University of Liberal Arts Bangladesh (ULAB)

Course Title: Strategic Management

Course Code: BUS 307

Section: 03

Submitted To

Mr. Sahadat Hossain

Senior Lecturer

School of Business

Date: 20-05-2021
1. Using any industry with which you are familiar, please analyze the industry
using Porter’s Five Forces Model. Please explain your rationale.

Answer: Porter’s Five Forces analysis is a useful method and a tool to analyze the external
environment in which any industry operates. The key aspect of using Porter’s Five Forces for
the airline industry in the United States is that the airline industry has been buffeted by strong
headwinds from a host of external factors that include declining passenger traffic, increasing
operating expenses, high fuel prices, and greater landing and maintenance costs, apart from
intense competition from low-cost carriers that have led to a cutthroat price war which has led
the industry severely affected.
 Suppliers Power: The power of suppliers in the airline industry is immense because the
three inputs that airlines have in terms of fuel, aircraft, and labor are all affected by the
external environment. For instance, the price of aviation fuel is subject to fluctuations
in the global market for oil, which can gyrate wildly because of geopolitical and other
factors. Similarly, labor is subject to the power of the unions who often bargain and get
unreasonable and costly concessions from the airlines. Third, the airline industry needs
aircraft either on outright sale or wet-lease basis, so the airlines have to depend on the
two biggies, Airbus, and Boeing for their aircraft needs.

 Buyers Power: With the proliferation of online ticketing and distribution systems, fliers
no longer have to be at the mercy of the agents and the intermediaries as well the airlines
themselves for their ticketing needs. Apart from this, the entry of low-cost carriers and
the resultant price wars has benefited the fliers. The tight regulation on the demand side
of the airline industry meaning that passengers and fliers have been protected by the
regulators means that the balance of power is tipped in their favor. All these factors
make the airline industry cede power to the consumers and hence, the power of buyers
is moderate to high as per Porter’s Five Forces method. Apart from this, the buyers can
engage in “price discovery” meaning that price fluctuations do not deter them as they
have multiple channels through which they can book their tickets.

 Threat of New Entrants: The threat of new entrants is another major aspect of the five
forces. This aspect has a low threat to the airline industry. Two aspects do, however,
raise the threat level. First, there are extremely low switching costs. Second, there are

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 no proprietary products or services involved. Even with these two aspects, the industry
still has a very low threat overall. Existing firms have an enormous cost advantage. This
industry requires an extensive amount of capital and without a strong customer base,
there will be little to no profit in the first few years. Existing firms can and will use their
high capital to retaliate against newer firms with whatever means necessary, such as
lowering prices and taking a loss. Although there are low switching costs between
brands, consumers tend to only chose well-known names. Airline tickets are expensive,
so people don’t want to give that money to firms they don’t trust. There is also a huge
safety aspect involved and most consumers feel safer with firms that have been around
for a long period. This industry requires plane and flying experience, which also lowers
the threat of entry. When firms decide to enter the market, they first have to become
licensed, which can take about a year. After that, they are constantly being regulated by
several organizations such as the Federal Aviation Administration and the Department
of Transportation. The time and money to spend to solely open an airline company are
enough to prevent most people from entering the industry.

 The threat of Substitutes and Complementarities: The airline industry in the United
States is not a threat from substitutes and complementarities, as unlike in the developing
world, consumers do not take the train or the bus for journeys. What this means is that
flying is a natural phenomenon for the consumers and hence, the substitutes in terms of
the train and bus are minimal in their impact.

 The intensity of Competitive Rivalry: As mentioned in the introduction, the airline

industry in the United States is extremely competitive because of several reasons which
include the entry of low-cost carriers, the tight regulation of the industry wherein safety
become paramount leading to high operating expenses, and that the airlines operate
according to a business model that is outdated especially in times of rapid turnover and
churn in the industry. Apart from anything else, the airline industry is regulated on the
supply side more than the demand side, so instead of the airlines being free to choose
which markets to operate and which segments to target, it is the fliers who get to be
pampered by the regulators. This is the reason low-cost carriers have grounded the full-
service airlines and when combined with the intense competition that was always the
case in the United States, the result is that the sector is one of the most competitive in
the country.

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2. From a strategic management perspective, examine the Bangladesh domestic
automobile industry. Which of the influences in the broad (remote)
environment do you see as having the greatest impact in the next 18 months?
Why? Please explain your rationale.

