HI6006 Competitive Strategy Tutorial Questions Assessment Answer

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Question :

Assessment Details and Submission Guidelines
T2 2020
Unit Code
Unit Title
Competitive Strategy
Assessment Type
Assessment Title
Tutorial Questions
Purpose of the assessment (with ULO Mapping)
This assignment is designed to assess your level of knowledge of the key topics covered in this unit and application of strategy development and implementation theory to contemporary business cases.
Maps to Unit Learning Outcomes 1,2,3,4.
50% of the total assessments
Total Marks
Word limit
Between 1000 and 2000 words


HI6006 - Tutorial Questions Submission Specifications

The questions to be answered are;

Question 1- Week 2. Analyse the mini case regarding German luxury cars using the five competitive forces to determine the industry’s attractiveness. (7 marks)

Question 2.- Week 4. Describe the risks David Jones faces with the differentiation strategy. - (7 marks)

Question 3. - Week 8. Walmart expansion in China carries multiple risks, identify and discuss. Refer to the case study information to support your discussion- (7 marks)

Question 4. - Week 9. What advantages and disadvantages General Electric international cooperative strategies would bring? - (7 marks)

Question 5. - Week 7. From the Starbucks case, can you identify any organisational capabilities that Starbucks has been able to develop through these experiences? How will these organisational capabilities translate to core competencies that give Starbucks a sustainable competitive advantage in their industry? (11 marks)

Question 6. - Week 11 How does Jack Yun Ma (Founder / Director) shape the strategic direction of Alibaba Group? Refer to the case study information to support your discussion. (11 marks)

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Answer :

Question 1

In this scenario, the mini case regarding the luxury cars from Germany using five different competitive forces to determine the industry’s attractiveness is going to be analyzed. In this topic, Audi, BMW and Mercedes-Benz are regulating the market's attractiveness using five competitive forces. One of the five forces that the Audi, BMW and Mercedes-Benz are using is the Bargaining power of customers which is affected by various elements such as the firm's size, the concentration of suppliers in Chinese market (Turcic et al. 2019). The supply chain partners of Audi, BMW and Mercedes-Benz are auto firms and the partnership's aim is to produce cars locally in China’s fast-growing market. The bargaining power of the customer is another factor that affects profit and sales. This force increases higher completion also as each brand is racing to grow its consumer base and market share. The threat of substitutes affects the demand and profitability of these companies. The main substitutes of Audi, BMW and Mercedes-Benz include rival brands like Ford and the alternative sources of transportation like taxis, buses. The threat of the new entrance is very minimal due to high entry and exit barriers in China. In order to survive in the Chinese market, many leading brands have created a partnership with Chinses automotive companies. The Intensity of rivalry with other car companies is also a major threat to Audi, BMW and Mercedes-Benz.   

Question 2

The risks of a differentiation strategy that David Jones faces depend on various key factors like relationship with Myers. In late 2014, DJs was acquired by South Africa’s and the price was A$2.1 billion. The expectation of the consumers develops by the exciting advertisements of the products. The consumers can be highly disappointed if the desired product cannot match the expectation to them. This is a major risk for well-priced products. The price factor between David Jones and the other organizations formed on cost-price strategy can be considered too large due to external threats like GFC, strong AUD, and technology (Li et al. 2019). Distributor resistance is another main factor that affects the differentiation strategy in 2015 when Ian Nairn was replaced by CEO John Dixon. In many categories warehouse and space are limited and stocking excessive brands is a risk for many distributors. From a small marketer, the new products are resisted by the distributors when the products are distanced based on a financial perspective because A$400 million was waged to upgrade stores. The same reaction would be happening among the members of the supply chain and wholesalers. Another risk factor faced by David Jones is Resource Misallocation. It's always challenging for small firms to allocate marketing resources properly among their product contributions. However, others brands like Studio W, JT One, RE and Distraction can widen these resources insecurely which are weakly differentiated and unstable to hold customer loyalty. Risk reduction is a major risk in the strategy. The risks of product differentiation can be reduced by consumer research. 

Question 3

Globalization has raised a progressively consistent world, with in excess of $30 trillion in goods and services traded and more than $1 trillion in corporate investment each year. The road to the expansion of Walmart in China is not easy and congests various kinds of risk factors. The smart consumer behavior is one of the major risks to Walmart in China. The incapability to connect with the local inhabitants and the market has made the challenging condition for Walmart to gain significance because managers are not just optimists but they are unbridled optimists. Apart from that, the business model of Walmart has been imitated and outwitted by the Sun-Art organization. When Walmart has failed to dominate the market in the locality of China, its native rival company Sun-Art gained supremacy in the market with a more localized approach. The preferences of the consumers are mainly understood by Sun-Art while Walmart failed to realize their needs (Jindal et al. 2020). Another risk of Walmart’s expansion in the Chinese market is the Macro-Economic environment. In addition, the Chinese government fined Walmart for violating local and national laws and even forced it to close stores temporarily for purported product violations. Government austerity programs are also developed a negative impact on sales with respect to economic, political, and cultural environments. Walmart is focusing on increasing productivity in the store. The company plans to improve its store's productivity due to incomparable sales in China. In order to build a strong foundation for sales growth and reduce expenses, Walmart decided to slow down the pace in 2012.

