MNG3701 LATEST EXAM PACK

MNG3701 LATEST EXAM PACK. This is a complete and an all-inclusive guide to MNG3701 - Strategic Management A competitive advantage occurs when a significant number of buyers prefer the company's products or services over those of its competitors and when the basis for this preference is sustainable over the long term it’s called a sustainable competitive advantage Sustainable competitive advantage For a competitive advantage to be sustainable, there must be requirements: valuable, rare, too difficult or costly to imitate, non-tradable, durable and based on the exceptional deployment of organisational resources, capabilities and distinctive or core competencies in satisfying customer needs and market demands better than the competitors do. However, apart from the organisation‘s unique, rare and valuable resources, capabilities and distinctive or core competencies, the following competitive business level strategies could also be important sources of competitive advantage: a cost-leadership strategy; a differentiation strategy; focus strategy and a best-cost provider strategy, based on optimal customer value creation. Transient competitive advantage Transient competitive advantage implies that an organisation constantly recognise new, emerging realities and accommodate those in order to stay ahead of competitors. A good example here is Samsung that always stay in front of their competitors in the cell phone market by continuously launching launch new models. MNG-E-1 Memo _ T Mudyano _ MCom, BCom Honours in Business Management, BCom HR Management, Certificate in HR Hiring Practices (UNISA) Contact number: 078 717 3916/ _ Email: OR _Website: 5 | P a g e 1.2 The purpose of sustainable development is to ensure that organisations reach their economic goals without compromising the capacity of future generations to reach their goals. It seeks to strike a balance between economic growth, a healthy physical environment and the wellbeing of society. In business terms, these elements relates to the triple-bottom line. Three requirements for sustainable development include:  Ethical profits (economic bottom line) – business must be profitable and profit must be generated in an ethical way.  A healthy physical environment (environmental bottom line) – business activities must not be harmful to the environment. This will ensure sustainability of the environment. Many boards strategise around sustainability and disclose such initiatives in their annual reports.  Healthy communities (social bottom line) – businesses must plough back into the communities they operate in. Companies are compelled to look after the communities where they operate. Woolworths meet these requirements. It is evident from the scenario that Woolworths meets the requirements of triple-bottom line as it managed maintain the balance between economic, social and environment. Examples from the case study: “In April 2007, Woolworths launched their Good Business Journey – a bold plan to make a difference in eight key areas on their journey towards sustainability Energy, Water, Waste, Sustainable Farming, Ethical Sourcing, Transformation, Social Development and Health and Wellness.” 1.3 The characteristics that resources and capabilities have to meet in order to become core competencies that can result in a competitive advantage – value, rarity, inimitability and organisation (VRIO): Value – Implies the ability of the organisation to transform a resource into a product or service at a lower cost or with a higher value to the consumer. Capabilities are valuable when they enable an organisation to implement a strategy that improves efficiency and effectiveness. Rarity – A valuable resource and/or capability that an organisation owns that the other organisations do not have and that is not generally available in the open market. MNG-E-1 Memo _ T Mudyano _ MCom, BCom Honours in Business Management, BCom HR Management, Certificate in HR Hiring Practices (UNISA) Contact number: 078 717 3916/ _ Email: OR _Website: 6 | P a g e Inimitability (it cannot easily be imitated) – Inimitable and core competencies are valuable, unique and complex resources including intangible resources such as reputation, networks, client trust and intellectual property. Capabilities such as knowledge, the culture of the organisation, skills and experience make it difficult for competitors to copy what an organisation is doing and result in a sustained competitive advantage. Organisation (structure and policies) – The organisation’s structure and systems should be suitable for a specific competitive advantage. If an organisation cannot be geared to exploit a resource or capability, it will have little value. Woolworths has several OPPORTUNITIES in South Africa and other countries where it operates. Woolworths faces the following OPPORTUNITIES:  There are opportunities to expand further into Africa (explore more markets).  E-commerce continues to present Woolworths with the opportunity to expand market share in the online space.  Woollies’ biggest competitors – Edgars, on the clothing side, and Pick n Pay, on the food side – are struggling. They are going through turnaround situations, they’re not performing as well and that is the opportunity to take market share. Woolworths faces the following THREATS: