Marketing For MOST: Module 12 - Strategic Management in The Asia-Pacific

Marketing for MOST
Module 12 Strategic Management in the Asia-Pacific
Ritsumeikan Asia Pacific University : Takamoto, Akihiro

October, 2003
Module 12: Strategic Management in the Asia-Pacific
Module 12: Strategic Management in the AsiaPacific

1.
The Strategic Importance of

the Asia Pacific
2.
Managing Strategic Alliance
3.
Portfolio Management
4.
Game Theory
5.
Value and Supply Chain

Management
6.
Balanced Scorecard
1.
The Strategic Importance

of the
Asia Pacific
The Region
Profile of Asia Pacific Region

The Asia Pacific region covers 25 countries from Mongolia in
the north to New Zealand in the south, and from Pakistan in the
west to Kiribati in the east.
With 1835 million inhabitants, the region represents 32 percent
of the worlds population and 25 percents of the worlds output.
Status of Economy
GDP Growth Rate in the AP
Asia Pacific Market

Widely diversified market
Different status of economic development
Expectation for quality and service varies
Market price also varies
Different cultures and customs
Different approaches required

- How to manage each market is a critical challenge
Four Major Blocks

Japan
Newly Industrialized Economies (NIEs)
(Korea, Taiwan, Hong Kong, and Singapore)
Association of South East Asian Nations
(ASEAN)
China
The Players in the Asia Pacific Arena
Global
Korean chaebol
Taiwanese
Scope of Operation
Regional
Japan kaisha
American MNCs
European MNCs
Regional Overseas
Chinese
Domestic Overseas
Chinese
Local Small or
Medium Sized Firms
Government Owned
Firms
Local
Low Cost
Differentiation
Basis of Competitive Advantages
The Simplest Way to View AP: Groups

of Countries on a classic growth curve
A Strategic Framework for the Asia

Pacific
Ambition
Mission, Vision, Objectives
Positioning
Choice of:
Businesses
Choice of:
Segments
Organization
Way to Compete
Investment and
Priority for
Countries
Choice of:
Investment
Strategy
Resource Development
Structure
Assets Building
System
Competence Creation
Process
The importance of the AP as a

Resource Base
Sourcing
Raw Materials
Cost
Labor
Customer
Adaptation
Flexibility
Service
Market
Speed
Intelligence
Technology
New
Materials
Contact
Components
Indonesia
Logistics
Korean
China
Malaysia
Philippines
Thailand
Taiwan
Financing
New Processes
Singapore
Japan
Hong Kong
Country Attractiveness in Asia Pacific Region
Inflation
Unemployment
Political Stability
Investment Flow
Ease of Licenses
Management Control
Tax Law
Skilled Labor
Cost of Labor
Cost of Premises
Most Attractive
Least Attractive
Japan
Thailand
Korea
Philippines
Hong Kong
Indonesia
Singapore
Taiwan
Malaysia
China
GDP size
Entry Modes in Asia Pacific Region
Established
Markets
Japan
Maturing
Markets
Taiwan
Growth
Markets
Korea
Integrate into
Joint
Venture
Joint Venture
Expand
regional
Expand
Local Operation
China
Thailand
Joint Venture
Local
business
activities
Indonesia
Subsidiary
Multiple
presence
India
Platform
operations
Initiate several
Malaysia
Emerging
Markets
global
Philippines
Establish initial
Vietnam
Agents
Myanmar
Representative
Investment
through
Laos,Cambodia
offices
Joint venture or
Singapore
Hong Kong
Rationalizatio
n
Establish a base
Local subsidiary
to learn, collect
Set up a regional
Information and
Office to coordinate
set up contacts
efforts
Entry
Development
Regional offices
For administration
of synergies
Consolidation
Strategic Capabilities in the AP Region

Mind Set
Visibility & support
Flexibility
Markets &
Competitive
Intelligence
Access to Resources
. Local human resources
. Suppliers and sub-contractors
. Contactors
. Partners
Social, Cultural,
Developing
Political know how
Regional
Competences
Building Assets
. Logistics
. Distribution networks
. Product development
. Brand reputation
How Did The Financial Crisis Affect
Asia Pacific Strategies

