Business Transformation 2


SKU: AMSEQ-037 Category:

Assignment A


Question 1: Business transformation builds on the dynamic interplay among value, complexity, and change. What are the major considerations that usually revolve around any transformation process? Also discuss the various types of Business Transformation.


Question 2: Write short Notes on

a)      Business Model Innovation

b)      Incremental Strategy Development

c)       Elements of Strategic Decision-making Process


Question 3a): How does Environmental Scanning using SWOT, can keep a close watch over environmental factors that affect your start-up and prepare adequately to face the emerging challenges?


Question 3b): “VRIO is an acronym for the four question framework”. Discuss the Questions which can help a firm attain the competitive Advantage.


Question 4a): What are critical questions answered by corporate-level strategists. Discuss the various types of Corporate Strategies and how does Strickland’s Grand Strategy Selection Matrix help in Making strategic Choices?


Question 4b): Differentiate between BCG and GE Matrix. Also cite the demerits of BCG matrix in brief.


Question 5: Organizational structures imply formal relationships with well defined duties and responsibilities. Discuss the various types of Organizational Structures.


Assignment B:

Question 1:  Explain the term Strategic Decision Making .Do you agree that in Strategic decision making situations-“Options are consequential, situations may not have clear cause-and-effect outcomes”.


Question 2: The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives. Explain the same with the help of example and relevant model


Question 3: The understanding for any business is that its core competency is rooted in the process of transformation itself, rather than being focused rather narrowly on competitive advantage in service or delivery of product. Comment.


Case Study

Nestle (NESN) has long been known for making chocolate treats for the common man. Think Kit Kat or Crunch bars. But demand for pricier premium chocolates is growing faster than that of plain old candy. So the Vevey (Switzerland)-based company has devised a novel strategy to move up the value chain: customized confections. Internet shoppers in Switzerland and Liechtenstein can now order a taster pack from Nestle’s Maison Cailler line of expensive Swiss chocolates. After nibbling the samples of five kinds of Ecuador-sourced chocolate with various cocoa content, consumers complete an online survey to determine their “chocolate personality.” They then can order larger boxes of the candies, marrying their favored chocolate with preferred fillings ranging from peppercorn and vanilla to raspberry and verbena.

The bespoke chocolate experience doesn’t come at Baby Ruth prices. A 16-piece box of the Maison Cailler chocolates costs 26 Swiss francs ($28.30). That’s just 128 grams of chocolate, or slightly more than 4 ounces, so these custom sweets price out to more than $100 a pound. Yet such luxe pricing can succeed even amid the economic downturn, says Laurent Freixe, head of Nestle’s European business. “It may sound counterintuitive, but what’s happening in the [financial] crisis is a quest by consumers for value, for more-affordable product, but also for products that overtake their expectations.”

In high-end chocolate, Nestle hopes to mimic a strategy it used to build demand for its Nespresso capsule, which helped create the luxury home-coffee market. That single-serving espresso-maker business began in only two countries in 1986, with Nestle introducing online sales in the 1990s and stores in 2002. Now it’s a 3 billion Swiss franc ($3.3 billion) brand, with about half its sales coming from the Internet and more than 250 boutiques worldwide. Nestle already has tried its hand at other premium, customized goods. The company in 2011 began selling BabyNes formula milk capsules, which fit its own $272 single-serving machine. A year earlier it debuted pricey Special.T pods containing top-quality tea in France.

While Kit Kat bars are the world’s ninth-biggest chocolate brand, according to Euromonitor International, the company has had mixed success in the premium sweets segment in the past. Nestle, which merged with Cailler in 1929, sought to revamp the brand in 2006 with higher prices and packaging designed by architect Jean Nouvel. The overhaul was scrapped after it failed to boost revenue. Cailler still isn’t well-known outside of Switzerland, with only 8 percent of sales coming from abroad. “Nestle is a strong player in the mass-market, but in the premium segment, it doesn’t have a strong reputation,” says Patrick Hasenboehler, an analyst at Bank Sarasin in Zurich.


Chocolate producers including Swiss rival Lindt & Spriingli Group (LISP) already sell online, but only for standard products. Bespoke chocolate is generally sold by niche chocolatiers. Maison Cailler’s online store will generate the bulk of its revenue, although some sales will come from a boutique in Broc, Switzerland, home to the 193-year-old Cailler brand. Nestle plans to expand the custom candies to neighboring countries beginning next year. “The big objective is to make it sustainable, make it something which will enter into consumption habits and which will not be just a one-off,” Freixe says.


Case Study Questions

Question 1: Discuss the Value Chain adopted by Nestle to enhance Value for its Target Audience while competing with their counterparts?


Question 2: Nestle does a big business in low-priced candy bars. Now it’s selling $100-a-pound chocolates customized to buyers’ personal tastes. Comment on the Generic Business Strategy followed here.



Assignment C


A tendency of individuals to adopt the perspective of the group as a whole. It occurs when decision makers don’t question the underlying assumptions. Think Tank Group Think Out of Box Thinking Questionable Thinking


Clusters of firms within an industry that share certain critical asset configurations and follow common strategies. Strategic Business Units Strategic Groups Sectoral Groups Rival Groups


Focus the firm’s efforts and resources in one industry. Diversification Concentration Integration Outsourcing


The costs incurred when a buyer switches from one supplier to another. Fixed Costs Switching Costs

Transfer Cost

Variable Costs


Aggressiveness in Pricing by a firm against its rivals with the intent of driving them out of business. Penetration Pricing Predatory Pricing Skim Pricing

Mark Up Pricing


Factors that reduce entry of new players or entrants into an industry. Exit Barriers Entry Barriers Mobility Barriers Defensive Barriers


