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ODA BULTUM UNIVERSITY DEPARTMENT OF MANAGEMENT

POST GRADUATE MBA YEAR II -SEMESTER III (WEEK

END AWASH 7 KILO)

COURSE TITLE: BUSINESS POLICY AND STRATEGIC


MANAGEMENT

INDIVIDUAL ASSIGNMENT

PREPARED BY: NARDOS MESFIN

ID NO: WM0102/14

SUBMITTED TO: - DR.BOGALE A.

OCTOBER,2023
1 Recommendation for 'Freewheeling Opportunism' for Oda Bultum
University:
Freewheeling opportunism, as a strategic approach, is typically adopted when an organization
operates in highly uncertain and dynamic environments. For Oda Bultum University, adopting
freewheeling opportunism might be recommended under the following circumstances:

• merging Market Expansion: If Oda Bultum University is looking to expand into


emerging or rapidly developing markets, where traditional strategies may not apply due to
constantly changing conditions and uncertainties, freewheeling opportunism can help the
university adapt quickly to evolving circumstances.

• Rapid Technological Advancements: In sectors such as education, technology is


continuously evolving. If the university needs to stay at the cutting edge of educational
technology and adapt to emerging tools and platforms swiftly, freewheeling opportunism
might be a suitable approach.

• Short-term Opportunities: If the university frequently identifies unique, time-sensitive


opportunities, such as research collaborations, grants, or partnerships that could bring
significant benefits, freewheeling opportunism can enable it to capitalize on these
opportunities without being constrained by a rigid strategic plan.

• Experimentation and Innovation: Freewheeling opportunism allows for


experimentation and innovation. If Oda Bultum University seeks to foster a culture of
innovation and explore new teaching methodologies or research approaches, this strategy
can facilitate such endeavors.

• Competitive Disruption: In highly competitive environments or situations where


disruptive forces are at play, freewheeling opportunism can enable the university to adapt
swiftly to maintain a competitive edge and find new avenues for growth.

• External Shocks or Crises: During unforeseen external shocks or crises, such as natural
disasters or public health emergencies (like a pandemic), freewheeling opportunism may
help the university make quick decisions and pivot its operations to address urgent
challenges.

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It's important to note that while freewheeling opportunism can be beneficial in certain
circumstances, it also carries risks, including potential lack of strategic direction, resource
allocation issues, and difficulty in sustaining long-term growth. Therefore, it should be applied
judiciously and with a clear understanding of the risks and benefits. The university should also
have mechanisms in place to monitor and evaluate the outcomes of this strategy.

2 Factors Influencing the Intensity of Competition:


The intensity of competition in an industry depends on several key factors:

• Market Structure:

Concentration: The number and size distribution of firms in the industry can significantly affect
competition. In concentrated markets with a few dominant players, competition may be less
intense, while in fragmented markets with numerous small competitors, rivalry can be fierce.

• Industry Growth Rate:

Slow Growth: In industries with slow growth rates, firms may compete more aggressively for a
limited pool of customers, intensifying competition.

High Growth: High-growth industries can also be highly competitive, as the potential for future
profits attracts new entrants.

• Product Differentiation:

High Differentiation: Industries with highly differentiated products or services may have less
intense competition. Firms can charge premium prices due to unique features or branding.

Low Differentiation: In industries with low product differentiation, there is often more price
competition as customers can easily switch between providers.

• Barriers to Entry:

High Barriers: Industries with high barriers to entry, such as significant capital requirements,
regulatory hurdles, or strong brand loyalty, tend to have less competition.

Low Barriers: Low barriers make it easier for new entrants to join the market, increasing

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competitive forces.

• Buyer Power:

Strong Buyer Power: When customers have substantial bargaining power, they can demand
lower prices and better terms, intensifying competition as firms strive to meet customer demands.

Weak Buyer Power: In cases where customers have limited influence, competition may be less
intense.

• Supplier Power:

Strong Supplier Power: Suppliers with significant control over key resources can increase costs
for firms in the industry, intensifying competition.