Answer: The Bangladesh domestic automobile industry will still be under the effects of the
global financial credit crisis within the next 18 months. The purchasing power for most
individuals has been diminished throughout this period as the prices of basic commodities
remain exorbitantly high.

Transportation plays a very important role in the development of society as demand for
transportation increases along with development. It is one of the major industrial sectors of an
economy. The growth of the automobile industry is linked to the country’s industrial activities
and the overall GDP.

Following the Motorcycle Industry Development Policy 2018, the government now is working
to finalize the Automobile Industry Development Policy 2020, the draft of which is drawing
mixed reaction since that contains a plan to phase out imports of reconditioned vehicles in five
years and Bangladesh car market is mostly made of reconditioned Japanese cars due to their
perceived reliability and a wide range of models from the top Japanese car brands.

However, even before the policy is finalized, some top local groups including Uttara Motors,
Ifad, Runner, GPH, in collaboration with their foreign technological partners, have proposed
to invest nearly Tk3,000 crore in total to invest in Bangabandhu Sheikh Mujib Shilpa Nagar in
Chattogram alone as the emerging industrial park offers a suitable package for automobile
investors.

Thus, realizing its necessity and potentiality, the government of Bangladesh has added the
automobile industry as one of the thrust sectors of Bangladesh. Macroeconomic uncertainty,
depression, idleness & other economic issues may frighten the automobile industry in
Bangladesh for a long period. Bank rate, the inflation rate is the key point of economical
segments.

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3. Explain the relationship between a firm and the various levels of external
environment. Which stakeholder in the operating environment do you believe to
be the most important? Why? Please explain your rationale.

Answer: Every organization, whether business or non-business has its environment. The
organizational environment is always dynamic and ever-changing. Environment embraces such
abstract things as an organization’s image and such remote visible issues as economic
conditions of the country and political situations. Organizations have an external and internal
environment;
1. External environment / Macro Environment.
a. General environment
b. Industry environment
c. Competitive environment
a. General environment: The general environment helps shape the task environment, thus
determining the magnitude of the opportunities and threats confronting the organization.
The general environment is remote and less easy to shape than the task environment, but it
is no less important. PESTEL analysis includes Political, Economic, Social, Technological,
Environmental and Legal analysis. It is an external environment analysis for conducting a
strategic analysis or carrying out market research. It offers a certain overview of the varied
macro-environmental factors that the company has to consider.

b. Industry environment: An industry is defined as a group of firms producing products that

are close substitutes the industry environment has a higher impact on a firm’s general
competitiveness and ability to earn above-average return compared to the general
environment. The intensity of competition and profit potential is a function of Porter's five
forces analysis.

c. Competitive environment: Competitor intelligence is the data and information that a firm
gathers to better understand and expect its competitor’s objectives, strategies, assumptions,
and capabilities. When gathering competitive intelligence, firms must pay specific attention
to compliments that add value to the focal firms’ products and strategies. E.g. Microsoft
and Intel are complements. Competitor Intelligence collection needs to follow ethical

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 practices which can be through obtaining and analyzing public information or attending
trade fairs, getting brochures, etc.

The most important stakeholder of a firm is the employee. Organizations operate with a view
of providing their products and services to the market, and therefore target to impress their
clients. However, if employees are not comfortable with their own organization, it would be
difficult for the firm to please any of the other remaining stakeholders. Therefore, the leading
stakeholders for any organization often are the employees. Employees reflect to the rest of the
stakeholders whether or not the company will be in a position to satisfy their needs and
expectations as well.

4. How do we identify direct competitors and what are some of the common
mistakes in identifying them? What tools are used to assist executives in
examining direct competitors?

Answer: Direct competitors can easily be identified by thoroughly analyzing the kind of goods
or services that they deal in. If the goods or services offered by a rival firm resemble the ones
offered by your company, then effectively the rival firm qualifies to be considered as a direct
competitor. Direct competitors also target the same customers and employ the same price
mechanisms to win over the market. A marketing plan will provide a manager with the
necessary intelligence to strategically arrange operations such that competitors may not be able
to take advantage of the company. This will involve collecting of facts regarding the operations
of the competitor firm, such as pricing mechanism, promotional strategies, and even ordering
for supplies and employing of workers in order to establish the operations of the competitor.
This framework is based on the following four key aspects of a competitor:
1. Competitor's strategy
2. Competitor's objectives
3. Competitor's assumptions
4. Competitor's capabilities

