<General Instructions/information for the students for completing the assignment>
Answer all questions. Deadline of submission: 08/06/2020
The marks received on the assignment will be scaled down to the actual weightage of the
assignment which is <50> marks
Formative feedback on the complete assignment draft will be provided if the draft is submitted at least 10 days before the final submission date. Feedback after final evaluation will be provided by 21/06/2020
Module Learning Outcomes The following LOs are achieved by the student by completing the assignment successfully 1) Explain the differing perspectives and theories that contribute to the processes of Strategic Management. 2) Understand and integrate a range of contemporary issues within the strategic management field and their influence on the strategic decision making process. 3) Apply critical analytical processes, both qualitative and quantitative, within complex business environments to develop cogent perspectives/ arguments. Assignment Tasks Case Study – This question is compulsory and MUST be attempted The following information should be used when answering the provided questions below:- 1 Introduction Belaria Shoes was formed by two brothers who were passionate about diversity in cultures existing in Italy in early 1970s. At this time, the country was undergoing a period of rapid industrial growth and many companies were established that paid low wages and expected employees to work long hours in dangerous and dirty conditions. Workers lived in poor housing, were largely illiterate and had a life expectancy of less than forty years. The Belaria brothers held a set of beliefs that stressed the social obligations of employers. Their beliefs guided their employment principles – education and housing for employees, secure jobs and good working conditions. Belaria Shoes expanded quickly, but it still retained its principles. Today, the company is a private limited company whose shares are wholly owned by the Belaria family. Belaria Shoes still produce footwear in Petatown, but they now also own almost one hundred retail shops throughout Italy selling their shoes and
IN SEMESTER (INDIVIDUAL) ASSIGNMENT
Module Code: BUSS 1009
Module Name: Strategic Management
Max. Marks: 100 Scaled down to 50
boots. The factory (and surrounding land) in Petatown is owned by the company and so are the shops, which is unusual in a country where most commercial properties are leased. In many respects this policy reflects the principles of the family. They are keen to promote ownership and are averse to risk and borrowing. They believe that all stakeholders should be treated fairly. Reflecting this, the company aims to pay all suppliers within 30 days of the invoice date. These are the standard terms of supply in Italy, although many companies do, in reality, take much longer to pay their creditors. The current Belaria family are still passionate about the beliefs and principles that inspired the founders of the company. Recent history Although the Belaria family still own the company, it is now totally run by professional managers. The last Belaria to have operational responsibility was Jock Belaria, who commissioned and implemented the last upgrade of the production facilities in 1991. In the past five years the Belaria family has taken substantial dividends from the company, whilst leaving the running of the company to the professional managers that they had appointed. During this period the company has been under increased competitive pressure from overseas suppliers who have much lower labour rates and more efficient production facilities. The financial performance of the company has declined rapidly and as a result the Belaria family has recently commissioned a firm of business analysts to undertake a SWOT analysis to help them understand the strategic position of the company. SWOT analysis: Here is the summary SWOT analysis from the business analysts’ report. Strengths Significant retail expertise: Belaria Shoes is recognized as a successful retailer with excellent supply systems, bright and welcoming shops and shop employees who are regularly recognized, in independent surveys, for their excellent customer care and extensive product knowledge. Excellent computer systems/software expertise: Some of the success of Belaria Shoes as a retailer is due to its innovative computer systems developed in-house by the company’s information systems department. These systems not only concern the distribution of footwear, but also its design and development. Belaria is acknowledged, by the rest of the industry, as a leader in computer-aided footwear design and distribution. Significant property portfolio: The factory in Petatown is owned by the company and so is a significant amount of the surrounding land. All the retail shops are owned by the company. The company also owns a disused factory in the north of Italy. This was originally bought as a potential production site, but increasingly competitive imports made its development unviable. The Petatown factory site incorporates a retail shop, but none of the remaining retail shops are near to this factory, or indeed to the disused factory site in the north of the country. Weaknesses High production costs: Italy is a high labor cost economy. Out-dated production facilities: The actual production facilities were last updated in 1991. Current equipment is not efficient in its use of either labor, materials or energy. Module Name Strategic Management (BUSS1009) – Semester – Spring 20 – CW 1 (Assignment) – Session D – QP MEC_AMO_TEM_034_01 Page 3 of 10 Restricted internet site: Software development has focused on internal systems, rather than internet development. The current website only provides information about Belaria Shoes; it is not possible to buy footwear from the company’s website. Opportunities Increased consumer spending and consumerism: Despite the decline of its manufacturing industries, Italy remains a prosperous country with high consumer spending. Consumers generally have a high disposable income and are fashion conscious. Parents spend a lot of money on their children, with the aim of ‘making sure that they get a good start in life’. Increased desire for safe family shopping environment: A recent trend is for consumers to prefer shopping in safe, car-free environments where they can visit a variety of shops and restaurants. These shopping villages are increasingly popular. Growth