Strategic Management | My Assignment Tutor

Strategic Management | My Assignment Tutor

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Strategic Management (SM) MP1, 2019-2020 Module responsibilities: Dr. Dan Musinguzi (Module Coordinator) Email: [email protected] Dr. Anu Jossan (Business Economics, Annual Report & Calculair) Email: [email protected] MP1, 2019-2020 – Strategic Management Basis of the module Strategic Management 2 MP1, 2019-2020 – Strategic Management Table of Contents 1 INTRODUCTION 4 3 EXAMINATION19 4 STUDENT-LED WORKSHOP22 5 CASES24 5.1 Case 1: Individual Case 24 6 AIRLINE GAME42 7 BUSINESS ECONOMICS51 8 LITERATURE LIST92 3 MP1, 2019-2020 – Strategic Management INTRODUCTION Welcome to the module Strategic Management! The module “Strategic Management” is compulsory for all Tourism Management bachelor students in their third study year, which is why in the subsequent section the year rationale for the third year will be presented. Supplementary information concerning this module will be published on Blackboard. The study load for the module “Strategic Management” is 336 hours for which 12 credits (EC) can be earned. CHANGES COMPARED TO LAST YEAR The structure of the module is comparable to last year. For the academic year 2019/2020, the following changes were made: Case 2 RyanAir and the corresponding Peer Feedback report are made conditional and students receive formative feedback instead of grades. This change is in line with the concept of DBE an provides students with the opportunity to take over responsibility for their own and peers’ learning on the one hand. On the other hand, students can practice the analysis of and strategy creation for a tourism organisation in all facets and the provision of professional feedback without the pressure of grading. Consequently, the weighing of case 2 RyanAir is reallocated to case 1 Infographic (now 40% instead of 35%) and case 3 Project X (now 50% instead of 35%). Since case 2 is a preparation and practice for case 3, the new weighing can be justified. The Peer Feedback 2 report is valid for 10% now (instead of 5%). An increase for case one and the peer feedback also allows students to accelerate on individual level. We wish you great success for this module. Best regards, Marlies Böckenhauer Herman Wassens & Varun Bhatia 4 MP1, 2019-2020 – Strategic Management RATIONALE 2.1 YEAR RATIONALE FOR THE THIRD YEAR The Specialisation / Integration phase draws together the elements already covered in the previous two years and challenges you to synthesise their knowledge, skills and attitude and to produce coherent, professional solutions. It requires students to demonstrate their command and fluency of management skills and their leadership potential. Rationale of 3rd year Demonstration of professional skills AttitudeKnowledgeExpressionCoachSyntheses &Transfer Figure 1: Rationale of the 3rd year The third year has a dual character. Half of it makes up part of the compulsory program; the remainder is an optional program, comprising minors, Grand Tour or International Exchange programme. In the compulsory part of the third year program, you develop strategic vision and test their effectiveness in a strategically oriented management game. Students must learn to integrate their knowledge, skills and attitude and project these towards the creation of a specialism. After successfully completing the compulsory part of the third year, you Have developed skills and knowledge in strategic marketing Have developed strategic management skillsHave developed and demonstrated project management and research skills Are ready to start the Industrial PlacementAre ready to tackle the Dissertation. 5 MP1, 2019-2020 – Strategic Management 2.2 COMPETENCIES The nine-week module Strategic Management ideally concludes the compulsory program of Tourism Management. During management game, case studies and role plays, you can demonstrate several competencies from the National Competencies Frameworks from Tourism. Competencies that are addressed in this module are: HBO- domain competencies Bachelor of Business Administration Development of a vision on changes and trends in the external environment and developing relationships, networks and chains. Analysing policy problems and translating these in policy objectives and alternatives, and preparing for decision-making. Analysis of the financial and legal aspects, internal processes and the company or organisation’s environment in order to strengthen connection and interaction. Development, implementation and evaluation of the change process. HBO domain competencies Generic 8. Self-Management (self-steering competency) Specific competency 9. Balancing between People, Planet and Profit 6 MP1, 2019-2020 – Strategic Management 2.3 Module goals Having completed this module, you will: Have acquired an extensive vocabulary on the topic of strategic management. Be