Assignment 04
BU470 Strategic Management
Directions: Be sure to make an electronic copy of your answer before submitting it to Ashworth College for grading.  Unless otherwise stated, answer in complete sentences, and be sure to use correct English spelling and grammar.  Sources must be cited in APA format.  Your response should be four (4) pages in length; refer to the “Assignment Format” page for specific format requirements.
Part A
The questions in Part A refer to the material discussed in Lesson 1 of this course. Respond to the following.
1. Describe the strategic management process. What does it mean to manage strategically?
2. Apply what you have learned in this lesson by reading the brief below and answer the questions that follow.
As the world’s largest beauty products company, L’Oréal SA creates cosmetics, perfume, and hair and skin care items. However, as the global economy continued down a fluctuating and uncertain path, the French company found itself with stagnating sales. According to company officials, one contributing factor was higher raw materials costs that have hit many companies, including L’Oréal, which uses oil in its products and packaging. However, weak consumer demand and currency fluctuations played a major role in the sales slowdown. In an effort to reduce its dependence on mature consumer markets such as Europe and the United States, L’Oréal’s strategy is to recruit millions of new consumers in emerging markets from Africa to Asia.
Sources: Based on C. Passariello, “Heiress Loses L’Oréal Family Fight,” Wall Street Journal, October 18, 2011, p. B8; C. Passariello and Noémie Bisserbe, “Uncertainty Colors L’Oréal,” Wall Street Journal, August 31, 2011, p. B4; and C. Passariello, “Sales Stagnate at L’Oréal,” Wall Street Journal, July 13, 2011, p. B4.
a. What do you think of L’Oréal’s strategies in light of today’s environment?
b. How might strategic management be useful?
Part B
The questions in Part B refer to the material discussed in Lesson 2 of this course. Respond to the following.
1. Describe the three major driving forces of the business environment.
2. Explain the four major implications of these driving forces.
3. Discuss the three critical factors for succeeding in the business environment.
4. Apply what you have learned in this lesson by reading the brief below and answer the questions that follow.
As a pioneer of Internet TV, Hulu is one of the most-watched online video properties in the United States. Hulu operates a Web site that features video from more than 225 content providers. Offerings include TV shows from ABC, Fox, and NBC as well as from cable channels and films from studios including Sony and MGM. Most of the content is streamed free eight days after its broadcast debut. Viewers can watch shows earlier through a premium subscription service called Hulu Plus. Hulu.com attracts some 26 million visitors a month. Hulu is owned by entertainment and broadcasting powerhouses, including NBC Universal, Comcast, News Corp., and Walt Disney Co., and by a private equity firm. However, it now faces a challenging environment in which consumers have a growing number of options on where and how to access content. Hulu’s owners had been exploring a sale of the online video venture but decided in late 2011 not to sell the company. Now they have to figure out what to do with it.
Sources: Based on S. Schechner, “Hulu Puts Owners in New Quandary,” Wall Street Journal, October 17, 2011, p. B1; S. Schechner, “Hulu’s Owners End Efforts to Sell Streaming-TV Website,” Wall Street Journal, October 14, 2011, p. B3; S. Schechner and J. E. Vascellaro, “Hulu Reworks Its Script As Digital Change Hits TV,” Wall Street Journal, January 27, 2011, pp. A1+; and A. Palazzo, “Hulu Says It Will Reach 1 Million Paid-User Goal in 3 Months,” Bloomberg BusinessWeek Online, July 6, 2011.
a. What do you think Hulu’s owners should do now?
b. What is it about this situation context that’s so challenging?
c. What type of resource(s) does Hulu have? Would you call it unique? Explain.
Part C
The questions in Part C refer to the material discussed in Lesson 3 of this course.
In Lesson 2 you discussed the industrial organization (I/O) and resource-based views (RBV) on competitive advantage. You now know that competition and competencies are both major organizational concerns. In Lesson 3 we take a closer look at how to conduct an external analysis of an organization’s specific and general environments.
To demonstrate your understanding of external analysis, respond to the following.
1. Describe an external analysis.
2. Assess the benefits and challenges of doing an external analysis.
3. Apply what you have learned in this lesson by reading the brief below and answer the questions that follow.
Digital technology has disrupted all types of industries—from financial services to recorded music. One industry that’s seen a significant impact is the publishing industry. E-book sales have skyrocketed, and one publisher went so far as to predict that e-books could account for as much as 40 percent of total revenue by the end of 2012. Reading those e-books requires a device and the competition in the e-book device industry is fierce.
Amazon fired the first volley when it introduced the Kindle in November 2007. As with any new product, customers had to get used to the new technology, but once they did, the Kindles were on fire! Two years later, retailer Barnes & Noble introduced the Nook, a cheaper e-book device. Amazon responded by cutting the price of its cheapest Kindle. Three months later in January 2010, Apple introduced its iPad. Although it was a more expensive tablet, its functionality and options attracted a lot of attention and sales. In response, Barnes & Noble cut the price of its Nook, and Amazon again cut the price of the Kindle.