of the green consumer: The numbers of ‘green consumers’ is increasing in Italy. They are conscious of the energy used in the production and distribution of the products they buy. These consumers also expect suppliers to be socially responsible. A recent television programme on the use of cheap and exploited labor in Ethiopia was greeted with a call for a boycott of goods from that country. One of the political parties in Italy has emphasized environmentally responsible purchasing in its manifesto. It suggests that ‘shorter shipping distances reduce energy use and pollution. Purchasing locally supports communities and local jobs’. Threats Cheap imports: The lower production costs of overseas countries provide a constant threat. It is still much cheaper to make shoes in Ethiopia, 4000 kilometres away, and transport the shoes by sea, road and train to shops in Italy, where they can be offered at prices that are still significantly lower than the footwear produced by Belaria Shoes. Legislation within Italy: Italy has comprehensive legislation on health and safety as well as a statutory minimum wage and generous redundancy rights and payments for employees. The government is likely to extend its employment legislation programme. Recent strategies Senior management at Belaria Shoes have recently suggested that the company should consider closing its Petatown production plant and move production overseas, perhaps outsourcing to established suppliers in Ethiopia and elsewhere. This suggestion was immediately rejected by the Belaria family, who questioned the values of the senior management. The family issued a press release with the aim of re-affirming the core values which underpinned their business. The press release stated that ‘in our view, the day that Belaria Shoes ceases to be a Module Name Strategic Management (BUSS1009) – Semester – Spring 20 – CW 1 (Assignment) – Session D – QP MEC_AMO_TEM_034_01 Page 4 of 10 Petatown company, is the day that it closes’. Consequently, the senior management team was asked to propose an alternative strategic direction. The senior management team’s alternative is for the company to upgrade its production facilities to gain labor and energy efficiencies. The cost of this proposal is $37·5m. At a recent scenario planning workshop the management team developed what they considered to be two realistic scenarios. Both scenarios predict that demand for Belaria Shoes’ footwear would be low for the next three years. However, increased productivity and lower labor costs would bring net benefits of $5m in each of these years. After three years the two scenarios differ. The first scenario predicts a continued low demand for the next three years with net benefits still running at $5m per year. The team felt that this option had a probability of 0·7. The alternative scenario (with a probability of 0·3) predicts a higher demand for Belaria’s products due to changes in the external environment. This would lead to net benefits of $10m per year in years four, five and six. All estimated net benefits are based on the discounted future cash flows. Required: Question One Using academic principles and examples from the above case, assess the following concepts:- (a) Strategy (15 marks) (b) Strategic planning (15 marks) (c) Strategy development. (20 marks) Question Two Belaria shoes wishes to develop a strategy for guiding its operations in future. (a) Classify and examine the main factors which are likely to shape and influence the values and strategy of the above organization? (25 marks) (b) Discuss the likely problems with mergers as a means of external growth. (25 marks) Module Name Strategic Management (BUSS1009) – Semester – Spring 20 – CW 1 (Assignment) – Session D – QP MEC_AMO_TEM_034_01 Page 5 of 10 Rules & Regulations: <Below given are only suggestive. It may be edited as per the needs of the assignment/module>
All resources should be cited using CU Harvard style. The final assignment must have a Title page, Table of Contents, References/ bibliography using CU Harvard Style and page numbers. Title Page must have Assignment Name, Module name, Session, your name, ID, and the name of the faculty. Softcopy in word format is to be submitted through Turnitin link on Moodle. Viva will be conducted after the assignment submission as per the dates informed earlier.
Guidelines: <Below given guidelines are only suggestive. It may be edited as per the needs of the assignment/module>
Assignment must be computer typed.
Font – Times New Roman Font – Style – Regular Font – Size – 12 Heading should be with Font Size 14, Bold, Capital and Underline.
Explain with suitable diagrams wherever required. Diagrams must be drawn using suitable software or by pencil. Each student has to do the assignment individually / Students have to do the assignment collaboratively and each student should write a brief reflection on their contribution and learnings from group work. You can refer books in eLibrary or use internet resource. But you should not cut and paste material
from internet nor provide photocopied material from books. The assignment answers should be in your own words after understanding the matter from the above resources. Important Policies to be followed 1. Student Academic Integrity Policy*: MEC upholds the spirit of academic integrity in all forms of academic work and any form of violation of academic integrity shall invite severe penalty. Any benefit obtained by indulging in the act of violation of academic integrity shall be cancelled. All cases of violation of academic integrity on the part of the student shall fall under any of the below mentioned categories: 1. Plagiarism 2. Malpractice 3. Ghost Writing Module Name Strategic Management (BUSS1009) – Semester – Spring 20 – CW 1 (Assignment) – Session D – QP MEC_AMO_TEM_034_01 Page 6 of 10 4. Collusion 5. Other cases If the student fails a module and has a proven case of academic integrity violation in this module, the student is required to re-register the module. This is applicable to first and second offenders of plagiarism. 1. Plagiarism A. First offence of plagiarism I. If a student is caught first time in an act of plagiarism during his/her course of study in any assignment other than project work, the student will be allowed to re-submit the assignment once, within a maximum period of one week. However, a penalty of deduction of 25% of the marks obtained for the resubmitted work will be imposed.