Strategic Planning: Shaping the Future (2015/6)

Reading List
The online resource list for this module is in the module’s Blackboard site in the Learning Materials section or through the Library Gateway link to reading lists https://shu.rl.talis.com/ (search by name of the module or module code).
The following three books are recommended reading for this module:

• Twiss A and Ellis M (2015): Strategic Management, Pearson Education Ltd.- this is
adapted from: Exploring strategy, Tenth Edition, 2014, Johnson G, Whittington R,
Scholes K, Angwin D and Regner, P

This text has been compiled by two SHU lecturers: Amanda Twiss and Mark Ellis and can be purchased from Blackwell’s Bookshop (on Level 2 of the Atrium). This adaptation is available at a reduced price of £30.00, to ensure you are not purchasing what you do not need.

Please note that the Tenth edition of Exploring Strategy by the above authors can also be bought in Blackwell’s or found in the learning centre. This textbook has all of the content of the custom book plus additional chapters and cases (if you were to purchase it, the cost would be significantly more).
• Kew J and Stredwick J (2009):Business Environment: Managing in a Strategic Context, 2nd edition, CIPD

• Lynch R L (2012): Strategic Management, 6th Edition, Prentice Hall
The following articles are included at the back of the Module Guide. These will be used during topic nine: Different Strategic Approaches.

• Appendix 1 : Bodwell W, Chermack TJ (2010) Organizational Ambidexterity: Integrating deliberate and emergent strategy with scenario planning, Technological Forecasting and Change 77 pages 193-202.

• Appendix 2: O’Regan N and Ghobadin A (2007) Formal strategic planning: annual raindance or wheel of success? Strategic Change 16, pages 11-22.

• Appendix 3: Neugebauer F, Figge F and Hahn T (2015) Planned or Emergent Strategy Making? Exploring the Formation of Corporate Sustainability Strategies Business Strategy and the Environment Published online in Wiley Online Library DO/ 10.1002/bse.1875
Additional reading will be recommended during the module. These are selected to provide you with a framework of study from which you can develop your learning. but you should also seek out further reading including Journals such as;

• Business Strategy Review
• Harvard Business Review
• European Management Journal
• Journal of Business Strategy
• Long Range Planning Journal (Strategic Planning Society)
• Management Today
• Strategy + Business Magazine
• Strategy Magazine (Strategic Planning Society)
• Strategic Management Journal
These all contain useful and accessible material and most are available via the Adsetts Centre. You should also pay attention to newspapers such as The Times and The Guardian that have a regular supply of excellent articles on strategic issues.

We recommend that you make use of the databases available through the Learning Centre for additional materials, e.g. Emerald and Business Source Premier.
Assessment Package
The module is formally assessed in two parts via group project and an individual assignment.

Task 1: Individual Assignment

Module Title: Strategic Planning: Shaping the Future
Assessment Title: Individual assignment
Weighting: 60%
Submission Date: See assessment scheduler for the hand-in date and time.

Individual assignment task: Select one of the five organisations listed below and undertake a strategic review which demonstrates understanding of the internal and external environment in which organisations exist. You should undertake effective analysis using the strategic frameworks, theories and concepts discussed throughout the module to evaluate the key external and internal factors that impact on the organisations strategic options. Additionally, you should identify potential strategic options the organisation could utilise in response to their strategic position.

• HSBC,
• Sheffield Hallam University
• Comic Relief,
• Apple or (I choose this organisation)
•
The theoretical models which could assist your analysis include PEST/PESTEL/LoNGPEST, Porter’s Five Forces, Competences and Resource analysis, Value Chain, Porter’s Generic Groups, Strategy Clock, Strategic Groups, SWOT, TOWS and Ansoff’s Strategic Directions. (Choose 2-3 theories)

Remember too that presentation is important. Your essay should be written in correct English. Please check for errors in grammar, spelling and punctuation. Referencing must be in line with the Harvard system, details of which are available on Blackboard and from the Adsetts Resource Centre.
Strategic Planning: Shaping the Future
Assessment Criteria – Task 1: Individual assignment (60%)
% Grade 0 – 39 40-49 50-59 60-69 70+
The critical selection and use of relevant and appropriate sources of information.
You have demonstrated no research or poor research drawn from a very limited set of source materials, some or all of which are irrelevant to the task set. You demonstrate only basic research which has been drawn from a limited range of source materials. You demonstrate a good standard of research drawing on a range of relevant source materials. You demonstrate a satisfactory standard of research with effective use of a good range relevant source materials, some indication of evaluation of sources. You demonstrate an excellent standard of research drawing on a wide range of relevant source materials with clear evaluation of the sources sselected.
Application of appropriate strategic frameworks, concepts and theories discussed throughout the module. Appropriate theoretical models were not used, misunderstood, or applied incorrectly to your chosen organisation. Although you demonstrate understanding of some elements of the theoretical models used in your report, confusion remained in places, and you have not really applied them effectively at all times. You demonstrate satisfactory ubderstanding of the theoretical models used in your report, and have applied them reasonably effectively to your chosen orgnisation. Overall, you demonstrated good understanding of the theoretical models used in the report, though there were some areas of weakness. You applied them effectively to your chosen organisation. You demonstrated excellent, in depth, understanding of all theoretical models used in your report, and have applied them most skilfully to your chosen organisation.
Evaluation and analysis of the key external and internal factors which impact on the organisation, Descriptive coverage of issues, not all of which are relevant to the task set. Little or no attempt at evaluation. Few or no comparisons of theory with practice. No demonstration of understanding of the internal and external environment in which organisations exist Limited analysis of relevant issues. Little attempts at evaluation. Few comparisons of theory with practice. A basic knowledge of relevant theory and concepts. Limited demonstration of understanding the internal and external environment in which organisations exist. A satisfactory standard of analysis and evaluation of most issues with good general comparisons of theory with practice. Overall, you demonstrate a good understanding of the internal and external environment in which organisations exist.
A good standard of analysis and evaluation of relevant issues with well integrated comparisons of theory and practice. You demonstrate a clear and well explained understanding of the internal and external environment in which organisations exist.
Thorough analysis of relevant issues with excellent synthesis of theory and practice with well-chosen examples. You demonstrate a thorough and detailed understanding of the internal and external environment in which organisations exist.

Identification of a range of potential strategic options to the organisations’ stratgic position. No potential strategic options which the organisation could utilise in response to their strategic position have been provided. Any conclusions made are largely unsubstantiated.
Limited strategic options which the organisation could utilise in response to their strategic position have been provided. Conclusions are weak and only partially supported by the arguments made. You demonstrate satisfactory identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a cohesive case. You demonstrate good identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a well-argued and cohesive case. You demonstrate an excellent identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a rigorously argued and convincing case.
Assignment presentation and academic rigour. Poorly written with errors in grammar and/or vocabulary. Meaning often obscured. Little structure and no attempt to reference. Clearly written. Has
structure but arguments
are not fully developed.
Referencing is incomplete. A satisfactory standard of written English. Well-structured and cohesive. Well argued. Referencing is usually thorough and complete with all sources acknowledged. A good standard of written English. Well-structured and cohesive. Well argued. Referencing is thorough and complete with all sources acknowledged. A very high standard of written English. Excellent structure and cohesive, critical analysis demonstrated. Referencing is thorough and complete
with all sources
acknowledged.
Seminar Guide
Topic 1: Internal Environment: Strategic Capability and Value Chain
Johnson, Whittington, Scholes Angwin & Regnér (pg 71, 2011)

Resources Competences
Physical
Financial
Human
Threshold/Distinctive Capabilities
Johnson, Whittington & Scholes (pg 87, 2011)

Resources Competences
Threshold
Distinctive

Value Chain
(Porter, 1985)

Topic 2: Internal Environment: Stakeholders and Organisational Culture

Seminar activity 1
The class will be split into 4 groups, each allocated with one of the four cultural types. Each group should undertake the following for their allocated types – be prepared to feedback to the class.

1.1 Draw a pictorial diagram of the ‘culture’ in the appropriate section below.

1.2 List the key attributes related to the ‘culture’

1.3 Does the organisation benefit from this structure?

During the feedback session, add appropriate diagrams to each ‘cultural type’ below.
22
Power culture Task Culture
……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..
Role Culture Person Culture
……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..
Activity 2

Whilst watching “Can Gerry Robinson fix the NHS: One year on” try to identify indications which organisational cultures are indicated. Also make a note of any ‘stakeholders’ you spot.

NHS Stakeholders
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
2.1 What cultures are visible at Rotherham hospital?

2.2 Name 3 positions and 3 cultures?
2.3 Who’s was in charge of the hospital and who is in charge of the hospital?
2.4 What is meant by hierarchical? And which culture, according to Handy, operates within a hierarchy?
2.5 In what areas do the cultures still clash?

Activity 3
In small groups either complete a stakeholder analysis or a cultural web for the NHS using the models below. Be prepared to feedback to the class; complete the alternative model during the class discussions.

NHS Cultural Web

NHS Stakeholder Analysis
1) List stakeholders
2) Mark ‘positions’ on the matrix

Reading related to this seminar
• Read Johnson G, Whittington R, Scholes K, Angwin D & Regner P (2014) Exploring Strategy, Harlow, Pearson (Chapter 5) or

• Custom text: Strategic Management (2015) compiled by Twiss, A. and Ellis, M.

Activities to undertake following the seminar
• Review your chosen organisation for the assessment task 1, the individual assignment – what stakeholders and culture(s) are present?

Topic 3 External Environment: PEST Analysis

Seminar activity 1: PEST review

In pairs consider the following questions:

1. Define the term external environment?
2. List the elements of PEST, LoNGPEST, PESTEL and STEEPLE.

PEST –

LoNGPEST –

PESTEL –

STEEPLE –

3. Explain the difference between ‘international’ and ‘global’?

4. Name 3 sociocultural factors which could impact on organisations?

5. Name 3 technological factors which could impact on organisations?
6. Where can organisations find the information which will allow them to analyse their external environment?
7. State 3 key benefits to organisations of undertaking external environmental analysis?
8. Name 3 influences from the political external environment
9. Name 3 influences from the economic external environment
10. Name 3 influences from the socio-cultural external environment
11. Name one of the roles of the Bank of England in the economy of the UK?
12. Explain the role of the London stock market in the economy of the UK?

Seminar activity 2: “Iceland- Life in the Freezer Cabinet” (BBC2, 2013)

Selected excerpts from this video will be played. Consider the following questions and make notes for discussion later.

1. Which sector of the economy does Iceland operate in?

2. What type of legal organisation is Iceland Foods?

3. What type of structure does Iceland operate under? Draw a diagram of such a structure.
4. Which industrial sector would you place Iceland in?

Iceland – PEST

Political

Economic

Socio-cultural

Technological
Seminar activity 3: Sources of information

List 5 potential ‘good’ sources of information which could assist with a PEST analysis

1.
2.
3.
4.
5.

What makes these sources acceptable as ‘good’ quality sources?
Why are the following sources not acceptable?

• Wikipedia
• Businessballs
• Tutor2u
• Net MBA
• Yourdictionary
• Business dictionary
• Suite 101
• answers.com
• changeingminds.org
• change-management-coach
• hroot.com
• brightub.com
• smallbusiness.chron.com
• leadership-with-you
Topic 4 External Environment: Porter’s Five Forces
Activity 1; Q/A review and class discussion

1. List Porter’s five forces of competition?

1)

2)

3)

4)

5)
2. State 3 factors making an industry attractive to new entrants?

3. List three factors making substitute products or services a threat?

4. State three factors strengthening a buyer’s power?

5. List 3 factors strengthening a supplier’s power?

Activity 2

Watch: “Coffee Shop Hot Shot: Business Boomers” (BBC2, 2014) .

Whilst watching the video make notes in the grid on the next page of anything you see or hear which helps you to consider the five forces of competition. Remember Porter’s 5 Force analysis can be used to review the competitive position of an industry or a specific sector. For this activity you will be analysing the ‘coffee shop’ sector.
Issue / questions to consider are:

• Who are the ‘rivals’, how many are there, how similar are they?
• What sort of buyers are there? Can they be grouped in any way?
• What sort of suppliers are there? Can they be grouped in any way?
• What is the primary product / service/customer benefit? What would be a substitute for these?
• What would you need to enter this sector? How easy/difficult would it be?

Activity 3 – Porter’s 5 forces analysis

Coffee Shop Sector

Competitive Rivalry

High

Medium

Low
Buying Power

High

Medium

Low
Power of Suppliers

High

Medium

Low
Threat of Substitutes

High

Medium

Low
Threat of Entrants

High

Medium

Low
Activity 4: Assessment Task 1 – individual assignment

Consider P5F in relation to your chosen organisation.
Q) How much do you know about the organisation’s sector already? From what source?
Q) Where could you find out more?

Chosen organisation for Task 1:…………………………………………………………………………………………..

Competitive rivalry (High / med / low – don’t know yet)
Power of suppliers (High / med / low – don’t know yet)
Power of buyers (High / med / low – don’t know yet)
Threat of new entrants (High / med / low – don’t know yet)

Threat of substitutes (High / med / low – don’t know yet)
Topic 5 Strategy frameworks: Generic Strategies and the Strategy Clock.
Activity 1: Split into 4 groups. You will be given one industry out of the 4 listed below.

• UK Airlines

• UK Coffee and Sandwich Shops

• UK Supermarkets

• UK Youth Fashion wear

Once in your groups, identify 4 organisations operating in that industry. Try to think of different ‘types’ or organisation within your allocated industry: different perceived quality or service, cost or market share.

Identify the competitive strategies the 4 chosen organisations in your industry are following.