Question 4

General electric cooperative strategies of Wesfarmers consist of two categories that are Strategic Alliance and Joint Venture. The strategic alliance is also known as a strategic partnership, which is basically collaborative management among some organizations. The main purpose of the strategic alliance is to help each other in business function for mutual benefits.  This strategy does not create a different organizational structure to Wesfarmers. The partnership which is formed by strategic alliances bears no ownership ties like a joint venture. This strategy helps the partners of Wesfarmers to work well together. The other cooperative strategy Joint Venture pushes the company into a new organizational structure recognized by two or more groups. It is generally a business agreement where the capital is equal between two or more firms. 

Advantages: The major advantages are it would create an opportunity to unite the assets and skills of partner companies to build a new and effective venture. This strategy would create a path to enter into a different market when the government restricts market entry with a local partner in an outside country (Drewniak and Karaszewski, 2020). The global joint venture is a productive method for fortifying Wesfarmers’s seriousness on the global market.

Disadvantages: The disadvantages that General Electric international cooperative strategies would bring are difficulty would occur in distributing the control share between two partners.  The competition would increase among the joint venture companies in a related business. Problems would arise due to the lack of support for the supporting firms in Wesfarmers.  

Question 5

The organizational capabilities that Starbucks wanted to have been able to develop and achieve by these experiences depend on Value, Rarity, Imitability, and organization concept. Starbucks has changed its view in people's minds about coffee by generating a strong brand image (Herningsih et al. 2019). The company is known widely for its superior quality products. Starbucks has been able to source good quality cocoa while maintaining the quality with effectiveness and set a goal to have 12500 stores in USA within 2015. The organization of Starbucks delivers superior customer service to its consumers.

Starbucks is very popular and stands alone in the Chinese market with its brand image. The company makes various beverages and developed large investments in the Chinese market. Starbucks leaves other rival companies behind in terms of its effective supply chain. The company has set a benchmark with its expansion in China by 75% from 2008 to US$886000 to the end of 2012. 

Starbucks has set its brand image value to a level that it is hard to be imitated by other rival companies (Herningsih et al. 2019). It is very tough to imitate Starbucks's product for its superior quality at Vietnam since 2013.  Customer service and supply chain are not to be imitated easily by other companies because Starbucks offer best practice in Vietnam with a partnership with Tata Group.

Branding is a major element of the company's strategy and it paid US$620 to acquire Atlanta-based Company. The company's customer service, supply chain, environment, and global impact are superior and higher value than other organizations.

In terms of sustainable competitive advantage, the supply chain of Starbucks is the most valuable because the sustainability of the company depends on the supply chain. Starbucks provides great and superior customer service to the customers which are rare to other companies. The product quality of Starbucks is not to be imitated easily because they provide the best quality products by acquiring few companies like Evolution Fresh, juice maker, and Bay Bread and operators of La Boulanga bakeries.

Question 6

Jack Yun Ma is the founder and director of the Alibaba group and its IPO on the Hong Kong stock exchange produced US$1.7 billion. The director showed some strategic direction which helped the group to be one of the top companies in the e-commerce business and it covers 80% in China. It was founded in Hangzhou, China in 1999 with 2300 sellers. Alibaba.com is the company's English l; language portal which controls the sales between exporters and importers from 240 countries and regions (Zhang and Zipser, 2019). Small buyers can gain advantages from Alibaba because it offers a wholesale platform on the world market providing fast shipments of small amounts of goods with a support of 5000 sales associates.  

E-commerce sales in India are expected to grow from $14 B to $55 B from 2015 to 2018, according to the data of eMarketer. Retail online currency sets for around 0.8% of all sales which occur in India and by 2019 it is suggested to grow by 4.8%. Alibaba seeks a way to lead in the country due to the opportunity and the fast growth rate which is being tapped by Amazon. Alibaba gives free membership from the first in order to charm the clients to the e-trade market. In 2015, Alibaba has sales worth US$390 billion with an aim to capture US market. This way the company captured the market through revenue and price strategy. Alibaba group enlarges its market by offering freebies in order to attract more customers to use Alibaba as a digital marketing stage. Alibaba offers a communicational platform for its trading partners in real-time by using the TradeManager tool in the e-trading market place. Alibaba seeks to capture the domestic Chinese market in the future (Zhang and Zipser, 2019). To expand its success through the global market Alibaba needs to focus on the local market first. CEO of Alibaba, David Wei and COO, Elvis Lee both resigned to due to their acceptance for unethical business practice. Chinese police also arrested 36 individuals with respect to fraudulent activity of Alibaba.com.