able to identify stakeholder groups, to analyse their expectations regarding the organisation’s performance, and to formulate strategies taking into consideration these conflicting expectations. Be able to analyse the strategic position of an organisation given its external environment, the expectations of stakeholders, the purpose of the organisation, and the organisation’s resources and competencies. Be able to foresee future trends and to translate these into plausible scenarios. Understand what strategic directions and methods of development are available to organisations, why some methods and directions are preferred, and how some directions and methods succeed better than others do. Be able to identify an organisation’s strategic choices. Be able to compare, contrast and evaluate organisational structures, behaviour and processes necessary for putting strategy into action. Understand how organizations conduct strategic change processes. Be able to analyse and interpret activities and produce an annual report. Be able to implement and evaluate different investment yield standards. Be able to take or advise upon strategic management decisions. 7 MP1, 2019-2020 – Strategic Management 2.4 Module rationale The content of the programme and the cases utilised are related to the tourism industry. A management simulation game is part of the module. The position of the strategy within the total company can be visualised in many ways. Each model has its particular strengths and weaknesses. To clarify this position as well as the position of the Strategic Management module in our curriculum we use the diagnostic EFQM model where strategy is on the left side of the model, with the “enablers”. 1310%9%People & workHRM28%LeadershipPolicies &strategy49%Managementof Resources 514%79%AppreciationbyPersonnel620%ManagementAppreciationby Customersof&Suppliersprofession86%by SocietyAppreciation 915%financialMeasuresoperational OrganizationFeedbackResults Figure 2. The Position of Strategy in the EFQM Model To explain the structure in this module a model in which the strategy is represented as an ongoing, cyclical process is needed. For this purpose the model of Johnson, Whittington and Scholes (abbreviated; JWS) is used (figure 1). Moreover, the model of JWS is a good example of the strategic cycle: there is a reciprocal influence between Analysis: determining the strategic position,Selection: making strategic choices,Implementation: strategy into action. At NHL-Stenden, we think that the three elements of the strategic cycle ultimately must be driven by values. 8 MP1, 2019-2020 – Strategic Management Strategic Position ValuesStrategicStrategy intoActionChoices Figure 3. The Basic Johnson, Whittington and Scholes Conceptual Model for the Strategic Cycle Each of the themes has been divided by JWS in sub-themes (figure 4). The JWS model will be the guiding principle for this module. Figure 4. The Extended Johnson, Whittington and Scholes Model for Strategic Management 9 MP1, 2019-2020 – Strategic Management Theme 1. Introduction: Understanding Strategy Development In the first year module “Organisations & Personnel 1” you have had the chance to familiarise yourself with the basic concept of strategic management. In the present module, and especially in this theme 1, you will acquire a more comprehensive vocabulary for strategic management. Furthermore, you will come to realise that there are several theories about strategic management, each with a limited validity and specific contexts in which these can be applied. The same is true for the different perspectives one can have toward strategy (the “strategic lenses” as JWS put it). Typical questions that could be asked in this stage are: What is our mission? What is our vision? How has our strategy developed over time? Etc. Theme 2. Strategic Position: Understanding Strategic Capability in relation to the environment. Macro environment Meso environment Strategy Micro environment Structure Culture Figure 5: Visualisation of the strategic positioning analysis Figure 5 shows that the strategic position of an organisation is partly depending on external factors, like the macro environment and the industry, as well as internal factors such as the structure (JWS chapter 14) and culture (JWS chapter 6) within the organisation. 