Q) Why are the organisations in your industry following these strategies?

Q) Have these strategies changed over time? If so, why?

Be prepared to present your findings to the class – 5/10 minutes per group.

Industry sector……………………………………………………………………………………………………………..

Organisation 1)……………………………………………………………………….
(Add notes here)

Organisation 2)……………………………………………………………………….
(Add notes here)
Organisation 3)……………………………………………………………………….
(Add notes here)
Organisation 4)……………………………………………………………………….
(Add notes here)
‘Position’ each organisation on the two frameworks.

Porter’s Competitive Strategies

Bowman’s Strategy Clock

Activity 3: Assessment Task 1 – individual assignment: consider the two frameworks in relation to your chosen organisation.
TOPIC 6 What does all this add up to? Organisational SWOT

Activity 1: Hawick Textiles

You will view the video of Hawick Textiles in three parts. The aim is to undertake a review of their strategic position using the concepts and models discussed during the module to date arising at a SWOT analysis.

In groups you will need to decide the following:

Q) Which models and frameworks discussed in the module to date could provide information and analysis useful for a SWOT analysis? Make notes below.

Activity 2) Following a class discussion each group will be asked to undertake the appropriate analysis for one or two of the models and feedback to the class. Create a separate flipchart summary of each model.

Make notes below of your group’s and other groups’ analysis.

Activity 3) When all analysis models are discussed each group should attempt a SWOT analysis for Hawick using the template on the following page. Don’t worry if this is not completed during this seminar as the activity will be reviewed and developed next week. Make sure one of your group retains the flipcharts and brings them to the next seminar.
SWOT TEMPLATE

Company: Hawick Textiles

Strengths

Weaknesses
Opportunities
Threats

You will be using this SWOT during next week’s seminar.
Topic 7 Where does all this lead to? Organisational TOWS

Activity 1: Review your SWOT of Hawick Textile undertaken during the previous seminar.
Activity 2: In groups, using the SWOT and the guidance below, undertake a TOWS analysis on the next page for Hawick Textiles. Be prepared to feedback to the class.

TOWS TEMPLATE Company: Hawick Textiles

Internal Factors
Strengths (S) Weaknesses (W)
External Factors Opportunities (O) S/O W/O
Threats (T) ST WT

Activity 3: Further sections of the Troubleshooter: Hawick video will be played. You should review your TOWS in light of the additional information.
Activity 4: Assessment Task 1- individual assignment. Consider a SWOT and TOWS analysis in relation to your chosen organisation.

Which models and frameworks discussed in the module to date could provide information and analysis useful for a SWOT analysis?

Have you undertaken sufficient research?

What additional information do you need?

Make notes below.
Topic 8 Assignment Preparation

This seminar will be devoted to Assessment Task 1, the individual assignment. See pages 1- to 13 for full details. This assignment is to be handed in shortly (check your assessment schedule for the precise date and time) and you should use this seminar to ensure you fully understand the task set and the criteria used for marking.

The workshop will be relatively informal with a review discussion of the task set and how this relates to the module to date. There will be an opportunity to ask any questions you may have so it is important that you have so come prepared.

There will be time to work on your assignment during the seminar.

Topic 9: Different strategic approaches

During this seminar you will be considering the two case studies: Virgin Group and Starbucks and answering the linked questions.
Case study – Emergent strategy at Virgin Group
Taken from Richard Lynch: Strategic Management, 7th Edition, Pearson Education
Under the strong and populist leadership of its chief executive, Sir Richard Branson, Virgin Group has pursued an opportunistic strategy to build a company with estimated annual sales of over US$10 billion by 2007.

Starting from nothing in 1968, Virgin Group tried a series of strategies over the next 30 years. Its aim was to find opportunities to grow the business on the basis of what became the Virgin brand name and on the strong reputation of its founder and chief executive. The strategic trial-and-error process was essentially emergent, rather than prescriptive. This case outlines some of the main strategies with Virgin’s successes, failures and continuing business developments.
Background to the early years

After an experimental launch of a student magazine, the young Richard Branson developed a small record mail-order business in 1969 to take advantage of the end of resale price maintenance in the UK. He opened his first record shop two years later and subsequently developed it into the Virgin Megastore chain. At the same time, he was attempting to develop a record label by signing up various pop artists of the time. None of these businesses possessed any clear competitive advantage, though arguably contractual rights to popular musicians and the Virgin brand itself had some real value. He continued to seek business opportunities using the Virgin brand and, by chance, met up with an entrepreneur wishing to develop an airline business. This eventually led to the Virgin airline business with its first route to New York in 1984.

In later years, the company moved into a variety of business ventures – from Virgin Bride and Virgin Cola to Virgin Trains and Virgin Mobile telephones – see Table 1.

In terms of its strategy, Virgin Group claims to examine business opportunities carefully, seeking an opportunity for ‘restructuring the market and creating competitive advantage’. Virgin Group’s underlying business strategy The company has developed its strategy over a number of years. Essentially, Virgin takes the view that there are always opportunities available for the hungry business executive. The underlying business logic has been summarised by Branson thus: Business opportunities are like buses . . . There’s always another coming along.

In practice, what this means is that Virgin examines new opportunities to see if the group can offer something ‘better, fresher and more valuable’ than existing companies. It looks particularly at markets where the existing customers are not always receiving value for money and where the existing companies have in some cases become complacent – trains, insurance and banking for example – and where the new internet might deliver a business opportunity. This means that the main thrust of the strategy has been to find new market opportunities where the company believes its brand name can create competitive advantage. ‘Contrary to what people may think, our constantly expanding and eclectic empire is neither random nor reckless. Each new business demonstrates our skill at picking the right market and the right opportunity,’ says the Virgin website.

Outcome of emergent strategies: Virgin focuses on geographical expansion

In the last few years, Virgin has focused its strategy on geographical expansion of its existing product portfolio rather than adding products. For example, it has taken its highly successful concept of Virgin Mobile telephones to other countries beyond its UK base. However, it remains opportunistic in its main product areas – for example, its bid to rescue the failed UK bank Northern Rock in 2007. The strategy continues to emerge – both into new countries and into new product areas.

Table 1 – Selected business opportunities developed by the Virgin Group

Year Business opportunity
1968 First issue of Student magazine – Branson’s first business venture, which was subsequently closed

1970 Start of Virgin Mail Order operation – records sent by mail at cheaper prices than those of record stores

1971 First Virgin Record Store opens in Oxford Street, London, UK 1972 First Virgin Recording Studio

1973 Launch of Virgin Records label plus Virgin Music Publishing – the Sex Pistols were signed in 1977

1984 Virgin Atlantic Airways launched with limited flights between the UK and USA 1985 Virgin Holidays founded (travel agency chain in the UK) – Virgin Hotels then followed in 1988

1988 Virgin Megastores opened in UK – Japan followed in 1990

1991 Virgin Publishing (book publishing) begins

1992 Virgin Records sold to the major record company, EMI

1994 Virgin Vodka and Virgin Cola launched with great publicity

1995 Virgin Direct Personal Services founded – sells financial services within the UK

1996 Virgin Trains launched to provide long-distance train services in parts of the UK

1999 Virgin Mobile begins – sells mobile telephone services in the UK by renting space on the network of a competitor; Virgin Bride – a bridal emporium – begins with Sir Richard seeking publicity by being photographed in a white bridal gown

2000 Virgin Cars – a car purchasing website;
Virgin Wines – a wine purchasing website;
Virgin Cosmetics – 500 products for men and women in the UK;
Virgin Active – acquisition of chain of fitness centres in UK
Virgin Blue – low cost airline launched in Australia – becomes major success with Initial Public Offering (IPO) in 2003

2001 Virgin Mobile extends into Singapore

2002 Virgin Mobile extends into the USA and into South Africa

2000 Virgin Group decides to grow its businesses by a geographic expansion strategy of existing products and services, while also identifying new products and services in its home country

2003 Virgin acquires stake in the British cable television company NTL, which is re-branded as Virgin Cable
Virgin case study questions

1. The Virgin emergent approach to strategy development has not always proved successful – Virgin Bride and Virgin Cola, for example, remain relatively small businesses. Does this matter? Do all emergent strategies have to be successful?

2. Critically evaluate Virgin Group’s strategies over the period of the case study. Was the company wise to spend so much time investing in so many new product areas? What would you have done?

Make notes here

Case study Starbucks – sacrificing dividends for global growth
Taken from Richard Lynch: Strategic Management, 7th Edition, Pearson Education

Most companies with annual sales over $9 billion would wish to pay an annual dividend to their shareholders. But not the coffee restaurant chain Starbucks. Its purpose is to grow the company and it retained all its profits for many years to achieve this. The case explains the background and explores the implications

Starbucks history
Originally a coffee roasting company, Starbucks opened its first coffee bar in Seattle, USA, in 1985. The young Howard Schulz, who had joined the company in 1982 as marketing executive, persuaded the original owners to use the company’s roasted beans to experiment with an ‘Italian coffee bar’ concept. The early bars were successful, so Schulz persuaded some local backers to help him buy the company in 1987. Starbucks then expanded into new cafes in Chicago and Vancouver, Canada. It was not long before there were some 17 bars. The numbers then expanded and numbered 165 at the time the company made a public offering of its shares in 1992.

Starbucks operations
Essentially, Starbucks sells fresh coffee, tea and other beverages, along with a range of snacks and light refreshments. It operates mainly in high-traffic, high-visibility locations and, in North America, it usually owns the shops. The company’s American stores dominated the total worldwide business in 2007, with just over 7,000 coffee shops (up from 4,300 in 2004). There were also another 4,000 (up from 1,800 in 2004) Starbucks in the USA that were licensed to other operators to sell Starbucks coffee products in areas where the company was not otherwise represented, such as smaller neighbourhoods, off highways and in rural locations. Starbucks’ strategy was to seek out innovative new flavours, products and even music to enhance its stores: ‘The Starbucks Experience has a rich emotional connection for people everywhere and we are creating a “third place” [in addition to home and work] for an ever broadening audience around the world.’

Internationally, the company opened its first Starbucks outside North America in 1997. By the end of 2007, there were almost 1,800 (up from 1,000 in 2004) company-owned stores and another 2,800 (up from 1,500 in 2004) licensed stores in over 40 countries. For example, there were 748 stores in Japan, 591 in China, 231 in South Korea and 50 in Singapore; there were over 614 stores in the UK, 113 in Germany but only 41 in France; there were also substantial licensing operations in the Middle East and South America but none in Africa. The company was continuing to expand rapidly and estimated that it was serving 40 million customers every week. The company commented in 2004: ‘Given our sustained success to date, we believe that we previously underestimated the scope of the long-term opportunity for Starbucks. Accordingly, we recently increased our ultimate projected growth from 25,000 to at least 30,000 stores worldwide, with at least 15,000 locations outside the United States.’ This statement with regard to purpose was arguably over-optimistic since there were still only 11,000 stores in the USA and nearly 6,000 stores internationally in 2010. Part of the reason was that Starbucks was about to hit a rough patch with regard to its sales and profitability.

Starbucks’ financial results and green strategy
The rapid increase in stores wa

Strategic Planning: Shaping the Future (2015/6)

Reading List
The online resource list for this module is in the module’s Blackboard site in the Learning Materials section or through the Library Gateway link to reading lists https://shu.rl.talis.com/ (search by name of the module or module code).
The following three books are recommended reading for this module:

• Twiss A and Ellis M (2015): Strategic Management, Pearson Education Ltd.- this is
adapted from: Exploring strategy, Tenth Edition, 2014, Johnson G, Whittington R,
Scholes K, Angwin D and Regner, P

This text has been compiled by two SHU lecturers: Amanda Twiss and Mark Ellis and can be purchased from Blackwell’s Bookshop (on Level 2 of the Atrium). This adaptation is available at a reduced price of £30.00, to ensure you are not purchasing what you do not need.

Please note that the Tenth edition of Exploring Strategy by the above authors can also be bought in Blackwell’s or found in the learning centre. This textbook has all of the content of the custom book plus additional chapters and cases (if you were to purchase it, the cost would be significantly more).
• Kew J and Stredwick J (2009):Business Environment: Managing in a Strategic Context, 2nd edition, CIPD

• Lynch R L (2012): Strategic Management, 6th Edition, Prentice Hall
The following articles are included at the back of the Module Guide. These will be used during topic nine: Different Strategic Approaches.

• Appendix 1 : Bodwell W, Chermack TJ (2010) Organizational Ambidexterity: Integrating deliberate and emergent strategy with scenario planning, Technological Forecasting and Change 77 pages 193-202.

• Appendix 2: O’Regan N and Ghobadin A (2007) Formal strategic planning: annual raindance or wheel of success? Strategic Change 16, pages 11-22.

• Appendix 3: Neugebauer F, Figge F and Hahn T (2015) Planned or Emergent Strategy Making? Exploring the Formation of Corporate Sustainability Strategies Business Strategy and the Environment Published online in Wiley Online Library DO/ 10.1002/bse.1875
Additional reading will be recommended during the module. These are selected to provide you with a framework of study from which you can develop your learning. but you should also seek out further reading including Journals such as;

• Business Strategy Review
• Harvard Business Review
• European Management Journal
• Journal of Business Strategy
• Long Range Planning Journal (Strategic Planning Society)
• Management Today
• Strategy + Business Magazine
• Strategy Magazine (Strategic Planning Society)
• Strategic Management Journal
These all contain useful and accessible material and most are available via the Adsetts Centre. You should also pay attention to newspapers such as The Times and The Guardian that have a regular supply of excellent articles on strategic issues.

