I’m working on a management question and need support to help me learn.
please respond to the 2 peers below
As outlined in this week’s lecture notes, there are seven common game-winning moves that can be leveraged to differentiate and strengthen competitive positioning. They include: Geographic Expansion, New Price Tiers, Vertical Integration, Moving Into Adjacent Product Segments, New Distribution Channels, Discontinuous Innovation, and Mergers & Acquisitions.
- Identify an organization in your industry (but not the company you selected for your course project) that used one of the seven common winning moves.
- Which move did they use and why do you think they elected to use this move?
- How effective was this move in establishing meaningful differentiation? Support your response with references to this week’s materials including Chapter 9 from Sherman.
1. Stephen Gilderdale
RE: Week 6 Discussion
Dear Professor Sturtevant and classmates.
Identify an organization in your industry (but not the company you selected for your course project) that used one of the seven common winning moves.
As I read this week’s lecture notes, I found the German car manufactures and Rolex comments interesting. This is not related to my industry but as an interesting topic. Did you know that Audi, as an example, has 12 brands (1) from cheap and basic to high-performance supercars (Porsche and Lamborghini)? This allows them to operate across a number of the 7 areas (JWI, 2)
- Geographic Expansion (Some brands work better in different regions due to the cost nature of the region)
- New price tiers. Audi can sell a Porsche Panamera for a very high price, and A6 a little cheaper, a VW Passat at a medium price and a Skoda Octavia at the lowest price. All these cars are built off the same design with tweaks to meet the requirements of the high-end, high price or cheaper models.
- Vertical Integration for the same reason as above
- Adjacent segment. Audi also produces Motorbikes under the Ducati brand
- M&A. The Audi group did not start all these brands, they acquired them.
Okay, on to my industry, I will look at the larger Enterprise Technology Industry and select Microsoft. As you would expect, Microsoft have used the M&A tool a lot. Microsoft has acquired 12 businesses since the start of 2020 (Microsoft, 3). As well as this, Microsoft has used the below techniques:-
- Geographic Expansion – Microsoft are constantly expanding their Azure platform into new regions and countries (Microsoft, 4).
- New price tiers – Microsoft offers certain discount levels to schools and colleges (5) at a higher discount rate than enterprise customers and even for free to nonprofits (6).
- Vertical Integration – the introduction of the Microsoft surface laptop. In the past, Microsoft only built software, now they design, built and sell hardware as well.
- Adjacent segment. Xbox, Microsoft entered the gaming industry as well as the Cloud industry with Microsoft Azure.
- M&A – mentioned above
Which move did they use and why do you think they elected to use this move?
Mentioned above the techniques.
It makes sense for an organization the size and scale of Microsoft to use many different techniques to grow and continue to add value to customers. The technology industry moves so fast M&A is a great way to integrate new ideas and products faster than you can build them (JWI, 2).
The shareholders at Microsoft expect to see growth, and breaking into new areas is a must to continue to see the levels that Microsoft expects. Therefore, winning in the gaming space, laptops and Cloud are needed to get out of the enterprise technology only space.
How effective was this move in establishing meaningful differentiation? Support your response with references to this week’s materials including Chapter 9 from Sherman.
Looking at how Microsoft established differentiation based on M&A it is very hard to say. The acquisitions made by Microsoft no doubt was for intellectual property more so than for a product or revenue. The purchase of Nuance will allow Microsoft to expand the capabilities of AI that Nuance has developed and run this inside Azure (7).
Comparing the above 5 techniques with meaningful differentiation (Sherman, 8) I would suggest a lot of these have allowed Microsoft to play more in:-
- Norms – being available in all the locations AWS are available. Surface laptop allowing to compete better with hardware vendors and continue to grow topline
- Image – Microsoft has a great image / brand on helping children become the best they can be. This starts with access to a good education and technology to support this.