10 MP1, 2019-2020 – Strategic Management This analysis focuses on developments in: The Environment: This sub-theme gives answers to the question: What is characteristic of the external environment and how does it influence the organisation? (the external analysis) Capability: This sub-theme gives answers to the question: What are the internal resources (and what is missing!); what can be used to realise our organisational goals? (the internal analysis). JWS include the SWOT analysis in this chapter. Purpose: What do the different people who are stakeholders in the organisation expect from their work, their investments, their patronage, etc.? How are conflicting interests to be resolved? Culture: The influence of history and culture on the strategic position and strategy formulation of the organisation. Typical questions that could be asked in this stage are: Who are our competitors? Which rules and regulations do we have to comply with? What is important to our customers? How is our financial position? What is the structure of our team? Who is involved in the governance of our organisation? What are our goals? Etc. Theme 3. Strategic Choices: Understanding strategic options at several levels and evaluation of possible strategies. In conformity with the JWS model, the theme of strategic choice is made up of five sub-themes: Corporate Level Strategy: In this sub-theme strategy from the perspective of a leader in a bigger corporation, consisting of several business units is dealt with. Business Level Strategy: This theme is mainly about the competition for the patronage of customers. International Strategy: Diversification strategies into new geographical markets. Innovation: This is one of the most important characteristics of entrepreneurship. Innovation is a continuous process, and not only applicable at the start of an organisation. Mergers, acquisitions and alliances: three ways of expansion through co-operation with outside parties. Typical questions that could be asked in this stage are: Which options are available to us? Will we involve external parties (e.g. merger or acquisition)? Is our product/service portfolio complete? What will be our future direction? In case of expansion: in which markets do we want to expand? Etc. 11 MP1, 2019-2020 – Strategic Management Theme 4. Strategy into Action: Understanding the Strategic Change Process, organising for success, structures, relationships and boundaries. Theme 4, Strategy into Action is built up from 4 sub-themes. The theme is centred around the structural types of organisations, the first part of chapter 12. In the first place it is necessary to define and describe the relationship between the centre, the ”headquarters” and the business units. What can the centre do in order to enhance the success of the business units, or, in other words, which resources are allocated where, and what does the centre expect back from the SBUs? A different way of looking at organisational structure is the organisational configurations as proposed by Mintzberg. Similar “building blocks” require similar resources. Therefore, the position of resource allocation in this scheme is self-evident: thanks to the resources, the strategy is enabled. Compare this to the EFQM model where the “enablers” are on the left side of the model. The environment changes, and the organisations grow or shrink. Strategic change is often necessary, and not always easy; therefore it requires special attention. Typical questions that could be asked in this stage are: How will we carry out the strategic choice(s) we made? How will we finance the necessary changes/investments? How can we remove impediments (blockades) to change? How do we monitor, measure and evaluate the outcome of our choices? Etc. In the themes, industry specific elements and functional strategies will be incorporated. Concluding: the sub-themes within Strategy Implementation are Processes Organising Changing Practice Evaluating 12 MP1, 2019-2020 – Strategic Management 2.5 Core problems of the module Theme 1. Introduction: Understanding strategy development 1.1 Am I aware which perspective on strategy I use, in general and with respect to specific situations? 1.2 How must I shape my organisation’s strategy whilst facing uncertainty, and how can organisational learning help me in this respect? 1.3 What does strategic management consist of? 1.4 What kind of people are involved in strategy? 1.5 What is our mission, vision and what are our corporate values? Theme 2. Strategic Analysis Sub-theme 2.1. The Environment 2.1.1. How can I characterise my business environment? 2.1.2 How can I identify the macro-environmental factors in my business environment and how can I evaluate their potential impact on my business? 2.1.3 How will the competitive environment change in the future? 2.1.4 How can I identify competitive forces and evaluate how these will impact my business? 2.1.5 How can I determine my business’s competitive position? Sub-theme 2.2:Resources, Competencies and Strategic Capabilities 2.2.1 How can I make a resource audit for my business and how does this relate to the competencies? 2.2.2 How can I identify my business’s core competencies? 2.2.3 How can I evaluate the strength of the underlying elements of the core competencies? 2.2.4 How can different forms of comparative analysis help me in the appraisal of my business’s competitive force? 2.2.5 How can I identify the Critical Success Factors of my business? Sub-theme 2.3.Purpose 2.3.1 How must I deal with the written and unwritten laws of corporate governance? 