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i. Competitor's Current Strategy: The two main sources of information about a
competitor's strategy is what the competitor says and what it does. What a competitor is
saying about its strategy is revealed in:
 annual shareholder reports
 interviews with analysts
 statements by managers
 press releases
However, this stated strategy often differs from what the competitor actually is doing. What
the competitor is doing is evident in where its cash flow is directed, such as in the following
tangible actions:
 hiring activity
 capital investments
 promotional campaigns
 strategic partnerships
 mergers and acquisitions

ii Competitor's Objectives: Knowledge of a competitor's objectives facilitates a better

prediction of the competitor's reaction to different competitive moves. For example, a
competitor that is focused on reaching short-term financial goals might not be willing to
spend much money responding to a competitive attack. Rather, such a competitor might
favor focusing on the products that hold positions it can defend better. A company that has
no short-term profitability objectives might take part in destructive price competition in
which neither firm earns a profit. Competitor objectives may be financial or other types.
Some examples include growth rate, market share, and technology leadership. They may
associate goals with each hierarchical level of strategy - corporate, business unit, and
functional level. The competitor's organizational structure provides clues it deemed which
functions of the company to be the more important. For example, those functions that report
directly to the chief executive officer are likely to be given priority over those that report
to a senior vice president. Other aspects of the competitor that serve as indicators of its
objectives include risk tolerance, management incentives, backgrounds of the executives,
the composition of the board of directors, legal restrictions, and any additional corporate-
level goals that may influence the competing business unit.

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 iii. Competitor's Assumptions: The assumptions that a competitor's managers hold about
their firm and their industry help to define the moves that they will consider. For example,
if in the past the industry introduced a new type of product that failed, the industry
executives may assume that there is no market for the product. Such assumptions are not
always accurate and if incorrect may present opportunities. For example, new entrants may
have the opportunity to introduce a product similar to a previously unsuccessful one without
retaliation because incumbent firms may not take their threat seriously. Honda was able to
enter the U.S. motorcycle market with a small motorbike because U.S. manufacturers had
assumed that there was no market for small bikes based on their past experience.

iv. Competitor's Resources and Capabilities: Knowledge of the competitor's assumptions,

objectives, and current strategy is useful in understanding how the competitor might want
to respond to a competitive attack. However, its resources and capabilities determine its
ability to respond effectively. A competitor's capabilities can be analyzed according to its
strengths and weaknesses in various functional areas, as is done in a SWOT analysis. The
competitor's strengths define its capabilities. The analysis can be taken further to evaluate
the competitor's ability to increase its capabilities in certain areas. A financial analysis can
be performed to reveal its sustainable growth rate. Finally, since the competitive
environment is dynamic, the competitor's ability to react swiftly to change should be
evaluated. Some firms have heavy momentum and may continue for many years in the
same direction before adapting. Others are able to mobilize and adapt very quickly. Factors
that slow a company down include low cash reserves, large investments in fixed assets, and
an organizational structure that hinders quick action.

5. In Porter’s model we are asked to consider potential entrants and substitute

products as additional competitors. On what basis do we judge whether a firm is
a potential entrant? On what basis do we determine if a competing product is a
substitute?

Answer: A firm is regarded to be a potential entrant in the Five Force analysis model as
postulated by Porter if it can meet the capital requirements needed to enter an industry.
Established firms that are already operational often enjoy their economic positions by virtue of
the elaborate financial power that they enjoy as a result of participating in the business for

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longer durations of time. This makes them difficult competitors to beat especially for a smaller
firm whose financial capacity may not match that of an already established company. However,
a strong financial base for a new entrant could prove very supportive in the sense that the
company will have the financial power to acquire the necessary assets and materials, and
equally create a competitive advantage able to attract customers. The incumbency advantages
enjoyed by a firm could also act as a strong pointer to its capabilities of entering an industry or
market and effectively competing with the established players. Large firms which have been
operational but serving other markets or industries could decide to shift their business focus or
expand their portfolio to cover new industries and markets.
Such firms will be potential entrants by virtue of their proprietary technology or patents which
they hold. Thus, their past experiences and level of skill will be the main competitive advantage
that they enjoy, which makes them a threat.
Weaker barriers to market entry also provide an opportunity to potential market entrants to be
viewed as a threat by the already established industry players. If a company attains the entire
mandatory requirements set by government policies and legal structures, then it becomes a
strong indicator to other industry players that the company could possibly enter the industry
and pose a threat to their operations. A competing product could be considered to be a substitute
threat if buyers in the market can equally derive the same utility from the product. The threat
becomes more dangerous to the established industry players if the substitute product or service
can be acquired at a comparatively cheaper cost. An easy to find substitute that is also viable
to the buyers will effectively compete with the products manufactured by established industry
players, and consequently reduce their power.

