RSM100 Dicussion Cheat sheet

Small Business

an independent business with fewer than 100 employees and revenues less than $2 million that is not dominant in its market.

small and mid-sized business

• Many firms, such as Natura can be both small and mid-sized businesses

  • Fewer than 100 employees but more than 2 million in revenue

  • Whether a company is small or medium sized does not matter unless they are applying for work, grants, or loans

  • Firms want to reap benefits offered by government to small businesses so they need to know if they qualify

importance of being small business

• Whether a company is small or medium sized does not matter unless they are applying for work, grants, or loans

• Firms want to reap benefits offered by government to small businesses so they need to know if they qualify

small business contributions to economy

• Creating new jobs

  • Hire people who have difficulty finding jobs at large firms

• Creating new industries

  • Give businesspeople an opportunity and outlet to develop new ideas

    • Sometimes ideas become whole new industries

    • New industries can be created when small businesses shift focus to meet consumer interests and preferences

    • Fintech streamlines loan application processes

Why small businesses fail

• Management experience (lack of managerial experience)

• inadequate financing

• government regulations

  • Administrative paperwork (small business struggle with compliance due to limited resources)

franchising

a contractual business arrangement between a manufacturer or other supplier and a dealer, such as a restaurant operator or retailer.

advantages of franchising

• Instant company recognition/preexisting branding/customers

• Proven successful business model/Prior performance record, tested management program

• Can be quickest way to become business owner

• Successful franchisor can bargain for better deals on inputs and real estates due to financial strength and large volume of purchases→can also be passed down to franchisee

disadvantages of franchising

• Initial franchise fees

• Loyalty payments

• Poor experience in one branch may deter customers from other branches

• A bad franchisee can reflect badly on the franchisor

• Lose control over every aspect of business, no flexibility

Corporation Management

Shareholders

owners of a corporation as a result of their purchase of shares in the corporation

elect board of directors

closely held corporation

owned by only a few shareholders and shares are unavailable to outsiders (ex: family businesses)

Open/publicly held corporation

• sells shares to the general public, which sets up a diversified ownership.

  • Annual shareholders meetings

  • Broader range of operations

Outside Director

Part of Board of Directors (not an employee of corporation)

• No direct role in daily operations 

• They don’t have to be a shareholder 

• Remain independent 

• Provide oversight, strategic direction, ensure accountability 

Board of directors

the governing body of a corporation.

• Sets overall policy, 

• authorizes the corporation’s major transactions

• hires the chief executive officer (CEO)

• Elected by shareholders

• Approve strategic direction 

• Ensuring regulatory compliance 

• Top executive can also chair the board sometimes

• Can include both inside and outside directors (shareholders but not employed by organization)

Corporate officers and managers

• Executives:

  • Chief executive officer (CEO)

  • Chief operating officer (COO)

  • Chief financial officer (CFO) 

  • Chief information officer (CIO)

• Managers:

  • Middle management→ongoing operational functions, act as liason between top and bottom management

  • Supervisory personnel→day to day operations, task allocation, evaluate job performance

advatages of corporation

• Separate legal entity

  • Shareholders not personally liable for debts of company

• Limited financial risk

  • Only risk money they have invested in purchasing shares

    • Personal finances remain untouched

• Extends legal lifespan

  • Continue to operate regardless of ownership changes

disadvantages of corporation

• Double taxation

  • Taxed on profits at corporate level

  • Shareholders taxed again on dividends they receive

• Lots of paperwork

  • required to file extensive paperwork

• Loss of control

  • As it grows, shareholders can exert more influence

• Slower decision-making

  • Can take longer to reach consensus as more people involved

• Financial disclosure

  • Required to disclose their financial statements to public

    • More vulnerable to competitors

    • Takes time, resources

Equity as Debt

• If they are redeemable, it's like having to pay the principle at the end

  • Company has obligation to buy back shares 

    • Similar to repaying a loan 

• If they are cumulative, it's kind of like an obligation to pay annually→kind of like paying back principal interest

