2021

ASSIGNMENT ON
CLOSING CASE
SUB: STRATEGY FUNDAMENTALS
SUBMITTED TO:
RASHEDUR RAHMAN
ASSOCIATE PROFESSOR,
DEPARTMENT OF ORGANIZATION STRATEGY AND LEADERSHIP
UNIVERSITY OF DHAKA

SUBMITTED BY:
TANMOY BAKSHI RAJU
Id: 91908013

1/15/2021
 Chapter 1
Wal-Mart is one of the most extraordinary success stories in Business history. It is a very much large company. It
is not only large but also profitable. Wal-Mart’s persistently superior profitability is based on a number of factors.
Wal-Mart was one of the first companies to apply self service supermarket business nodel developed by grocery
chains to sell genera merchandise. Wal-Mart grew quickly by pricing its products lower than those of local
retailers, often putting them out of business. Overtime the company became an innovator in information system,
logistics and Human Resource practice.

Q1. Wal-Mart’s strategic vision was to target small towns in the south. These towns were usually ignored by
competitors of Wal-Mart so this created the perfect market for them to attack. They also made their prices lower
than local mom and pop stores and other retailers to give more attractiveness to the store to lure in new consumers
trying to save money. This is what gave them a competitive advantage. Rural towns are often forgotten about by
larger corporations, so by Wal-Mart focusing on these areas it gave them more of a customer base because most
townspeople in these rural areas don’t want to drive an hour or so to the next city to go shopping when they can
have a supercenter where they can get everything they need in their town. Wal-Mart's competitors only focused
on urban and suburban areas which gave Wal-Mart an advantage over them and since Wal-Mart priced everything
at a bare minimum cost it allowed the company to grow so drastically because it was so affordable to the
customer.

Q2. In order to continue strengthening its competitive advantage, Wal-Mart became the pioneer in information
systems, logistics and human resources practices. Taking actions in these functional areas allowed the company to
increase its profit margin at a lower cost, enabling them to charge lower prices and gain higher revenue than the
competition. Additionally, Wal-Mart developed and implemented bar-code technology and checkout scanners
which enabled them to track if products were being distributed properly in the right places. The company also
avoided over stocking to mitigate the issue of dealing with unsold inventory. Lastly, the linking of their
information system with nationwide distribution centers for inventory helped to strengthen the company’s
competitive advantage. This teaches that in order to maintain a competitive advantage, a company must analyze
its strengths, weaknesses, opportunities, and threats and follow the demands and needs of its customers. A long
term competitive advantage means that a company needs to keep inventing and using new technology and
charging lower prices than its competitors.3. By the early 1990s, Wal-Mart was encountering limits to growth in
the US. How did it overcome these limits to growth? Explain how the expansion moves that Wal-Mart made into
the 1990s made economic sense and helped to create value for the company's shareholders. One of the things that
Wal-Mart did to expand their limits to grow was expand their departments of retail. A major move that helped
expand Wal-Mart was to move into the grocery business.

Q4. I believe Wal-Mart is encountering limits to growth because there is only so much growth you can do in the
industry they are in. Wal-Mart can expand into different industries in order to break the limits on the growth they
can do within the retail industry. 5. How much of Wal-Mart’s strategy do you think was planned at the outset and
how much evolved over time in response to circumstances? What does this suggest to you about the nature of
strategy development? Wal-Mart’s strategy was planned at the outset, because they were so strategic about where
they first started their business and knowing that would allow them to expand across the U.S. and hopefully into
other countries using the same strategies. Using the same strategies and tweaking them a bit per country they
expand into because of different laws and regulations, it can help them keep a competitive advantage because
other countries don’t really have a store like Wal-Mart so it will maintain a competitive advantage.
 Chapter 2

The commercial aircraft manufacturing industry is comprised of two segments namely narrow-bodied and large-
bodied jets. The dominant players in the large-bodied segment are Company B and Company A. They produce
jets whose seating capacity is more than 100. The narrow-bodied segment comprises of manufacturers, namely
Company E, Company BB, and Company C who produces jets with a seating capacity of less than 100.There is a
good growth potential in this industry, as the number of flyers would increase considerably in the future. There
are no new entrants in the large-bodied segment because of the huge investment barrier. Company C is a new
entrant in the narrow-bodied segment. To counter the threat, the two large-bodied segment companies are also
focusing on their narrow-bodied jets.