6. Please compare and contrast the terms environmental determinism, strategic

choice, stakeholder approach.
Answer:
 Environmental determinism: is a perspective which considers the physical environment
to be the main determinant of culture and not social conditions. This view considers
human beings to be defined strictly by their stimulus-response, or environment-
behavior which they can hardly deviate from. This school of analysis considers with
high regard the position of the environment being both deterministic and dominant
while seeking to design a strategy. In this case, therefore, strategy is only considered to
be a reactive process with the organization being considered as passive.

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  Strategic choice: forms a significant part in the process of strategy formulation within
an organization or firm. Various choices have to be selected upon in order to be able to
instill value while thinking about value. When managers draw out their strategies, some
choices may appear to be so apparent but a reflection of the same in the long run may
point at the influence of unexpected events determining the results. Thus, in choosing
strategy, managers literally evaluate available options before selecting on the best
possible one and consequently take probable actions to ensure that targeted results are
achieved. Strategy choices have to ensure that they remain challenging enough in order
to effectively compete with other rival firms. Strategic choices are basically realized
through thorough analytical skills and high level judgment capability.

 Stakeholder approach: is a concept which emphasizes on making decisions while

bearing in mind those to be affected by changes in the climate, as well as those to be
involved in the adaptation implementation. Organizational operations often have
consequences on the surrounding environment, which affect communities living close
to or neighboring the firm. These consequences could turn out to be negative in terms
of environmental implications, individual’s health, or even culturally distorting the
basis of a community. As such, it is upon the organization to ensure that before any
such decisions are made, these implications need to be analyzed fully in order to ensure
the negative effects are mitigated. Organizations need to maintain cordial relations with
the communities which neighbor such institutions in order to also receive support in
return, mainly in form of employment skills and market.

7. What do we mean by saying a resource-based view of the firm? What are these
resources and what makes them valuable?

Answer: The Resource Based View (RBV) of the firm starts from the concept that a firm’s
performance is determined by the resources it has at its disposal. The way these resources are
used and configured enable the firm to perform and can provide a distinct competitive
advantage. In RBV model, resources are given the major role in helping companies to achieve
higher organizational performance. There are two types of resources: tangible and intangible.

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  Tangible assets: are physical things. Land, buildings, machinery, equipment and capital
– all these assets are tangible. Physical resources can easily be bought in the market so
they confer little advantage to the companies in the long run because rivals can soon
acquire the identical assets.

 Intangible assets: are everything else that has no physical presence but can still be
owned by the company. Brand reputation, trademarks, intellectual property are all
intangible assets. Unlike physical resources, brand reputation is built over a long time
and is something that other companies cannot buy from the market. Intangible resources
usually stay within a company and are the main source of sustainable competitive
advantage.
The resource-based view (RBV) explores the role of key resources, identified as intangible
assets and capabilities, in creating competitive advantage and superior performance. The
conceptual analysis and empirical research within the RBV have focused on the firm's
perspective of key resources and the value to the firm of these key resources. For that reason,
it is much more valuable.

8. Please compare and contrast Porter’s five forces model with the Blue Ocean
perspective. Are these competing approaches? Please explain your rationale.

Answer: Porter’s Five Force model of industry analysis basically seeks to enable players in an
industry on how to dominate the market. On the contrary, the Blue Ocean perspective of
industry analysis seeks to find new opportunities to enable players get a chance to create new
markets. Organizations can produce both high profits and growth through the creation of
demand in a market space that has not previously been contested.
The “Blue Ocean” refers to the uncontested market space. Unlike the five forces identified by
Porter, which act in a market, the Blue Ocean model does not maintain head-to-head
competition between different players in the same market or industry. The concept of the “Blue
Ocean” is actually the opposite of the “Red Ocean”, which implies the market environment
that is already known. In Porter’s Five Force analysis model, the concept of the Red Ocean
easily applies. The five force analysis considers a market environment where there are several
players trying to outperform each other as they target to win the market. Although rules are
defined in the five force analysis postulated by Porter, what players seek to do is to expand

