Knowledge in Strategy
Strategy evalua,on: Balanced scorecard
Balanced Scorecard- How to create it and what are the important factors.
Shaurya Agarwal
Group Exercises for Strategic Management
Group Exercises for Strategic Management
Wireless World and its future
Wireless World and its future Market Analysis
Kajal Jindal
A SHORT ANALYSIS OF BALANCE SCORECARD’S CONCEPT
A SHORT ANALYSIS OF THE BALANCE SCORECARD’S CONCEPT INTRODUCTION While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century
Unilever’s lifebuoy in India
Unilever’s lifebuoy in India- Case Analysis
Rand McNally: Navigating the wireless landscape
Rand McNally: Navigating the wireless landscape Situation Analysis Market Analysis Recommendations to improve market share
INNOVATION
INNOVATION Innovation – An introduction Competition for Profits
Strategic Choice- Using a balanced scorecard
How to use a balanced scorecard? The Grid Matrix
Case Analysis- Kramer pharmaceuticals, Inc.
Case Analysis- Kramer pharmaceuticals, Inc. Review Kramer’s sales structure and review the role of a sales representative and District Manager.
Strategy Implementation of Royal Enfield
This presentation talks about the turnaround strategy implemented by Royal Enfield which made it a iconic company while it was supposed to be shut down or sell off.
Satyaki Kundu
Arthur Andersen
ANDERSEN COMPANY DEVELOPMENT • 1947: Death of Arthur Andersen. Leonard Spacey, a senior partner at the accounting firm, took over as CEO • 1954: Introduced the firm to consulting work • 1970s: Auditing firms came under pressure to cut costs and started to search for alternative revenue sources The area most accounting firms turned to for alternative revenue sources was business and systems consulting. • 1970s: Consulting business exploded as the demand for IT services increased • 1978: Andersen consulting became the industry leader with consulting practice accounting for 21% of firm’s revenues • 1979: Almost a half of the firm’s worldwide fees came from the consulting work • 1980s: Surpassed 1000 partners and became the world’s biggest business services firm • 1984: Consulting practice more profitable per partner than traditional accounting and tax business • 1989: Company formed a separate consulting practice • ANDERSEN WORLDWIDE: Arthur Andersen and Andersen Consulting • 2000: AC became independent and renamed itself as Accenture • 2002: AA had 85000 employees, 2300 clients and $9.3 billion annual revenues Factors leading to Separation of firms • DECLINE IN AUDIT FEES Firms began to outbid one another aggressively for audit engagements, eventually leading to decreased industry standards as firms became unwilling to upset clients. • PERCEPTION TOWARDS AUDIT WORK Audit work began to be viewed as a loss leader as the Big Five Firms used audit engagements as a springboard to sign up clients for more lucrative consulting engagements. • DISSIMILARITY BETWEEN CONSULTING AND ACCOUNTING MARKETS The two markets, consulting and accounting, were very dissimilar. The clients had different needs and strategies, resources and operating models required to meet these needs differed. As a result of this dissimilarity, the consulting partners in 1989 created Anderson Consulting as a separate legal commercial enterprise devoted to business and technology consulting. According to Jon Conahan, a global managing partner responsible for Andersen consulting’s market strategy since its formation, “We needed to draw a clear distinction in the market place between a traditional Big Eight accounting and tax firm and a firm capable of challenging IBM or EDS.” Establishing a new operating unit posed a serious financial risk for the original partners of Andersen Consulting. They set out to create a new organization and there was no guarantee of success. Moreover the consulting partners had to give up their ownership interest in Arthur Andersen and join new Andersen Consulting partnerships established as separate legal entities. The switch paid off. Andersen Consulting’s annual revenues grew from just over $1 billion in 1989 to $8.3 billion in 1998. In addition, the firm also served more than 85 of the Fortune 100 largest global public companies and many of the world’s leading governments. • NO COMPLETE INDEPENDENCE TO EITHER FIRM The auditing and consulting units remained under the Andersen Worldwide SC umbrella. As part of the agreement, the units had a revenue sharing model. Although Andersen had been divided into two companies- AA and AC- the split did not provide the complete independence that the consulting side sought. • INITIATION OF ARBITRATION PROCESS AND FURTHER DISCUSSIONS (AUGUST 2000) As the tension between the two sides of the firm increased, an arbitration process was initiated to decide upon the firm’s future. In AUGUST 2000, after a three-year confrontation between the two sides, the arbitration court separated Andersen Consulting from Arthur Andersen. The International Chamber of Commerce arbitrator found the parent, Andersen Worldwide, to be failing in its contractual obligation of assuring cooperation, coordination and compatibility. During the arbitration discussions, Arthur Andersen asked for $14 billion to let Andersen Consulting break away. However, it was eventually awarded only $1 billion, resulting in further pressure on Arthur Andersen to boost the firm’s revenue. Overnight the accounting firm’s partners went from having an equity stake in annual revenues of $16.3 billion to $ 7.3 billion. After the two firms split, Andersen Consulting, which fought unsuccessfully to keep the rights to the prestigious Andersen name, renamed itself ACCENTURE; Arthur Andersen launched a new brand campaign, calling itself Andersen. As a part of its new initiative to increase consulting revenues, the newly named Andersen, formerly known as Arthur Andersen, reinforced its business strategies and aggressively sought new consulting engagements to help drive revenue growth. As such, it adopted a new version: “To be the partner for success in the new economy”.