2.3.2 How can I identify the stakeholders of my business and how can I assess their interest and their power in it? 2.3.3 Which ethical stance should I take with my business? 2.3.4 Can I do good business with a long-term vision and high ethical stance? Sub-theme 2.4 Culture 2.4.1 How does culture, at different levels, influence the behaviour of different stakeholders, and hence my strategy? 2.4.2 How do historical tendencies influence strategy development? 2.4.3 Why are culture and history important in determining the strategic position of a company? Theme 3. Strategic Choices Sub-theme 3.1. Corporate Strategy and Diversification 3.1.1 How does the relationship between parent and daughter SBU affect my work and my position? 3.1.2 How can I assess the portfolio of the corporation I am working for? 13 MP1, 2019-2020 – Strategic Management 3.1.3 How must I decide when I become involved in a diversifying corporation? 3.1.4 How must I decide when the geographic diversity increases? 3.1.4 How can the acquisition of my SBU by a (different) large corporation influence the SBU, the industry in general and my career? 3.1.5 How must I decide which strategic direction to follow for my business portfolio? Sub-theme 3.2. Business Level Strategy 3.2.1 How can I select the right competitive strategy for my business? 3.2.2 Do my business’s core competencies match the desired strategy, do my core competencies give me a competitive advantage? 3.2.3 How sustainable is my competitive advantage? 3.2.4 In which cases makes cooperation with a competitor sense? 3.2.5 How can application of the game theory improve my insight into the competition within my industry? 3.2.6 How should I cope with hyper competition? Subtheme 3.3. International Strategy 3.3.1 How can internationalisation prospects of different markets be assessed? 3.3.2 How can sources of competitive advantage in international strategy be identified? 3.3.3 Which markets should be entered or penetrated? 3.3.4 Which entry modes can we use to enter these markets? Sub-theme 3.4. Innovation and Entrepreneurship 3.4.1 How to direct a company from initial stages of start-up and growth to exit? 3.4.2 Which innovative strategy is most appropriate; being a first mover or a follower? 3.4.3 How should an incumbent organisation respond to innovative challenges? 3.4.4 Which paths can an organisation follow in order to be innovative? Sub-theme 3.5. Mergers, Acquisitions and Alliances 3.5.1 Should we team up with external parties? 3.5.2 What are the consequences of venturing upon mergers or acquisitions? 3.5.3 How can we ally with external parties? Theme 4. Strategy in action Sub-theme 4.1.Evaluating Strategies 4.1.1 How can I evaluate the positioning of my business? 4.1.2 How can I evaluate the business if it suits the life cycle stage of my industry? 4.1.3 How can I evaluate what the strategy contributes to my business’s value chain? 4.1.4 How can I evaluate what the strategy adds to my business’s portfolio? 4.1.5 How can I evaluate the overall financial performance? 4.1.6 Which analytical tools can help me in the above evaluations? 4.1.7 Which financial analytical tools can help me to evaluate the profitability or the benefits? 4.1.8 Which analytical tools can help me to evaluate the feasibility? 4.1.9 How can forecasting techniques support me in making the right choices? 4.1.10 How can I, using the Service Profit Chain, establish which factors do indeed contribute to the success of my strategy? 4.1.11 Which financial analytical tools can help me to evaluate the risks? 14 MP1, 2019-2020 – Strategic Management Sub-theme 4.2. Strategy Development Processes 4.2.1 Which patterns can a company take on to formulate a strategy? 4.2.2 How can different processes of strategy be found in multiple forms and in different contexts? 4.2.3 What is the difference between intended and emergent strategy? 4.2.4 Which emergent processes of strategy development can be identified? 4.2.5 Which intended processes of strategy development can be identified? Sub-theme 4.3. Organising for Success. 4.3.1 Which type of organisation structure is most appropriate for my organisation in its particular situation? 4.3.2 In the case that I bear responsibilities for an SBU in a larger corporation, which type of relationship between the centre and my SBU is the most desirable? 4.3.3 Which changes in organisation structure and configuration impose themselves when my organisation or its environment changes? 4.3.4 Which type of organisation configuration is most appropriate for my organisation in its particular situation? Sub-theme 4.4. Leadership and Strategic Change 4.4.1 How must I choose the right type of change for my situation, given the context and the organisational culture? 4.4.2 How can I choose the appropriate leadership style for the strategic change? 