  • Unpaid dividends collect overtime 

starbucks solutions

1. Lower prices

   1. Positive: increase customer base by attracting more price-sensitive/lower income customers

   2. Negative: Could dilute premium image of starbucks brand

2. Streamlining operations

   1. Positive: Could decrease wait times/improve customer service efficiency

   2. Negative: Could be costly + reduce employee morale by creating pressure to do more work with fewer resources

3. Alternative product offerings

   1. Positive: Expanding beyond coffee could appeal to new customer segments, diversified product portfolio

   2. Negative: Could dilute starbucks core identity as a premium coffee brand

pros of remote work

• Cost savings - less need for office space can lead to significant savings

• Environmental benefits,  Reduced commuting,  Office energy consumption

  • Lower environmental footprint 

• Wider Talent Pool

  • Broadens the hiring pool

  • Allow companies to recruit talent from diverse locations without geographic restrictions

Cons of remote work

• Lack of social interaction - in person interaction can diminish the social aspect of the workplace

  • Leading to feelings of isolation

• Decreased teamwork

  • Limited physical interaction = weaken team collaboration

• Communication Gaps

  • Lack of spontaneous communication or informal networking can affect work dynamics

• Out of sight out of mind 

  • Remote workers might be overlooked for promotions or recognition due to reduced visibility

• More distractions

• Networking challenges

Medtronic (Dr Jha)

• Having clear vision + strong ethical standards

  • Building strong ethical foundation and a highly motivated workforce

• Mission: helping people and making a positive impact though their products

  • Wasn’t about revenues and profits but rather how quickly someone could be helped

Mastercard (Dr Jha)

• Importance of planning, understanding the market

• 85% of global transactions are in cash, 15% was electronic

• Vision→kill cash

  • Focused on converting the 85% into card-based transactions

    • Forward thinking aimed at long term growth

• Shifted mastercard’s approach from immediate competition to future market expansion

Bestbuy (Dr. Jha)

• Used strategic planning process

• Differentiating itself by focusing on customer service

  • Increasing pay for employees

    • Providing better service

    • Improving customer satisfaction

• While other companies might compete on price, Bestbuy could compete through service

• Charged tech companies to place products in bestbuy stores

  • Created a brick and mortar presence for stores that didn’t’ want the cost and risk of building stores

  • Allowed brands to have a physical space whilst generating revenue

  • Shifted strategy to: offer value through services

  • Competitors like amazon couldn’t easily match

    • Includes: in-store advice, tech support, immediate access to products

  • Hubert Joly (former ceo) →win-win situation

    • Customer receives better service/immediate access to products

    • Vendors got exposure/presence without overhead costs

    • Best buy generated revenue from both customers and companies

JP Morgan Chase (Dr. Jha)

• Decision making + meeting efficiency

• No presentations (CEO Jamie Dimon)

  • Everyone required to do pre-reads and come prepared with recommendations

    • Ensures that meeting time is used efficiently to make decisions

      • Not go over details that could be prepared in advance

        • Focuses solely on decision making

• preparations →more productive meetings→better decisions

Dr. Jha: Development bank of singapore (DBS)

• Encouraging risk-taking

  • Piyush Gupta Former CEO of DBS fostered a culture of taking risks and making bold decisions

  • Ex. An employee made a decision that costed the bank a few million dollars, Gupta gave the individual an award

    • Mistake only existed because there was a fault in the company 

• Promotes independent thinking and a proactive approach to problem solving 

Nvidia (Jensen Huang CEO of Nvidia, Dr. Jha)

• Servant Leadership→how can I help you?

  • Leads with humility and focuses on needs of the organization than seeking personal acclaim

• Highlights: 

  • Selflessness

  • Commitment to broader mission of company 

Cleveland Clinic (Dr Jha)

• Once rated lowest patient care in the US

• Solution:

  • Every staff member wore a badge saying “I am a caregiverˮ

  • Making clinicʼs objectives more about service rather than profit Improved services from top to bottom

West Jet (Dr Jha)

• Corporate culture

  • People and culture

    • Importance of employees

  • Guest experience

    • Ensuring customer satisfaction through excellent service experience

  • Revenues and growth

    • Expanding business and generating consistent revenue streams

Adidas (Dr. Jha)

• Instill belief that they're not just making shoes/apparel but about helping athletes achieve their dreams

• Pivot corporate culture/mission/vision

Levis (Dr. Jha)