Strategies were revised but long-term goals of presence in
the region were maintained
Resources needed to be readjusted and expansion plans
temporarily delayed, but not abandoned
Flexibility and adaptability remained key competences and
could be preserved or enhanced
New opportunities offered by potential acquisitions had to
Prospects for Asia Pacific
(Beyond The Crisis)

The regional market growth is still prominent
The regional trade liberalization and the gradual
reduction of investment restrictions that started well
before the crisis and that are all expected to prevail in
the long-term.
With increased regionalization and increased number
of countries competing for FDI
Economic Cooperation in the Asia

Pacific Region
Several regional integration programs sub-regional,

regional, bilateral and multilateral approach.
Regional integration schemes of East Asia, mainly AsiaPacific Economic Cooperation (APEC), the Association of
South-East Asia Nations (ASEAN), ASEAN+3, ASEAN
Regional Forum (ARF), and other bilateral cooperation,
have strongly impact on recent economic position.
With the Impact of single European Union (EU) and NAFTA
concept of trade liberalization, Asia Pacific Economic
Cooperation (APEC) was established in 1989 and United
States is supporting the APEC initiatives.
The prospect of APEC Common Currency Unit is the next
challenge of Asia Pacific Region for the 21st century.
2. Managing Strategic Alliance
Strategic Alliance
Partnership between two or more entities that allow an
exchange of resources for mutual benefit
Why Form Strategic Alliance

Open new market and territories
Gain greater speed to market
Enhance companys creditability and value
Increase revenue opportunity
Maintain focus on core strengths
Access new products and technologies
Strategic Alliances
Firm A
Partnerships between firms
Firm B
where their
Resources
Capabilities
are combined to pursue

mutual interests to
Develop
Core
Competencies
Goods
Manufacture
Distribute
Services
Strategic Alliance
Firm A
Resources
Capabilities
Core Competencies
Firm B
Resources
Capabilities
Core Competencies
Combined
Resources
Capabilities
Core Competencies
Mutual interests in designing, manufacturing,

or distributing goods or services
Types of Strategic Alliances

Equity Strategic Alliance
Equal Partners (50 50 %)
Not Equal Partners (30 70 %)
Multiple Partners (More Than Two)
Non-Equity Strategic Alliance

Contract is given to supply, produce or distribute a firms goods
or services
(without equity sharing)
Types of Alliances
STRATEGIC
IMPORTANCE
Acquisition
Minority Interest
High
Joint Venture
Joint Marketing
Joint Development Projects
Medium
Licensing Agreements
Commercial Contract
Low
Technology Trials
Low
LEVEL OF COMMITMENT
High

Reasons for Alliances
by Market Type
Slow
Cycle
Market
Standard
Cycle
Market
* Gain access to a restricted market

* Establish franchise in a new market
* Maintain market stability
* Gain market power
* Gain access to complementary resources
* Pool resources for large projects
* Learn new business practices
* Overcome trade and non-tariff barriers
* Meet competitive challenge
Fast
Cycle
Market
* Speed-up product, service or market entry
* Maintain market leadership

* Form industry technology standards
* Share risky R&D expenses
* Overcome uncertainty
Types of Strategic Alliances
Complementary Alliances
BusinessLevel
Competition Reduction Alliances

Competition Response Alliances
Uncertainty Reduction Alliances
Diversification Alliances
CorporateLevel
Synergistic Alliances
Franchising
Complementary Strategic Alliances

Supplier Value Chain
Buyer Value Chain
Partnerships that build on the

complementarities among firms
that make each more competitive
Include distribution, supplier or
outsourcing alliances where
firms rely on upstream partners
Vertical or downstream partners
Alliance to build competitive advantage
Japanese manufacturers rely on close
relationships with and among suppliers to
implement Just-In-Time inventory systems
Complementary Strategic Alliances
Used to increase the strategic

competitiveness of the partners
Buyer Value Chain
Horizontal
Alliance
Buyer Value Chain
For example:
Marketing agreements between Various Airlines
Types of Business-Level Strategic Alliances
Competition Reduction Strategies