We recommend that you make use of the databases available through the Learning Centre for additional materials, e.g. Emerald and Business Source Premier.
Assessment Package
The module is formally assessed in two parts via group project and an individual assignment.

Task 1: Individual Assignment

Module Title: Strategic Planning: Shaping the Future
Assessment Title: Individual assignment
Weighting: 60%
Submission Date: See assessment scheduler for the hand-in date and time.

Individual assignment task: Select one of the five organisations listed below and undertake a strategic review which demonstrates understanding of the internal and external environment in which organisations exist. You should undertake effective analysis using the strategic frameworks, theories and concepts discussed throughout the module to evaluate the key external and internal factors that impact on the organisations strategic options. Additionally, you should identify potential strategic options the organisation could utilise in response to their strategic position.

• HSBC,
• Sheffield Hallam University
• Comic Relief,
• Apple or (I choose this organisation)
•
The theoretical models which could assist your analysis include PEST/PESTEL/LoNGPEST, Porter’s Five Forces, Competences and Resource analysis, Value Chain, Porter’s Generic Groups, Strategy Clock, Strategic Groups, SWOT, TOWS and Ansoff’s Strategic Directions. (Choose 2-3 theories)

Remember too that presentation is important. Your essay should be written in correct English. Please check for errors in grammar, spelling and punctuation. Referencing must be in line with the Harvard system, details of which are available on Blackboard and from the Adsetts Resource Centre.
Strategic Planning: Shaping the Future
Assessment Criteria – Task 1: Individual assignment (60%)
% Grade 0 – 39 40-49 50-59 60-69 70+
The critical selection and use of relevant and appropriate sources of information.
You have demonstrated no research or poor research drawn from a very limited set of source materials, some or all of which are irrelevant to the task set. You demonstrate only basic research which has been drawn from a limited range of source materials. You demonstrate a good standard of research drawing on a range of relevant source materials. You demonstrate a satisfactory standard of research with effective use of a good range relevant source materials, some indication of evaluation of sources. You demonstrate an excellent standard of research drawing on a wide range of relevant source materials with clear evaluation of the sources sselected.
Application of appropriate strategic frameworks, concepts and theories discussed throughout the module. Appropriate theoretical models were not used, misunderstood, or applied incorrectly to your chosen organisation. Although you demonstrate understanding of some elements of the theoretical models used in your report, confusion remained in places, and you have not really applied them effectively at all times. You demonstrate satisfactory ubderstanding of the theoretical models used in your report, and have applied them reasonably effectively to your chosen orgnisation. Overall, you demonstrated good understanding of the theoretical models used in the report, though there were some areas of weakness. You applied them effectively to your chosen organisation. You demonstrated excellent, in depth, understanding of all theoretical models used in your report, and have applied them most skilfully to your chosen organisation.
Evaluation and analysis of the key external and internal factors which impact on the organisation, Descriptive coverage of issues, not all of which are relevant to the task set. Little or no attempt at evaluation. Few or no comparisons of theory with practice. No demonstration of understanding of the internal and external environment in which organisations exist Limited analysis of relevant issues. Little attempts at evaluation. Few comparisons of theory with practice. A basic knowledge of relevant theory and concepts. Limited demonstration of understanding the internal and external environment in which organisations exist. A satisfactory standard of analysis and evaluation of most issues with good general comparisons of theory with practice. Overall, you demonstrate a good understanding of the internal and external environment in which organisations exist.
A good standard of analysis and evaluation of relevant issues with well integrated comparisons of theory and practice. You demonstrate a clear and well explained understanding of the internal and external environment in which organisations exist.
Thorough analysis of relevant issues with excellent synthesis of theory and practice with well-chosen examples. You demonstrate a thorough and detailed understanding of the internal and external environment in which organisations exist.

Identification of a range of potential strategic options to the organisations’ stratgic position. No potential strategic options which the organisation could utilise in response to their strategic position have been provided. Any conclusions made are largely unsubstantiated.
Limited strategic options which the organisation could utilise in response to their strategic position have been provided. Conclusions are weak and only partially supported by the arguments made. You demonstrate satisfactory identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a cohesive case. You demonstrate good identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a well-argued and cohesive case. You demonstrate an excellent identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a rigorously argued and convincing case.
Assignment presentation and academic rigour. Poorly written with errors in grammar and/or vocabulary. Meaning often obscured. Little structure and no attempt to reference. Clearly written. Has
structure but arguments
are not fully developed.
Referencing is incomplete. A satisfactory standard of written English. Well-structured and cohesive. Well argued. Referencing is usually thorough and complete with all sources acknowledged. A good standard of written English. Well-structured and cohesive. Well argued. Referencing is thorough and complete with all sources acknowledged. A very high standard of written English. Excellent structure and cohesive, critical analysis demonstrated. Referencing is thorough and complete
with all sources
acknowledged.
Seminar Guide
Topic 1: Internal Environment: Strategic Capability and Value Chain
Johnson, Whittington, Scholes Angwin & Regnér (pg 71, 2011)

Resources Competences
Physical
Financial
Human
Threshold/Distinctive Capabilities
Johnson, Whittington & Scholes (pg 87, 2011)

Resources Competences
Threshold
Distinctive

Value Chain
(Porter, 1985)

Topic 2: Internal Environment: Stakeholders and Organisational Culture

Seminar activity 1
The class will be split into 4 groups, each allocated with one of the four cultural types. Each group should undertake the following for their allocated types – be prepared to feedback to the class.

1.1 Draw a pictorial diagram of the ‘culture’ in the appropriate section below.

1.2 List the key attributes related to the ‘culture’

1.3 Does the organisation benefit from this structure?

During the feedback session, add appropriate diagrams to each ‘cultural type’ below.
22
Power culture Task Culture
……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..
Role Culture Person Culture
……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..
Activity 2

Whilst watching “Can Gerry Robinson fix the NHS: One year on” try to identify indications which organisational cultures are indicated. Also make a note of any ‘stakeholders’ you spot.

NHS Stakeholders
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
2.1 What cultures are visible at Rotherham hospital?

2.2 Name 3 positions and 3 cultures?
2.3 Who’s was in charge of the hospital and who is in charge of the hospital?
2.4 What is meant by hierarchical? And which culture, according to Handy, operates within a hierarchy?
2.5 In what areas do the cultures still clash?

Activity 3
In small groups either complete a stakeholder analysis or a cultural web for the NHS using the models below. Be prepared to feedback to the class; complete the alternative model during the class discussions.

NHS Cultural Web

NHS Stakeholder Analysis
1) List stakeholders
2) Mark ‘positions’ on the matrix

Reading related to this seminar
• Read Johnson G, Whittington R, Scholes K, Angwin D & Regner P (2014) Exploring Strategy, Harlow, Pearson (Chapter 5) or

• Custom text: Strategic Management (2015) compiled by Twiss, A. and Ellis, M.

Activities to undertake following the seminar
• Review your chosen organisation for the assessment task 1, the individual assignment – what stakeholders and culture(s) are present?

Topic 3 External Environment: PEST Analysis

Seminar activity 1: PEST review

In pairs consider the following questions:

1. Define the term external environment?
2. List the elements of PEST, LoNGPEST, PESTEL and STEEPLE.

PEST –

LoNGPEST –

PESTEL –

STEEPLE –

3. Explain the difference between ‘international’ and ‘global’?

4. Name 3 sociocultural factors which could impact on organisations?

5. Name 3 technological factors which could impact on organisations?
6. Where can organisations find the information which will allow them to analyse their external environment?
7. State 3 key benefits to organisations of undertaking external environmental analysis?
8. Name 3 influences from the political external environment
9. Name 3 influences from the economic external environment
10. Name 3 influences from the socio-cultural external environment
11. Name one of the roles of the Bank of England in the economy of the UK?
12. Explain the role of the London stock market in the economy of the UK?

Seminar activity 2: “Iceland- Life in the Freezer Cabinet” (BBC2, 2013)

Selected excerpts from this video will be played. Consider the following questions and make notes for discussion later.

1. Which sector of the economy does Iceland operate in?

2. What type of legal organisation is Iceland Foods?

3. What type of structure does Iceland operate under? Draw a diagram of such a structure.
4. Which industrial sector would you place Iceland in?

Iceland – PEST

Political

Economic

Socio-cultural

Technological
Seminar activity 3: Sources of information

List 5 potential ‘good’ sources of information which could assist with a PEST analysis

1.
2.
3.
4.
5.

What makes these sources acceptable as ‘good’ quality sources?
Why are the following sources not acceptable?

• Wikipedia
• Businessballs
• Tutor2u
• Net MBA
• Yourdictionary
• Business dictionary
• Suite 101
• answers.com
• changeingminds.org
• change-management-coach
• hroot.com
• brightub.com
• smallbusiness.chron.com
• leadership-with-you
Topic 4 External Environment: Porter’s Five Forces
Activity 1; Q/A review and class discussion

1. List Porter’s five forces of competition?

1)

2)

3)

4)

5)
2. State 3 factors making an industry attractive to new entrants?

3. List three factors making substitute products or services a threat?

4. State three factors strengthening a buyer’s power?

5. List 3 factors strengthening a supplier’s power?

Activity 2

Watch: “Coffee Shop Hot Shot: Business Boomers” (BBC2, 2014) .

Whilst watching the video make notes in the grid on the next page of anything you see or hear which helps you to consider the five forces of competition. Remember Porter’s 5 Force analysis can be used to review the competitive position of an industry or a specific sector. For this activity you will be analysing the ‘coffee shop’ sector.
Issue / questions to consider are:

• Who are the ‘rivals’, how many are there, how similar are they?
• What sort of buyers are there? Can they be grouped in any way?
• What sort of suppliers are there? Can they be grouped in any way?
• What is the primary product / service/customer benefit? What would be a substitute for these?
• What would you need to enter this sector? How easy/difficult would it be?

Activity 3 – Porter’s 5 forces analysis

Coffee Shop Sector

Competitive Rivalry

High

Medium

Low
Buying Power

High

Medium

Low
Power of Suppliers

High

Medium

Low
Threat of Substitutes

High

Medium

Low
Threat of Entrants

High

Medium

Low
Activity 4: Assessment Task 1 – individual assignment

Consider P5F in relation to your chosen organisation.
Q) How much do you know about the organisation’s sector already? From what source?
Q) Where could you find out more?

Chosen organisation for Task 1:…………………………………………………………………………………………..

Competitive rivalry (High / med / low – don’t know yet)
Power of suppliers (High / med / low – don’t know yet)
Power of buyers (High / med / low – don’t know yet)
Threat of new entrants (High / med / low – don’t know yet)

Threat of substitutes (High / med / low – don’t know yet)
Topic 5 Strategy frameworks: Generic Strategies and the Strategy Clock.
Activity 1: Split into 4 groups. You will be given one industry out of the 4 listed below.

• UK Airlines

• UK Coffee and Sandwich Shops

• UK Supermarkets

• UK Youth Fashion wear

Once in your groups, identify 4 organisations operating in that industry. Try to think of different ‘types’ or organisation within your allocated industry: different perceived quality or service, cost or market share.

Identify the competitive strategies the 4 chosen organisations in your industry are following.

Q) Why are the organisations in your industry following these strategies?

Q) Have these strategies changed over time? If so, why?

Be prepared to present your findings to the class – 5/10 minutes per group.

Industry sector……………………………………………………………………………………………………………..

Organisation 1)……………………………………………………………………….
(Add notes here)

Organisation 2)……………………………………………………………………….
(Add notes here)
Organisation 3)……………………………………………………………………….
(Add notes here)
Organisation 4)……………………………………………………………………….
(Add notes here)
‘Position’ each organisation on the two frameworks.

Porter’s Competitive Strategies

Bowman’s Strategy Clock

Activity 3: Assessment Task 1 – individual assignment: consider the two frameworks in relation to your chosen organisation.
TOPIC 6 What does all this add up to? Organisational SWOT

Activity 1: Hawick Textiles

You will view the video of Hawick Textiles in three parts. The aim is to undertake a review of their strategic position using the concepts and models discussed during the module to date arising at a SWOT analysis.

In groups you will need to decide the following:

Q) Which models and frameworks discussed in the module to date could provide information and analysis useful for a SWOT analysis? Make notes below.

Activity 2) Following a class discussion each group will be asked to undertake the appropriate analysis for one or two of the models and feedback to the class. Create a separate flipchart summary of each model.

Make notes below of your group’s and other groups’ analysis.

Activity 3) When all analysis models are discussed each group should attempt a SWOT analysis for Hawick using the template on the following page. Don’t worry if this is not completed during this seminar as the activity will be reviewed and developed next week. Make sure one of your group retains the flipcharts and brings them to the next seminar.
SWOT TEMPLATE

Company: Hawick Textiles

Strengths

Weaknesses
Opportunities
Threats

You will be using this SWOT during next week’s seminar.
Topic 7 Where does all this lead to? Organisational TOWS

Activity 1: Review your SWOT of Hawick Textile undertaken during the previous seminar.
Activity 2: In groups, using the SWOT and the guidance below, undertake a TOWS analysis on the next page for Hawick Textiles. Be prepared to feedback to the class.

TOWS TEMPLATE Company: Hawick Textiles

Internal Factors
Strengths (S) Weaknesses (W)
External Factors Opportunities (O) S/O W/O
Threats (T) ST WT

Activity 3: Further sections of the Troubleshooter: Hawick video will be played. You should review your TOWS in light of the additional information.
Activity 4: Assessment Task 1- individual assignment. Consider a SWOT and TOWS analysis in relation to your chosen organisation.

Which models and frameworks discussed in the module to date could provide information and analysis useful for a SWOT analysis?

Have you undertaken sufficient research?

What additional information do you need?