• Vision: Environmental sustainability + long term customer loyalty 

  • Reduce waste

  • Recycled clothing

    • “Blue Jeans go Greenˮ Program promotes recycling old denim into new products

      • Customers are rewarded for participating in recycling program 

        • Fostering customer loyalty while promoting CSR

Google

• Bright, spacious, airy offices

• Amenities like sport facilities and free food

  • Create engaging, positive atmosphere

Pros of Google

• Attracts higher # of applications due to appealing work environment

• Boost employee efficiency/productivity 

• Improves employee morale

• Flexible to what you do (autonomy)

Cons of google

• High costs in environmental maintenance 

• No guarantee that it will improve productivity 

• Risk of employee becoming distracted

• Reduced professionalism

• Intellectual property theft (open environment)

Ashley Maddison

• Slogan: “Life is short, Have an affair”

• Major data breach revealed their private information and harmed their relationships 

  • Families destroyed, suicides

  • John gibson suicide (he was a pastor teaching religion)

  • Company→promised it was anonymous and trustworthy

  • Gibson→made an account on how own accord, made his own choices including suicide

  • Website made it a public shaming

• Customers

  • Often deceived by fake profiles

  • Misled thinking they were engaging with real users

  • Paid for interactions with fake people

• Employees

  • Some were involved in creating fake user profiles

  • Ethical dilemmas for workers even though they were paid for the work

• Investors

  • Unethical investment

• General public

  • Faced criticism for promoting infidelity

  • Platform normalizes unethical behavior affecting trust in relationships

ashley madison branding change

• Life is short. Have an affair→find your moment

• Does branding change make strategic sense?

  • Once a cheating website=always will be a cheating website

  • Doesn’t matter what they’re selling, its still ashley madison

  • Reverted back to original motto several months later

Bell- Lisa Laflamme (Case study)

• Ethical dilemma surrounding the dismissal of Lisa Laflammae 

  • Prominent news anchor replaced after letting her hair turn grey 

• Double Standard in Appearance 

  • Men with grey hair = sophisticated 

  • Women with grey hair are not viewed positively 

• Replaced by Omar Sachedina; 

• CityNews hired Lisa LaFlamme after dismissal 

  • Pros: CityNews gains positive public opinion by hiring her after the controversy

• Consumers

  • May be ethical given whether the consumers prefer a new anchor

• Employees

  • Against: Firing her over hair color takes away her autonomy and freedom to look the way she chooses

  • For: Expectation for a certain ‘lookʼ in public roles like news anchor

• Investors

  • Risk to profitability with accusations of unethical behavior 

  • Potentially hurting the companyʼs image and stock

• Public

  • Depending on different views

  • Some may view it as meeting consumer demand

  • Others may view it as promoting sexism and ageism

Wells Fargo (case study)

• Unethical behavior driven by aggressive sales culture 

  • Related to creation of fake accounts to meet unreasonable sales targets

  • Inflating # of accounts to make performance metrics look better

• Employees pressured to meeting high sales 

  • Resulting in creation of multiple accounts without consumer knowledge

• Employees:

  • Pressured into unethical practices, leading to firings 

• Consumers:

  • Misled and exploited with unauthorized accounts 

• Investors/shareholders:

  • Companyʼs reputation damaged

  • Impacted stock price and long term profitability

• Lack of accountability

  • Executives were not initially held accountable

  • Reflects poorly on companyʼs brand and leadership 

• Highlights:

  • Setting reasonable management goals 

  • Maintaining ethical standards

EU Imports Chinese EVs

• China grew from 1% to 15% of EU EV Market share 

• Free trade vs protectionism

  • Chinese EVs is supported/subsidized by its government→unfair competition 

    • People in EU buying Chinese cars 

• EU wants to lower carbon footprint, so tariff may harm this goal

• State capitalism vs market economies

  • State capitalism by china influences global markets

• Balancing environmental and economic goals

Pros of state capitalism

• Lower costs, faster growth

• High market dominance

• Easier to scale up

• More stable in economic downturn

• Economies of scale and competitive advantage

• Lower costs→increases market efficiency

• More efficient use of labor + lower cost labor

• Larger = buy in bulk = cut costs/negotiate with suppliers→purchasing economies of scale

• Standardized components across vehicles

Cons of state capitalism

• Less entrepreneurship, inefficiencies

• Overinvestment by local government

• Lack of innovation because less competition

  • Less incentive to be innovative, cut costs etc because large funding from government

• Market tensions among different countries

  • Trade retaliation

pros of tariffs (market economies policy)

• Levels the playing field by reducing price gap between foreign and domestic companies

• Protects local workers

• Temporary relief to restructure

• Encouraging domestic purchasing

cons of tariffs (market economies policy)

• Less motivation for domestic companies to innovate because less competition

• Inefficiency

• Decreases cooperation between local and foreign companies

• Trade tensions + trade retaliation

• Dealing with tariffs

tariff alternatives

• Moving production lines overseas

• Joint ventures

• Subcontracting

• Licensing

• Offshoring

• Franchising

• Staying innovative

• Dumping?