Avoiding competition by using tacit collusion such
as price fixing
OPEC petroleum cartel
Competition Response Strategies

Firms join forces to respond to a strategic action of
another competitor
Many of the airline alliances
Uncertainty Reduction Strategies

Alliances can be used to hedge against risk & uncertainty
Yahoos 50% interest in the Overture
Types of Corporate-Level Strategic Alliances
Diversifying Alliances
Allows a firm to expand into a new
product or market area with an acquisition
Samsung Groups moves into a range of

industries
Synergistic
Strategic Alliances
synergy across multiple businesses between firms
Sony shares development with many small firms
Franchising
Allows firms to grow and relatively strong centralized
control without significant capital investments
McDonalds or KFC
International Cooperative Strategies

Cross-border strategic alliance
an international cooperative strategy in which firms with
headquarters in different nations combine some of their
resources and capabilities to create a competitive advantage
a firm may form cross-border strategic alliances to leverage
core competencies that are the foundation of its domestic
success to expand into international markets
International Cooperative Strategies

Allows risk sharing by reducing financial investment
Host partner knows local market and customs
International alliances can be difficult to manage due
to differences in management styles, cultures or
regulatory constraints
Must gauge partners strategic intent so they do not
gain access to important technology and become a
competitor
Alliance Success Factors

Have a clear strategic purpose
Find a fitting partner
Allocate task and responsibility
Create incentive for cooperation
Minimize conflicts between partners
Share information
Exchange personnel
Operate with long time horizon
Develop multiple joint projects
References
Hitt Michael. A (1995). Strategic Management: Competitiveness and

Globalization, West
Publishing Company.
Ramu Shiva. S (1997). Strategic Alliances:

Building Network
Relationships For Mutual Gain, A Division of Sage Publications.
Harvard Business Review (2002). Strategic

Business School Press.
Alliances, Harvard
3. Portfolio Management
Portfolio Models
Portfolio Models: History
McKinsey sells GE on the idea of Strategic
Business Units (SBUs)
BCG attacks McKinsey with the Growth-Share
Matrix and the Portfolio model
McKinsey responds with its own Portfolio
model, the Business Attractiveness Matrix
Portfolio Models
Boston Consulting
Group Matrix
(BCG Matrix)
General Electric Grid

GE Grid
Strategic Business Units (SBUs)

Most firms consist of multiple units producing
numerous products.
The mission, objectives, strategies, and
tactics will be different for each unit.
For efficiency, a multiproduct organization
should be divided according to its major
markets or products
These divisions are called Strategic Business
Units (SBUs)
Characteristics of a Strategic Business Unit

(SBU)
It is a single business or collection of related businesses that
can be planned for separately from the rest of the company.
It has its own set of competitors.
It has a manager who is responsible for strategic planning and
profit performance and who controls most of the factors
affecting profits.
Assigning Resources to Each SBU

Analytical tools are needed for classifying businesses by
profit potential, for decisions on whether to build,
maintain, harvest, or divest individual SBUs.
Two well-known business portfolio evaluation models are

the Boston Consulting Group (BCG) growth/share
matrix and the General Electric multi-factor portfolio
matrix
Boston Consulting Group Matrix

Business portfolio matrix that uses market growth
rate and relative market share as the indicators of
the firms strategic position
Market growth rate
A measure of the annual growth percentage of the
market in which the business operates.
Relative market share
The firms market share divided by the market share
of its largest competitor.
BCG Growth/Share Matrix

This model classifies SBUs into either:
Question marks (high growth + low market share).