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their capabilities by literally taking advantage of weaknesses showcased by competitors. The
five forces that Porter identifies are aimed at giving an insight to the competing organization
to analyze in the market situation in terms of new competition developing and eating out on
the market potentials, threat of substitute products being adopted and utilized by the market as
an alternative to a player’s provisions, services, and products, as well as checking the possible
rivalry that could emerge as a result of the different players pursuing their intentions and
objectives. The other forces which Porter also gives significant attention to is the power of
suppliers in the industry and how their actions could end up affecting players, and the extent
of the power of the buyers and their effects on players. The Blue Ocean, in contrast, is a market
environment or experience that is first of all non-existent. Here, competition is totally non-
existent because demand does not exist at all. Thus, rather than fight for a demand that already
exists in the market, this model looks at the prospects of innovating value. While Michael
Porter believes that businesses can only be successful if they maintain either niche-markets or
operate at very low costs, the Blue Ocean idea as introduced by Charles Hill maintains that
businesses will equally manage to be successful if they focus on value innovation that cuts
across conventional market segments. Value, according to the Blue Ocean concept, is very
important in enhancing performance instead of competing within a single market that is
crowded.

9. Compare and contrast the business (generic) level competitive strategies. In

particular, when would each strategy be most effective and what do you perceive
as the greatest limitation of each? Please give me a real world example of a low
cost producer and a company that is competing by broad differentiation.

Answer: A business-level strategy addresses the question of how a business aims to compete
in its particular industry. It’s how a business differentiates itself from its competitors.

The 5 different types of business-level strategy:

i. Cost leadership
ii. Differentiation
iii. Focused differentiation
iv. Focused low-cost
v. Integrated low-cost differentiation

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 i. Cost leadership: A cost leadership business-level strategy is a strategy that businesses use
to increase efficiency and reduce production costs to make it below that the industry
average. In other words, a business charging lower prices for its products than others in the
same industry – the cheapest of its kind around!

Advantages:

 Increase profits – by gaining more business

 Market domination over time – unless your competitors are willing to undercut (and
go into the minus) it will become impossible for competitors to survive allowing
for market domination over time
 Improves business stability – when a trade war occurs or a downturn in the
economy, companies with the lowest prices and costs survive

Risks:

 Requires a large sales volume for success – it’s most successful when a large
volume of sales is reached to maintain profitability
 Requires capital that may not be available – must be able to achieve large sales
volumes while scaling before running out of money. If the business is unable to
reach stability before depleting capital reserves, then they could find themselves
filing bankruptcy. This is why taking a Line of Credit or Business Loans is a good
idea for all businesses to keep cash flow flowing, and allow for expansion
 Could cause cuts in areas that harm the business – this strategy is all about cutting
costs, and corners, which could mean cutting costs in critical areas such as customer
support and R&D (thus reducing product innovation)

ii. Differentiation: A differentiation strategy is all about providing a product or service with
unique attributes when comparing against the competition. It’s all about making the product
or service really stand out from the crowd – one that solves a problem that no one else has.
It requires innovation and out of the box thinking. To execute the differentiation strategy,
you’d need to conduct extensive market research to find a gap in the market that needs
filling, or by improving an existing product or service.

Advantages:

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  Turn clients into fans by creating brand loyalty – the right small business branding
strategy can make all the difference. If people love what you’re doing, they will
share it. This shows when taking the LUSH example above – they have a huge fan
base!
 Marketing efforts become easy – when you have a unique selling point (USP), it
makes it much easier to market your product or service
 If you create a product in high demand, you can price it higher!

Risks:

 High cost – providing a distinct quality could make for high research and
development costs. New product elements could increase the final production costs
 Too different could be bad – if a product is too unfamiliar or complex to the
consumer, they may shy away
 Excludes some buyers – you can’t please everyone and by differentiating to a very
small niche – if said niche isn’t large enough you may not become profitable

iii. Focused differentiation: A focused differentiation business strategy involves targeting a

specific or small group of customers with differentiated products. This means your product
or service should have unique features that meet the demands of a niche market.