4.4.3 Who must be the change agents and what will be their roles? 4.4.4 What stimulates me and what impedes me in strategic change? 15 MP1, 2019-2020 – Strategic Management 2.6 Content 2.6.1 Competencies connected to learning outcomes and assessment ECSubsidiaryCompetenceDublinWork formAssessmentLearning OutcomesDescriptor6The student can perform an analysis1,4,5,82,4,5CBLConsultancyof the internal and externalLecturesreportenvironment of an internationallySLWSM SAToperating tourism organization.Self-studyBE workshopsThe student can recommend the best1,2,4,5,83,4,5CBLConsultancystrategic choice to management ofLecturesreportan internationally operating tourismSLWSM SATorganization, based on an internalSelf-studyand external analysis.BE workshopsETFI workshopThe student can create an1, 4, 5, 6, 8,3,4,5CBLConsultancyimplementation plan for the best9, 10Lecturesreportstrategic choice.SLWSM SATBE workshopsETFI workshopThe student shows understanding of2peer feedbackFeedbackstrategic management theory byReportjudging a peer’s strategic analysis ofa tourism organisation.3The student can demonstrate the1,2,5,6,8,93,4,5ManagementOrganisationalability to function as a team memberSimulationresult of gamein a simulated environment.GameAnnual ReportLecturesCalculairBE workshopInterviewConsultancyBE Exam3The student can apply the theory of1,2,3,4,52CBLSM SATstrategic management.SLWThe student can share applied theory7,8(&2,4,5CBLSLWof strategic management with peers.depending onSLWstudent’sConsultancychoice) 2.6.2 Organisation Strategic Management consists of the following elements: Self-studyLectures supporting the content of Johnson, Whittington and Scholes and the casesStudent-led workshopsConsultancy sessions (CBL and SLW)A short answer test (SAT) with BE part and separate SM part The Airline Simulation Explanation Your self-study will be supported by lectures. This is necessary because of the complexity of the subject and the difficulty of the text. Lectures given by expert tutors for the support of the Airline Simulation are necessary because of the various rounds to be completed and ongoing feedback of the airline simulation game 16 MP1, 2019-2020 – Strategic Management results. Expert tutors will also give consultancy to support the content of the various learning activities attached to the game. CBL-sessions are replaced by consultancy sessions, coached by an expert tutor and peer feedback for teams in their case study analysis process. Student-led workshops. The theme of the student led workshops will be “Exploring Strategy”. The prescribed chapters from the textbook of Johnson, Whittington and Scholes will serve as the content for the workshops. Basic concepts and the main terminology necessary to understand the field of strategy will be applied and discussed. Students leading the workshops are expected to produce a handout for fellow group members. This handout could be a useful study tool for the short answer test in week eight of the module. A peer assessment and feedback for the presenters will be provided during the workshops. Strategic Management Test: in week 9 a short answer test will be organised on both the concept of strategic management and BE. In this exam, you need to answer theoretical questions and apply theory from the JWS book. Theory from the latest version of the Johnson, Whittington and Scholes book should be mastered in order to be able to answer the questions. The second part of the test will consist of BE questions on the topic of Investment Yield Standards. As for all exams at NHL-Stenden, you have to enrol for it on Progress well in advance. Notes: For the first group case one Question & Answer lecture is scheduled. During this lecture you have the possibility to ask questions directly to the module coordinator. For the individual case you can ask questions during the CBL sessions as well as during the scheduled Q&A session for the group case. Concerning the Q&A Lecture To ensure the quality of the answers to your questions you have to hand in your questions 24 hours before the lecture takes place (via email [email protected]). The Q&A lectures for the Annual Report are offered to give additional information about making the annual report for your airline company. Although the deadline for this assignment is scheduled for week 9 it will prove very valuable to attend these lectures. Questions can be sent to Dr. Anu Jossan at [email protected]. 2.7 Deadline procedure; handing in assignments Your case assignments and peer feedback reports need to be handed in via Blackboard (check case text for deadlines). If you are late, your assignment will NOT be graded. If Blackboard is not working you have to send your assignment to your tutor by email before the deadline. The Annual Report and the Calculair assignment need to be handed in via email to Dr Anu Jossan on Thursdays before 12.00. All reports will be checked for plagiarism. Fraud will be reported to the exam committee and measures will be taken. The exam regulations state that in case of fraud your entire module will be cancelled and you will have to do the entire module again. 