Stars
(high growth + high market share).
Cash cows
(low growth + high market share).
Dogs
(low growth + low market share).
BCG Growth/Share Matrix

Once classified, four alternative objectives can be pursued for each SBU:
Build: increase market share.
Maintain/hold: preserve market share.
Harvest: increase short-term cash flow.
Divest: sell or liquidate.
BCG MATRIX: COMPANYS MARKET SHARE

High
Low
INDUSTRY
GROWTH RATE
High
Stars
Question marks
Cash cows
Dogs
Low
Portfolio Planning Models: The BCG

Growth-Share Matrix
Annual real rate of market growth (%)
HIGH
Earnings:
low, unstable, growing
Cash flow:
negative
Earnings:
high stable, growing
Cash flow:
neutral
Strategy:
invest for growth
Earnings:
high stable
Earnings:
Cash flow:
high stable
Cash flow:
neutral or negative
Strategy:
milk
Strategy:
divest
Strategy:
analyze to determine
whether business can
be grown into a
star, or
will degenerate
into a dog
low, unstable
$$$$$$
LOW
HIGH
LOW
BCG Growth-Share Matrix
22
Stars
Question Marks
Cash Cows
Dogs
18
16
14
12
10
8
6
4
2
Relative Competitive Position
0.1x
0.2x
0.5x
0.4x
0.3x
1x
2x
1.5x
4x
0
10x
Business Grow th Rate

(Percent)
20
Source: B. Hedley, Strategy and

the Business Portfolio, Long Range
Planning (February 1997), p. 12.
Reprinted with permission.
Boston Consulting Groups

Four Cell Business Portfolio Matrix
Question Marks/Problem Children

Rapid Market Growth
Cash Needs are High (Cash Hog)
Options
Aggressive Grow-and-Build
(Overall and Reposition) or
Divest
Characteristics of Cash Hogs
A business is a cash hog when its internal

cash flows are inadequate to fully fund its
need for working capital and new capital
investment
the parent company has to
continually pump in capital to feed the hog
Strategic options
Aggressively invest in
attractive cash hogs
Divest cash hogs lacking

long-term potential
Boston Consulting Groups Four Cell Business Portfolio

Matrix
Stars
Market Leaders in High
Growth Industry
Young Stars or Cash
Hogs
Mature Stars or Cash
Cows
Aggressive Growth
Characteristics of Cash Cows
A cash cow business generates cash surpluses over and

above what is needed to sustain its present market
position
Such businesses are valuable because surplus cash can

be used to
Pay corporate dividends
Finance new acquisitions
Invest in promising cash hogs
Strategic objective: Aggressive Growth or Fortify and

defend present market position--keep the business
healthy!!!
Boston Consulting Groups Four Cell

Business Portfolio Matrix
Dogs
Low Growth Market with
Low Market Share
Weak Competitive
Position and Low Profit
Potential
Strategy is to:
Harvesting - if
profitable
Divestiture
Liquidation
Health foods
division
Frozen food
division
10
Fruit juices
division
Bakery division
-2
Annual real rate of market growth

(%)
Portfolio Planning Models:

Applying the BCG Matrix to BM Foods Inc.
2
Current position
1.5
0.5
Relative market
share
Previous position.
proportional to $ sales.
0.1
Area of circle
GE Multi-factor Matrix
Matrix uses business
strength compared to
market attractiveness
Business strength (strong,

average, or weak).
Market attractiveness
(high, medium, low).
MARKET ATTRACTIVENESS
The
The GE
GE
Business
Business
Screen
Screen
High
Medium
Low
BUSINESS POSITION
High
Medium
Low
INVEST
INVEST
PROTECT
INVEST
PROTECT
HARVEST
PROTECT
HARVEST
DIVEST
Market Attractiveness Matrix (GE)

BUSINESS POSITON
HIGH
MEDIUM
MEDIUM
WEAK
High Attractiveness
Medium Attractiveness
Low Attractiveness
LOW
MARKET ATTRACTIVENESS
STRONG
GE Nine Cell
Attractiveness/Strength Matrix
Use quantitative measures of industry

attractiveness and business strength to plot
location of each business in matrix
Each business unit appears as a circle
area of circle can represent relative size of

industry with pie slice showing the companys
market share
McKinsey GE Stoplight Matrix
Industry (Product-Market) Attractiveness
Business Strength-Competitive Position

Strong
Winners
Average
Weak
Winners
High
Question
marks
Winners
Medium
Average
Business
Losers
Low
Profit
Producers
Losers
Losers
Industry Attractiveness Factors
Market size and projected growth

