Pindelski_Competitive_Strategies

originally intended to be complementary to the breakfast offer. However, it seems that McCoffee will be a slightly separate entity, but also directed towards a restaurant customer visiting in the morning, way before the hours of operation. This sector, however, is very poorly developed in many countries.

Unfortunately, this strategy required the raising of prices. However, they are still lower than in any other coffee or restaurant chains.

Discussion questions:

1.What strategies are implemented by McDonald’s?

2.Why do you think it chose exactly this/these one/s?

3.What are the risks?

4.What requires the implementation of these strategies?

Further readings

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

2.H.I.Ansoff (2007), Strategic Management Classic Edition, Palgrave Macmillan; First Edition, New York, 2007

3.H.I.Ansoff (1965), Corporate Strategy: An analytic approach to business policy for growth and expansion, McGraw Hill, New York, 1965

4.M.E. Porter, (1980) Competitive Strategy, Free Press, New York, 1980

5.M.E. Porter, (1985) Competitive Advantage, Free Press, New York, 1985

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Bibliography

1.Porter, M.E. (1980) Competitive Strategy, Free Press, New York, 1980, and Porter, M.E. (1985) Competitive Advantage, Free Press, New York, 1985.

2.Ansoff H.I., (2007), Strategic Management Classic Edition, Palgrave Macmillan; First Edition, New York, 2007 and H.I.Ansoff (1965), Corporate Strategy: An analytic approach to business policy for growth and expansion, McGraw Hill, New York, 1965

3.Miles R.E., .Snow C.C., (1978), Organizational Strategy, Structure and Process, Mc Graw Hill, New York, 1978

4.Krupski R., (2007), Zarządzanie Strategiczne, Koncepcje-Metody, [ed.] R. Krupski, Wydawnictwo Akademii Ekonomicznej im. O. Langego we Wrocławiu, Wrocław

2007

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2. Company environment and its impact on managerial strategic choices.

Pre-class readings:

1.Zukowska Joanna, Pindelski Mikolaj, Factors Determining the Competitiveness of Entities on Global Market, [in:] red: Lachiewicz S., Zakrzewska-Bielawska A. Fundamentals of Management in Modern Small and Medium-Sized Enterprises, Technical University Lodz, A Series of Monographs, 2011, pp. 91-109

Available on: http://www.e-sgh.pl/Mikolaj_Pindelski/120591-0190

2.Brock David M., A., Alon Ilan, Internationalization of Professional Service Firms, International Business: Research Teaching and Practice, 2009 3(1), pp.52-70 Available on:

http://new.aibse.org/www.aibse.org/wpcontent/uploads/2012/02/BrockAlon2009.pdf

Task: Prepare a short presentation showing the main thesis, assumptions and conclusions

of the article.

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

1.How do companies go global ?

2.How does globalization influence companies and their strategies ?

3.How do international companies build their competitive advantages ?

4.Are some factors to be named that help companies to cope with the trend of globalization ?

5.How big, international companies influence local markets, what are your thoughts?

6.Do you know some other megatrends you can name that influence companies and their strategies ?

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The contemporary environment seems to be largely uncertain and undoubtedly is subject to prompt and continuous changes, while the proper business functioning and its longterm survival to a great extent depends on the fact of whether it understands the environment it operates within. This concerns even, or perhaps most of all, the innovators determining new trends as they had to perfectly recognize the present and future customer needs or situations where new ways of satisfying such needs may be promoted. Apple can stand as an example here, setting the tone in electronics design and way of promotion or Amazon with the teaching of how to use a new distribution channel-the Internet.

The external environment includes all the elements set outside the organization with the potential effective impact thereon. Its structure is usually comprised of two spheres: general environment (macro-environment) and task environment (micro-environment). The references also suggest the term of internal environment wherein the internal organizational conditions and forces operating therein are described.

Environment – the definition

includes overall phenomena, processes and institutions forming the mutual relationships within a business, sales opportunities, scope of activity and development perspectives.

Macro-environment (general, global, external, further environment) includes dimensions and forces acting on the market that have a potential impact on business operations. Such forces may affect the organization, while the organization is unable to affect them or its impact is largely restricted and frequently spread over time. Such forces also create trends occurring in the macro-environment that are transferred onto the microenvironment and the business itself.

Trend in the environment – the definition

A trend in the environment is a set of subsequent events arranged into a certain direction of some phenomenon’s development. Next the events are created over the ones preceding them and are directed by the latter, being set into a uniform integrity tending towards a certain direction. In such case the events concern one of several dimensions of further environment.