Shivang Wadhwa
Netflix - A strategic Perspective
NETFLIX Company's Growth Story • Within a decade, subscriber base grew from seven million U.S. subscribers to 93 million people worldwide • Aims to stake claim as the FIRST GLOBAL TELEVISION NETWORK - Not much growth opportunity left in US Market with already 49 million American subscribers (which makes it available in 43 percent of U.S. households) and hence seek to expand abroad • 1990 - Distributed DVDs- mainly films- by mail 2007 - Launched National Video Streaming Service 2013 - Added film and television production as well as online distribution 2016 - Television series broadcasted on its network accounted for 70 percent of its streaming 2016 - Added more than 5.8 million paying members between October & December 2016 of which 1.43 million belonged to US (beating internet forecast of 1.15 million) REASONS FOR IMMENSE SUCCESS • Netflix delivers programs "on demand" via internet which gives the user option to choose what and when to watch according to his comfort rather than simply watching what is being broadcasted. • Subscriber-funded services just like Netflix must offer enough programming that viewers find the service worthy of their monthly fee charged from them. While every broadcasted show doesn't require a mass audience, the majority do so that the subscriber finds enough value offered on the platform and continues to pay. • Conglomerated Niche Strategy : Develops programs for audiences with varied interests ranging from serial dramas ("House of Cards") , horror series ("Hemlock Grove") to action series like Daredevil. Netflix caters to around 2,000 taste communities. Gathers extensive data about its subscribers' behaviour with the help of internet distribution , cultivates its library according to information obtained and then provides the users with their likely desired content. • Broadcasts shows produced not only for the US Audiences but also develops original series for subscribers in non-U.S. markets that are also available to U.S. subscribers such as “Marseille,” a French political drama or “Hibana,” a Japanese drama about the country’s competitive comedy scene. • Develops localized content which helps it to compete with local channels or networks relying primarily on regional language entertainment. And if it can't produce the required local content , it outrightly purchases the content from local publishers either for an upfront fee or upfront fee plus royalties. THE BUSINESS MODEL • Subscribed-Based Business Model : Netflix makes money by selling the audiences to the advertisers. The viewers pay a monthly fee for access to the library of content available on Netflix • The Process 1. Buy /License the commercial rights to broadcast or stream content from the different production houses (which are the real owners of the content). 2. Prepare and maintain a Robust Platform to broadcast these pieces of content. 3. Attract users to view these contents for free for a certain time (Free Trial for a month or so) and develop their interest in the same. 4. Convert Free Users to paid recurring subscribers and charge them a monthly fee for viewing the content. 5. Maintain this subscriber base by continously buying fresh and new content. NETFLIX OPERATIONAL STRATEGY Considering the Porter's Three Generic Forces Model (1985) , Netflix pursues competitive advantage through DIFFERENTIATION LEADERSHIP. In fact, Netflix tries to deliver an offering perceived as unique by the mass market and its sources of differentiation are mainly two : Content and Criterions of Use. 1. CONTENT Change in proposition from focussing earlier on quantity to now focussing more on the Quality. Netflix tries to offer its users appealing content, especially through its TV series of high quality and their availability exclusively on the Netflix platform. Moreover, from 2013 Netflix also ventured into creating its original productions which delivered prime content only to its loyal users. 