Intensity of competition
Emerging opportunities and threats
Seasonal and cyclical factors
Resource requirements
Strategic fits and resource fits with present
businesses
Industry profitability
Social, political, regulatory, and environmental factors
Degree of risk and uncertainty
Example:
Rating Industry Attractiveness
Weight
Attractiveness
Rating
Weighted
Industry Rating
Market size and projected growth
0.15
0.75
Intensity of competition
0.30
2.40
Emerging industry opportunities and

threats
Social, political, regulatory, and
environmental factors
Seasonality and cyclical influences
0.05
0.10
0.05
0.30
0.05
0.20
Resource requirements
0.15
1.05
Industry profitability
0.15
0.60
Degree of risk and uncertainty
0.10
0.50
Industry Attractiveness Factor
Sum of weights
1.00
Industry attractiveness rating
Rating Scale: 1 = Unattractive; 10 = Very attractive
5.90
Evaluate Each Business

Units Competitive Strength
Objectives
Determine how well each business is

positioned in its industry relative to
rivals
Evaluate whether it is or can be

competitively strong enough to contend
for
market leadership
#1!
Factors to Use in Evaluating Competitive Strength
Ability to compete on cost
Ability to match rivals on quality and/or service
Ability to exercise bargaining leverage with key suppliers

or customers
Technology and innovation capabilities
How well business units competitive assets and

competencies match industry KSFs
Brand name recognition and reputation
Profitability relative to competitors
Example: Rating a Business Units Competitive Strength

Weight
Strength Rating
Weighted
Strength Rating
0.20
1.00
Ability to compete on cost
0.25
2.00
Ability to match rivals on quality or

service
Bargaining leverage
0.05
0.10
0.10
0.60
Technology/innovation capabilities
0.05
0.20
How well resources match KSFs
0.15
1.05
Brand name reputation/image
0.10
0.40
Degree of profit relative to rivals
0.10
0.50
Competitive Strength Measure
Sum of weights
1.00
Competitive strength rating
Rating Scale: 1 = Weak ; 10 = Strong
5.85
Strategy Implications of GE Attractiveness/Strength Matrix
Businesses in upper left corner
Accorded top investment priority
Strategic prescription is grow and build
Businesses in three diagonal cells
Given medium investment priority
Invest to maintain position
Businesses in lower right corner
Candidates for harvesting or divestiture
May be candidates for an overhaul and reposition

strategy
Advantages of Portfolio Analyses

Encourages top management to evaluate each
business individually; to set objectives; and
consider resources.
It stimulates use of external data to supplement
managements judgment.
Its graphic representation makes interpretation
and communication easier.
Limits of Portfolio Analysis

All the portfolio models still remain a set of
very primitive tools to deal with the real world
of business which is very complex
characterized by multi-dimensional variables.
The portfolio model should be regarded as a
tool to sharpen and deepen our strategic
thinking rather than an executive summary of
strategic analysis.
4. A COGENT GAME THEORY
A GAME
A form of recreation constituted by a set of
rules that specify an object to be attained and
the permissible means of attaining it
Win or Lose
Business = Win or Lose?
Win-Win, Lose-Lose, Win-Lose
Everything is fair in Love, War, and Business
GAME THEORY
Started by a book Theory of Games and
Economic Behavior by John Von
Neumann and Oskar Morgenstern
Rule based games
Free-wheeling games
QUINTESSENCE OF GAME THEORY

Added values
Allocentrism: focusing on others
Look forward and reason backward
Shape the game according to your strategies
CO-OPETITION
Cooperative competition
Win-Win and Win-Lose strategies
Lose-Lose scenario
General Motors: GM credit card (Win-Lose
strategy)
Imitation by Ford and Volkswagen
Win-Win strategy: Imitation by others is beneficial
for you
COMPANYS VALUE NET

Customers
Substitutors
Company
Suppliers
Complementors
INTERACTIONS IN THE VALUE NET

