (goods or services).
Service: The speed and dependability with which an organization delivers what customers want.
Speed: Fast and timely execution, response, and delivery of products.
Social capital: Goodwill stemming from your social relationships; a competitive advantage in the form of
relationships with other people and the image other people have of you.
Sustainability: Minimizing the use of resources, especially those that are polluting and nonrenewable
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Top-level managers: Senior executives responsible for the overall management and effectiveness of the
organization.
Value: The monetary amount associated with how well a job, task, good, or service meets users’ needs.
Chapter 2
Acquisition: One firm buying another.
Barriers to entry: Conditions that prevent new companies from entering an industry.
Benchmarking: The process of comparing an organization's practices and technologies with those of
other companies.
Buffering: Creating suppliers of excess resources in case of unpredictable needs.
Competitive environment: The immediate environment surrounding a firm; includes suppliers, customers,
rivals, and the like.
Competitive intelligence: Information that helps managers determine how to compete better.
Cooperative strategies: Strategies used by two or more organizations working together to manage the
external environment.
Defenders: Companies that stay within a stable product domain as a strategic maneuver.
Demographics: Measures of various characteristics of the people who make up groups or other social
units.
Diversification: A firm's investment in a different product, business, or geographic area.
Divestiture: A firm selling one or more businesses.
Domain selection: Entering a new market or industry using an existing expertise.
Empowerment: The process of sharing power with employees, thereby enhancing their confidence in
their ability to perform their jobs and their belief that they are influential contributors to the organization.
Environmental scanning: Searching for and sorting through information about the environment.
Environmental uncertainty: When managers do not have enough information about the environment to
understand or predict the future.
External environment: All relevant forces outside a firm’s boundaries, such as competitors, customers,
the government, and the economy.
Final consumer: A customer who purchases products in their finished form.
Flexible: Processes Methods for adapting the technical core to changes in the environment.
Forecasting: Method for predicting how variables will change the future.
Independent strategies: Strategies that an organization acting on its own uses to change some aspect of
its current environment.
Inputs: Goods and services organizations take in and use to create products or services.
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Intermediate consumer: A customer who purchases raw materials or wholesale products before selling
them to final customers.
Macroenvironment: The general environment; includes governments, economic conditions, and other
fundamental factors that generally affect all organizations.
Merger: One or more companies combining with another.
Organizational Climate: The patterns of attitudes and behavior that shape people’s experience of an
organization.
Organization Culture: The set of important assumptions about the organization and its goals and
practices that members of the company shares.
Outputs: The products and services organizations create.
Prospectors: Companies that continuously change the boundaries for their task environments by seeking
new products and markets, diversifying, and merging, or acquiring new enterprises.
Scenario: A narrative that describes a particular set of future conditions.
Smoothing: Leveling normal fluctuations at the boundaries of the environment.
Strategic maneuvering: An organization’s conscious efforts to change the boundaries of its task
environment.
Supply chain management: The management of the network of facilities and people that obtain materials
from outside the organization, transform them into products, and distribute them to customers.
Switching costs: Fixed costs buyers face when they change suppliers.
Chapter 3
Affective conflict: Emotional disagreement directed toward other people.
Bounded rationality: A less-than-perfect form of rationality in which decision makers cannot be perfectly
rational because decisions are complex and complete information is unavailable or cannot be fully
processed.
Brainstorming: A process in which group members generate as many ideas about a problem as they can;
criticism is withheld until all ideas have been proposed.
Certainty: The state that exists when decision makers have accurate and comprehensive information.
Coalitional Model: Model of organizational decision making in which groups with differing preferences
use power and negotiation to influence decisions.
Cognitive conflict: Issue-based differences in perspectives or judgments.
Conflict: Opposing pressures from different sources, occurring on the level of psychological conflict or
conflict between individuals or groups.
Contingency plans: Alternative courses of action that can be implemented based on how the future
unfolds.
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Custom-made solutions: New, creative solutions designed specifically for the problem.
Devil’s Advocate: A person who has the job of criticizing ideas to ensure that their downsides are fully
explored.