Q1. The wide-bodied segment of the large commercial jet aircraft industry can be only profitable for Boeing and
Airbus due to the extremely high entry barriers reinforced by substantial economies of scale, absolute cost
advantage, high customer switching costs and absolute cost advantage. The costs and risks of entering the wide-
bodied segment industry are so high that no other company can afford competing with Boeing and Airbus. Simply
put, only these two aircraft producers have resources to develop and bring new wide-bodied jets into the market.
In addition, the demand for the products needs to be high so that the companies can see profit-making
opportunities in developing new aircraft. In fact, it may take 10 years for Boeing to break even on their latest
Boeing 787.

Q2. The entry barriers into the narrow-bodied segment seem to be much lower than the entry barriers into the
wide-bodied segment. This statement can be supported by the recent changes in the competitive landscape of the
narrow-bodied segment. In fact, in last year’s, three new companies entered the industry offering smaller narrow-
bodied jets.

Q4. The long-term strategy would be to develop an expertise in the narrow-bodied industry, create substantial
economy of scale and gain customer loyalty. Once achieved, the companies should focus on improving their
narrow-bodied aircraft, paying a special attention to fuel efficiency. Even if these new entrants keep growing and
developing successfully, it will be extremely had directly compete with credible and reputable companies like
Boeing and Airbus. Hence, new entrants may consider joining forces and creating alliances in order to become
more competitive.

Q5. The short answer is that nobody else _wants_ to make large transports. There's no money in it, its extremely
high financial risk and requires government backing.
 Chapter -3
One of the most significant facts about version is that it has the lowest churn rate in the industry. The risk of churn
increased significantly in the United States after November 2003, when the FCC allowed wireless subscrivers to
transfer the3ir phone numbers when they switched to a new service provider. The low customer churn at verezon
is due to a number of factors. It has the most extensive network in the United states and the company has invested
aggressively in high speed wireless networks. To further reduce customer churn, Verizon has invested heavily in
its customer care function.

Q1. According to the text, Verizon has several resources that enable the company to have such a strong
competitive position. The primary is the extensive amount of coverage provided from their reception towers,
which “blanket over 95% of the nation.” To couple with this impressive statistic, Verizon has invested substantial
money into another beneficial resource, a wireless, high-speed, fiber-optic network. Finally, Verizon has a
customer care resource, which is an automated software program that enables Verizon to analyze the call habits of
individual customers and make various recommendations with this data. From independent research, Verizon has
added three other resources to the company in the past few years. In 2015 and 2017, respectively, Verizon
acquired AOL and Yahoo to diversify the company’s interests and to generate an uptick in profitability. Most
recently, as of 2018, Verizon announced the acquisition of Movil data International, a Spain-based provider of
commercial fleet management solutions. The CEO of Verizon Telemetric, Andres Orlando, believes this strategic
acquisition “strengthens Verizon Telemetric’ market position accelerates growth and allows the expansion of our
market-leading solutions and services

Q2. How these resources enable Verizon to improve one or more of the following: efficiency, quality, customer
responsiveness, and innovation. These resources are helping Verizon to improve, and help them to do better on
following four points

• Efficiency: While reducing the customer churn, Verizon doesn’t need to investor cost in order to attain
new customers.
• Quality: Verizon’s wireless network covers 95% of the nation and keeps reducing in fewer dropped calls
and dead zones. Verizon also offers fast downloads and high-speed data transportation between cell
towers.
• Customer responsiveness: Version set the customer care function and analyze the call habits of individual
customers to know every customer’s demand and provide personalize service.
• Innovation: Verizon keeps working on improvement and upgrade their qualities and service which wants
to have low customer churn.