Weak Supplier Power: Industries where suppliers have less power often experience lower
competition as firms have more control over their costs.

• Economic Conditions:

Economic Downturn: During economic downturns, competition can become more intense as
firms compete for a smaller pool of customers.

Economic Growth: In times of economic growth, competition may be less intense as demand
increases.

• Regulatory Environment:

Regulatory Constraints: Heavily regulated industries may have less competition due to the
barriers imposed by government regulations.

Lax Regulations: Industries with fewer regulations can attract more players, potentially
increasing competition.

• Technological Change:

Rapid Technological Change: Industries characterized by rapid technological advancements


often have intense competition as firms innovate and compete to adopt and develop new
technologies.
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Stable Technology: In industries with stable technology, competition may be less intense as
firms focus on incremental improvements rather than disruptive innovations.

Understanding these factors is essential for strategic planning and competitive analysis.

2.1 Can Cost Leadership Strategy Allow Above-Average Returns Despite


Strong Competitive Forces?
Yes, a cost leadership strategy can allow a firm to earn above-average returns even in the face of
strong competitive forces, but it depends on various factors:

Efficiency and Cost Control: A firm employing a cost leadership strategy must excel at cost
control and efficiency in its operations. This includes streamlining processes, minimizing waste,
and optimizing resource utilization to produce goods or services at a lower cost than competitors.

Economies of Scale: Achieving economies of scale through high-volume production can


significantly reduce costs. As a cost leader, a firm can capitalize on these efficiencies and offer
competitive prices while maintaining healthy profit margins.

Price Leadership: By offering products or services at lower prices, a cost leader can attract
price-sensitive customers and gain market share, even in competitive markets.

Cost Focus: Maintaining a strong cost focus encourages continuous improvement and innovation
in cost-saving measures, allowing the firm to adapt to competitive pressures effectively.

However, it's important to note that a cost leadership strategy may not be suitable for all
industries or market conditions. It can be challenging to sustain in rapidly changing markets
where product differentiation and innovation are paramount. Additionally, intense price
competition may erode profit margins if cost leadership is not continuously maintained.

2.2 Cost Leadership vs. Cost Reduction:


Cost Leadership: Cost leadership is a competitive strategy where a firm aims to become the
lowest-cost producer in its industry or market segment. The goal is to offer products or services at
competitive prices while maintaining profitability. Cost leadership involves building efficient
operations, achieving economies of scale, and continuously reducing costs.

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Cost Reduction: Cost reduction is a broader approach that involves reducing costs within an
organization. It's not necessarily about becoming the absolute lowest-cost producer in the industry
but about improving cost efficiency across various business processes. Cost reduction may
involve measures like optimizing supply chains, cutting non-essential expenses, improving
process efficiency, and reducing waste.

While cost leadership is a specific strategic positioning that focuses on achieving and maintaining
the lowest cost in the industry, cost reduction is an ongoing process that aims to reduce expenses
and improve overall cost-efficiency across the organization. Cost reduction efforts can support the
broader strategic goal of cost leadership when applied in the right context.

3 The strategic management process encompasses three phases-strategy


formulation, implementation, and evaluation and control. Discuss this in
the eyes of your own organization.
Certainly, I can provide a general overview of the strategic management process with a focus on
the three phases of strategy formulation, implementation, and evaluation and control, as they
might apply to an organization. However, since I don't have specific information about your
organization, I'll provide a more generic explanation that you can adapt to your context.

• Strategy Formulation:

In the context of your organization, strategy formulation is the initial phase of the strategic
management process. This phase involves several key activities:

Setting a Clear Mission and Vision: Your organization should have a well-defined mission
statement that outlines its purpose and a vision statement that describes the future it aspires to
achieve.

External Analysis: Conduct a comprehensive analysis of the external environment, including


factors like market trends, competitors, regulatory changes, and emerging opportunities and
threats.

Internal Analysis: Evaluate your organization's internal strengths and weaknesses, including its
resources, capabilities, and core competencies.

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Setting Objectives and Goals: Define specific, measurable, achievable, relevant, and time-
bound (SMART) objectives and goals that align with the mission and vision.