Advantages:

 Can charge very high prices – even higher than those simply following the
differentiation strategy, as you are offering a unique experience/product/service
 Competition is limited – if you’ve specialized in a very niche area, to a niche
audience, you’re likely to have limited competition
 Build customer loyalty – if you’re selling, for example, plastic-free eco-friendly
shampoo bars, you’re going to target a very specific individual that despite higher
prices, will continue to return to you for shampoo due to the health benefits to hair
and the environment, thus building strong customer loyalty

Risks

 Limited demand could limit growth capabilities

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  Your niche could simply disappear or be outcompeted by larger competitors (think
about gun stores that went under when Wal-Mart and Wholesale Sports starting
selling firearms)
 Could be outcompeted by businesses adopting an even narrower focus – think about
a clothes store that sells winter apparel vs a new store that specializes in gloves. A
consumer that needs gloves specifically may choose the glove store as they can
receive more choice and specific guidance there

iv. Focused low-cost: A focused low-cost business strategy is very similar to a focused
strategy – one that focuses on a small niche of customers but with one small difference,
you guessed it – it’s lower cost!

Advantages:
 Low cost
 Draw in a narrow market segment
 Increase brand affinity – from having a specialized product

Risks
 Could be too specific for the market – make sure there is enough demand for
your product/service
 Future growth could be limited – if you specialize too much, then future
expansion could be tough

v. Integrated low-cost differentiation: An integrated low-cost/differentiation strategy is

where a business has differentiated products that are offered at a lower cost. This new
hybrid business strategy could be on its way to becoming increasingly popular as global
competition increases. Compared to companies relying on a single strategy, those that
integrate two may be able to position themselves to adapt much quicker to environmental
changes.

Advantages:

 Great for gaining customer loyalty – there’s a huge value for customers both in the
product and price
 Adaptable business model – can easily adapt to environmental changes
 Your business will have both unique features and be relatively low-cost

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 Risks:

 Involves compromise – you’ll neither be the lowest cost nor the most differentiated
company
 Risk of becoming “stuck in the middle” – the company could lack the expertise that
comes with directly following either a cost leadership or differentiated business
strategy
 Multi-tasking – the business needs to be capable of simultaneously focusing on
reducing costs and adding unique features that customers value and are willing to
pay a slightly higher price for

Different between cost leadership and differentiation

Cost leadership: They built a cost strategy on no-frills. Cost leadership strives towards cutting
costs to a minimum level to provide customers with lower prices and thus boost their savings.
Cost strategy prerequisites normally relate to high technical capabilities and access to capital
for the company to invest in technology and assure economies of scale. Example: Lifebuoy
Differentiation: It built a differentiation strategy on a belief that one needs a clear and unique
positioning. Differentiation leadership focuses on providing perks that add value for
consumers, while higher prices are a sort of “make-up” for their higher costs. Example: Dove

10. Please complete a SWOT analysis for any organization with which you are
familiar.
Answer: SWOT Analysis of Pathao

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 Strengths

Opportuni
ties SWOT Weakness

Threats

Pathao is a Bangladeshi company and was one of the most-mentioned companies in recent
years in media because of its rapid success. It’s an on-demand ride-sharing app that developed
and became the most successful ride-sharing company.
 Pathao Strengths: Pathao is one of the most pre-eminent transportation network
companies in Bangladesh. Their major focus is delivering a product on demand. As
well as, Pathao rides come very handy in an emergency. This agency provides cars and
bikes for transportation. And they are very affordable too. We can track them via G.P.S
which very much convenient nowadays. Pathao has created a brand name through its
amazing customer service. They have reached their service Dhaka, Sylhet &
Chattogram.

 Pathao Weakness: Among all these pros, there are some cons too. Pathao does not
deliver products that weigh more than 2 kg. That means they deliver only lightweight
products. Also, they do not transport any documents such as passport, ID card or any
sort of thing like that because if any kind of damage happens, they won’t take the
responsibility for that. Second, Pathao bikers don’t use logos and it becomes hard for
customers to track them. Third, Pathao has not expanded its services to all the areas of
Bangladesh. They certainly need to work on that and expand their services throughout
the country. Then again, sometimes bikers don’t know the use of Google map. And that
becomes a problem for the users.

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  Pathao Opportunities: Pathao can level up the services by expanding their business to
the areas where they haven’t reached yet. They can also include female freelancer or
bikers for their team and this way they can attract the female segment. So, it’s going to
be more comfortable the females to use bikes daily. They can also sign contracts with
other agencies. Like Daraz, Bikroy.com, PriyoShop.com and many more.