Make notes below.
Topic 8 Assignment Preparation

This seminar will be devoted to Assessment Task 1, the individual assignment. See pages 1- to 13 for full details. This assignment is to be handed in shortly (check your assessment schedule for the precise date and time) and you should use this seminar to ensure you fully understand the task set and the criteria used for marking.

The workshop will be relatively informal with a review discussion of the task set and how this relates to the module to date. There will be an opportunity to ask any questions you may have so it is important that you have so come prepared.

There will be time to work on your assignment during the seminar.

Topic 9: Different strategic approaches

During this seminar you will be considering the two case studies: Virgin Group and Starbucks and answering the linked questions.
Case study – Emergent strategy at Virgin Group
Taken from Richard Lynch: Strategic Management, 7th Edition, Pearson Education
Under the strong and populist leadership of its chief executive, Sir Richard Branson, Virgin Group has pursued an opportunistic strategy to build a company with estimated annual sales of over US$10 billion by 2007.

Starting from nothing in 1968, Virgin Group tried a series of strategies over the next 30 years. Its aim was to find opportunities to grow the business on the basis of what became the Virgin brand name and on the strong reputation of its founder and chief executive. The strategic trial-and-error process was essentially emergent, rather than prescriptive. This case outlines some of the main strategies with Virgin’s successes, failures and continuing business developments.
Background to the early years

After an experimental launch of a student magazine, the young Richard Branson developed a small record mail-order business in 1969 to take advantage of the end of resale price maintenance in the UK. He opened his first record shop two years later and subsequently developed it into the Virgin Megastore chain. At the same time, he was attempting to develop a record label by signing up various pop artists of the time. None of these businesses possessed any clear competitive advantage, though arguably contractual rights to popular musicians and the Virgin brand itself had some real value. He continued to seek business opportunities using the Virgin brand and, by chance, met up with an entrepreneur wishing to develop an airline business. This eventually led to the Virgin airline business with its first route to New York in 1984.

In later years, the company moved into a variety of business ventures – from Virgin Bride and Virgin Cola to Virgin Trains and Virgin Mobile telephones – see Table 1.

In terms of its strategy, Virgin Group claims to examine business opportunities carefully, seeking an opportunity for ‘restructuring the market and creating competitive advantage’. Virgin Group’s underlying business strategy The company has developed its strategy over a number of years. Essentially, Virgin takes the view that there are always opportunities available for the hungry business executive. The underlying business logic has been summarised by Branson thus: Business opportunities are like buses . . . There’s always another coming along.

In practice, what this means is that Virgin examines new opportunities to see if the group can offer something ‘better, fresher and more valuable’ than existing companies. It looks particularly at markets where the existing customers are not always receiving value for money and where the existing companies have in some cases become complacent – trains, insurance and banking for example – and where the new internet might deliver a business opportunity. This means that the main thrust of the strategy has been to find new market opportunities where the company believes its brand name can create competitive advantage. ‘Contrary to what people may think, our constantly expanding and eclectic empire is neither random nor reckless. Each new business demonstrates our skill at picking the right market and the right opportunity,’ says the Virgin website.

Outcome of emergent strategies: Virgin focuses on geographical expansion

In the last few years, Virgin has focused its strategy on geographical expansion of its existing product portfolio rather than adding products. For example, it has taken its highly successful concept of Virgin Mobile telephones to other countries beyond its UK base. However, it remains opportunistic in its main product areas – for example, its bid to rescue the failed UK bank Northern Rock in 2007. The strategy continues to emerge – both into new countries and into new product areas.

Table 1 – Selected business opportunities developed by the Virgin Group

Year Business opportunity
1968 First issue of Student magazine – Branson’s first business venture, which was subsequently closed

1970 Start of Virgin Mail Order operation – records sent by mail at cheaper prices than those of record stores

1971 First Virgin Record Store opens in Oxford Street, London, UK 1972 First Virgin Recording Studio

1973 Launch of Virgin Records label plus Virgin Music Publishing – the Sex Pistols were signed in 1977

1984 Virgin Atlantic Airways launched with limited flights between the UK and USA 1985 Virgin Holidays founded (travel agency chain in the UK) – Virgin Hotels then followed in 1988

1988 Virgin Megastores opened in UK – Japan followed in 1990

1991 Virgin Publishing (book publishing) begins

1992 Virgin Records sold to the major record company, EMI

1994 Virgin Vodka and Virgin Cola launched with great publicity

1995 Virgin Direct Personal Services founded – sells financial services within the UK

1996 Virgin Trains launched to provide long-distance train services in parts of the UK

1999 Virgin Mobile begins – sells mobile telephone services in the UK by renting space on the network of a competitor; Virgin Bride – a bridal emporium – begins with Sir Richard seeking publicity by being photographed in a white bridal gown

2000 Virgin Cars – a car purchasing website;
Virgin Wines – a wine purchasing website;
Virgin Cosmetics – 500 products for men and women in the UK;
Virgin Active – acquisition of chain of fitness centres in UK
Virgin Blue – low cost airline launched in Australia – becomes major success with Initial Public Offering (IPO) in 2003

2001 Virgin Mobile extends into Singapore

2002 Virgin Mobile extends into the USA and into South Africa

2000 Virgin Group decides to grow its businesses by a geographic expansion strategy of existing products and services, while also identifying new products and services in its home country

2003 Virgin acquires stake in the British cable television company NTL, which is re-branded as Virgin Cable
Virgin case study questions

1. The Virgin emergent approach to strategy development has not always proved successful – Virgin Bride and Virgin Cola, for example, remain relatively small businesses. Does this matter? Do all emergent strategies have to be successful?

2. Critically evaluate Virgin Group’s strategies over the period of the case study. Was the company wise to spend so much time investing in so many new product areas? What would you have done?

Make notes here

Case study Starbucks – sacrificing dividends for global growth
Taken from Richard Lynch: Strategic Management, 7th Edition, Pearson Education

Most companies with annual sales over $9 billion would wish to pay an annual dividend to their shareholders. But not the coffee restaurant chain Starbucks. Its purpose is to grow the company and it retained all its profits for many years to achieve this. The case explains the background and explores the implications

Starbucks history
Originally a coffee roasting company, Starbucks opened its first coffee bar in Seattle, USA, in 1985. The young Howard Schulz, who had joined the company in 1982 as marketing executive, persuaded the original owners to use the company’s roasted beans to experiment with an ‘Italian coffee bar’ concept. The early bars were successful, so Schulz persuaded some local backers to help him buy the company in 1987. Starbucks then expanded into new cafes in Chicago and Vancouver, Canada. It was not long before there were some 17 bars. The numbers then expanded and numbered 165 at the time the company made a public offering of its shares in 1992.

Starbucks operations
Essentially, Starbucks sells fresh coffee, tea and other beverages, along with a range of snacks and light refreshments. It operates mainly in high-traffic, high-visibility locations and, in North America, it usually owns the shops. The company’s American stores dominated the total worldwide business in 2007, with just over 7,000 coffee shops (up from 4,300 in 2004). There were also another 4,000 (up from 1,800 in 2004) Starbucks in the USA that were licensed to other operators to sell Starbucks coffee products in areas where the company was not otherwise represented, such as smaller neighbourhoods, off highways and in rural locations. Starbucks’ strategy was to seek out innovative new flavours, products and even music to enhance its stores: ‘The Starbucks Experience has a rich emotional connection for people everywhere and we are creating a “third place” [in addition to home and work] for an ever broadening audience around the world.’

Internationally, the company opened its first Starbucks outside North America in 1997. By the end of 2007, there were almost 1,800 (up from 1,000 in 2004) company-owned stores and another 2,800 (up from 1,500 in 2004) licensed stores in over 40 countries. For example, there were 748 stores in Japan, 591 in China, 231 in South Korea and 50 in Singapore; there were over 614 stores in the UK, 113 in Germany but only 41 in France; there were also substantial licensing operations in the Middle East and South America but none in Africa. The company was continuing to expand rapidly and estimated that it was serving 40 million customers every week. The company commented in 2004: ‘Given our sustained success to date, we believe that we previously underestimated the scope of the long-term opportunity for Starbucks. Accordingly, we recently increased our ultimate projected growth from 25,000 to at least 30,000 stores worldwide, with at least 15,000 locations outside the United States.’ This statement with regard to purpose was arguably over-optimistic since there were still only 11,000 stores in the USA and nearly 6,000 stores internationally in 2010. Part of the reason was that Starbucks was about to hit a rough patch with regard to its sales and profitability.

Starbucks’ financial results and green strategy
The rapid increase in stores was initially reflected in similar increases in annual revenue and net profits. The company increased its sales profit margin over the years by buying centrally and by operating tightly controlled costs procedures. Conscious of its responsibility to local coffee producers and with regard to green strategy, the company ran a Farmer Support Centre in Costa Rica to support its local coffee suppliers and it also operated third-party verification procedures with regard to the social and economic practices of its many agricultural and other suppliers.

A number of the company’s senior employees were also shareholders in the company, including Howard Schulz, who was ‘chairman and chief global strategist’. Employee shareholding was part of Starbucks’ company policy since the shares were first offered for sale to the public in 1992. With such rapid growth, there was a related need to increase working capital and capital investment at the company. It was therefore not surprising that the company had never paid a dividend to its shareholders up to 2009, though there were other methods of raising finance for such expansion. Although no share dividend was paid, shareholders clearly had the benefit of the underpinning increase in the capital value of their shares.

Starbucks sacked its CEO in 2008
Even though the company had performed exceptionally up to 2007, profit margins slowed after this time. The situation was considered important enough for the company’s founder, Howard Schulz, to be re-appointed in early 2008 as Chief Executive Officer (CEO) in addition to his role as Chairman. Jim Donald, the former CEO, left the company.

Essentially, Schulz took the view that the company had lost its way, especially in North America. It was no longer the distinctive Starbucks experience of the past. According to an email leaked onto the web, he wrote that the coffee chain was ‘watering down’ its brand by opening too many ‘sterile, cookie cutter’ stores that lacked character and soul. The memo was headed the ‘The Commoditisation of the Starbucks Experience’ and argued that the company’s expansion from 1,000 stores to 13,000 outlets over the 10-year period to 2007 had weakened the brand. ‘We desperately need to look into the mirror and . . . make the changes necessary to evoke the heritage, the tradition and the passion that we all have for the true Starbucks experience.’

But it was not just the downgrading of the Starbucks experience that was a problem. McDonald’s Restaurants had begun a new strategy of opening coffee bars in its outlets – see Case 6.2. The competition was increasing. Starbucks’ share price dipped dramatically as a result of all this news in early 2008. This meant that, not only was the company not paying share dividends, but it was also not seeing any growth in the share price either.

Starbucks re-invigorates its purpose
Some analysts were even beginning to ask: how long before Starbucks changes its purpose? Starbucks’ answer was for Howard Schulz and his colleagues to re-invigorate the company. Under his guidance, the company closed down its under-performing outlets and achieved other supply-chain cost savings amounting to nearly $600 million. It refocused the company on the Starbucks Experience. More fundamentally, it decided to pay a dividend on its shares. It declared its first cash dividends per share in 2010: now that was a real change of purpose!

GREEN STRATEGY: For many years, Starbucks has had strong policies with regard to green strategy.

Starbucks case study questions

1. What are the benefits and dangers of focusing strongly on growth as the only purpose of an organisation?

2. Can other companies learn anything from Starbucks or is the company unique?
Make notes here.
Topic 10 What is Strategic Planning? – Strategic Choice

Activity 1 – Which direction for the business?

Taskers – The Home Store – Video link

http://shuplayer.shu.ac.uk/portal/#vod_title_information;{“vodItem”:”Running_the_Shop_Tue_09_06_2015_TS_44621_6″}

Start at 00:18
Stop at 09:50

Start at 50:57 watch to end – including staff feedback
Truffles – Video link

http://shuplayer.shu.ac.uk/portal/#vod_title_information;{“vodItem”:”Running_the_Shop_Tue_16_06_2015_TS_45559_6″}

Start at 01:58
Stop at 09:17

Start at 52:08 watch to end – including staff feedback –

Eve & Ranshaw

http://shuplayer.shu.ac.uk/portal/#vod_title_information;{“vodItem”:”Running_the_Shop_Tue_23_06_2015_TS_46478_6″}

Start at 02:09
Stop at 11:21

Start at 50:33 watch to end – including staff feedback
Product or Service: Innovation

Existing New

Market: Increasing New Customers Existing Market Penetration Product Development

New Market Development Diversification
Product or Service: Innovation

Existing New

Market: Increasing New Customers Existing Market Penetration Product Development
New Market Development Diversification

 

How Greyston’s diversification transforms a depressed community.

Probably best known for producing the brownies in the famous Ben and Jerry’s ice-creams, the Greyston Bakery is part of the Greyston Foundation – a $15m (£9m; €11.25m) integrated network of for-profit and not-for-profit entities. The Foundation provides a wide array of services to benefit its local depressed community.

A Zen Buddhist meditation group started the baker in 1982. They located in the poor neighbourhood of Yonkers, New York, where they perceived a need to create jobs for people in the community who were ‘hard to employ’ – the homeless, those with spotted employment histories, prison records and past substance-abuse problems. Radically they used an ‘open hiring’ practice that continues today, in which anybody who applies for a job has an opportunity to work, on a first-come, first-hired basis. Employees have to show up for work on time, perform the job, and have an appropriate attitude for three months and are then automatically made permanent employees. As SVP David Rome says, “we judge people based on their performance in the operation, not on their background”. There is high initial turnover but the average tenure is about 3 years. Greyston considers it a success when a employee moves on to a new job using their new skills. According to CEO Julius Walls, “The company provides opportunities and resources to its employees so they can be successful not only in the workplace but in their personal lives. We don’t hire people to bake brownies; we bake brownies to hire people”.