Dialectic: A structured debate comparing two conflicting courses of action.
Discounting the future: A bias weighting short-term costs and benefits more heavily than long-term costs
and benefits.
Framing Effects: A decision bias influenced by the way in which a problem or decision alternative is
phrased or presented.
Garbage can model: Model of organizational decision making depicting a chaotic process and seemingly
random decisions.
Goal displacement: A decision-making group loses sight of its original goal and a new, less important
goal emerges.
Groupthink: A phenomenon that occurs in decision making when group members avoid disagreement as
they strive for consensus.
Illusion of Control: People’s belief that they can influence events even when they have no control over
what will happen.
Incremental model: Model of organizational decision making in which major solutions arise through a
series of smaller decisions.
Maximizing: A decision realizing the best possible outcome.
Nonprogrammed decisions: New, novel, complex decisions having no proven answers.
Optimizing: Achieving the best possible balance among several goals.
Programmed decisions: Decisions encountered and made before, having objectively correct answers, and
solvable by using simple rules, policies, or numerical computations.
Ready-made solutions: Ideas that have been seen or tired before.
Risk: The state that exists when the probability of success is less than 100 percent and losses may occur.
Satisficing: Choosing an option that is acceptable, although not necessarily the best or perfect.
Uncertainty: The state that exists when decision makers have insufficient information.
Vigilance: A process in which a decision maker carefully executes all stages of decision making.
Chapter 4
Business strategy: The major actions by which a business competes in a particular industry or market.
Concentration: A strategy employed for an organization that operates a single business and competes in a
single industry.
Concentric diversification: A strategy used to add new businesses that produce related products or are
involved in related markets and activities.
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Conglomerate diversification: A strategy used to add new businesses that produce unrelated products or
are involved in unrelated markets and activities.
Core capability: A unique skill and/or knowledge an organization possesses that gives it an edge over
competitors.
Corporate strategy: The set of businesses, markets, or industries in which an organization competes and
the distribution of resources among those entities.
Differentiation strategy: A strategy an organization uses to build competitive advantage by being unique
in its industry or market segment along one or more dimensions.
Functional strategies: Strategies implemented by each functional area of the organization to support the
organization’s business strategy
Goal: A target or end that management desires to reach.
Low-cost strategy: A strategy an organization uses to build competitive advantage by being efficient and
offering a standard, no-frills product.
Mission: An organization’s basic purpose and scope of operations.
Operational planning: The process of identifying the specific procedures and processes required at lower
levels of the organization.
Plans: The actions or means managers intend to use to achieve organizational goals.
Resources: Inputs to a system that can enhance performance.
Situational analysis: A process planners use to gather, interpret, and summarize all information relevant
to the planning issue under consideration.
Stakeholders: Groups and individuals who affect and are affected by the achievement of the
organization’s mission, goals, and strategies.
Strategic goals: Major targets or end results relating to the organization’s long-term survival, value, and
growth.
Strategic management: A process that involves managers from all parts of the organization in the
formulation and implementation of strategic goals and strategies.
Strategic planning: A set of procedures for making decisions about the organization’s long-term goals
and strategies; see also planning.
Strategic vision: The long-term direction and strategic intent of a company.
Strategy: A pattern of actions and resource allocations designed to achieve the organization’s goals.
SWOT analysis: A comparison of strengths, weaknesses, opportunities, and threats that helps executives
formulate strategy.
Tactical planning: A set of procedures for translating broad strategic goals and plans into specific goals
and plans that are relevant to a distinct portion of the organization, such as a functional area like
marketing.
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Vertical integration: The acquisition or development of new businesses that produce parts or components
of the organization’s product.
Chapter 5
Business ethics: The moral principles and standards that guide behavior in the world of business. See also
ethics.
Carbon footprint: The output of carbon dioxide and other greenhouse gases.
Caux Principles: Ethical principles established by international executives based in Caux, Switzerland, in
collaboration with business leaders from Japan, Europe, and the United States.
Compliance-based ethics programs: Company mechanisms typically designed by corporate counsel to
prevent, detect, and punish legal violations.