Q4. Company V is a leading player in the wireless telecommunication industry in Country U. The market
share of Company V accounts to 38 percent and the churn rate is as low as 1.28 percent per month. The
customers are happy with the service of Company V and tend to stay with the company significantly reducing
the churn rate.Companies have maintained a cost advantage in the past by offering lower costs and more data
than their competitors and by eliminating contracts and fees. Verizon can also continue to maintain its
competitive advantage by continuing to build out and upgrade its network infrastructure.
 Chapter 4

Amazon offers customers a much wider selection of merchandisethanthey can find in a physical store, and does so
at allow price. Online shopping and purchasing is made easy with a user friendly interface, product
recommendations, customer wish lists, and a one click purchasing option for repeat customers. To deliver
products to customer’s quickly and accurately, Amazon has been investing heavily in a network of distribution
centers. On the innovation font, Amazon has been a leader in pushing the digitalization of media. Amazon has
been able to succeed over physical stores by offering a wide variety of merchandise at a lower price and by
eliminating customers’ travel time to stores or other efforts implied in the process of obtaining the desired
product.

Q1. Functional-level strategy Amazon pursued to boost its efficiency is production—implementing flexible
manufacturing systems (automation). Another strategy is information system to automate processes to reduce
costs of coordination (cost of processing information in an organization).

Q2. Amazon has implemented several strategies to increase its efficiency and customer responsiveness to increase
its overall product quality. These strategies include optimizing their picking and packing processes by using
robots to reduce the costs that the customer pays.

Q3. Quality would mean how well the services or products meet customer’s expectations. To boost product
quality, Amazon would need to control or oversee the quality of products sold by 3rdparties
vendors/sellers/merchants/retailers.

Q4. Amazon has been able to succeed over physical stores by offering a wide variety of merchandise at a lower
price and by eliminating customers’ travel time to stores or other efforts implied in the process of obtaining the
desired product.

Q5. Amazon’s early investment in cloud-based infrastructure to build Amazon Web series is a rare and valuable
resource because that is believed to match Amazon’s online business in sales volume, in the near future.

Q6. Amazon appears to be ahead of the curve. It started as a retailer of books to later on be the one digitalizing
them for a more convenient usage in this new era where electronics are increasingly being used.
 Chapter 5
Nordstrom is a niche company, one of the Americans most successful fashion retailer with 200 chain stores in 31
states. Their approach to business was to provide exceptional customer service, selection quality and value. Its
main focus is relatively affluent customer base that is looking for affordable luxury. They make their stores
services very much customer friendly. Their policy is customer is always right. Their excellent customer service
differentiates them from their rivals. The organization charts is an inverted pyramid at which ceo is at the bottom.
For their outstanding customer service and legendary business policy, Nordstrom generated almost 12.5 billion
dollar sales in 2014 and consistently increasing.

Q1.Nordstrom is a niche company and focuses on a very specific group of customers. They provide exceptional
customer service, selection, quality, and value to their customers. They chose to focuses on a relatively affluent
customer base that is looking for affordable luxury.

Q2. Nordstrom’s stores, located in upscale areas, have expensive fittings and fixtures that convey an impression
of luxury and invite browsing. Touches such as live music played on a grand piano help create an appealing
atmosphere. The merchandise is fashionable and of high quality. What truly differentiates Nordstrom from many
of its rivals, however, is its legendary excellence in customer service.

Q3. Generic business level strategy is a strategy that gives a specific form of competitive advantage to a company
with the profitability. Nordstrom is taking full advantage of the generic business level strategy.

Q4.Nordstrom has implemented good compensation plan for their salesperson and human resource. Apart from
the compensation benefit, payment is presented for the salespeople. Nordstrom believes that proper compensation
plans for the salesperson is necessary for ensuring the complete support from the sales person.