• Diversifying supply chain

Strategic importance of supply chain control

• More control→ reduce costs increase efficiency

• Control quality of goods being made

• Responsiveness and agility → adapt to changes

vertical integration

• Better control of supply chain, communication

• Everything is in-house, better innovation

  • Ex: Tesla 

    • Produces vehicle components in house and operates its own sales / service network 

Outsourcing

• Less control over subcontractors

• Dependence on others 

• Reduce costs

• Fix costs are incurred on the outsourcing company

• Efficiency → others may be better at doing something

  • Product development 

• Reduce labor costs→outsource to country with lower labor costs

• Decrease operational costs

Global supply chain dependencies

• China's control of EV battery supply chain

  • Risks associated with overreliance on single country for critical component

  • Less bargaining power

  • Geopolitical issues

  • Supply chain risks 

  • Fluctuations

  • Regulations

• Strategies to mitigate overreliance:

  • Strengthen inventory management

  • Diversify supply chain

  • Collaborate regionally

  • Not put all eggs into one basket

business impacts

• property damage, disruption of business, insurance claims

• Companies will be more thoughtful about location of operations and how to manage related climate risk

rising c02 emissions

• Principle factors

  • Rising populations

  • Growing energy use per capita

    • Use of technology

    • More money, consume more

• Fastest growth in population and gdp per capita and energy use per capita in emerging/developing countries

who must respond

• Individual→ municipal →provincial→federal→global

• Governments and businesses have more responsibility (scale matters)

• Important framework: shareholder capitalism (milton friedman) vs stakeholder capitalism

Shareholder capitalism (old model)

• focus on shareholder value (maximizing profit)

  • Most companies that were historically operating under shareholder capitalism are switching towards stakeholder model

  • Deliver highest returns to its shareholders 

  • Maximizing profit

Stakeholder capitalism (new model)

•  looks at all stakeholders

  • : if you want to be a successful corporation, you need to take care of all stakeholders (employees, customers, shareholders, suppliers, etc.)

  • Balancing profitability with social environmental 

  • Care for stake holders 

  • Employees

  • Shareholders

  • Customers

  • Suppliers

  • Communities

  • Planet

traditional model

• Traditional model (Triple E): Company must have right environment, good economics, and be equitable in order to be sustainable

New model

• New model has unequal priorities, working from outer circle inwards → environment is higher priority

• Economy doesn’t matter if environment is not safe and stable

• Economy doesn’t matter if there is social unrest

• Economy is important but it is no longer the top priority

• Environment sustainability is a top priority

• Society = building long term trust and stability 

  • Otherwise economy cannot thrive 

options to respond

• example: own a flagship hotel

  • 1) minimize own negative impact (ESG)

    • use renewable source of power to minimize own impact→hotels use a lot of energy (water, electricity, etc)

    • Asks customers what they want to be washed

    • Saving money (financial)

    • Minimizes impact (environmental)