 Pathao Threats: The threat that this agency discerns is the other competitor agencies.
Like Uber, Sundarban Courier Service. Especially Sundarban Courier Service because
they provide their service countrywide and it is more beneficial to the people who live
in remote areas. And also, governmental issues such as if the tax amount rises, they
have to increase their charges. So, it might be a threat soon.

11. Please list and explain an organization’s options as to growth strategies.

Please give me an example of a company that is pursuing external growth
strategies and another that is pursuing internal growth strategies.

Answer: ‘Growth Strategy’ refers to a strategic plan formulated and implemented for
expanding firm’s business. Every firm must develop its own growth strategy according to its
own characteristics and environment. Business growth is an imperative for the survival of any
company, because customers’ tastes change, and products become obsolete. At the same time,
competitors constantly attack the market share rivals with better products and services. Many
big companies started small and grew to a more robust size by initiating appropriate strategies
and building on opportunities. Growth strategy are 2 types:
 Internal Growth
 External growth

Internal Growth: Internal growth (or organic growth) is when a business expands its own
operations by relying on developing its own internal resources and capabilities. This can for
example be done by assessing a company’s core competencies and by determining and
exploiting the strength of its current resources. Moreover, companies can decide to grow
organically by expanding current operations and businesses or by starting new businesses from
scratch (e.g. Greenfield investment). Important to note here is that all growth is established

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without the aid of external resources or external parties. Internal growth strategies relate to the
following actions:
 Building on existing products/services for new opportunities
 Increase sales of products/services through better market reach
 Expanding existing product lines and service offerings
 Reaching out for new markets

External growth: External growth (or inorganic growth) strategies are about increasing output
or business reaches with the aid of resources and capabilities that are not internally developed
by the company itself. Rather, these resources are obtained through the merger with/acquisition
of or partnership with other companies. External growth strategies can therefore be divided
between M&A (Mergers and Acquisitions) strategies and Strategic Alliance strategies (e.g.
joint ventures). There are many potential advantages of external growth through acquisitions
and alliances. Down below there is a list of some of these advantages compared to internal
growth depending on the nature of the acquisition/alliance.

 Instant market share / increased market power

 Economies of scale (perhaps by combining production capacity)
 Secure better distribution channels
 Increased control of supplies
 Decreased competition (by taking them over or partnering with them)
 Acquire intangible assets (brands, patents, trademarks) Example: Robi - Airtel (Merger)

12. Assume you’re approaching the marketplace with a differentiation strategy

based upon speed. What might your value chain analysis look like?

Answer: A value chain is a business term describing the full range of iterative activities a
company uses to create a product or a service. The purpose of the value-chain analysis is to
increase production efficiency so that a company can deliver maximum value for the least
possible cost. Value chain analysis is a way to visually analyze a company's business activities
to see how the company can create a competitive advantage for itself. As I was saying earlier,
Michael Porter was the first to put forward this concept, and that is why it is often called
Porter’s value chain model.

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This model categorizes the various activities of a firm in two broad categories: Primary and
Support Activities.
Primary Activities: comprise five components, and all are essential for adding value and
creating competitive advantage:
i. Inbound logistics: include functions like receiving, warehousing and managing
inventory.
ii. Operations: include procedures for converting raw materials into a finished product.
iii. Outbound logistics: include activities to distribute a final product to a consumer.
iv. Marketing and sales: include strategies to enhance visibility and target customers-such
as advertising, promotion, and pricing.
v. Service: includes programs to maintain products and enhance the consumer experience
like customer service, maintenance, repair, refund, and exchange.
Support Activities: The role of support activities is to help make the primary activities more
efficient. When you increase the efficiency of the four support activities, it benefits at least one
of the five primary activities. We denote these support activities as overhead costs on a
company's income statement:
i. Procurement: concerns how a company gets raw materials.
ii. Technological development: is used at a firm's research and development (R&D)
stage-like designing and developing manufacturing techniques and automating
processes.
iii. Human Resources Management: involves hiring and keeping employees who will
fulfil the firm's business strategy and help design, market, and sell the product.
iv. Infrastructure: includes company systems and the composition of its management
team-such as planning, accounting, finance, and quality control.