2. CRITERIONS OF USE Netflix tries to focus more on the functionality, usability and performance to be able to provide the users with a lively and innovative entertaining visual experience and not just provide any ordinary watching experience. Netflix focusses on maximising the user experience and provides features unique in many aspects : from 4k video definition to compatibility with almost every device, from many language and subtitles offerings to binge watching. To be able to fully sustain its competitive advantage , the available resources and capabilities (shown below) should be organized effectively. Considering the Ansoff's Matrix Model (1957) , Netfix has implemented both Market Development and Vertical Integration Strategies. • MARKET DEVELOPMENT Leveraging on its core competencies and experience , Netflix is present in 190 countries and this expansion allows it explore new revenue opportunities and counterbalance the slow growth in the US. It is ,however, important to note here that since Netflix is continously reinvesting money into content at an extraordinary rate, the only way to sustain this model is to continously genrate new subscrptions. • VERTICAL INTEGRATION Netflix began its backward integration bu producing exclusive content since 2013. The strategic decision allows it to mitigate suppliers' bargaining power and control the content costs, to sustain the international expansion and to respond better to customers' preferences thereby increasing its retention. The bar charts below show the growth as achieved by Netflix both in terms of Profts as well as Revenue generation. CHALLENGES AHEAD 1. INTERNATIONAL EXPANSION : In most of the countries it has entered, it has been a late entrant implying that the local competitors have been well established and have already acquired a significant customer base. It hence becomes difficult for Netflix to establish itself in such a strong market space. 2.BACKWARD INTEGRATION : To counter the increasing bargaining power of suppliers. Vertical Integration to allow better control over content costs. Also can go in for revenue-sharing agreement which makes the studios more willing to offer their content. 3. MOBILE WATCHING : Increase in people watching shows on the go worldwide but common mobile contracts allow users to watch no more than 2-3 HD films a month. Hence, to cater to such a segment Netflix can go in for "download and watch later" feature. PARTNERSHIPS Microsoft : In 2008, Netflix subsequently partnered with Microsoft for developing a streaming video app for their gaming console. As part of the partnership Netflix developed a native app for the game console Microsoft XBox 360. This gave access to XBox Live Gold Members access to Netflix on their television via their game console. For Netflix it meant that the market of 12 million XBox Live members was opened up, whereas for Microsoft could market their XBox for the million Netflix subscribers. The deal required Netflix to maintain the streaming video technology exclusively to XBox for an year. Subsequent to that Netflix would develop a Blu-ray disk based streaming video solution for Sony’s Playstation. The company would later go on to generalize the software platform they developed for DVD players to enable Netflix integration via Software Development Kits (SDKs). This also meant that as Smart TVs emerged and prevalence of streaming video over the internet developed over the years, Netflix was essentially prepared and could offer easy integrations. Sony : In 2009, Netflix partnered with Sony Electronics that enabled Netflix subscribers to instantly watch movies streamed from Netflix on Sony's BRAVIA Internet Video-capable HDTVs and on previous BRAVIA models compatible with Sony's BRAVIA Internet video link module. Amazon : In 2008, Netflix partnered with Amazon web services to transfer its complete database to cloud.This process started in 2008 and completed in 2016. Orange Group : Orange and Netflix have renewed the agreement signed in 2014 for the distribution of Netflix for Orange TV customers in France, and have expanded their partnership to all countries in which the Orange Group is present. This strategic partnership will enable the Group’s subsidiaries in Europe, Africa and the Middle East to distribute Netflix in the future, bringing their customers the rich, globally popular, exclusive content of this service to all their screens: licensed and original TV series, movies, stand up comedies, documentaries and children's programmes. Netflix is the home of award- winning shows likeStranger Things , Orange is the New Black, House of Cards andThe Crown; and global phenomena such as13 Reasons Why andNarcos. Orange has been a Netflix distributor in France since 2014 and in Spain in recent months.