Pindelski_Competitive_Strategies

this solution, Stealth will gain even more customers and enter new product and geographical market segments by increasing foreign sales.

The Stealth Company, in collaboration with the consulting - training firm IMMOQEE, has developed its own business model. This model was composed of 8 elements, whose formulation enabled the company to develop the proper assessment of the company's situation and determine its future business strategies.

Customer Segment

The Stealth Company operates on the market in which the major buyers are:

•mobile telephone networks,

•telephone and smartphone manufacturers,

•wholesale distributors of smartphones and telephones

•consumer electronics stores.

Value Proposition

The Stealth Company offers its customers a product, whose value is determined by:

1.timeliness and regularity of deliveries;

2.attractive price offer;

3.a wide range of products and promotion;

4.product innovation.

Channels

The main channel of contact with customers is its own sales department. Representatives interact with mobile telephone networks, telephone retailers and wholesale distributors in the country, as well as with companies abroad that are attracted by the price and quality of the product.

Customer Relationships

Stealth has chosen a very personal type of a relationship. Each customer has his own representative, who ensures the timeliness of the product and the right logistics of the product's delivery. Contact with the customer is usually via email, telephone, and if necessary, a direct, face to face contact. The customer can arrive at the company, familiarize himself with the production cycle and decide to place an order.

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Key Resources

The key resources of Stealth are:

•The company has experienced staff,

•The offered products have a very attractive price,

•Products are of high-quality having - certificates, protecting patents, a specially designed mounting clip for the protective case,

•The company has business agreements with companies guaranteeing a fixed market (for the customer as well).

•The company introduces new solutions and uses the experience effect;

•Smooth order processing of raw materials from suppliers allows undertaking largescale orders.

•It is environmentally friendly - high energy efficiency and water consumption efficiency;

•Each lot undergoes strict quality control before reaching a customer.

Key actions

The most important key action introduced by Stealth is innovation creation and its

implementation.

Innovation of Stealth's production process consists of three elements:

•Process Innovation - related to the implementation of 3 automated technological production lines using advanced designs, fully computerized and robotic injection molding machines.

•Product Innovation - this is due to the possibility of introducing for the first time in Poland new products with a special catch.

•Technological Innovation - involving the application of the new, innovative injection molding machines with enhanced performance, making a serial production of new assortment possible.

Key Partners

The key partners of the Stealth Company are:

•Suppliers of raw materials (polypropylene, regranulate PP, milling PP);

•Suppliers of manufacturing materials (polypropylene film, cartons, stretch tape, gray tape, pallets.);

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•Suppliers of electricity;

•Competitive companies that operate within the industry, with whom the company does research on product development.

Cost Structure

The Stealth Company has a cost structure based on the value, which means that the main focus is on the quality of products, not so much on the costs, which directly shows in the products price. However, customers are willing to pay for the high quality.

Discussion questions:

1.By using the business model description by Osterwalder and Pigneur, describe Stealth's business model and its value proposition.

2.How could one expand/develop Stealth's business model?

3.Which element of the business model would be the most difficult to copy by the competitors?

Further readings:

To be read and study by yourself . You can discuss the papers, materials and conclusions during the next class.

1.Osterwalder A., Pigneur Y., Business Model Generation. A Handbook for Visionaries, Game Changers, and Challengers, Published by John Wiley & Sons, Inc., Hoboken, New Jersey, 2010

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Bibliography

1.Osterwalder A., Pigneur Y., Business Model Generation. A Handbook for Visionaries, Game Changers, and Challengers, Published by John Wiley & Sons, Inc., Hoboken, New Jersey, 2010

2.Afuah A., Tucci Ch.L., Biznes internetowy - strategie i modele, Oficyna Ekonomiczna, Krakow 2003

3.Obłój K. Tworzywo skutecznych strategii. Na rynku starych i nowych reguł konkurencji, Polish Economics Publisher, Warsaw, 2002

4.Fox S., Internetowi milionerzy czyli jak zdobyć fortunę online, Helion, Gliwice 2008, p.125

5.Eisenmann T.R., Internet Business model: text and cases, McGraw-Hill, 2002, p. XII.

6.Chesbrough H., Rosenbloom R., The Role of the Business Model in Capturing

Value from Innovation: Evidence from Xerox Corporation’s Technology SpinOff Companies, Harvard Business School Working Paper 01-002, p. 7. http://www.hbs.edu/research/facpubs/workingpapers/papers2/0001/01-002.pdf

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10. Strategic Control

Pre-class readings:

Flamholz Eric, Effective Organizational Control: A Framework, Apllications and Implications, European Management Journal, Vol.14 No.6, December 1996

Available on: http://personal.anderson.ucla.edu/eric.flamholtz/article1.pdf

Task: Prepare a short presentation demonstrating what is a control in the company and how it could be pursued.

Additional questions to be answered and/or discussed after pre-class readings:

1.What is a control, what does it mean to you ?

2.Do you like to be controlled ?

3.When and where the control is needed and when is necessary ?

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10.1. Control – the definition

Control is one of the most important functions in business management. It allows a correct flow of processes, an appropriate business making decisions and continuous correction of imperfections. By control and examination of actual state deviations to planned one. The past of an organization can be observed along with all the decisions and changes already made through control and examination of deviations. Control enables to outline company’s future of and adjust to it accordingly.

It also has a great impact on other management functions (administration). We can actually state, that it is a necessary tool, which allows correct implementation and goal achievement. Control is related to following functions:

•Planning, where correction of goals and standards is allowed;

•Organizing, where follow-up applications are submitted to different levels of management;

•Motivating, where as a result of follow-up operations, changes to systems of selection, training or governance may be applied.