Q5.To ensures the competitive advantage on long-term, Nordstrom is trying to create a brand loyalty among the
customers. The way of treating the customers gave a unique identity tothe company. Nordstrom is very serious
about customer satisfaction and they are making even the setup in their stores ready for impressing the mind of
the customers. The way in which Nordstrom provides satisfaction in the mind of the customer is different. The
competitors cannot be able to imitate the strategies adopted by the company

Q6. Nordstrom is organized to attain a big success. They have implemented an inverted pyramid model of
organization chart. In an inverted pyramid model, the salespersons will be placed in the top most Position and the
CEO will be placed in the bottom of the pyramid.
 Chapter9
Apple is a very well-known electronic company, owned by Americans. Their all products manufacture and
assemble in China. Because the overseas factories of china provide breathtaking flexibility, speed and superior
scale diligence and access to industrial skills that not the American or the other countries can match. However
China offers advantages in whole supply chain, not in any specific part of production. For this reason one third of
the apple employees are from outside US. As a part of vertical integration apple decided to produce their own
hardware and software and software and sell them its own retail stores. Apple also spends billions of dollars for
buying production equipments and act fit in some Asian industries. Apples strategy is controlling device design
and production with commoditization and rapid cast reduction to win competitive ideas. As a result apple
develops superior flexibility and technological sophistication that its competitors cannot match.

Q1. The advantages to Apple outsourcing its production to factories in China include superior responsiveness,
superior scale, flexibility, diligence, and access to industrial skills. An example of the superior responsiveness, in
assembly, to Apple’s needs is the impressive speed and flexibility of Chinese factories to accommodate a change
request. Hiring qualified industrial engineers takes only days to procure compared to months for the United
States. A positive impact to the entire supply chain comes from supply factories near Apple’s Chinese factory.
Cost differential and cheap manual labor can contribute to Apple’s differentiation advantage or that lowers its cost
structure. Disadvantages could include quality control, low quality materials, overcoming language issues and
mainly, Apple’s criticisms about failing to support employment in its home country.

Q2. Factors that influence the choice of countries to which a firm might outsource its production; supply chain,
qualified employees, standardized production facilities and investing in superior technology or scale.

Q3. Government incentives, tax incentives, and lower regulations are some ways that might persuade Apple to
eventually shift production back to the US.

Q4. Apple is more vertically integrated than many other computer makers because of its decision to produce its
own hardware and software. Additionally, it instituted an upfront payment for technology and capacity.

Q5. The SWOT analysis (as we usually start any case by understanding the situation) - Problems identifications
Apple's competitors analysis (to understand the compete Apple competitors analysis (to understand the
competitive strategy of apple "based on the available information" Explain what is Apple outsourcing strategy?
Explain what is Apple vertical integration strategy? Evaluate each strategy interns of advantages and disadvantage
-Conclude with recommendations linked to your SWOT analysis.
 Chapter 10

Citibank is the consumer division of financial services multinational citygroup. Citibank was founded in 1812 as
the city bank of New York and later became first National City bank of new York. The bank fast 2649 branches in
Mexico. In 2016, the United States accounted for 70% of revenue and Mexico accounted for 13% of revenue.
Aside from the US. And Mexico most of the company’s branches are in Poland, Russia, Pakistan, India and the
United Arab Emirates.

Q1. A ‘financial supermarket’ is a financial institution or company that offers a wide range of financial service
sunder one roof.1Anadvantagefor Citigroup would be the numerous ‘cross-selling’ opportunities available to its
customer base. By merging services like banking, insurance and investments, City group could serve all its
customers with every financial need under one roof. Additionally, the merger and expanded services could
promote other financial products and create cost savings by consolidating operations such as information
technology, customer service, and billing. Results would include increased revenue stream and business growth.

Q3. It was so hard to integrate the different companies that were merged because Citigroup and the merged
companies failed to communicate. There were no right controls, no governance or oversight, and lack of
accountability. There were dozens of technology systems and dozens of financial ledgers, making it difficult to
assess how much gain or loss there was. Moreover, Citigroup had to deal with anxious investors after posting
billions in losses and falling stock prices. As a result, Citigroup restructured into two operating units. Citigroup
for retail and institutional client business, and Citi Holdings for its brokerage and asset management.

Q4. Some challenges involved with managing a very large, diverse financial-services company are to provide
sufficient, and effective, oversight within the firm.Some factors to consider are conflicts of interest among
businesses, consolidated risk management, understanding the role of risk management, the cost of integrating
information across business lines, conceptual and technical challenges, and regulatory barriers.