As the bakery expanded they realised providing jobs to the community wasn’t enough. In 1991, working with governmental agencies, Greyston Family Inn was opened to provide permanent housing for homeless people. Currently there are three buildings, providing fifty housing units. A child day-care centre was also started with after-school care as one of the most pressing needs in the community for working parents to fill the gap left by public schools. In 1992, Greyston Health Services was formed, to help poor people with HIV/AIDS and in 1997 Issan House opened with 35 permanent housing units for those with HIV/AIDS, mental illness or chemical dependency. Other ventures included Greyston Garden Project, 5 community-run gardens on neglected properties and a technology education centre. In 2011, a local retail bakery/café was opened and, in 2012, with the help of the Foundation’s real-estate division, a new bakery was constructed, for $10m in a public-private partnership project with the city, on a long dormant brownfield (contaminated) site.

The Foundation is an umbrella for all Greyston organistions: providing centralised management, fund-raising, real-estate development, and planning services. It now comprises four interrelated organisations: bakery, healthcare services, child and family programmes and real-estate development. The Foundation’s social mission of supporting low-income people to forge a path to self-sufficiency and community transformation is blended with business collaboration to enable continual growth.

In 2012, Greyston Bakery celebrated its 30th anniversary, and received a fantastic present from New York State: to become a Benefit Corporation, allowing Greyston to demonstrate higher standards of corporate purpose, accountability and transparency. As Foundation CEO Steven Brown says, “really, we were a benefit corporation long before the term was coined. You’re in business for a much larger community that has a stake in what you are doing. The extent that we can create value and opportunity is the path out of distress for many of these communities. It is not easy but we are growing”.

Taken from Fundamentals of Strategy, 3rd Edition, Instructors Manual
Questions

1. What were the motivation(s) for Greyston bakery’s diversifications?
2. Referring to the Ansoff matrix, how would you classify these diversifications?

Topic 11 Ethics, Governance and Corporate Social Responsibility
Seminar Activity Mini Case – Illegal or Unethical?

While definitions of business ethics focus on issues of right and wrong that are not covered by the law, the dividing line between behaviour that is evidently illegal and that which is unethical can sometimes be difficult to draw. Take the following recent cases of alleged and controversial business practices. Where would you draw the line?

1. Major Banks – including UBS, Barclays, Standard Chartered, HSBC, RBS, JP Morgan and Lloyds – have been accused of and sometimes fined for a series of misdemeanours. These have included mis-selling of payment protection insurance; manipulating the key London inter-bank interest rate (LIBOR); breaches of money laundering rules and sanctions busting; selling of sub-prime mortgages; being involved in businesses that speculate on world food prices; manipulation of exchange rates. Not all of the above named backs have been accused of every one of these practices and some allegations are still being investigated.

2. Major international companies (eg Starbucks, Vodafone, Amazon, Apple, Facebook, Google) have been criticised for arranging their business affairs so as to minimise the tax paid to host governments.

3. GSK has been accused of paying bribes to win business in China. Rolls-Royce is facing similar allegations relating to past contracts in both Indonesia and China.

4. A number of major retailers – including Primark, Marks and Spencer, H&M, New Look – have come under pressure to investigate more fully the conditions in overseas factories supplying their garments following a fatal fire in a Bangladeshi supplier’s premises. Most major retailers have now signed up to a UN-sponsored, legally binding agreement on worker safety and building regulations.

5. Some major food and drink firms have been exhorted to provide more accurate product labelling, particularly salt, sugar and calorie content, because of concerns over diabetes and obesity. Critics have accused some of the major companies in the food industry of providing unclear information and guidance.

Taken from Worthington I & Britton C (2015) The Business Environment, pg 208, Harlow, Pearson
Seminar Activity – Apple

Apple’s Supplier Standards can be found via this link

https://www.apple.com/supplier-responsibility/pdf/Apple_Supplier_Responsibility_Standards.pdf

Questions – Apple’s Broken Promises

1. How are Apple’s products described and why?

2. How many iphones and ipads were sold in 2013?

3. How much money did Apple make in 2013 and what is their net worth?

4. Why is Apple in the best position possible to ‘clean up its supply chain’?

5. What went wrong in 2010? And what were the factors involved?
6. How did Foxconn appear to deal with this?

7. What International Standards does taking someone’s ID breach?

8. How many people live on site at Pegatron?

Identify the key issues in the next segment.

9. What use is measuring hours?

10. What use is the firm that ‘audits Apple’?

11. Is Apple an ethical organisation?
12. Are our expectations too high?
Activity 3: Cargill, the ‘farm to fork’ giant

Although Cargill’s name might be unfamiliar, an ordinary person tucking into breakfast just about anywhere in the world is likely to be consuming a product that has been grown, processed or traded by this giant company. It produces pork which goes into the sausages, grows the soya which feeds livestock, processes the grain for bread products, grows and processes the oil which goes into spreads, and produces salt and seasonings for all types of processed foods. Our consumer’s cocoa drink is likely to be made for cocoa and sugar traded by Cargill, as it is the world’s largest trader of both these commodities. Even our breakfaster’s cotton shirt is likely to be made for African cotton processed and traded by the company, although the name never appears on any labels.

Cargill is a private company founded in the US Midwest in 1865, a year more often remembered for the end of the American Civil War. The Cargill family still owns the company, which has grown into the world’s largest trader of agricultural commodities. At the basic level, an agricultural trader typically buys produce from farmers, stores it, processes it and sells it to customers, who are likely to be food processors themselves. But buyers can also be governments and international agencies. When these activities become globalised, purchases and sales span the globe.

Cargill has invested heavily in vertical integration, controlling the supply chain in commodities. From its palm oil plantations, Cargill is both the largest exporter of palm oil to the US and the largest importer of palm oil into the US, where it is used in the production of processed food and cosmetics. For soya, another important commodity crop, especially for the use in animal feeds, it supplies seeds and chemicals to farmers in Brazil. Crops are handled in its processing plants, and shipped from its own purpose-built port terminals. Cargill’s size gives it considerable economic power over suppliers and customers. It has faced criticism for its potentially anti-competitive power over markets, as well as lack of transparency. As a result, it now keeps customers more informed about markets, including trends, such as imports of US corn by China and other emerging markets. The growing consumption of meat in emerging markets, where people’s eating preferences are becoming more westernized, is one of the trends which boost Cargill’s business.

Cargill enjoyed nearly $117 billion in revenues in 2008, and employs 138,000 people in 67 countries. However, it has run into controversy in countries such as Indonesia and Brazil, where rainforests and sensitive ecological environments have been destroyed to make way for industrialized farming. Both palm oil and soya production typically involve destroying lowland rainforests. Cargill has been accused of clearing forests in Borneo for its plantations without the environmental impact assessment required by Indonesian law, even though it has subscribed to the Roundtable for Sustainable Palm Oil Principles (Rainforest Action Network, 3 May 2010). Its three plantations in Papua New Guinea also evoked criticism. Here, the company’s labour scheme involved converting people who are been independent farmers into share croppers on fixed contracts with the company for their crops. The company was also alleged by NGOs to have been complicit in child labour practices. Promises of new roads and schools, which it made to local communities, failed to materialise (Gilbert, 2010).

In Brazil, a surge in deforestation in the Amazon has been attributed to Cargill’s building soya refineries as well as port facilities deep into the Amazon rainforests (Vidal, 2006). The Brazilian government closed down Cargill’s new port facility at Santarèm on the Amazon River, for failure to report adequately on environmental impacts. However, the company has continued expanding its port facilities, enabling it to process growing quantities of soya and sugar. It now has six grain and sugar terminals in Brazil, and aims to quadruple the handling capacity of the Santarèm port (Kassai, 2010). Most of the soya produced globally goes into feed for the livestock industry. Half the soya exported from the Amazon goes to Europe, where, among other uses, it goes to feed chickens reared by Sun Valley, a Cargill wholly owned subsidiary in Britain, whose chicken are used in McDonald’s Chicken McNuggets.

Cargill has a ‘corporate responsibility’ policy, notably without the inclusion of ‘social’ between the two words. It asserts that it is a good corporate citizen wherever it operates, and that it complies with national laws and principles of sustainability. Inhabitants of Indonesia, Papua New Guinea and Brazil might suggest otherwise.

Questions for discussion

1. What issues of corporate social responsibility are featured in this case study?

2. Assess Cargill’s CSR profile on each of the issues listed in the first question.

Taken from Morrison J (2011) The Global Business Environment: Meeting the Challenges, 3rd Edition, Basingstoke, Palgrave Macmillan
Be prepared for the Assessment Task 2 at the next seminar!
Topic 12 Group project presentations

You must come to this seminar fully prepared for completion of Assessment Task 2 with access to your ‘YouTube’ presentation a completed and signed Peer Assessment Form (a single form for each group). See pages 14-16 for details of the task, and the Peer Assessment Form proforma in appendix 4.

And finally ………

On behalf of the

Strategic Planning: Shaping the Future team…
we hope you enjoyed this module!

APPENDIX 1

Article

Bodwell W, Chermack TJ (2010) Organizational Ambidexterity: Integrating deliberate and emergent strategy with scenario planning, Technological Forecasting and Change 77 pages 193-202.
APPENDIX 2
Article

O’Regan N and Ghobadin A (2007) Formal strategic planning: annual raindance or wheel of success? Strategic Change 16, pages 11-22.
APPENDIX 3
Article

Neugebauer F, Figge F and Hahn T (2015) Planned or Emergent Strategy Making? Exploring the Formation of Corporate Sustainability Strategies Business Strategy and the Environment Published online in Wiley Online Lirary DO/ 10.1002/bse.1875
APPENDIX 4
Module: Strategic Planning: Shaping the Future

Assessment Task 2: Group Project PEER ASSESSMENT FORM
To be handed to your seminar tutor during the modules final seminar.

Seminar tutor name…………………………………………………………………………………………
Seminar group number……………………………………………………………………………………
Task group name (Name of organisation chosen/ YouTube title/link)
……………………………………………………………………………………………………………………………………
Names
Cooperation
Initiative
Attendance
Reliability
Productivity
Total/100

Signatures

Mark each member of your group out of 20 for each factor listed below. Remember your group will probably contain a mix of genders, races, religions, languages and cultures often with different attitudes to group work. This diversity is to be embraced and celebrated; its OK that people will behave differently so long as they participate productively. You should sit together as a group and complete this form. Firstly decide what you, as a group, agree is acceptable levels of Cooperation, Initiative, Attendance, Reliability and Productivity this will become your group norm. These conforming to these norms will score 20. You should all sign the form.

Team members who score between 100 – 80 will receive the full weighting; between 80-60 will get the group weighting minus 10%; between 60-40 group weighting minus 20%; between 40-20 group weighting minus 30%; between 1-20 minus 40%. NOTE: those receiving 0 will not have participated at all. You should seek the advice of you seminar tutor before suggesting a zero grade. Students who fail to attend the business pitch automatically receive 0 in the attendance, reliability and productivity section.
Should you wish to mark down a colleague significantly then you must clearly state why and justify your actions with supporting comments. Your seminar tutor’s decision is final. Please use a separate sheet if necessary.

APPENDIX 5

Using AV and editing equipment

Full details of how to obtain university video equipment etc. are as follows:

The equipment loan service shuspace site is here:AV Equipment Loan

There’s a pull down menu to choose the equipment you want, which then lists everything available.

Some of the equipment can be borrowed over the counter at Learning Centres – and there is then a link to the library catalogue to indicate availability.

Other, perhaps more advanced, equipment is bookable from AV itself, and you have to collect from their office once booked. All the contact details etc are on the website above.

Also via that site are self-help guides to the equipment. For any advice beyond that, specialist support is available if students go through x3333 or email [email protected]. Staff at the helpdesk in Adsetts won’t be in a position to assist very much.

There are sound/video edit suites available, which are supported. For information on these, see: http://students.shu.ac.uk/lits/it/bookings/av/editsuite.html

There are also drop-in sessions for media/visual resources, and the staff running those may also be able to offer advice:

http://students.shu.ac.uk/lits/resources/dropins/visual_resources.html.

Strategic Planning: Shaping the Future (2015/6)

Reading List
The online resource list for this module is in the module’s Blackboard site in the Learning Materials section or through the Library Gateway link to reading lists https://shu.rl.talis.com/ (search by name of the module or module code).
The following three books are recommended reading for this module:

• Twiss A and Ellis M (2015): Strategic Management, Pearson Education Ltd.- this is
adapted from: Exploring strategy, Tenth Edition, 2014, Johnson G, Whittington R,
Scholes K, Angwin D and Regner, P

This text has been compiled by two SHU lecturers: Amanda Twiss and Mark Ellis and can be purchased from Blackwell’s Bookshop (on Level 2 of the Atrium). This adaptation is available at a reduced price of £30.00, to ensure you are not purchasing what you do not need.

Please note that the Tenth edition of Exploring Strategy by the above authors can also be bought in Blackwell’s or found in the learning centre. This textbook has all of the content of the custom book plus additional chapters and cases (if you were to purchase it, the cost would be significantly more).
• Kew J and Stredwick J (2009):Business Environment: Managing in a Strategic Context, 2nd edition, CIPD

• Lynch R L (2012): Strategic Management, 6th Edition, Prentice Hall
The following articles are included at the back of the Module Guide. These will be used during topic nine: Different Strategic Approaches.