To monitor, evaluate and disseminate information from the external environment to key people within the firm. Information Sharing Environmental Scanning

Data Churning

Data Mining


An unfavorable trend or development in the firm’s external environment that may lead to an erosion of the firm’s competitive position. Weaknesses Threats Strengths Opportunities


statements indicating the desired strategic future for the firm Purpose Vision Mission Objective


The rate over time at which innovations are copied by rivals Learning Curve Diffusion Curve Life Cycle Curve Innovation Curve


Looking inside the business and identifying strengths and weaknesses of the firm External Appraisal Internal Appraisal SWOT


ETOP Analysis


Each product and enterprise is considered as an individual responsibility center for purposes of strategy formulation. Parenting Anlaysis Portfolio Analysis Pareto Analysis PEST Analysis


Individuals and groups inside and outside the firm who have an interest in the actions and decisions of the firm. Shareholders Stakeholders Human Capital Directors


A checklist of questions that provide an assessment of a firm’s strategic position and performance. Strategic Schedule

Strategic Audit

Strategic Questionnaire Strategic Accounting


Unplanned strategy that emerge from within the organization intended Strategy Emergent Strategy Deliberate Strategy Realised Strategy


The development of long-range plans for the management of environmental opportunities and threats, in light of the firms strengths and weaknesses. Strategy Formulation Strategy Analysis Strategy



Strategy Evaluation


Compares performance with desired results and provides the feedback for management to evaluate results and take corrective action. Strategy Controls Strategy Objectives Strategy Actions Strategy statements


A strategy serving a specialized part of the market Focus Cost Leadership


Best Solution Provider


The process by which strategies and policies are put into action through the development of programs, budgets, and procedures. Strategy Implementation Strategy Evaluation Strategy Formulation Strategy Analysis


Fit between what the environment wants and what the firm has to offer Strategic Fit Strategic Direction Strategic Disparity Strategic Balance


Where one firm has full ownership and control over all the stages in the production of a product Full integration Taper Intergration Quasi Integration Horizontal Integration


A portfolio planning model based on analysing the relative market share and market growth rates for a company’s products and/or strategic business units BCG Matrix Probability Matrix PIMS Matrix GE Matrix


These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a “mature” market, and every corporation would be thrilled to own as many as possible. Cash Cows Dogs Stars

Question Marks


The business unit has low market share compared to competitors, however it is doing business in high-growth market. Most of the new businesses start in this quadrant. There are well established businesses in this market and new businesses try to grow and capture more market share. This market is growing and there are opportunities for new businesses.

Question Marks

Cash Cows Dogs Stars


GE Matrix compares different products or businesses on “Business Strength” and “Market Attractiveness” variables and in addition the size of the bubbles represents the market size.It is also known as Multifactor Portfolio Analysis Model ETOP Model Hofer Model Ansoff Model


It is a collection of businesses ranging from primary producers, processors, distributors and retailers that progressively create consumer value in a specific market segment. Value chain Supply Chain Distribution Chain Food Chain


It is positive disposition of a customer toward a particular enterprise. It however, also includes intangible assets or qualities of the company, or its management, that cause people to hold the company in high regard. Goodwill Patents Copyrights Competencies


It is the return of information about the impact of an activity. In other uses it can also mean the return of a portion of the output of a process as new input. Feedback Reverse Logistics Reverse Information Relative Input


These are resources under the control of an enterprise that are typically non-physical and not of a monetary nature, and that are critical for the success of the business. These resources include things such as brand image, customer and employee loyalty, quality of business relationships, social standing Intangible Resouces Tangible Resources Valuable Resources Human Resources


It is an organization that is able to adapt to change, move forward, and transform itself by acquiring new knowledge, skills, or behaviors. Learning Organisation Lean Organisation Flat Organisation Tall Organisation


It is a cost/benefit comparison of the cost of an investment or activity compared with the financial and/or non-financial benefits that result. Cost of Return Cost of investment Break Even Return on Investment


A                   is appropriate where the target customer segment is not price-sensitive, the market is competitive or saturated, customers have very specific needs which are possibly under-served, and the firm has unique resources and capabilities which enable it to satisfy these needs in ways that are difficult to copy Best Solution Strategy Focus strategy Cost



differentiation strategy


A                   should target market segments that are less vulnerable to substitutes or where a competition is weakest to earn above-average return on investment. Best Solution Strategy Cost



differentiation strategy

focused strategy


The Primary Activities of the Value Chain which are the transformation activities that change inputs into outputs that are sold to customers. Here, your operational systems create value. Operations Logistics Marketing Customer Service


These are all the processes related to receiving, storing, and distributing inputs internally. Your supplier relationships are a key factor in creating value here. Inbound Logistics Outbound Logistics Warehousing Transportation


These are a company’s support systems, and the functions that allow it to maintain daily operations. Accounting, legal, administrative, and general management are examples of necessary infrastructure that businesses can use to their advantage. Infrastructure Human



Procurement Research and Technology


“Restitching” business portfolio

according to changes in market requirements allows corporate managers to focus on the best market opportunities.

Patching Co evolving Regeneration Refocus


Ability of two or more business units to generate greater value working together than they could working apart, synergy has its sources in shared resources, knowledge and skills, coordinated strategies, vertical integration or establishing internal alliances in enterprise Co-Evolution



Business Splits


It is usually a restructuring plan and is adopted when a turnaround has been attempted but has proved to be unsuccessful or it was ignored. Divestment

Captive Company




It is any combination of Data, Information, and Knowledge concerning the Business environment in which a company operates that, when acted upon, will confer a significant Competitive advantage or enable sound decisions to be made Action with Intelligence

Innovation with Intellegence

Business Intelligence

Business Decisions



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