13. How might the product life cycle impact your choice of competitive strategy?
Please explain.
Answer: Products, like people, have a life cycle. They are born, grow, mature and finally
decline and die. The innovation of a new product and its degeneration into a common product
is termed as the life cycle of a product. The product life cycle (PLC) identifies and explains the
stages that a product may go through from the moment it is launched on to the market to the
moment it is withdrawn. Knowledge of the PLC can help identify important marketing
environmental factors that managers should be aware of before they decide upon the most

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effective marketing effort. In today’s highly competitive and rapidly changing scenario it is
getting increasingly difficult to predict any changes that may affect the very survival of the
company.
Life cycle is broken down into five different stages, which include the development,
introduction, growth, maturity and decline stages of the product. The product life cycle is an
extremely important concept in marketing. It describes the stages a product passes through
from when it was first thought of, till it is finally removed from the market. Not all products
reach these defined stages. In fact, some products continue to grow while other products rise
and fall. For emerging businesses, the product life cycle concept is an ideal tool that enables
marketers to forecast future sales and plan new marketing strategies.

14. Compare and contrast the terms: market failure, taper integration, and quasi
integration. Why might a firm consider violating the principle of market failure
and pursue taper integration?
Answer:
 Market failure: refers to the inefficient distribution of goods and services in the free
market. In a typical free market, the prices of goods and services are determined by the
forces of supply and demand, and any change in one of the forces results in a price
change and a corresponding change in the other force. The changes lead to a price
equilibrium.
 Quasi-integration: includes arrangements such as minority equity investments, loans or
loan guarantees, pre purchase credits, exclusive dealing agreements, specialized
logistical facilities, and cooperative R&D. Quasi-integration can provide lower cost
than full integration, eliminate the need to commit to the full supply or demand of an
adjacent unit, avoid the investment required for integration, and avoid the need to
manage the adjacent business. However, an analysis of quasi-integration is needed to
determine if the potential benefits exceed those that could be obtained by full or partial
integration.

 Taper Integration: Tapered integration refers to partial backward or forward integration

where the firm purchases the remainder of its needs on the open market. For tapered
integration to be advantageous, the firm's product or service demands need to be large

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 enough to support an efficient size in-house facility and still require additional product
or service from the market. Firms interested in taper integration because of
 Secure alternative sources of supply
 Comparative cost controls
 Understand nature of asset specificity
 Protect resource/capabilities

15. Compare and contrast the grand strategies of concentration, integration, and
diversification. Focus on the strengths and limitations of each. Also, please give
me an example of a firm for each of these corporate level strategies.

Answer: Organizations usually seek growth in sales, profits, market share, or some other
measure as a primary aim. The different grand strategies in this category are:
 Concentration: The most common grand strategy is concentration on the current
business. A concentration strategy is one in which an organization focuses on a single
line of business the firm directs its resources to the profitable growth of a single product,
in a single market, and with a single technology. Example: TV, refrigerator etc.
Concentration strategies succeed for so many businesses–including the vast majority of
smaller firms–because of the advantages of business-level specialization. By
concentrating on one product, in one market, and with one technology, a firm can gain
competitive advantages over its more diversified competitors in production skill,
marketing know-how, customer sensitivity, and reputation in the marketplace. They
also based it on the known competencies of the firm. On the negative side, for most
companies concentration results in steady but slow increases in growth and profitability
and a narrow range of investment options. Further, because of their narrow base of
competition, concentrated firms are especially susceptible to performance variations
resulting from industry trends.

 Integration: Integration may take two forms: vertical and horizontal integration.
 Vertical Integration: Vertical integration strategy involves growth through the
acquisition of other organizations in a channel of distribution. When an organization
purchases other companies that supply it, it engages in backward integration. The
organization that purchases other firms that are closer to the end-users of the product

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 (such as wholesalers and retailers) engages in forwarding integration. Vertical
integration is used to get greater control over a business line and increase profits
through greater efficiency or better-selling efforts.
 Horizontal Integration: This strategy involves growth through the acquisition of
competing firms in the same line of business. I adopted it to increase the size, sales,
profits, and potential market share of an organization. Smaller firms sometimes use
this strategy in an industry dominated by one or a few large competitors, such as
the soft drink and computer industries.

 Diversification: This strategy involves growth through the acquisition of firms in other
industries or lines of business, as explained below.
 Organizations in slow-growth industries may purchase firms in faster-growing
industries to increase their overall growth rate.
 Organizations with excess cash often find investment in another industry
(particularly a fast-growing one) a profitable strategy.
 Organizations may diversify to spread their risks across several industries.
 The gaining organization may have management talent, financial and technical
resources, or marketing skills it can apply to a weak firm in another industry
hoping to make it highly profitable.

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