By September 2011, Amazon dropped Kindle’s starting price to $79 and launched Kindle Fire. Then in November 2011, Barnes & Noble joined the tablet battle with its $249 Nook Tablet. And these are just the top three competitors. Other industry competitors include the Sony Reader and Endless Ideas’ Be Book Neo. As the popularity of e-books continues to grow, the “reader wars” are likely to continue.
Sources: Based on J. A. Trachtenberg and M. Peers, “Barnes & Noble Seeks Next Chapter,” Wall Street Journal, January 6, 2012, pp. A1+; J. Bosman and M. J. De La Merced, “Barnes & Noble Considers Spinning Off Its Nook Unit,” IPO Offerings.com, January 5, 2012; M. Maxwell, “Barnes & Noble’s Digital Strategy Gaining Traction,” Wall Street Journal, August 31, 2011, p. B3; J. A. Trachtenberg, S. Schechner, and G. Chon, “B&N Vulnerable to Rivals: Amazon, Apple Loom as Bookseller’s Takeover Offer Dies,” Wall Street Journal Online, August 20, 2011; A. Flood, “Hardback Sales Plummeting in Age of the ebook,” The Guardian, [guardian.co.uk], August 12, 2011; and J. Bosman, “Publishing Gives Hints of Revival, Data Show,” New York Times Online, August 9, 2011.
a. What affects the level of rivalry? Porter listed eight conditions that contribute to intense rivalry among existing competitors. Using the eight conditions, assess the level of current rivalry in this industry.
b. Which of these eight conditions do you think are the most important to the level of current rivalry in this industry? Why?
c. As the industry matures, do you think the intensity of rivalry will change? Explain.
Part D
The questions in Part D refer to the material discussed in Lesson 4 of this course.
As you learned in Lesson 3, performing an external analysis can provide information to be used in planning, decision making, and strategy formulation. Organizations that conduct external analysis are most successful when they combine this knowledge with a solid understanding of their internal strengths and weaknesses.
To demonstrate your understanding of internal analysis, respond to the following.
1. Define and present the characteristics of distinctive organizational capabilities.
2. Describe the criteria involved in judging organizational strengths and weaknesses.
3. Apply what you have learned in this lesson by reading the brief below and answer the question that follows.
The clothing industry isn’t an easy one to compete and be successful in. However, VF Corporation has become one of the world’s largest, most profitable clothing conglomerates by doing many things well. One thing the CEO did was buy languishing fashion brands and turn them into winners. How? By using VF’s capabilities: state-of-the-art distribution, global buying power, and keen merchandising instincts. For instance, VF bought the North Face brand for a bargain price of $135 million, revamped its sourcing, distribution, and financial operations, and was able to nearly double sales over a five-year period. As one analyst said, “The North Face is a great example of what VF can do. For VF it was easy, and it’s not easy for everybody.”
Source: Based on, “VF Corporation: Company Profile,” Datamonitor, December 30, 2011; A. J. Karr, “Global Growth Boosts VF Net,” Women’s Wear Daily, July 22, 2011, p. 2-1; R. Dodes, “VF Dresses Up Its Operations, Bucking Recession,” Wall Street Journal, March 30, 2009, p. B3; and M. V. Copeland, “Stitching Together an Apparel Powerhouse,” Business 2.0, April 2005, pp. 52–54.
a. Which characteristics of distinctive capabilities does this illustrate? Explain.
Grading Rubric
Please refer to the rubric below for the grading criteria for this assignment.


CATEGORYExemplarySatisfactoryUnsatisfactoryUnacceptable
5 points 4 points 3 points 2 points
Student provides a clear, logical
description of the strategic
management process, as well as
the three types of
organizational strategies, and
how they are different.
Student provides a mostly clear,
logical description of the
strategic management process,
as well as the three types of
organizational strategies, and
how they are different.
Student provides a weak or
unclear description of the
strategic management process,
with some discussion of the
three types of organizational
strategies and how they are
different.
Student provides a poor
description of the strategic
management process, with
some discussion of the three
types of organizational
strategies and how they are
different.
5 points 4 points 3 points 2 points
Student provides a clear, logical
application of critical thinking
and demonstrated knowledge
of the topics.
Student provides a mostly clear,
logical application of critical
thinking and demonstrated
knowledge of the topics.
Student provides a weak or
unclear application of critical
thinking and knowledge of the
topics.
Student provides a poor
application of critical thinking
and knowledge of the topics.
5 points 4 points 3 points 2 points
Student provides a clear, logical
discussion of the benefits of
and the primary responsibility
of managers in conducting
external analysis.
Student provides a mostly clear,
logical discussion of the
benefits of and the primary
responsibility of managers in
conducting external analysis.
Student provides a weak or
unclear discussion of the
benefits of and the primary
responsibility of managers in
conducting external analysis.
