Advanced Business Strategy and Assessment Guidelines

Assessment 2: Written Report and Interactive Oral Logistics

• The primary focus of recent discussions centers on Assessment 2, which consists of a written report and an interactive oral component. These two elements are linked, and completing the oral component is mandatory; failing to do so results in a failure of the entire assignment, as a separate mark for the report will not be provided in isolation.
• There are no automatic extensions available for this assignment. The standard seven-day automatic extension does not apply. Any issues preventing a student from meeting the report or oral deadlines require an application for special consideration supported by documentation and evidence.
• Submissions and bookings follow a strict timeline:
  • Report Deadline: $August\,21$
  • Interactive Oral Booking Deadline: $August\,21$
  • Interactive Oral Window: $September\,7$ to $September\,11$
  • Next Online Meeting: $September\,10$
  • Drop-in Sessions: A session will be held on $August\,20$ for report questions and during the mid-session break (week of $August\,31$) for interactive oral preparation.

Detailed Guidelines for the Assessment 2 Written Report

• The analysis must be industry-based rather than organization-based. A "funnel" approach should be utilized: first providing an overall industry analysis and then narrowing the focus to how industry-wide factors impact the specific opportunities and threats for the chosen organization.
• Specific environmental factors (PESTEL) must be supported by references and concrete data. For instance, rather than stating interest rates have changed, students must provide specific figures regarding how they have shifted over a defined period (e.g., the past $6$ to $12$ months).
• The Five Forces analysis requires similar specificity. When analyzing rivalry among competing sellers, students must identify specific rivals and define the nature of the industry (e.g., monopoly, perfect competition, or an industry dominated by a few large competitors). Claims regarding high or low competitive rivalry must be backed by media articles, industry reports, or official press releases.
• The report must not include recommendations. The final section, titled "Key Issues and Implications," involves synthesizing critical findings from the external and internal analysis to discuss their meaning for the organization's strategic direction. Formal recommendations for organizational action are reserved exclusively for Assignment 3.

Conduct and Structure of the Interactive Oral (IO)

• The IO is a $10\text{-minute}$ discussion regarding the submitted report, although students should set aside $15$ to $20\,minutes$ in total to account for the check-in process. The session includes:
  • Logging into the Zoom room and entering a waiting room.
  • Identity verification via a student ID card.
  • Communication with Marker Mark Hill. While the session is recorded for moderation purposes, recordings are not published and remain private between the marker and the moderator.
• The objective of the IO is to gauge the depth of a student’s knowledge and their understanding of key concepts. It is intended to be a relaxed, conversational discussion rather than a high-pressure job interview.
• Performance Tips and Expectations:
  • Students may have their report present for reference but should avoid reading from it verbatim or memorizing sections.
  • Pausing to consider a question is viewed as professional rather than a penalty.
  • Students should seek clarification if a question is unclear (e.g., "What do you mean by that?") and are permitted to "recover" if they realize they have gone off track.
  • Feedback for both the report and the oral should be provided within approximately $2\,weeks$.

Interactive Oral Questioning and Marking Criteria

• The marker will ask a question related to each section of the report, including the organizational overview, PESTEL, Porter’s Five Forces, VRIO, and key issues/implications. Questions vary between students and may be specific to individual report findings.
• Sample Question 1: "How would you describe this strategic business unit or organization to someone unfamiliar with the organization?"
• Sample Question 2: "Which of the PESTEL factors that you identified has the greatest impact on industry growth and why?"
• The marking criteria require students to:
  • Articulate a focused verbal overview using specific data.
  • Justify choice of metrics and prioritize macro-environmental factors.
  • Defend the selection of opportunities and threats with targeted examples.
  • Provide verbal justification for VRIO classifications.
  • Synthesize a conclusion forming a direct future pathway.
  • Address questions directly with deeper rationale not fully detailed in the written report.
• A failure in the oral component is characterized by answers that contradict the data or findings submitted in the original written report.

Strategic Business Units (SBUs) and Fundamental Strategic Choices

• A Strategic Business Unit (SBU) is a division of a company that supplies goods or services for a distinct domain of activity. A small business typically consists of a single business unit, whereas large diversified companies (e.g., Wesfarmers, which includes divisions like Bunnings) comprise multiple SBUs or profit centers.
• There are two fundamental choices for a business:
  • Business Strategy: Focuses on how to compete in the marketplace and deliver better value than competitors.
  • Business Model: Focuses on how the business will create, deliver, and capture value.
• Business-level strategies involve satisfying specific needs for specific customers. Key questions include: Who will be served? What needs will be satisfied? How will those needs be satisfied?

Porter’s Generic Competitive Strategies

• Low-Cost Provider Strategy: Striving to achieve lower overall costs than rivals to appeal to a broad spectrum of customers and underprice competitors. Kmart is a prime example, utilizing the "Anko" brand and targeting broad market segments with low-priced goods across various categories.
  • This strategy works best when price competition is vigorous, products of rivals are identical, and buyers incur low switching costs.
  • Cost advantages are often achieved through the value chain via economies of scale, operating at full capacity, or using lower-cost inputs without sacrificing quality.
• Broad Differentiation Strategy: Differentiating products from rivals in ways that appeal to a large number of buyers (e.g., Apple or Samsung). This allows firms to command premium prices, increase unit sales, and gain brand loyalty.
  • This works best when technological change is fast-paced and buyer needs are diverse.
  • Uniqueness can be created through product design, performance, employee skills, or superior customer service.
• Focused Cost (Niche) Strategy: Targeting a narrow market segment (geographic or customer-specific) with lower costs than rivals.
• Focused Differentiation (Niche) Strategy: Targeting a narrow market segment with customized, high-value attributes.
• Best-Cost Provider Strategy: A hybrid strategy that gives customers more value for their money by satisfying expectations on quality and features while beating price expectations (e.g., IKEA).

Business Model Frameworks and Patterns

• A business model serves as a blueprint for yielding profit. It consists of the Customer Value Proposition (CVP) and the Profit Formula.
• Value Creation Components:
  • Target Market: Who the customers are and what problems are being satisfied.
  • Value Configuration: How the resources and activities are structured.
  • Value Capture: How the model generates a margin through revenue streams and cost structures.
• Common Business Model Patterns:
  • Razor and Blade: Selling a master product (the razor) at a low price or break-even while generating high margins on repeat purchases of consumables (the blades or ink cartridges).
  • Freemium: Providing a basic version of a service for free to build volume, then converting users to a paid premium version (common in online apps and streaming services).
  • Peer-to-Peer: Facilitating transactions between equals.
• Comparison of Media Business Models:
  • Pandora: Free internet radio supported by targeted ads, with a subscription option for an ad-free experience.
  • Over-the-Air Radio: Completely free to listeners, with heavy reliance on advertising sales for revenue.
  • Paid Apps vs. Free Apps: Free apps utilize ad-based revenue models, while paid apps provide higher quality or ad-free content for a direct fee.

Future Roadmap

• Current Week: Chapter $9$ (Corporate Strategy).
• Next Week: International Strategy. This topic is particularly relevant for Assignment $3$ if a business has international operations or if international expansion is a recommended strategy.
• Assignment 3: Will require students to identify which generic competitive strategy their chosen organization uses and apply contents from the entire subject to provide strategic recommendations.