Resources flow from the suppliers to the
company whereas, Products and services
flow from the company to its customers
Money flows from customers to the company
and from the company to its suppliers
Substitutors: Coca-Cola and Pepsi
Complementors: Hardware and Software
PARTS
Added
Values
Players
Scope
Elements
of the
game
Tactics
Rules
Players are customers, suppliers, substitutors, and

complementors
Added values are what players bring to the game
Rules give structure to the game
Tactics are the ways to play the game
Scope describes the boundaries of the game
CHANGING PARTS
P: Its beneficial to change a player but find a

strong player with branded and superior products
As substitutors are usually seen only as enemies,
complementors are seen only as friends
A: Raise your own added value or lower that of
others (example: Trans World Air-lines, Nintendo,
and softsoap)
Meet the customers demands, use your
resources efficiently, implement ways to lower
the costs
R: One price to all and Look forward

and reason backward rules make a new
players entry profitable
Judo economics: stay small and turn the
previous players larger size to your own
benefit
Meet-the-Competition Clause (MCC): A
classic case of coopetition. A producer
can capture more than its added value
T: Changing perceptions
Lifting the fog: reducing misperceptions
Thickening the fog: creating uncertainty
S: A game in one place can affect games
elsewhere, and a game today can influence
games tomorrow
Accept the
game you find
yourself in
Fail to think
methodically
about
changing the
game
Changing the
game must
come at the
expense of
others
THE TRAPS OF
STRATEGY
What you dont

see, you cant
change
You have to find

something to do
that others cant
MIXED STRATEGY
By randomize move, you can surprise the opponent
Mixed Strategy: Specifies that an actual move be
chosen randomly from the set of pure strategies
with some specific probabilities
Nash Equilibrium in Mixed Strategies: A probability
distribution for each player
The distributions are mutual best responses to one
another in the sense of expectations
PRISONERS DILEMMA
Companies spend a large sum of money on
publicity of their products
To leave a long lasting impact on the viewers, you
need to have something extraordinary
Click on this link and have a look at this
commercial: E*Trade
Does it leave some impact on you?
SONY VS. MICROSOFT

Players
PLAYERS
Moves
No
Publicity
Sony (PS)
Microsoft (Xbox)
No publicity
Publicity
5 , 5
2 , 6
6 , 2
3 , 3
Publicity
Payoffs
STRATEGIES AND PAYOFFS

If Microsoft publicizes its Xbox, the best move
for Sony is to publicize its PS
If Microsoft does not publicize, still the best
move for Sony is to publicize
It means Sony has a dominant strategy of
publicizing regardless of Microsoft's moves
Microsoft has same dominant strategy to
publicize regardless of Sonys moves
Nash equilibrium: An outcome from which no

player has an incentive to deviate unilaterally
(John Nash: Nobel prize, Economics 1994)
Nash equilibriums are self-enforcing
Involvement and commitment: The difference
between these two is like eggs and ham. The
chicken is involved but the pig was
committed.
USE OF THE GAME THEORY
When to
compet
e
When to
cooperate
Firm
When you are increasing the size of the pie: Co-operate
When you are dividing the pie: Compete
CONCLUSION
Game theory will keep on growing
because of the importance of added
values in business
Firms should stop thinking that business
is a war and they must beat the
competition
5. Value and Supply Chain

Management
Value Chain Analysis
helps to identify which resources and capabilities can add value
Firm Infrastructure
Technological Development
M
A
R
G
IN
Primary Activities
Service
M
A
R
G
IN
Marketing
& Sales
Outbound
Logistics
Operations
Procurement
Inbound
Logistics
Support
Activities
Human Resource Management
Primary Activities
M
AR
G
IN
Service
Outbound
Logistics
Marketing and Sales
Operations
in the Value Chain
Procurement
Inbound Logistics
Support Activities
IN
Primary and
G
AR
M
Support
Activities
Firm Infrastructure

Assessing the PRIMARY Activities in the Value Chain
Inbound Logistics
Materials control system
Inventory control system
Raw material handling and warehousing
Operations
Equipment comparison to competitors

Plant layout
Production control system
Level of automation in production processes

Outbound Logistics
Timeliness and efficiency of finished products delivery
Warehousing of finished products
Marketing and Sales
Marketing research
Sales promotions and advertising
Alternative distribution channels
Competency and motivation of sales force
Organizations image of quality
Organizations reputation
Brand loyalty of customers
Domination of various market segments