Strategy Formulation: Develop strategies that outline how the organization will achieve its
objectives. These strategies may include market entry strategies, product development strategies,
cost leadership strategies, and more.

• Implementation:

The second phase of the strategic management process is strategy implementation. This is where
the formulated strategies are put into action. Key components of this phase include:

Resource Allocation: Allocate resources such as budget, personnel, and technology to support
the chosen strategies. Ensure that there's alignment between resource allocation and strategic
priorities.

Action Planning: Develop detailed action plans that outline who will do what, when, and how.
Assign responsibilities and create a timeline for implementation.

Communication and Alignment: Ensure that everyone in the organization is aware of the
strategic objectives and their roles in achieving them. Effective communication is crucial for
successful implementation.

Monitoring Progress: Implement a system for monitoring and tracking progress. Key
performance indicators (KPIs) and milestones should be regularly measured and assessed.

• Evaluation and Control:

The final phase involves the evaluation and control of the strategies to ensure that they are on
track and delivering the desired outcomes. Key activities in this phase include:

Performance Measurement: Continuously assess performance against KPIs and objectives. This
helps identify areas where the organization is meeting its goals and where adjustments may be
needed.

Feedback and Adaptation: Encourage a culture of learning and adaptation. If the evaluation
indicates that the strategies are not working as expected, be prepared to adjust and adapt.

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Corrective Actions: Develop and implement corrective actions when deviations from the
strategic plan are identified. This might involve revising the strategies, reallocating resources, or
modifying the implementation plan.

Learning and Improvement: Use the results of the evaluation and control phase to inform
future strategy formulation. Document lessons learned and apply them to refine future strategies.

The strategic management process is cyclical, with the results of the evaluation and control phase
feeding back into the strategy formulation phase, leading to continuous improvement and
adaptation. In your organization, this process should be dynamic and responsive to changes in the
external environment and evolving internal capabilities, helping the organization stay competitive
and achieve its mission and vision.

4 Draft a Conceptual Model for Creating a 'Strategic Plan' for Your


Organization:
Creating a strategic plan for your organization is a crucial process that involves various key
components. Here's a conceptual model for developing a strategic plan:

• Mission and Vision:

Start by defining a clear and inspiring mission statement that outlines your organization's
purpose.

Create a vision statement that describes the long-term aspirations and goals for the organization.

• External Analysis:

Conduct a comprehensive analysis of the external environment, including market trends,


competitors, regulatory changes, and emerging opportunities and threats.

Identify key stakeholders, such as customers, suppliers, and partners.

• Internal Analysis:

Evaluate your organization's internal strengths and weaknesses, including its resources,
capabilities, and core competencies.

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Assess the organization's culture and structure.

• SWOT Analysis:

Based on the results of the external and internal analyses, develop a SWOT analysis (Strengths,
Weaknesses, Opportunities, Threats) to summarize the key strategic factors.

• Objectives and Goals:

Define specific, measurable, achievable, relevant, and time-bound (SMART) objectives and goals
that align with the mission and vision.

Ensure that these objectives address key issues identified in the SWOT analysis.

• Strategy Formulation:

Develop strategies to achieve the objectives. These strategies should be consistent with the
organization's strengths and opportunities while addressing its weaknesses and threats.

Consider various strategic options, such as growth strategies, cost leadership, differentiation, etc.

• Action Planning:

Translate strategies into detailed action plans. Specify who will be responsible for each task,
deadlines, and resource requirements.

Create a timeline for implementation.

• Resource Allocation:

Allocate resources (budget, personnel, technology) to support the strategies. Ensure alignment
between resource allocation and strategic priorities.

• Communication and Alignment:

Communicate the strategic plan to all members of the organization to ensure alignment with the
objectives and goals.

Encourage buy-in and commitment from employees at all levels.

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• Monitoring and Evaluation:

Establish a system for monitoring and tracking progress. Regularly measure and assess key
performance indicators (KPIs) and milestones.

Conduct ongoing performance reviews to identify areas where objectives are met and areas where
adjustments may be needed.

• Feedback and Adaptation:

Promote a culture of learning and adaptation. Use performance data and feedback to make
necessary adjustments to strategies and action plans.

• Corrective Actions:

If deviations from the strategic plan are identified, develop and implement corrective actions.
This may involve revising strategies, reallocating resources, or modifying the implementation
plan.

• Learning and Improvement:

Use the results of the monitoring and evaluation phase to inform future strategy formulation.
Document lessons learned and apply them to refine future strategies.

4.1 What is 'Situation Audit' in Strategic Planning:


A situation audit, often referred to as a situation analysis or situational assessment, is a critical
component of the strategic planning process. It involves the systematic examination of an
organization's internal and external environments to assess its current position and to identify
factors that could impact its future. Here are the key elements of a situation audit:

• External Analysis:

Market Analysis: Assess the current market conditions, including market size, growth trends,
customer demographics, and competitive landscape.

Industry Analysis: Evaluate the dynamics and competitive forces within the industry or sector in
which the organization operates.

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• Internal Analysis:

Organizational Resources: Examine the organization's internal strengths and weaknesses,


including its human resources, financial assets, technologies, and operational capabilities.

Core Competencies: Identify the distinctive competencies and capabilities that give the
organization a competitive advantage.

• SWOT Analysis:

Based on the results of the external and internal analyses, create a SWOT analysis. This involves
identifying the organization's Strengths, Weaknesses, Opportunities, and Threats.

• Key Issues and Challenges:

Identify and prioritize the key strategic issues and challenges facing the organization based on the
SWOT analysis.

• Stakeholder Analysis:

Analyze the organization's key stakeholders, such as customers, suppliers, employees,


shareholders, and regulatory bodies. Understand their needs and expectations.

• Environmental Scanning:

Continuously monitor the external environment for emerging trends, changes in regulations, and
other factors that could impact the organization.

A well-executed situation audit provides a comprehensive understanding of the organization's


current state and the external forces affecting it. This analysis forms the foundation for
developing the organization's strategic plan, as it helps in setting clear objectives, defining
strategies, and making informed decisions to position the organization for future success.

5 The provided extract from the literary supplement of a leading newspaper


conveys a strategy-related message related to the publishing industry,
particularly in the context of promoting literature by and about women.
Here's a brief note on the strategic implications:

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• Strategic Message:

The extract highlights a significant shift in the publishing industry's strategies, particularly within
the niche of women's literature and gender-focused works. Several publishing houses mentioned
(e.g., Virago, Kali for Women, Stree, etc.) have adopted a strategic focus on publishing content
centered around women's issues and feminist perspectives. This strategy is driven by a
recognition of the demand for such content and the desire to address gender-related issues.

• Key Strategic Implications:

Niche Market Targeting: These publishing houses have identified and targeted a niche market -
readers interested in women's literature and feminist themes. This strategic choice reflects a deep
understanding of their audience's preferences and needs.

Differentiation: By focusing on women's voices and feminist content, these publishing houses
differentiate themselves in a crowded market. They provide unique, valuable content that stands
out from mainstream offerings.

Cultural and Social Relevance: The strategy aligns with cultural and social shifts towards more
inclusive and diverse literature. It reflects an awareness of the importance of representing
women's perspectives and addressing gender-related issues.
Global Reach: The mention of Seagull Bookstore's efforts to dedicate a separate shelf for books
on "gender" indicates a strategy to increase visibility and accessibility of such literature. This not
only serves local readers but also has the potential to reach a global audience.

Translation and Adaptation: The translation of works by authors like Mahasweta Devi into
English and their dissemination to a wider audience demonstrates an internationalization strategy.
This allows the content to reach a broader, global readership.

In summary, the extract conveys a strategic message of how publishing houses are adapting their
strategies to cater to the evolving preferences and values of readers. They are recognizing the
demand for literature centered around women and feminism, and this strategic shift has not only
given voice to women but also earned these publishing houses a respectable position in the
industry. It underlines the power of aligning strategic focus with societal changes and emerging
market demands.

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