Corporate social responsibility (CSR): Obligation toward society assumed by business. See also ethics.
Ecocentric management: Its goal is the creation of sustainable economic development and improvement
of quality of life worldwide for all organizational stakeholders.
Economic responsibilities: To produce goods and services that society wants at a price that perpetuates
the business and satisfies its obligations to investors.
Egoism: An ethical system defining acceptable behavior as that which maximizes consequences for the
individual
Ethical climate: In an organization, the processes by which decisions are evaluated and made on the basis
of right and wrong.
Ethical issue: Situation, problem, or opportunity in which an individual must choose among several
actions that must be evaluated as morally right or wrong.
Ethical leader: One who is both a moral person and a moral manager influencing others to behave
ethically.
Ethical responsibilities: Meeting other social expectations, not written as law.
Ethics: The system of rules that governs the ordering of values; see also corporate social responsibility
Integrity-based ethics programs: Company mechanisms designed to instill in people a personal
responsibility for ethical behavior.
Kohlberg’s model of cognitive moral development: Classification of people based on their level of moral
judgment.
Legal responsibilities: To obey local, state, federal, and relevant international laws.
Life-cycle analysis (LCA): A process of analyzing all inputs and outputs, through the entire “Cradle-to-
grave” life of a product, to determine total environmental impact.
Moral philosophy: Principles, rules, and values people use in deciding what is right or wrong
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Philanthropic responsibilities: Additional behaviors and activities that society finds desirable and that the
values of the business support.
Relativism Philosophy: that bases ethical behavior on the opinions and behaviors of relevant other
people.
Sarbanes-Oxley Act: An act passed into law by Congress to establish strict accounting and reporting rules
in order to make senior managers more accountable and to improve and maintain investor confidence
stewardship contributing to the long-term welfare of others.
Sustainable growth: Economic growth and development that meets present needs without harming the
needs of future generations.
Transcendent education: An education with five higher goals that balance self-interest with responsibility
to others.
Triple bottom line: Economic, social, and environmental performance.
Universalism: The ethical system stating that all people should uphold certain values that society needs
to function.
Utilitarianism: An ethical system stating that the greatest good for the greatest number should be the
overriding concern of decision makers.
Virtue ethics: Perspective that what is moral comes from what a mature person with “good” moral
character would deem right.
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CONCLUSIONS
2079307, Martínez Galván Andrea:
With this activity I conclude that there is a lot to consider around a competitive environment. I used to
think that competition was just about selling more than others. Now I know that there is a whole scenario
to analyze while talking about the success of your company. As an International Business Bachelor
student, one of my goals is to work for any international business. Now, knowing all this new
information I will be ready for any complications that I could face in the future. This work helped me to
understand better the elements we saw in class, now I know real applications for theoretical terms. I think
that with this activity we understood more all the faces that competitiveness has.
2081597 Martínez Loera, Pedro Iván:
In this evidence I had the opportunity to learn more about the true application of management. Normally
not everything that encompasses management is known, but with this activity I could realize that there
are points that are fundamental to the good development of a company. I could also see that there are
strengths that are very important for certain companies, because it can be the big differentiator with their
competition in the market. It is good to know about the experiences of companies, because at least in my
case that I like entrepreneurship, I think it is good to know about the mistakes of other companies to learn
from that and not in an own project, although in any case there is always good to learn by yourself.
2079329 Jaramillo Ramos, Larissa Fernanda:
From this work, I think it is very important to understand the relationship between an organization and its
environments. By analyzing the competitive advantages and the phases of decision making, I can now
understand what makes a company better than others. I conclude that to be successful in a changing
market, every organization should plan their strategies around the organization's strengths and
weaknesses.
1970353 Medina Balderas, Marcos Isaí:
With this activity I have understood that competition in a company is a whole process and various factors
that highlight one company from another, and which is the public's favorite, companies must have an
elaboration plan. advertising, and rigorous planning that are needed to stand out in the market, labor
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competitiveness is not only which company is better than another, but which market strategy is better
than another.
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