Customer Service
Customer input for product improvements

Handling of customer complaints
Warranty and guarantee policies
Employee training in customer education & service issues
Replacement parts and services

Assessing the SUPPORT Activities in the Value Chain
Procurement
Alternate sources for obtaining needed resources

Timeliness of resources procurement
Procurement of large capital expenditure resources
Lease-versus-purchase decisions
Long-term relationships with reliable suppliers
R&D activities in product and process innovations

Relationship between R&D and other departments
Meeting deadlines in technological development activities
Quality of labs and other research facilities
Qualifications of lab technicians and scientists
Creativity and innovation in organizational culture

Recruiting, selecting, orienting, and training employees

Employee promotion policies
Reward systems to motivate and challenge employees
Absenteeism and turnover
Union-organization relations
Employee participation in professional organizations
Employee motivation, job commitment, and satisfaction

Firm Infrastructure
Identification of external opportunities and threats
Accomplishing goals with strategic planning system
Coordination and integration of value chain activities
Low-cost capital expenditures & working capital funds
IS support for strategic and operational decisions
Relationships with stakeholders
Public image as a responsible corporate citizen
Value Chain Analysis: A Pizza Restaurant
PRIMARY ACTIVITIES
Inbound Logistics
Transport foodstuffs (e.g. dough, cheese, etc) from suppliers
to restaurant
Operations
Cook pizzas, salads, wings, other menu items

Outbound Logistics
No distribution channels just customers
Marketing/Sales
Develop advertising
Customer Service
Serve food to restaurant customers
(on-site or logistics with delivery)

SUPPORT ACTIVITIES
Procurement
Inbound Logistics: Buy trucks; lease warehouse space
(identify supplier offerings/negotiate terms)
Operations: Buy dough, cheese, ovens, and other supplies
Marketing/Sales: Buy TV time, promotional materials/
mailings, etc.
Service: Buy/maintain tables, chairs, silverware to equip
restaurant; buy/maintain automobiles/insurance, etc. for
delivery

Technology Development
Inbound Logistics: Improve truck routing and warehouse
methods
Operations: Develop new menu items; improve oven/kitchen
design
Marketing/Sales: Discover new promotional
materials/methods
Service: Improve restaurant layout / routing of deliveries

Inbound logistics: Supervise drivers and warehouse personnel
Operations: Supervise/train kitchen personnel
Marketing: Supervise advertising personnel
Service: Supervise waiters and drivers

Infrastructure
Obtain funds, carry out accounting and payroll functions, and
perform other administrative tasks for each primary activity area
Supply Chain Management

Supply-chain is a term that describes how
organizations (suppliers, manufacturers, distributors,
and customers) are linked together.
Supply-chain management is a total system
approach managing the entire flow of information,
materials, and services from raw-material suppliers
through factories and warehouses to the end
customer.

Apply a total systems approach to managing the
entire flow of:
Materials
Services
Information
Raw
material
suppliers
Factories &
warehouses
End
customer
3

Supply Chain management
Sophistication
???
Competition
Competition through IT
Competition through Quality
Competition through Cost

Logistics as
1960
1970
1980
1990
2000
Time

Supply
Supply
Management
Manufacturing
Management
Customer
Satisfaction
Management
Decision Processes
And Systems
Supplier
Customer
Demand
Procurement
Planning
Production
Demand
Planning
Planning
6. Balanced Scorecard
What is a Balanced Scorecard?

"Corporate Dashboard" for a balanced presentation of both
financial and operational measures for making decisions.
Developed in the early 1990's by Drs. Robert Kaplan
(Harvard Business School) and David Norton.
The balanced scorecard is a management system (not only a
measurement system) that enables organizations to clarify
their vision and strategy and translate them into action.
What the innovators thought.
"The balanced scorecard retains traditional financial measures. But

financial measures tell the story of past events, an adequate story
for industrial age companies for which investments in long-term
capabilities and customer relationships were not critical for success.
These financial measures are inadequate, however, for guiding and
evaluating the journey that information age companies must make
to create future value through investment in customers, suppliers,
employees, processes, technology, and innovation. -Kaplan and
Norton.
Why do we really need a Balanced