Sherman mentioned in the book (8) that PC sales are declining year on year, interesting but not surprising I would suggest, in 2020, it was a record growth year for PC’s (Page, 9), and in 2021 the prediction is this will increase even more. Due to COVID-19, there is now a need for a PC per person in households instead of 1 per house as it would have been in the past.
- Volkswagen Group. 2021. 12 Brands. https://www.volkswagenag.com/en/group.html#
- JWI. 2021. Lecture notes. Week 6 Strategy. https://blackboard.strayer.edu/
- Microsoft. 2021. Acquisition History. https://www.microsoft.com/en-us/Investor/acquisition-history.aspx
- Microsoft. 2021. Azure Geographies. https://azure.microsoft.com/en-gb/global-infrastructure/geographies/
- Microsoft. 20210. Buy the right technology for your school. https://www.microsoft.com/en-gb/education/how-to-buy
- Microsoft. 2021. Nonprofit. https://www.microsoft.com/en-us/nonprofits/microsoft-365?&ef_id=CjwKCAjw1uiEBhBzEiwAO9B_HbpPGYNm0IV-xO7PVktxanuveeZeDkJfUaWsvPtKLPe4b-N9PaJTmxoC7ooQAvD_BwE:G:s&ef_id=CjwKCAjw1uiEBhBzEiwAO9B_HbpPGYNm0IV-xO7PVktxanuveeZeDkJfUaWsvPtKLPe4b-N9PaJTmxoC7ooQAvD_BwE:G:s&OCID=AID2100239_SEM_CjwKCAjw1uiEBhBzEiwAO9B_HbpPGYNm0IV-xO7PVktxanuveeZeDkJfUaWsvPtKLPe4b-N9PaJTmxoC7ooQAvD_BwE:G:s&gclid=CjwKCAjw1uiEBhBzEiwAO9B_HbpPGYNm0IV-xO7PVktxanuveeZeDkJfUaWsvPtKLPe4b-N9PaJTmxoC7ooQAvD_BwE
- Microsoft. 2021. News. https://news.microsoft.com/2021/04/12/microsoft-accelerates-industry-cloud-strategy-for-healthcare-with-the-acquisition-of-nuance/
- Leonard Sherman. 2017. If You’re in a Dogfight, Become a Cat!: Strategies for Long-Term Growth
- Carly Page. 2020. PC Sales Just Broke A 10-Year Record Thanks To The Pandemic. https://www.forbes.com/sites/carlypage/2020/10/10/pc-sales-just-broke-a-10-year-record-thanks-to-the-pandemic/?sh=663340843c2c
. 2. Angela Cristiano
RE: Week 6 Discussion
Hippeas is a brand that capitalized on New Distribution Channels (JWI 540, Week 6) to expand their brand and gain growth. The brand, which marketed it’s chickpea based extruded puffs in a catchy yellow bag that made it very recognizable, partnered with Starbucks at the beginning of their launch (Watson, 2018). This partnership not only provided an opportunity launch immediately nationwide, but offered a totally different distribution channel, the nations leading coffee shop. This provided consumers an opportunity to recognize the bag later that day at their local grocery shop, creating instant brand recognition. Not only did sales grow through Starbucks, customers now knew exactly what that yellow bag was, and were willing to try it even though it sounded like a niche product.
Starbucks can be considered a different type of distribution channel as it is not a standard retailer for snacks, and it serves a totally different purpose. Starbucks, however, does offer a brand instant brand recognition which Hippeas was able to capitalize on. This channel offered them tremendous opportunity in the grocery and retail spaces. The brand has since expanded into other products, and is listed nationally in major retailers, including Costco, and has expanded geographically into Canada as well.
JWI 540. Week 6 Lecture Notes: Creating Meaningful Differentiation
Watson, E. (2018) Hippeas Founder: “Brand was everything for us, especially in the beginning”. Food Navigator. https://www.foodnavigator-usa.com/Article/2018/02/02/HIPPEAS-founder-Brand-was-everything-for-us-especially-in-the-beginning