17 MP1, 2019-2020 – Strategic Management Please note: According to the Exam Committee there is no need to bring your case under the Committees’ attention when you are experiencing problems which could have been avoided in the case of intelligent planning. Always include a safe margin in your planning schedule. Computer crashes, open bridges, traffic jams, flat tires, shortage of printing paper, etc., are therefore no reasons to miss your deadlines nor to expect any sympathy from the Exam Committee. The peer feedback assignments are between one and two pages (A4). The group-case reports have a maximum of 8,000 words. With this you need to make professional judgements about essentials to the report and set priorities. Furthermore, composite and to-the-point writing is trained this way. When you exceed this maximum, points will be deducted. The following rule will be applied for the case 3 report: Exceeding = 10% and 20% = your report will not be graded. When your case 3 report is not graded due to exceeding the maximum with more than 20% you will have to ask the Exam Committee for a replacement assignment. Add a word count on the front page of your case reports. 18 MP1, 2019-2020 – Strategic Management EXAMINATION 3.1. Module assessment and points structure: In this module you can earn 12 EC. These 12 EC have a study load of 12 * 28 hours = 336 hours. The module is subdivided in 3 blocks of 6, 3 and 3 EC. To pass the module you must score 5.5 or above for each of these blocks. Compensation between blocks is therefore not possible. Compensation within blocks however, is possible. The blocks are shown below: Module entryModuleMaxPassGradeGroup /ECcomponentscoreNormWeightIndividualCases & PeerCase 1105.540%I6FeedbackCase 210conditionalGCase 31050%GPeer feedback 110conditionalIPeer feedback 21010%ITotal100%ManagementAirline Game105.535%G3Game & relatedCalculair1010%GtopicsInterview1010%GAnnual report1010%GBE: Inv. Yield1035%IstandardsTotal100%Test & Student LedIndividual test105.575%I3WorkshopsStudent-led1025%GworkshopTotal100% 19 MP1, 2019-2020 – Strategic Management Overview of contact- and study hours Contact hours overviewContact hours in moduleSelf-study in moduleECCBL (& workshops)32 (24 clock hrs)136.5 clock hrs68×3 hrs (CBL per week)2×2 hrs (scenario plg.)2×2 hrs (infographic WS)Lectures (incl. Q&A)10 (7.5 clock hrs)4×2 hrs2×1 hrLectures (incl. Q&A &7.5 (5.6 clock hrs)68.65 clock hrs3interview)7×1 hrs1×0.5 hrConsultancy for game3 (2.25 clock hrs)12×0.25 hrsBusiness Economics10 (7.5 clock hrs)2×2 hrs & 6×1 hrsStudent Led Workshops22.33 (16.75 clock hrs)63.25 clock hrs37×3 hrs1×0.33 hr (consultancy)1×1 hr (lecture)Individual Test5.33 (4 clock hrs)1×2 hrs (training)1×3.33 hrs (exam)Total80.16/8=10 hrs / week1267.6/8=8.45 clock hrs /268.4/8=33.55 clock hrs336 clock hrs for moduleweek/ week NHL-Stenden broad a 12 EC (1 EC = 28 hours) module equals 336 working hours for the student in one module. In the table above, all contact- and class hours are mentioned, divided by 8 weeks (excl. the test week). 20 MP1, 2019-2020 – Strategic Management 3.2 CBL There is no mandatory participation during CBL (or any other session throughout this module). However, the following is expected from every student when participating: You arrive on time and you do not leave before the session is finished,You prepared the session carefullyYou make a substantial contribution during the meetings You contribute in a constructive way to the discussion about the (preliminary) findings of the cases. 3.3 Individual assessment (required for group assignments; according to Teaching and ExamRegulations – TER) If a group (member) has the feeling that not all members contribute to the process equally, the group needs to address the tutor early in the process. In addition, the group can request the calculation of the peer assessment factor. The module co-ordinator will provide information about this during the module assignment lecture. The request needs to be sent to the tutor when handing-in the case in question. 