  • 2)  prepare for unavoidable consequences

    • change infrastructure to make it more stable, withstand climate emergencies

      • Insurance policy coverage review

Shift

• nonprofit started in 2017

  • Vision: transforms potential of something discarded into something valuable

  • Real life example of addressing climate change

  • Created out of a business case competition

  • Vast energy potential of human waste

    • convert animal & human waste into clean energy for cooking fuel & lighting

impact of shift

• individual level

  • free resources

  • clean cooking fuel and lighting at night

  • improved quality of life

• community level

  • fertilizer from residual waste in energy domes

  • improved productivity from reliable energy access

• global level

  • prevent climate change

  • reduce greenhouse gases

  • safer energy source

  • reduce energy insecurity

5 Vs of big data

• Volume

  • Amount of data

• Variety

  • Diversity of data

• Velocity

  • Speed of data generation

• Veracity

  • Accuracy of data

• Value

  • Worth of data

CIA Triad

Foundational model in information security

• Confidentiality

• Integrity

• Availability

security risks in data management

• Leaks

• Data getting into the wrong hands

• Balancing accessibility and security

Role of CIO

• Chief information officer

• Growing prominence in recent years

• Make sure IT strategy is in line with business strategy

• Technology and information management

• Technological infrastructure and hardware + software

• Scalability

• Budgeting and cost management

• Ex: canadian immigration portal down 1 day after trump got elected

  • Costs: people have to wait, takes 3-4 years + 1 day 

    • Costs in scaling up

    • Very low impacts

  • Benefits: portal works, people can apply

• Need to consider impacts and risks before taking action

• Team leadership, managing IT team, overseeing tasks

• Compliance and cybersecurity

• Communication with stakeholders

Ways to use big data

• Predict demand

  • Good in higher demand during certain times

• Point out gaps

  • Software pointed out certain products not displayed on shelves

• Turnout analysis

  • Time taken from problem spotted to solution reduced form 3 weeks to 20 minutes

• Instore vs online retail

  • Big data just as relevant to walmart as it is to amazon

Challenges of using big data

• Capital intensive

  • Cost constraints

• Too much data

  • How do we figure out which data is relevant

• Recruitment

  • Hiring qualified resources

• Training

  • Developing talent

Coca Cola and ESG

• Every business has some sort of role of sustainability

  • How quickly can we get out of plastic, support recycling, reduce carbon, diesel to electric

    • Regulations could shut down the company

  • New trend of sustainability in business reports

  • Stakeholders

    • employees

    • Customers

    • Consumers

      • Don't want to have to hesitate when consuming the product because of sustainability impact

    • Shareholders

      • Shareholders need to know how quickly coca cola will fix these sustainability issues

Coca Cola Canada Bottling Limited (CCCBL)

• 5 years worth of rights to do bottling in canada

• foriegn licensing agreement/franchise

• Specialization in being efficient operator of bottling

• Coca cola company is separate from coca cola canada

  • TCCC gets a royalty 

  • CCBL is only able to sell bottles because of the demand/branding of TCCC

  • Two way relationship

    • Very similar to a franchise

Advantages for KO (the coca cola company)

• Company can fully focus on marketing, no need to focus on operations and distributions

• Less daily operational expenses

• Able to maintain the same brand image throughout north america and globally across cultures

  • Focus on big picture brands, focus on global perspective

  • People are always traveling, so it helps to have a consistent brand that people can recognize whatever country they are in

  • Allows global company to be a local company

  • Good to have a partnership with a local company

  • Collecting royalties is a good way to insulate yourself from the market

Disadvantages for KO (the coca cola company)

• Manufacturing challenge→reduced quality/inconsistency with parent company

• Local company might not work for the global brand

• Disagreement with local bottler, different interests

  • Franchisor asking franchisee to invest a lot of equipment to be able to produce new products in alignment with franchisor’s brand objectives

  • 20 years ago KO bought all the local bottler companies

    • Reengineering them with new staff that was more aligned with the coca cola brand

• Consumers may associate Issue with local bottler with the parent company

• Global company’s profits is based on local bottler’s performance

  • Profit might be the biggest objective for local bottler

  • Global company might be more focused on long term goals/sales, demographics engaged, rather than today’s profits

• Less control over production / safety

advantages for local bottlers

• Able to operate locally

• Profit off of coca cola’s brand image and marketing

• Less spending on branding and marketing

• Access to Supply networks from coca cola

disadvantages for local bottlers

• Franchisor is always taking money→cut of gross revenues

• Small company working with global behemoth

• Total dependency/delicate partnership

  • Coca cola has majority of the negotiating power

  • If coca cola were to revoke the license, bottling company would have million in machinery with no purpose

• Strong dependency on the global brand

  • If brand image is damaged in another country, it could affect local bottler

• Less autonomy

Why invest in a bottler operation

• E.g. Kilmer Group purchasing coca cola canada bottling limited

• Basically a franchise

• Growth in another sector

  • Diversify portfolio

• Safely enter another industry because there is already a pre-existing brand/company backing the business

Tim McNerney M&A

• Acquiring a business

  • The ILC skincare story

  • Formulation manufacturing packaging

    • Work with brands who have developed a new skincare product who wants to focus on the brand