• Appendix 1 : Bodwell W, Chermack TJ (2010) Organizational Ambidexterity: Integrating deliberate and emergent strategy with scenario planning, Technological Forecasting and Change 77 pages 193-202.

• Appendix 2: O’Regan N and Ghobadin A (2007) Formal strategic planning: annual raindance or wheel of success? Strategic Change 16, pages 11-22.

• Appendix 3: Neugebauer F, Figge F and Hahn T (2015) Planned or Emergent Strategy Making? Exploring the Formation of Corporate Sustainability Strategies Business Strategy and the Environment Published online in Wiley Online Library DO/ 10.1002/bse.1875
Additional reading will be recommended during the module. These are selected to provide you with a framework of study from which you can develop your learning. but you should also seek out further reading including Journals such as;

• Business Strategy Review
• Harvard Business Review
• European Management Journal
• Journal of Business Strategy
• Long Range Planning Journal (Strategic Planning Society)
• Management Today
• Strategy + Business Magazine
• Strategy Magazine (Strategic Planning Society)
• Strategic Management Journal
These all contain useful and accessible material and most are available via the Adsetts Centre. You should also pay attention to newspapers such as The Times and The Guardian that have a regular supply of excellent articles on strategic issues.

We recommend that you make use of the databases available through the Learning Centre for additional materials, e.g. Emerald and Business Source Premier.
Assessment Package
The module is formally assessed in two parts via group project and an individual assignment.

Task 1: Individual Assignment

Module Title: Strategic Planning: Shaping the Future
Assessment Title: Individual assignment
Weighting: 60%
Submission Date: See assessment scheduler for the hand-in date and time.

Individual assignment task: Select one of the five organisations listed below and undertake a strategic review which demonstrates understanding of the internal and external environment in which organisations exist. You should undertake effective analysis using the strategic frameworks, theories and concepts discussed throughout the module to evaluate the key external and internal factors that impact on the organisations strategic options. Additionally, you should identify potential strategic options the organisation could utilise in response to their strategic position.

• HSBC,
• Sheffield Hallam University
• Comic Relief,
• Apple or (I choose this organisation)
•
The theoretical models which could assist your analysis include PEST/PESTEL/LoNGPEST, Porter’s Five Forces, Competences and Resource analysis, Value Chain, Porter’s Generic Groups, Strategy Clock, Strategic Groups, SWOT, TOWS and Ansoff’s Strategic Directions. (Choose 2-3 theories)

Remember too that presentation is important. Your essay should be written in correct English. Please check for errors in grammar, spelling and punctuation. Referencing must be in line with the Harvard system, details of which are available on Blackboard and from the Adsetts Resource Centre.
Strategic Planning: Shaping the Future
Assessment Criteria – Task 1: Individual assignment (60%)
% Grade 0 – 39 40-49 50-59 60-69 70+
The critical selection and use of relevant and appropriate sources of information.
You have demonstrated no research or poor research drawn from a very limited set of source materials, some or all of which are irrelevant to the task set. You demonstrate only basic research which has been drawn from a limited range of source materials. You demonstrate a good standard of research drawing on a range of relevant source materials. You demonstrate a satisfactory standard of research with effective use of a good range relevant source materials, some indication of evaluation of sources. You demonstrate an excellent standard of research drawing on a wide range of relevant source materials with clear evaluation of the sources sselected.
Application of appropriate strategic frameworks, concepts and theories discussed throughout the module. Appropriate theoretical models were not used, misunderstood, or applied incorrectly to your chosen organisation. Although you demonstrate understanding of some elements of the theoretical models used in your report, confusion remained in places, and you have not really applied them effectively at all times. You demonstrate satisfactory ubderstanding of the theoretical models used in your report, and have applied them reasonably effectively to your chosen orgnisation. Overall, you demonstrated good understanding of the theoretical models used in the report, though there were some areas of weakness. You applied them effectively to your chosen organisation. You demonstrated excellent, in depth, understanding of all theoretical models used in your report, and have applied them most skilfully to your chosen organisation.
Evaluation and analysis of the key external and internal factors which impact on the organisation, Descriptive coverage of issues, not all of which are relevant to the task set. Little or no attempt at evaluation. Few or no comparisons of theory with practice. No demonstration of understanding of the internal and external environment in which organisations exist Limited analysis of relevant issues. Little attempts at evaluation. Few comparisons of theory with practice. A basic knowledge of relevant theory and concepts. Limited demonstration of understanding the internal and external environment in which organisations exist. A satisfactory standard of analysis and evaluation of most issues with good general comparisons of theory with practice. Overall, you demonstrate a good understanding of the internal and external environment in which organisations exist.
A good standard of analysis and evaluation of relevant issues with well integrated comparisons of theory and practice. You demonstrate a clear and well explained understanding of the internal and external environment in which organisations exist.
Thorough analysis of relevant issues with excellent synthesis of theory and practice with well-chosen examples. You demonstrate a thorough and detailed understanding of the internal and external environment in which organisations exist.

Identification of a range of potential strategic options to the organisations’ stratgic position. No potential strategic options which the organisation could utilise in response to their strategic position have been provided. Any conclusions made are largely unsubstantiated.
Limited strategic options which the organisation could utilise in response to their strategic position have been provided. Conclusions are weak and only partially supported by the arguments made. You demonstrate satisfactory identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a cohesive case. You demonstrate good identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a well-argued and cohesive case. You demonstrate an excellent identification of potential strategic options which the organisation could utilise in response to their strategic position and have provided a rigorously argued and convincing case.
Assignment presentation and academic rigour. Poorly written with errors in grammar and/or vocabulary. Meaning often obscured. Little structure and no attempt to reference. Clearly written. Has
structure but arguments
are not fully developed.
Referencing is incomplete. A satisfactory standard of written English. Well-structured and cohesive. Well argued. Referencing is usually thorough and complete with all sources acknowledged. A good standard of written English. Well-structured and cohesive. Well argued. Referencing is thorough and complete with all sources acknowledged. A very high standard of written English. Excellent structure and cohesive, critical analysis demonstrated. Referencing is thorough and complete
with all sources
acknowledged.
Seminar Guide
Topic 1: Internal Environment: Strategic Capability and Value Chain
Johnson, Whittington, Scholes Angwin & Regnér (pg 71, 2011)

Resources Competences
Physical
Financial
Human
Threshold/Distinctive Capabilities
Johnson, Whittington & Scholes (pg 87, 2011)

Resources Competences
Threshold
Distinctive

Value Chain
(Porter, 1985)

Topic 2: Internal Environment: Stakeholders and Organisational Culture

Seminar activity 1
The class will be split into 4 groups, each allocated with one of the four cultural types. Each group should undertake the following for their allocated types – be prepared to feedback to the class.

1.1 Draw a pictorial diagram of the ‘culture’ in the appropriate section below.

1.2 List the key attributes related to the ‘culture’

1.3 Does the organisation benefit from this structure?

During the feedback session, add appropriate diagrams to each ‘cultural type’ below.
22
Power culture Task Culture
……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..
Role Culture Person Culture
……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..

……………………………………………………………… …………………………………………………………..
Activity 2

Whilst watching “Can Gerry Robinson fix the NHS: One year on” try to identify indications which organisational cultures are indicated. Also make a note of any ‘stakeholders’ you spot.

NHS Stakeholders
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
…………………………………………………………. ………………………………………………………….
2.1 What cultures are visible at Rotherham hospital?

2.2 Name 3 positions and 3 cultures?
2.3 Who’s was in charge of the hospital and who is in charge of the hospital?
2.4 What is meant by hierarchical? And which culture, according to Handy, operates within a hierarchy?
2.5 In what areas do the cultures still clash?

Activity 3
In small groups either complete a stakeholder analysis or a cultural web for the NHS using the models below. Be prepared to feedback to the class; complete the alternative model during the class discussions.

NHS Cultural Web

NHS Stakeholder Analysis
1) List stakeholders
2) Mark ‘positions’ on the matrix

Reading related to this seminar
• Read Johnson G, Whittington R, Scholes K, Angwin D & Regner P (2014) Exploring Strategy, Harlow, Pearson (Chapter 5) or

• Custom text: Strategic Management (2015) compiled by Twiss, A. and Ellis, M.

Activities to undertake following the seminar
• Review your chosen organisation for the assessment task 1, the individual assignment – what stakeholders and culture(s) are present?

Topic 3 External Environment: PEST Analysis

Seminar activity 1: PEST review

In pairs consider the following questions:

1. Define the term external environment?
2. List the elements of PEST, LoNGPEST, PESTEL and STEEPLE.

PEST –

LoNGPEST –

PESTEL –

STEEPLE –

3. Explain the difference between ‘international’ and ‘global’?

4. Name 3 sociocultural factors which could impact on organisations?

5. Name 3 technological factors which could impact on organisations?
6. Where can organisations find the information which will allow them to analyse their external environment?
7. State 3 key benefits to organisations of undertaking external environmental analysis?
8. Name 3 influences from the political external environment
9. Name 3 influences from the economic external environment
10. Name 3 influences from the socio-cultural external environment
11. Name one of the roles of the Bank of England in the economy of the UK?
12. Explain the role of the London stock market in the economy of the UK?

Seminar activity 2: “Iceland- Life in the Freezer Cabinet” (BBC2, 2013)

Selected excerpts from this video will be played. Consider the following questions and make notes for discussion later.

1. Which sector of the economy does Iceland operate in?

2. What type of legal organisation is Iceland Foods?

3. What type of structure does Iceland operate under? Draw a diagram of such a structure.
4. Which industrial sector would you place Iceland in?

Iceland – PEST

Political

Economic

Socio-cultural

Technological
Seminar activity 3: Sources of information

List 5 potential ‘good’ sources of information which could assist with a PEST analysis

1.
2.
3.
4.
5.

What makes these sources acceptable as ‘good’ quality sources?
Why are the following sources not acceptable?

• Wikipedia
• Businessballs
• Tutor2u
• Net MBA
• Yourdictionary
• Business dictionary
• Suite 101
• answers.com
• changeingminds.org
• change-management-coach
• hroot.com
• brightub.com
• smallbusiness.chron.com
• leadership-with-you
Topic 4 External Environment: Porter’s Five Forces
Activity 1; Q/A review and class discussion

1. List Porter’s five forces of competition?

1)

2)

3)

4)

5)
2. State 3 factors making an industry attractive to new entrants?

3. List three factors making substitute products or services a threat?

4. State three factors strengthening a buyer’s power?

5. List 3 factors strengthening a supplier’s power?

Activity 2

Watch: “Coffee Shop Hot Shot: Business Boomers” (BBC2, 2014) .

Whilst watching the video make notes in the grid on the next page of anything you see or hear which helps you to consider the five forces of competition. Remember Porter’s 5 Force analysis can be used to review the competitive position of an industry or a specific sector. For this activity you will be analysing the ‘coffee shop’ sector.
Issue / questions to consider are:

• Who are the ‘rivals’, how many are there, how similar are they?
• What sort of buyers are there? Can they be grouped in any way?
• What sort of suppliers are there? Can they be grouped in any way?
• What is the primary product / service/customer benefit? What would be a substitute for these?
• What would you need to enter this sector? How easy/difficult would it be?

Activity 3 – Porter’s 5 forces analysis

Coffee Shop Sector

Competitive Rivalry

High

Medium

Low
Buying Power

High

Medium

Low
Power of Suppliers

High

Medium

Low
Threat of Substitutes

High

Medium

Low
Threat of Entrants

High

Medium

Low
Activity 4: Assessment Task 1 – individual assignment

Consider P5F in relation to your chosen organisation.
Q) How much do you know about the organisation’s sector already? From what source?
Q) Where could you find out more?

Chosen organisation for Task 1:…………………………………………………………………………………………..

Competitive rivalry (High / med / low – don’t know yet)
Power of suppliers (High / med / low – don’t know yet)
Power of buyers (High / med / low – don’t know yet)
Threat of new entrants (High / med / low – don’t know yet)

Threat of substitutes (High / med / low – don’t know yet)
Topic 5 Strategy frameworks: Generic Strategies and the Strategy Clock.
Activity 1: Split into 4 groups. You will be given one industry out of the 4 listed below.

• UK Airlines

• UK Coffee and Sandwich Shops

• UK Supermarkets

• UK Youth Fashion wear

Once in your groups, identify 4 organisations operating in that industry. Try to think of different ‘types’ or organisation within your allocated industry: different perceived quality or service, cost or market share.

Identify the competitive strategies the 4 chosen organisations in your industry are following.

Q) Why are the organisations in your industry following these strategies?

Q) Have these strategies changed over time? If so, why?

Be prepared to present your findings to the class – 5/10 minutes per group.

Industry sector……………………………………………………………………………………………………………..

Organisation 1)……………………………………………………………………….
(Add notes here)

Organisation 2)……………………………………………………………………….
(Add notes here)
Organisation 3)……………………………………………………………………….
(Add notes here)
Organisation 4)……………………………………………………………………….
(Add notes here)
‘Position’ each organisation on the two frameworks.

Porter’s Competitive Strategies

Bowman’s Strategy Clock

Activity 3: Assessment Task 1 – individual assignment: consider the two frameworks in relation to your chosen organisation.
TOPIC 6 What does all this add up to? Organisational SWOT

Activity 1: Hawick Textiles

You will view the video of Hawick Textiles in three parts. The aim is to undertake a review of their strategic position using the concepts and models discussed during the module to date arising at a SWOT analysis.

In groups you will need to decide the following:

Q) Which models and frameworks discussed in the module to date could provide information and analysis useful for a SWOT analysis? Make notes below.

Activity 2) Following a class discussion each group will be asked to undertake the appropriate analysis for one or two of the models and feedback to the class. Create a separate flipchart summary of each model.