Scorecard?
To Succeed in business it is important to measure what you
manage.
The Balanced Scorecard helps us to measure what cant be
measured in business.
It provides us with feedback and measurements of both internal
processes and external outcomes.
It helps us to continuously update our management strategies
and strategic performance.
Source: thebalancedscorecard.org
Four Perspectives
1.
2.
The customer perspective:
Uses measures of the value delivered to customers.
These measures are evaluated in four different areas

namely: time, quality, performance and service, and
cost.
The internal perspective:
Measuring companys satisfaction of customer needs

through internal processes.
Four Perspectives
3.
The innovation and learning perspective

= the growth perspective:
4.
Measuring continuous improvement through new

product innovation and gradual innovation of
existing products.
The financial perspective:

=Measure of finances. Income, Share value,
growth of sales, etc.
Scorecard Benefits
Obtain information to update its strategy on a continuous basis.
Balance long-term and short-term measures and evaluate every
part of the firm and how each contributes toward accomplishing
selected goals.
It helps firms emphasize their relationship between internal and
external partners.
Creates a long-term perspective for company sustainability.
Scorecard Benefits
A great communication tool between employees as they can
use the scorecard as a guide to coordinate their efforts.
Support employee evaluation in that individual performance
can be tied to successful outcomes on the metrics.
A way to measure the value of the company apart from
measuring its tangible assets.

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Marketing for MOST

Module 12 Strategic Management in the Asia-Pacific

Ritsumeikan Asia Pacific University : Takamoto, Akihiro

Module 12: Strategic Management in the Asia-Pacific

Module 12: Strategic Management in the AsiaPacific

The Strategic Importance of

Managing Strategic Alliance

Value and Supply Chain

The Strategic Importance

Module 12: Strategic Management in the Asia-Pacific

Module 12: Strategic Management in the Asia-Pacific

Profile of Asia Pacific Region

Module 12: Strategic Management in the Asia-Pacific

Module 12: Strategic Management in the Asia-Pacific

GDP Growth Rate in the AP

Module 12: Strategic Management in the Asia-Pacific

Asia Pacific Market

Different approaches required

Module 12: Strategic Management in the Asia-Pacific

Four Major Blocks

Module 12: Strategic Management in the Asia-Pacific

The Players in the Asia Pacific Arena

Basis of Competitive Advantages

Module 12: Strategic Management in the Asia-Pacific

The Simplest Way to View AP: Groups

Module 12: Strategic Management in the Asia-Pacific

A Strategic Framework for the Asia

Module 12: Strategic Management in the Asia-Pacific

The importance of the AP as a

Module 12: Strategic Management in the Asia-Pacific

Country Attractiveness in Asia Pacific Region

Entry Modes in Asia Pacific Region

Module 12: Strategic Management in the Asia-Pacific

Module 12: Strategic Management in the Asia-Pacific

Strategic Capabilities in the AP Region

Module 12: Strategic Management in the Asia-Pacific

How Did The Financial Crisis Affect

Module 12: Strategic Management in the Asia-Pacific

Asia Pacific Strategies

Prospects for Asia Pacific

Module 12: Strategic Management in the Asia-Pacific

(Beyond The Crisis)

Economic Cooperation in the Asia

Module 12: Strategic Management in the Asia-Pacific

Several regional integration programs sub-regional,

2. Managing Strategic Alliance

Module 12: Strategic Management in the Asia-Pacific

Why Form Strategic Alliance

Module 12: Strategic Management in the Asia-Pacific

Partnerships between firms

are combined to pursue

Module 12: Strategic Management in the Asia-Pacific

Mutual interests in designing, manufacturing,

Module 12: Strategic Management in the Asia-Pacific

Types of Strategic Alliances

Non-Equity Strategic Alliance

Module 12: Strategic Management in the Asia-Pacific

Module 12: Strategic Management in the Asia-Pacific

* Gain access to a restricted market

* Speed-up product, service or market entry

* Maintain market leadership

Module 12: Strategic Management in the Asia-Pacific

Types of Strategic Alliances