Exercise 15

Administration functions

Administration Functions (later, not very aptly named management functions) have been proposed by Henri Fayol (1841 - 1925). He stated that there are 5 functions of management in business administration:

•Planning

•Organizing

•Commanding

•Coordinating

•Controlling

Currently, there are 4 functions of management: organizing, directing, coordinating and controlling.

Read more in: Henri Fayol, General and Industrial Management, Martino Fine Books, New York, 2013

And about Henri Fayol and other important authors in: Tim Hindle, The Economist Guide to Management Ideas and Gurus, Economist Books, London, 2008

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satisfaction survey. Also, for instance, mystery shopping, an observation and surveying of the method of client cooperation and conversation.

Discussion questions:

1.Which of the following steps of control is the most expensive for the company and why ?

2.If you can divide resources (100 units) spent for control, what ratio would you propose for each of the stages ? (eg. 25/25/25/25)

3.When entry control is not efficient and does not result with any effect ?

H. Koontz and C. O'Donnell give us another definition of control. According to them,

control shall be understood as “comparing implementation with adopted standards and correcting deviations from standards to ensure achievement of planned objectives. “50

Control – the definition

Control is about comparing implementation with adopted standards and correcting deviations from standards to ensure achievement of planned objectives.

The definition draws a much more complete picture of what control actually is and how important of a job it plays within an organization. It is not just limited to activities aimed at comparing the implementation of adopted plans, but it also includes ongoing verification of performance within certain standards, and taking corrective actions in response to observed deviations.

Control in such approach, is no longer a passive and cold description of existing state of affairs, but rather a great tool, which affects the quality and the entire accomplishment of work. In addition, Koontz and O'Donnell pointed out that “control is the checking and correcting of subordinates in order to ensure that tasks are completed, and business plans are developed in such way to guarantee the achievement of these tasks51.

50H. Koontz, C. O’Donnell, Principles of Management an Analysis of Managerial Functions, McGrawHill; 3rd edition edition, New York, 1964, p. 557

51H. Koontz, C. O’Donnell, ibidem., p. 560

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By trying to define "control", it is worth to mention J. Gnoiński's reflections on this topic.

According to him, control should lead the way to achieve efficiency and effectiveness of operations. This state can be achieved through the following:

•Determining the method of how to remove the incompatibilities noted between the actual state, and the one intended (the goals).

•Establishing necessary changes in the processes of implementation of objectives or their correction.

•Identifying positive measures, actions, or results of operations, which favorably affect the implementation of objectives and effectiveness of operations within given range.

•Ensuring proper and comprehensive information about the actual state, for the needs of management. 52

According to T. Pszczolowski, control is the "comparison of goals and actual results of actions in order to perform praxeological evaluation, and in case of repetitive actions, to introduce modifications in relation to goals or individual elements of action."53 Such interpretation of “control” refers to the goal of action and the level of its implementation.

However, if we find reality different from plans, then it is necessary to determine the elements that need to be modified and consequently improve them. This is particularly important with repetitive actions, where quick detection of errors and their correction allows error cost reduction, therefore, improving the production process or service delivery. For the reason that control should be performed:

•systematically,

•consistently,

•based on scheduled frameworks and range,

•in conjunction with various types of reactions related to control results,

•in a manner to permit continuous correction and improvement of processes and operations.

In accordance with the standards suggested by the institutions of the European Union for the different types of national Chambers of Commerce, for the purpose of control carried

52J. Gnoiński, Zasady organizacji i funkcjonowania systemu kontroli w resorcie komunikacji, WKiŁ,

Warsaw 1967, p. 50-51

53T. Pszczołowski, Mała encyklopedia prakseologii i teorii organizacji, Ossolineum, Wrocław – Warsaw

– Cracow – Gdańsk 1978, p. 104-105

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out by the public administration authorities, it is accepted that control may have two meanings:

1.functional,

2.managerial.

Control, in a functional meaning, is a review or examination that helps to determine an actual status of a given unit; a comparison with the required state, followed by accurate interpretation and evaluation of information acquired. Evaluation includes three areas:

•conducting subject (controls carried out by internal / external authorities)

•length of time (ex-ante / ex post / current controls)

•tested area (financial job control).

Control, within the managerial meaning, presents an adopted system of managing, which consists of procedures, instructions, rules and different mechanisms. All these elements are designed to give a reasonable assurance that goals will be achieved.54

It should be noted that control is a highly dynamic process. Control tools and tasks may vary depending on the area and incoming information. Control is also a fully integrated activity. This means, that it is a process covering the entire area of an organization and is carried out by properly trained team, both substantively and technically.

Therefore, control of managing and competitive advantages creation can be considered within three aspects:

•a general aspect, understood as leadership,

•a technical aspect, where only facts count,

•an organizational - legal aspect, as a study of actual and model behaviors of people, machinery and equipment along with behavior causes.55

10.2. The Control Process

The control process is, or rather should be, a very well organized process. Indirect actions falling into the process description are an adequate preparation, smooth control conduction, drawing and generating correct conclusions, and finally, appropriate solution application. Correctly used control process allows achieving its main objective, i.e. detection and repair of irregularities and errors. The control process consists of three main phases marked in figure below (fig.22).

54B. R. Kuc, Kontrola jako funkcja zarządzania, Difin, Warsaw 2009, p. 22.

55Ibid., s. 24.

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