Make notes below of your group’s and other groups’ analysis.

Activity 3) When all analysis models are discussed each group should attempt a SWOT analysis for Hawick using the template on the following page. Don’t worry if this is not completed during this seminar as the activity will be reviewed and developed next week. Make sure one of your group retains the flipcharts and brings them to the next seminar.
SWOT TEMPLATE

Company: Hawick Textiles

Strengths

Weaknesses
Opportunities
Threats

You will be using this SWOT during next week’s seminar.
Topic 7 Where does all this lead to? Organisational TOWS

Activity 1: Review your SWOT of Hawick Textile undertaken during the previous seminar.
Activity 2: In groups, using the SWOT and the guidance below, undertake a TOWS analysis on the next page for Hawick Textiles. Be prepared to feedback to the class.

TOWS TEMPLATE Company: Hawick Textiles

Internal Factors
Strengths (S) Weaknesses (W)
External Factors Opportunities (O) S/O W/O
Threats (T) ST WT

Activity 3: Further sections of the Troubleshooter: Hawick video will be played. You should review your TOWS in light of the additional information.
Activity 4: Assessment Task 1- individual assignment. Consider a SWOT and TOWS analysis in relation to your chosen organisation.

Which models and frameworks discussed in the module to date could provide information and analysis useful for a SWOT analysis?

Have you undertaken sufficient research?

What additional information do you need?

Make notes below.
Topic 8 Assignment Preparation

This seminar will be devoted to Assessment Task 1, the individual assignment. See pages 1- to 13 for full details. This assignment is to be handed in shortly (check your assessment schedule for the precise date and time) and you should use this seminar to ensure you fully understand the task set and the criteria used for marking.

The workshop will be relatively informal with a review discussion of the task set and how this relates to the module to date. There will be an opportunity to ask any questions you may have so it is important that you have so come prepared.

There will be time to work on your assignment during the seminar.

Topic 9: Different strategic approaches

During this seminar you will be considering the two case studies: Virgin Group and Starbucks and answering the linked questions.
Case study – Emergent strategy at Virgin Group
Taken from Richard Lynch: Strategic Management, 7th Edition, Pearson Education
Under the strong and populist leadership of its chief executive, Sir Richard Branson, Virgin Group has pursued an opportunistic strategy to build a company with estimated annual sales of over US$10 billion by 2007.

Starting from nothing in 1968, Virgin Group tried a series of strategies over the next 30 years. Its aim was to find opportunities to grow the business on the basis of what became the Virgin brand name and on the strong reputation of its founder and chief executive. The strategic trial-and-error process was essentially emergent, rather than prescriptive. This case outlines some of the main strategies with Virgin’s successes, failures and continuing business developments.
Background to the early years

After an experimental launch of a student magazine, the young Richard Branson developed a small record mail-order business in 1969 to take advantage of the end of resale price maintenance in the UK. He opened his first record shop two years later and subsequently developed it into the Virgin Megastore chain. At the same time, he was attempting to develop a record label by signing up various pop artists of the time. None of these businesses possessed any clear competitive advantage, though arguably contractual rights to popular musicians and the Virgin brand itself had some real value. He continued to seek business opportunities using the Virgin brand and, by chance, met up with an entrepreneur wishing to develop an airline business. This eventually led to the Virgin airline business with its first route to New York in 1984.

In later years, the company moved into a variety of business ventures – from Virgin Bride and Virgin Cola to Virgin Trains and Virgin Mobile telephones – see Table 1.

In terms of its strategy, Virgin Group claims to examine business opportunities carefully, seeking an opportunity for ‘restructuring the market and creating competitive advantage’. Virgin Group’s underlying business strategy The company has developed its strategy over a number of years. Essentially, Virgin takes the view that there are always opportunities available for the hungry business executive. The underlying business logic has been summarised by Branson thus: Business opportunities are like buses . . . There’s always another coming along.

In practice, what this means is that Virgin examines new opportunities to see if the group can offer something ‘better, fresher and more valuable’ than existing companies. It looks particularly at markets where the existing customers are not always receiving value for money and where the existing companies have in some cases become complacent – trains, insurance and banking for example – and where the new internet might deliver a business opportunity. This means that the main thrust of the strategy has been to find new market opportunities where the company believes its brand name can create competitive advantage. ‘Contrary to what people may think, our constantly expanding and eclectic empire is neither random nor reckless. Each new business demonstrates our skill at picking the right market and the right opportunity,’ says the Virgin website.

Outcome of emergent strategies: Virgin focuses on geographical expansion

In the last few years, Virgin has focused its strategy on geographical expansion of its existing product portfolio rather than adding products. For example, it has taken its highly successful concept of Virgin Mobile telephones to other countries beyond its UK base. However, it remains opportunistic in its main product areas – for example, its bid to rescue the failed UK bank Northern Rock in 2007. The strategy continues to emerge – both into new countries and into new product areas.

Table 1 – Selected business opportunities developed by the Virgin Group

Year Business opportunity
1968 First issue of Student magazine – Branson’s first business venture, which was subsequently closed

1970 Start of Virgin Mail Order operation – records sent by mail at cheaper prices than those of record stores

1971 First Virgin Record Store opens in Oxford Street, London, UK 1972 First Virgin Recording Studio

1973 Launch of Virgin Records label plus Virgin Music Publishing – the Sex Pistols were signed in 1977

1984 Virgin Atlantic Airways launched with limited flights between the UK and USA 1985 Virgin Holidays founded (travel agency chain in the UK) – Virgin Hotels then followed in 1988

1988 Virgin Megastores opened in UK – Japan followed in 1990

1991 Virgin Publishing (book publishing) begins

1992 Virgin Records sold to the major record company, EMI

1994 Virgin Vodka and Virgin Cola launched with great publicity

1995 Virgin Direct Personal Services founded – sells financial services within the UK

1996 Virgin Trains launched to provide long-distance train services in parts of the UK

1999 Virgin Mobile begins – sells mobile telephone services in the UK by renting space on the network of a competitor; Virgin Bride – a bridal emporium – begins with Sir Richard seeking publicity by being photographed in a white bridal gown

2000 Virgin Cars – a car purchasing website;
Virgin Wines – a wine purchasing website;
Virgin Cosmetics – 500 products for men and women in the UK;
Virgin Active – acquisition of chain of fitness centres in UK
Virgin Blue – low cost airline launched in Australia – becomes major success with Initial Public Offering (IPO) in 2003

2001 Virgin Mobile extends into Singapore

2002 Virgin Mobile extends into the USA and into South Africa

2000 Virgin Group decides to grow its businesses by a geographic expansion strategy of existing products and services, while also identifying new products and services in its home country

2003 Virgin acquires stake in the British cable television company NTL, which is re-branded as Virgin Cable
Virgin case study questions

1. The Virgin emergent approach to strategy development has not always proved successful – Virgin Bride and Virgin Cola, for example, remain relatively small businesses. Does this matter? Do all emergent strategies have to be successful?

2. Critically evaluate Virgin Group’s strategies over the period of the case study. Was the company wise to spend so much time investing in so many new product areas? What would you have done?

Make notes here

Case study Starbucks – sacrificing dividends for global growth
Taken from Richard Lynch: Strategic Management, 7th Edition, Pearson Education

Most companies with annual sales over $9 billion would wish to pay an annual dividend to their shareholders. But not the coffee restaurant chain Starbucks. Its purpose is to grow the company and it retained all its profits for many years to achieve this. The case explains the background and explores the implications

Starbucks history
Originally a coffee roasting company, Starbucks opened its first coffee bar in Seattle, USA, in 1985. The young Howard Schulz, who had joined the company in 1982 as marketing executive, persuaded the original owners to use the company’s roasted beans to experiment with an ‘Italian coffee bar’ concept. The early bars were successful, so Schulz persuaded some local backers to help him buy the company in 1987. Starbucks then expanded into new cafes in Chicago and Vancouver, Canada. It was not long before there were some 17 bars. The numbers then expanded and numbered 165 at the time the company made a public offering of its shares in 1992.

Starbucks operations
Essentially, Starbucks sells fresh coffee, tea and other beverages, along with a range of snacks and light refreshments. It operates mainly in high-traffic, high-visibility locations and, in North America, it usually owns the shops. The company’s American stores dominated the total worldwide business in 2007, with just over 7,000 coffee shops (up from 4,300 in 2004). There were also another 4,000 (up from 1,800 in 2004) Starbucks in the USA that were licensed to other operators to sell Starbucks coffee products in areas where the company was not otherwise represented, such as smaller neighbourhoods, off highways and in rural locations. Starbucks’ strategy was to seek out innovative new flavours, products and even music to enhance its stores: ‘The Starbucks Experience has a rich emotional connection for people everywhere and we are creating a “third place” [in addition to home and work] for an ever broadening audience around the world.’

Internationally, the company opened its first Starbucks outside North America in 1997. By the end of 2007, there were almost 1,800 (up from 1,000 in 2004) company-owned stores and another 2,800 (up from 1,500 in 2004) licensed stores in over 40 countries. For example, there were 748 stores in Japan, 591 in China, 231 in South Korea and 50 in Singapore; there were over 614 stores in the UK, 113 in Germany but only 41 in France; there were also substantial licensing operations in the Middle East and South America but none in Africa. The company was continuing to expand rapidly and estimated that it was serving 40 million customers every week. The company commented in 2004: ‘Given our sustained success to date, we believe that we previously underestimated the scope of the long-term opportunity for Starbucks. Accordingly, we recently increased our ultimate projected growth from 25,000 to at least 30,000 stores worldwide, with at least 15,000 locations outside the United States.’ This statement with regard to purpose was arguably over-optimistic since there were still only 11,000 stores in the USA and nearly 6,000 stores internationally in 2010. Part of the reason was that Starbucks was about to hit a rough patch with regard to its sales and profitability.

Starbucks’ financial results and green strategy
The rapid increase in stores was initially reflected in similar increases in annual revenue and net profits. The company increased its sales profit margin over the years by buying centrally and by operating tightly controlled costs procedures. Conscious of its responsibility to local coffee producers and with regard to green strategy, the company ran a Farmer Support Centre in Costa Rica to support its local coffee suppliers and it also operated third-party verification procedures with regard to the social and economic practices of its many agricultural and other suppliers.

A number of the company’s senior employees were also shareholders in the company, including Howard Schulz, who was ‘chairman and chief global strategist’. Employee shareholding was part of Starbucks’ company policy since the shares were first offered for sale to the public in 1992. With such rapid growth, there was a related need to increase working capital and capital investment at the company. It was therefore not surprising that the company had never paid a dividend to its shareholders up to 2009, though there were other methods of raising finance for such expansion. Although no share dividend was paid, shareholders clearly had the benefit of the underpinning increase in the capital value of their shares.

Starbucks sacked its CEO in 2008
Even though the company had performed exceptionally up to 2007, profit margins slowed after this time. The situation was considered important enough for the company’s founder, Howard Schulz, to be re-appointed in early 2008 as Chief Executive Officer (CEO) in addition to his role as Chairman. Jim Donald, the former CEO, left the company.

Essentially, Schulz took the view that the company had lost its way, especially in North America. It was no longer the distinctive Starbucks experience of the past. According to an email leaked onto the web, he wrote that the coffee chain was ‘watering down’ its brand by opening too many ‘sterile, cookie cutter’ stores that lacked character and soul. The memo was headed the ‘The Commoditisation of the Starbucks Experience’ and argued that the company’s expansion from 1,000 stores to 13,000 outlets over the 10-year period to 2007 had weakened the brand. ‘We desperately need to look into the mirror and . . . make the changes necessary to evoke the heritage, the tradition and the passion that we all have for the true Starbucks experience.’

But it was not just the downgrading of the Starbucks experience that was a problem. McDonald’s Restaurants had begun a new strategy of opening coffee bars in its outlets – see Case 6.2. The competition was increasing. Starbucks’ share price dipped dramatically as a result of all this news in early 2008. This meant that, not only was the company not paying share dividends, but it was also not seeing any growth in the share price either.

Starbucks re-invigorates its purpose
Some analysts were even beginning to ask: how long before Starbucks changes its purpose? Starbucks’ answer was for Howard Schulz and his colleagues to re-invigorate the company. Under his guidance, the company closed down its under-performing outlets and achieved other supply-chain cost savings amounting to nearly $600 million. It refocused the company on the Starbucks Experience. More fundamentally, it decided to pay a dividend on its shares. It declared its first cash dividends per share in 2010: now that was a real change of purpose!

GREEN STRATEGY: For many years, Starbucks has had strong policies with regard to green strategy.

Starbucks case study questions

1. What are the benefits and dangers of focusing strongly on growth as the only purpose of an organisation?

2. Can other companies learn anything from Starbucks or is the company unique?
Make notes here.
Topic 10 What is Strategic Planning? – Strategic Choice

Activity 1 – Which direction for the business?

Taskers – The Home Store – Video link

http://shuplayer.shu.ac.uk/portal/#vod_title_information;{“vodItem”:”Running_the_Shop_Tue_09_06_2015_TS_44621_6″}

Start at 00:18
Stop at 09:50

Start at 50:57 watch to end – including staff feedback
Truffles – Video link

http://shuplayer.shu.ac.uk/portal/#vod_title_information;{“vodItem”:”Running_the_Shop_Tue_16_06_2015_TS_45559_6″}

Start at 01:58
Stop at 09:17

Start at 52:08 watch to end – including staff feedback –

Eve & Ranshaw

http://shuplayer.shu.ac.uk/portal/#vod_title_information;{“vodItem”:”Running_the_Shop_Tue_23_06_2015_TS_46478_6″}

Start at 02:09
Stop at 11:21

Start at 50:33 watch to end – including staff feedback
Product or Service: Innovation

Existing New

Market: Increasing New Customers Existing Market Penetration Product Development

New Market Development Diversification
Product or Service: Innovation

Existing New

Market: Increasing New Customers Existing Market Penetration Product Development
New Market Development Diversification

 

How Greyston’s diversification transforms a depressed community.