Student provides a poor
discussion of the benefits of
and the primary responsibility
of managers in conducting
external analysis.
5 points 4 points 3 points 2 points
Student provides a clear, logical
discussion of the characteristics
of distinctive organizational
capabilities.
Student provides a mostly clear,
logical discussion of distinctive
organizational capabilities.
Student provides a weak or
unclear discussion of distinctive
organizational capabilities.
Student provides a poor
discussion of of distinctive
organizational capabilities.
8 points 6 points 4 points 2 points
Student provides a clear, logical
outline of the steps in the
identification of distinctive
organizational capabilities.
Student provides a mostly clear,
logical outline of the steps in
the identification of distinctive
organizational capabilities.
Student provides a weak or
unclear outline of the steps in
the identification of distinctive
organizational capabilities.
Student provides a poor outline
of the steps in the identification
of distinctive organizational
capabilities.
6 points 4 points 3 points 2 points
Student provides a clear, logical
description of the criteria
involved in judging
organizational strengths and
weaknesses.
Student provides a mostly clear,
logical description of the
criteria involved in judging
organizational strengths and
weaknesses.
Student provides a weak or
unclear description of the
criteria involved in judging
organizational strengths and
weaknesses.
Student provides a poor
description of the criteria
involved in judging
organizational strengths and
weaknesses.
15 points 12 points 8 points 5 points
Student provides a clear, logical
discussion of the Hulu brief.
Student provides a mostly clear,
logical discussion of the Hulu
brief.
Student provides a weak or
unclear discussion of the Hulu
brief.
Student provides a poor
discussion of the Hulu brief.
5 points 4 points 3 points 2 points
Student provides a clear, logical
description of external analysis.
Student provides a mostly clear,
logical description of external
analysis.
Student provides a weak or
unclear description of external
analysis.
Student provides a poor
description of external analysis.
5 points 4 points 3 points 2 points
Student provides a clear, logical
discussion of the benefits and
challenges of doing an external
analysis.
Student provides a mostly clear,
logical discussion of the
benefits and challenges of doing
an external analysis.
Student provides a weak or
unclear discussion of the
benefits and challenges of doing
an external analysis.
Student provides a poor
discussion of the benefits and
challenges of doing an external
analysis.
16 points 12 points 8 points 4 points
Student provides a clear, logical
discussion of the digital
technology rivalry brief.
Student provides a mostly clear,
logical discussion of the digital
technology rivalry brief.
Student provides a weak or
unclear discussion of the digital
technology rivalry brief.
Student provides a poor
discussion of the digital
technology rivalry brief.
5 points 4 points 3 points 2 points
Student provides a clear, logical
discussion of the characteristics
of distinctive organizational
capabilities.
Student provides a mostly clear,
logical discussion of the
characteristics of distinctive
organizational capabilities.
Student provides a weak or
unclear discussion of the
characteristics of distinctive
organizational capabilities.
Student provides a poor
discussion of the characteristics
of distinctive organizational
capabilities.
10 points 8 points 5 points 2 points
Student provides a clear, logical
discussion of the distinctive
capabilities illustrated by the
brief.
Student provides a mostly clear,
logical discussion of the
distinctive capabilities
illustrated by the brief.
Student provides a weak or
unclear discussion of the
distinctive capabilities
illustrated by the brief.
Student provides a poor
discussion of the Hulu
distinctive capabilities
illustrated by the brief.
Part C: External Analysis
(5 Points)
Part A: L’Oréal’s
Strategies (5 Points)
Part B: Major
Implications (8 Points)
Part D: Analysis
(10 Points)
Part B: Hulu (15 Points)
Part D: Distinctive
Organization (5 Points)
Part C: Digital
Technology Rivalry
(16 Points)
Part C: Benefits and
Challenges (5 Points)
Part A: Strategic
Management (5 Points)
Part A: Use of Strategic
Management (5 Points)
Part B: Driving Forces
(5 Points)
Part B: Critical Success
Factors (6 Points)
5 points 4 points 3 points 2 points
Student makes no errors in
grammar or spelling that
distract the reader from the
content.
Student makes 1-2 errors in
grammar or spelling that
distract the reader from the
content.
Student makes 3-4 errors in
grammar or spelling that
distract the reader from the
content.
Student makes more than 4
errors in grammar or spelling
that distract the reader from
the content.
5 points 4 points 3 points 2 points
The paper is written in proper
format. All sources used for
quotes and facts are credible
and cited correctly.
The paper is written in proper
format with only 1-2 errors. All
sources used for quotes and
facts are credible and most are
cited correctly.
The paper is written in proper
format with only 3-5 errors.
Most sources used for quotes
and facts are credible and cited
correctly.
The paper is not written in
proper format. Many sources
used for quotes and facts are
less than credible (suspect)
and/or are not cited correctly.
Format (5 Points)
Mechanics (5 Points)

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