      • Basically like a bottler but for skincare

    • ILC does the manufacturing for these brands

Finding and identifying potential acquisitions

• Market research

  • Thoroughly analyze industry trends, competitor analysis, and customer pain points to uncover promising acquisition opportunities

• Growth potential

  • Look for business with strong growth prospects, innovative products or services, and a loyal customer base

• Synergies

  • Identify potential synergies that could create value such as complementary products, distribution channels, or cost savings

• Find one that is in a space that is least likely to be disrupted

  • Offshoring

  • Innovation

Reviewing opportunity: evaluating ILC skincare

• Financial analysis

  • Financial statements, profitability, revenue growth, cashflow 

• Market position

  • Asses ’s market share, brand reputation, competitive advantages to determine long term potential in market

• Operational efficiency

  • Analyze operations, supply chain, infrastructure to identify potential areas for improvement and cost optimization

LOI

• letter of intent (Buyer to seller)

  • Broad statements about how much you'd be willing to pay

  • Range of price

  • Your intentions as a buyer

  • Level of investment and activeness of buyer and seller

Presenting an offer: negotiating the agreement

• Initial offer

  • Multiple bids

  • Agent coordinates offers against each other

• Negotiating process

  • Exclusive negotiations

  • Completely open up their books to you for due diligence

    • Financial assessment and accounting skills becomes crucial

  • Constructive dialogue to reach mutually beneficial agreement

  • Address key terms and conditions

• Final agreement

Securing capital and financing (funding the acquisition)

• Equity financing

  • Leverage existing capital or seek investments from venture capitalists, angel investors, or strategic

• Debt financing

  • Bank loans, asset based lending, private debt placements to fund acquisition, bonds

  • Debt service coverage

    • Amount of debt you have to service (annual payments compared to how much profit you you make) >1.25

• Creative funding

  • Consider alternative financing solutions, such as crowdfunding, seller financing, or earnouts

• Careful planning

  • Develop comprehensive financing strategy that balances risk, cost, and the long term sustainability of acquired business

Transitioning to new ownership (smoothing out the takeover)

• Communication

  • Engage with stakeholders to ensure seamless transition

• Cultural integration

  • Foster a positive cultural alignment by aligning values, goals, and operational practices between the acquirer and the 

• Strategic alignment

  • Clearly define strategic vision, synergies, and growth plans to effectively integrate the acquired business

Entering and optimizing the business (driving growth)

• Set clear objectives

  • Measurable goals and key performance indicators to track success

• Leverage synergies

  • Identify and capitalize on operational, financial, and strategic synergies to drive efficiency and profitability

• Innovate and expand

  • Invest in product development, marketing and new market entry to fuel the growth of the acquired business

    • What do clients keep asking for which we have not offered as a service?

      • Sustainability

        • Increased orders, satisfy customers

• Empower the team

  • Retain and motivate key talent to foster a collaborative culture supporting integration and growth objectives

Key takeaways on M&A

• Thorough evaluation

• Strategic alignment

• Seamless integration

• Continuous improvement

• Understand own strengths and own work

• Scalability

• Location

Amazon

• Key success factors

  • Large scale digital infrastructure 

  • Customer-oriented approach →fast delivery etc

  • Anticipating customer needs/wants

  • Humans assisting robots rather than the other way around

    • Constantly measuring productivity

Cheetah and gazelle concept

• Amazon = cheetah

  • Goes after Gazelles

•  lower end companies, third party sellers (weak gazelles) 

  • Give them attractive terms and change them later

  • Squeeze them

Amazon strategic decisions

• AWS = amazon web services

• Generated revenue and profits for Amazon

• CIA did a joint project with AWS→created trust and brand reputation

• Amazon e-commerce (not AWS) was making a loss for 2 decades

  • Trying to keep prices competitive

  • Had to establish infrastructure to gain economies of scale

• Data analytics and big data

  • collecting/gathering data on consumer behavior

  • Anticipate consumer preferences to suggest goods

  • Predicting behavior

  • Constantly monitoring employees and productivity rate

Amazon threats

• Charged by EU in antitrust lawsuit (disadvantage)

  • Anticompetitive behavior (monopoly power)

    • Monopolistic Behavior 

  • Is Amazon becoming too big?