Probably best known for producing the brownies in the famous Ben and Jerry’s ice-creams, the Greyston Bakery is part of the Greyston Foundation – a $15m (£9m; €11.25m) integrated network of for-profit and not-for-profit entities. The Foundation provides a wide array of services to benefit its local depressed community.

A Zen Buddhist meditation group started the baker in 1982. They located in the poor neighbourhood of Yonkers, New York, where they perceived a need to create jobs for people in the community who were ‘hard to employ’ – the homeless, those with spotted employment histories, prison records and past substance-abuse problems. Radically they used an ‘open hiring’ practice that continues today, in which anybody who applies for a job has an opportunity to work, on a first-come, first-hired basis. Employees have to show up for work on time, perform the job, and have an appropriate attitude for three months and are then automatically made permanent employees. As SVP David Rome says, “we judge people based on their performance in the operation, not on their background”. There is high initial turnover but the average tenure is about 3 years. Greyston considers it a success when a employee moves on to a new job using their new skills. According to CEO Julius Walls, “The company provides opportunities and resources to its employees so they can be successful not only in the workplace but in their personal lives. We don’t hire people to bake brownies; we bake brownies to hire people”.

As the bakery expanded they realised providing jobs to the community wasn’t enough. In 1991, working with governmental agencies, Greyston Family Inn was opened to provide permanent housing for homeless people. Currently there are three buildings, providing fifty housing units. A child day-care centre was also started with after-school care as one of the most pressing needs in the community for working parents to fill the gap left by public schools. In 1992, Greyston Health Services was formed, to help poor people with HIV/AIDS and in 1997 Issan House opened with 35 permanent housing units for those with HIV/AIDS, mental illness or chemical dependency. Other ventures included Greyston Garden Project, 5 community-run gardens on neglected properties and a technology education centre. In 2011, a local retail bakery/café was opened and, in 2012, with the help of the Foundation’s real-estate division, a new bakery was constructed, for $10m in a public-private partnership project with the city, on a long dormant brownfield (contaminated) site.

The Foundation is an umbrella for all Greyston organistions: providing centralised management, fund-raising, real-estate development, and planning services. It now comprises four interrelated organisations: bakery, healthcare services, child and family programmes and real-estate development. The Foundation’s social mission of supporting low-income people to forge a path to self-sufficiency and community transformation is blended with business collaboration to enable continual growth.

In 2012, Greyston Bakery celebrated its 30th anniversary, and received a fantastic present from New York State: to become a Benefit Corporation, allowing Greyston to demonstrate higher standards of corporate purpose, accountability and transparency. As Foundation CEO Steven Brown says, “really, we were a benefit corporation long before the term was coined. You’re in business for a much larger community that has a stake in what you are doing. The extent that we can create value and opportunity is the path out of distress for many of these communities. It is not easy but we are growing”.

Taken from Fundamentals of Strategy, 3rd Edition, Instructors Manual
Questions

1. What were the motivation(s) for Greyston bakery’s diversifications?
2. Referring to the Ansoff matrix, how would you classify these diversifications?

Topic 11 Ethics, Governance and Corporate Social Responsibility
Seminar Activity Mini Case – Illegal or Unethical?

While definitions of business ethics focus on issues of right and wrong that are not covered by the law, the dividing line between behaviour that is evidently illegal and that which is unethical can sometimes be difficult to draw. Take the following recent cases of alleged and controversial business practices. Where would you draw the line?

1. Major Banks – including UBS, Barclays, Standard Chartered, HSBC, RBS, JP Morgan and Lloyds – have been accused of and sometimes fined for a series of misdemeanours. These have included mis-selling of payment protection insurance; manipulating the key London inter-bank interest rate (LIBOR); breaches of money laundering rules and sanctions busting; selling of sub-prime mortgages; being involved in businesses that speculate on world food prices; manipulation of exchange rates. Not all of the above named backs have been accused of every one of these practices and some allegations are still being investigated.

2. Major international companies (eg Starbucks, Vodafone, Amazon, Apple, Facebook, Google) have been criticised for arranging their business affairs so as to minimise the tax paid to host governments.

3. GSK has been accused of paying bribes to win business in China. Rolls-Royce is facing similar allegations relating to past contracts in both Indonesia and China.

4. A number of major retailers – including Primark, Marks and Spencer, H&M, New Look – have come under pressure to investigate more fully the conditions in overseas factories supplying their garments following a fatal fire in a Bangladeshi supplier’s premises. Most major retailers have now signed up to a UN-sponsored, legally binding agreement on worker safety and building regulations.

5. Some major food and drink firms have been exhorted to provide more accurate product labelling, particularly salt, sugar and calorie content, because of concerns over diabetes and obesity. Critics have accused some of the major companies in the food industry of providing unclear information and guidance.

Taken from Worthington I & Britton C (2015) The Business Environment, pg 208, Harlow, Pearson
Seminar Activity – Apple

Apple’s Supplier Standards can be found via this link

https://www.apple.com/supplier-responsibility/pdf/Apple_Supplier_Responsibility_Standards.pdf

Questions – Apple’s Broken Promises

1. How are Apple’s products described and why?

2. How many iphones and ipads were sold in 2013?

3. How much money did Apple make in 2013 and what is their net worth?

4. Why is Apple in the best position possible to ‘clean up its supply chain’?

5. What went wrong in 2010? And what were the factors involved?
6. How did Foxconn appear to deal with this?

7. What International Standards does taking someone’s ID breach?

8. How many people live on site at Pegatron?

Identify the key issues in the next segment.

9. What use is measuring hours?

10. What use is the firm that ‘audits Apple’?

11. Is Apple an ethical organisation?
12. Are our expectations too high?
Activity 3: Cargill, the ‘farm to fork’ giant

Although Cargill’s name might be unfamiliar, an ordinary person tucking into breakfast just about anywhere in the world is likely to be consuming a product that has been grown, processed or traded by this giant company. It produces pork which goes into the sausages, grows the soya which feeds livestock, processes the grain for bread products, grows and processes the oil which goes into spreads, and produces salt and seasonings for all types of processed foods. Our consumer’s cocoa drink is likely to be made for cocoa and sugar traded by Cargill, as it is the world’s largest trader of both these commodities. Even our breakfaster’s cotton shirt is likely to be made for African cotton processed and traded by the company, although the name never appears on any labels.

Cargill is a private company founded in the US Midwest in 1865, a year more often remembered for the end of the American Civil War. The Cargill family still owns the company, which has grown into the world’s largest trader of agricultural commodities. At the basic level, an agricultural trader typically buys produce from farmers, stores it, processes it and sells it to customers, who are likely to be food processors themselves. But buyers can also be governments and international agencies. When these activities become globalised, purchases and sales span the globe.

Cargill has invested heavily in vertical integration, controlling the supply chain in commodities. From its palm oil plantations, Cargill is both the largest exporter of palm oil to the US and the largest importer of palm oil into the US, where it is used in the production of processed food and cosmetics. For soya, another important commodity crop, especially for the use in animal feeds, it supplies seeds and chemicals to farmers in Brazil. Crops are handled in its processing plants, and shipped from its own purpose-built port terminals. Cargill’s size gives it considerable economic power over suppliers and customers. It has faced criticism for its potentially anti-competitive power over markets, as well as lack of transparency. As a result, it now keeps customers more informed about markets, including trends, such as imports of US corn by China and other emerging markets. The growing consumption of meat in emerging markets, where people’s eating preferences are becoming more westernized, is one of the trends which boost Cargill’s business.

Cargill enjoyed nearly $117 billion in revenues in 2008, and employs 138,000 people in 67 countries. However, it has run into controversy in countries such as Indonesia and Brazil, where rainforests and sensitive ecological environments have been destroyed to make way for industrialized farming. Both palm oil and soya production typically involve destroying lowland rainforests. Cargill has been accused of clearing forests in Borneo for its plantations without the environmental impact assessment required by Indonesian law, even though it has subscribed to the Roundtable for Sustainable Palm Oil Principles (Rainforest Action Network, 3 May 2010). Its three plantations in Papua New Guinea also evoked criticism. Here, the company’s labour scheme involved converting people who are been independent farmers into share croppers on fixed contracts with the company for their crops. The company was also alleged by NGOs to have been complicit in child labour practices. Promises of new roads and schools, which it made to local communities, failed to materialise (Gilbert, 2010).

In Brazil, a surge in deforestation in the Amazon has been attributed to Cargill’s building soya refineries as well as port facilities deep into the Amazon rainforests (Vidal, 2006). The Brazilian government closed down Cargill’s new port facility at Santarèm on the Amazon River, for failure to report adequately on environmental impacts. However, the company has continued expanding its port facilities, enabling it to process growing quantities of soya and sugar. It now has six grain and sugar terminals in Brazil, and aims to quadruple the handling capacity of the Santarèm port (Kassai, 2010). Most of the soya produced globally goes into feed for the livestock industry. Half the soya exported from the Amazon goes to Europe, where, among other uses, it goes to feed chickens reared by Sun Valley, a Cargill wholly owned subsidiary in Britain, whose chicken are used in McDonald’s Chicken McNuggets.

Cargill has a ‘corporate responsibility’ policy, notably without the inclusion of ‘social’ between the two words. It asserts that it is a good corporate citizen wherever it operates, and that it complies with national laws and principles of sustainability. Inhabitants of Indonesia, Papua New Guinea and Brazil might suggest otherwise.

Questions for discussion

1. What issues of corporate social responsibility are featured in this case study?

2. Assess Cargill’s CSR profile on each of the issues listed in the first question.

Taken from Morrison J (2011) The Global Business Environment: Meeting the Challenges, 3rd Edition, Basingstoke, Palgrave Macmillan
Be prepared for the Assessment Task 2 at the next seminar!
Topic 12 Group project presentations

You must come to this seminar fully prepared for completion of Assessment Task 2 with access to your ‘YouTube’ presentation a completed and signed Peer Assessment Form (a single form for each group). See pages 14-16 for details of the task, and the Peer Assessment Form proforma in appendix 4.

And finally ………

On behalf of the

Strategic Planning: Shaping the Future team…
we hope you enjoyed this module!

APPENDIX 1

Article

Bodwell W, Chermack TJ (2010) Organizational Ambidexterity: Integrating deliberate and emergent strategy with scenario planning, Technological Forecasting and Change 77 pages 193-202.
APPENDIX 2
Article

O’Regan N and Ghobadin A (2007) Formal strategic planning: annual raindance or wheel of success? Strategic Change 16, pages 11-22.
APPENDIX 3
Article

Neugebauer F, Figge F and Hahn T (2015) Planned or Emergent Strategy Making? Exploring the Formation of Corporate Sustainability Strategies Business Strategy and the Environment Published online in Wiley Online Lirary DO/ 10.1002/bse.1875
APPENDIX 4
Module: Strategic Planning: Shaping the Future

Assessment Task 2: Group Project PEER ASSESSMENT FORM
To be handed to your seminar tutor during the modules final seminar.

Seminar tutor name…………………………………………………………………………………………
Seminar group number……………………………………………………………………………………
Task group name (Name of organisation chosen/ YouTube title/link)
……………………………………………………………………………………………………………………………………
Names
Cooperation
Initiative
Attendance
Reliability
Productivity
Total/100

Signatures

Mark each member of your group out of 20 for each factor listed below. Remember your group will probably contain a mix of genders, races, religions, languages and cultures often with different attitudes to group work. This diversity is to be embraced and celebrated; its OK that people will behave differently so long as they participate productively. You should sit together as a group and complete this form. Firstly decide what you, as a group, agree is acceptable levels of Cooperation, Initiative, Attendance, Reliability and Productivity this will become your group norm. These conforming to these norms will score 20. You should all sign the form.

Team members who score between 100 – 80 will receive the full weighting; between 80-60 will get the group weighting minus 10%; between 60-40 group weighting minus 20%; between 40-20 group weighting minus 30%; between 1-20 minus 40%. NOTE: those receiving 0 will not have participated at all. You should seek the advice of you seminar tutor before suggesting a zero grade. Students who fail to attend the business pitch automatically receive 0 in the attendance, reliability and productivity section.
Should you wish to mark down a colleague significantly then you must clearly state why and justify your actions with supporting comments. Your seminar tutor’s decision is final. Please use a separate sheet if necessary.

APPENDIX 5

Using AV and editing equipment

Full details of how to obtain university video equipment etc. are as follows:

The equipment loan service shuspace site is here:AV Equipment Loan

There’s a pull down menu to choose the equipment you want, which then lists everything available.

Some of the equipment can be borrowed over the counter at Learning Centres – and there is then a link to the library catalogue to indicate availability.

Other, perhaps more advanced, equipment is bookable from AV itself, and you have to collect from their office once booked. All the contact details etc are on the website above.

Also via that site are self-help guides to the equipment. For any advice beyond that, specialist support is available if students go through x3333 or email [email protected]. Staff at the helpdesk in Adsetts won’t be in a position to assist very much.

There are sound/video edit suites available, which are supported. For information on these, see: http://students.shu.ac.uk/lits/it/bookings/av/editsuite.html

There are also drop-in sessions for media/visual resources, and the staff running those may also be able to offer advice:

http://students.shu.ac.uk/lits/resources/dropins/visual_resources.html.