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Macro-environment is considered in several dimensions that include:

•economic dimension,

•technological dimension,

•sociocultural dimension,

•political-legal dimension,

•international dimension,

Micro-environment 4 (closer environment, sphere of activity) is composed of the organization, particular persons or groups that may directly affect the business. In such cases, however, the business may also affect the micro-environment elements. They include competitors, customers, suppliers, some regulator, potential employees, strategic allies, etc.

Internal environment is sometimes distinguished as a separate dimension thereof. It is composed of the conditions and forces acting inside the organization. It is comprised of the employees, managers, management board, trade unions, labour organizations, shareholders, supervisory board and, for example, the organization’s culture.

4 Griffin R.W., (2012), Management, 11th edition, South – Western Cengage Learning; Mason OH, 2012, pp.60

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(hints page 231)

MACROENVIRONMENT

(general environment)

MICROENVIRONMENT

(targeted environment)

INTERNAL

ENVIRONMENT

dimension

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2.1. Macro Environment

Macro Environment includes widely understood overall conditions the business functions within. The business is usually unable to affect them (although there are cases that entities take up such measures, e.g. through lobbying of the political dimension) and it may only adapt thereto. This environmental space includes all the elements of indirect impact, affecting or potentially affecting the business activity. They are able to form its targets, size, activity methods or even the total strategy. The search for opportunities and threats usually refers to the macro environment. This is also the source of market trends, recessions and prosperity periods. The importance of the macro environment is even higher because it can only be observed, analyzed, used as a forecasting guidance source and adapt business operations to the conditions prevalent therein. The macro environment has been divided into several dimensions, in order to sort it out in the analyses and outline the aspects that need to be considered.

Economic dimension is a somewhat generally understood condition of state, region or even global economy. The spectrum of this approach most of all depends on the size of the market an organization operates on and the remoteness of dimensions that may effectively impact it. Recently, however, there are more and more opinions that practically each entity should consider the dimensions on at least an international or even global scale. Furthermore, the economic situation in the sector, economic development, GDP [Gross Domestic Product], interest rates, the amount of cash in the economy and its availability, state expenses, economic situation development /growth rate, average Return On Equity [ROE], inflation rate, exchange rates, unemployment level, indebtedness and any other macro-economic aspects are included here. In reference to the sector the factors affecting its economic attractiveness are usually analyzed,

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e.g. sector turnover, labour efficiency, remuneration level, functioning methods of funding business and their availability.

Tab.1 Selected elements forming the economic dimension

Source: author’s own elaboration on the basis of Stoner J.A.F, Freeman R.E., Gilbert

D.R.Jr, (1995), Management, Prentice Hall College Div, New York

Political-legal dimension refers to all the business regulations governed by the state apparatus and economy – state relationships. The regulations and legislation frequently bring about opportunities or threats to the world of business. The trend emerging here is the growing importance of trans-national legislation, for example, international copyright laws, terrorism prevention or cash flow control between states and financial institutions. Unions of states are established tending to the uniformization of their laws in some or several dimensions. This is what takes place in the European Union, the Arab State League or the Commonwealth of Independent States (the former Soviet Union). There are numerous regulations governing the market operation, closing parts of it for some entities, restricting or increasing the competition level thereon and regulating the internal life of businesses, such as Labour Law, Occupational Health and Safety rules, etc. The regulations protecting the buyers against fraud practices and preventing information asymmetry known from courses of economics are also significant.

Tab.2 Selected elements forming the political - legal dimension

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• political stability on the national level,

• making laws,

•stability of fiscal and customs regulations,

•political impact on environmental protection,

•competition-friendly political conditions,

•market openness to competition,

•The European Union policy impact on business functioning.

Source: author’s own elaboration on the basis of Stoner J.A.F, Freeman R.E., Gilbert

D.R.Jr, (1995), Management, Prentice Hall College Div, New York

International dimension determines the international environment impact on the organization. In particular, it refers those who operate on international markets. However, along with vanishing, in economic terms, state boundaries, the international environment elements are more and more difficult to be distinguished from, e.g. political-social and sociocultural elements. Globalization causes, without limitation, the emerging close dependencies of global economies. An example such as the recession of economic slowdown symptoms of 2008 can be used, their effect being distinct in numerous places and various sectors worldwide until the present. The changes occurring in the international environment may either drive the opportunities for, e.g. expansion or the occurrence of threats. The international environment also impacts the enterprises operating inside one country only, because is describes, e.g. the willingness of international players to enter the market, their determination, knowledge, wealth and overseas goods and human capital availability. The trend of legal deregulations in the scope of interstate commodity trading is noticeable in this environment dimension. It consists of the withdrawal of economic, legal barriers, duties, bans, quota concerning closed economic blocks (e.g. The European Union, NAFTA, i.e. North American Free Trade Agreement.

Tab.3 Selected elements forming the international dimension

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