  • Competitors: Temu, Alibaba

    • Not really close competitors - quality image (Low)

    • Certain things you buy at a dollar store

  • Breaking amazon down could harm consumers

    • Consumers would be upset if there wasnt amazon

amazon for startups

• Advantages

  • Anyone can signup and sell goods on amazon

  • Gives new businesses exposure and access to more consumers

• Disadvantages

  • Hard for businesses to compete with amazon’s infrastructure

  • Get squeezed/bullied by amazon because lower negotiating power

amazon finances

• Highest operating income - AWS

• International sector - loss

• Should they continue with their international operations?

  • Best predictor of future is past

    • Used to make loss in america

    • Number supports this argument because they are losing less

    • Losses are decreasing→eventually turn profit?

    • Expenses may proportionately decrease as these international countries become more developed with better infrastructure

    • Underestimated competition in china - JD

    • WTO expecting more trade barriers going forward with Trump planning to impose tariffs

• Revenue still getting bigger every year

• Drop 2020 as an anomaly?

  • Supply chain issues

  • Fuel price issues →transportation costs

amazon ethics

• Employees

  • Stipends (fixed regular sum)

  • Training

  • Harsh work conditions/stress because constant pressure to increase productivity

• Consumers

  • Convenience

  • Good prices

  • Alexa - listening and gathering data without consumer’s knowledge

• Vendor

  • Helps them expands

  • Harms them /squeeze them

• General

  • Bring in money

  • Tax dollars

  • Crate income create wealth

  • Create jobs

  • Questionable practices

  • Strategic alliances with government, CIA

  • Police department - ring software

  • Privacy violations

  • ESG and carbon footprint

• Investors

  • Bringing in money

  • Controversial

  • Anticompetitive behavior

  • Boycotts

sustainable competitive advantage

• one that is difficult for competitors to imitate→valuable and rare

strategy

• Foundations of strategic competitiveness

  • Competitive advantage

• Internal analysis + external analysis = strategic management

internal analysis

• Potential core competencies: 

  • Special knowledge

  • Superior tech

  • Efficient manufacturing approaches

  • Unique product distribution systems

external analysis

• Assessment of macro environment:

  • Tech

  • Government

  • Social structures and population demographic

  • Global economy

  • Natural environment

• Analysis of industry environment:

  • Resource suppliers

  • Competitors

  • Customers

SWOT

• Internal: strength and weakness

• External: opportunities and threats

• Tesla

  • s=self-driving commercial cars

  • w=production constraints, overinflated stock price

  • t=cheaper alternatives from competitors

  • o=people becoming more environmentally conscious

Growth strategies

concentration, diversification

Concentration

being everywhere, Tim Hortons

Diversification

vertical, related, and unrelated→Rogers owning X that offers a different product

Retrenchment

• improve financial stability and longterm success

• Restoring financial stability, Cutting excesses, Optimizing resources, Realigning business operations, and Salvaging profitable segments

• correcting weaknesses, liquidation, restructuring (downsizing and rightsizing), restructuring through divestitures

strategy formation

• Opportunities for achieving sustainable competitive advantage

  • Cost and quality

  • Knowledge and speed

  • Barriers to entry

  • Financial resources

Strategies vs tactics (long term vs short term)

• Battlefield strategy

  • first , we will win the war in the east, then turn our forces westward

    • The big picture of how the war will be waged over the next months

• Battlefield tactics 

  • This morning, the gunners will fire volleys, then the footmen will charge their positions

    • Short term plans for today’s battle, that support the strategy

• Tactics may change frequently, depending on movement to moment conditions, while strategies or the big picture typically won’t change very much very often

Eaton strategy formulation

• Steps of strategy formulation

  • Identify

    • prior strategy was to be middle-high end (like the Bay)

  • Analyse

    • appeared like the environment was open for another higher end department store and they had the resources to convert stores to higher end stores

  • Revise

    • Changed strategy to being a high end retailer

  • Implement

    • Changed store appearance and marketing campaigns

  • Evaluate

    • Realized they already had a brand image in the eyes of the consumer - failed miserably and sold the company to Sears who then closed all the Eaton’s stores purchased

why eaton failed

• Didn’t align with existing brand image 

• Rebranded to become a more higher end mall

• Emergence of ecommerce

• People want the whole value proposition (actual stall rather than small stands→experience matters)

• Why would i go to eaton when we can go to Bay where its more established as a higher end mall