3.4 Resits In this module all parts can be retaken; the rules mentioned below are applicable: Case assignments and peer feedback: you are allowed to hand in an assignment once more. The resit is the improvement of the corresponding report. It is advised to consider the feedback provided by the tutor for this improvement. Resits need to be uploaded to Blackboard or sent to the tutor. Student-led workshop: In the next module (in which SM is offered) you can join another team to redo the workshop. Airline Simulation: In the next module (in which SM is offered) you can join another team to redo the management simulation. Interview: Can be retaken on an individual basis however if possible it will be done together with other students who wish to resit this element of the module. Test: you can make the test 4 times per academic year. You can resit the strategic test and the BE test separately as these belong to two different entries on Progress. This year there will be four possibilities to do the test: Module 1, week 9Module 2, week 9Module 4, week 9Resit: week T4 (second week) 21 MP1, 2019-2020 – Strategic Management STUDENT-LED WORKSHOP During the workshops several topics addressed in Johnson, Whittington & Scholes are being presented in active workshops by you, the students. Each week 2 groups of 3-4 students will host workshops about a chapter from the book of Johnson, Whittington & Scholes (2017). Your goal in the workshop is to maximise your peers’ understanding of the chapter, by bringing it closer to them, by relating to actual matters and by making abstract theories concrete. Every week a consultation hour is scheduled with the workshop assessor. There is a list outside the Tourism Management office space for signing up for the consultancy. Make sure you plan ahead so you can make sure that you can go through your ideas for the workshop with the assessor during one of these consultation hours. Structure and details of Student-Led Workshops The division of chapters and presenting dates, further details and explanations regarding the workshops will be given during the student-led workshop lecture (LSLW) in week 1 of the module. Afterwards students can form groups of 3-4 peers themselves and register for one of the workshops. The division will then be published on Blackboard. Every student has to present one workshop. A maximum of 60 minutes per chapter is scheduled for each group. This includes set-up-time and time for questions. The evaluation will be done each week after both workshops. Skipping parts of Johnson, Whittington & Scholes is perfectly OK since not all parts of the book/chapter have the same level of depth. Demonstrating the ability to separate significant elements from less significant elements of the book will be rewarded. You can discuss your chosen subjects during the consultation hours. Add interactive elements since this is the main idea of a workshop. Providing an application to the real tourism world through case studies or (news) articles is very useful for the understanding of the theory. A lot of creativity is possible (and needed) for workshops. Do not spend time on explaining theory. The workshop is about judging, justifying and evaluation applications of theory. Every participant is expected to have prepared the theory upfront! You can earn a maximum of 10 points by hosting the workshop. Half of the score is given by your fellow students, the other half by the lecturer. A Criteria/Grading Sheet is available on Blackboard. Please bring (a minimum of 2 of) these sheets to all workshops. Video material The presenting group has to produce a short video about the content of the assigned chapter and send it (via online link – e.g. YouTube) to the module coordinator, who will make it available on Blackboard. You decide which concepts are most important to explain and summarise in this video. Link the theory to practice. The criteria for the video are as follows: Minimum length: 5 minutes 22 MP1, 2019-2020 – Strategic Management Maximum length: 10 minutesMinimum 50% of the video need to be own material Easy ways of putting together such a video are programmes like: Moviemaker (Windows)IMovie (Apple)Gopro StudioEtc. Send the link of the video (not the video as a complete file) to [email protected] latest one week after the workshop in order to be useful as input and preparation for the exam. If you do not send the video, you will not receive your grade for the workshop you host. 23 MP1, 2019-2020 – Strategic Management CASES Read all 3 cases as preparation for CBL session 1 5.1 Case 1: Individual Case For this case study you will be analysing and/or advising an organisation of your choice on a strategic management issue from a consultancy perspective. You need to analyse a topic/issue related to one of the strategic management concepts described in Johnson, Whittington and Scholes (2017). Contrary to case 2 & 3 you do not perform a complete organisational analysis but analyse a “focused” issue/topic only. Examples of this could be the analysis of a (part of a) company culture, the analysis of (the success or failure of) a specific corporate or business strategy, analysis of the effectiveness or efficiency of certain business processes or any other strategic management related topic. It is up to you to choose what kind of strategic management topic you will analyse; you can use cases from the JWS book, other books, recent news articles or your own network for trends, markets, processes, customer wishes, technology, etc. Advice: select an organisation about which you know already a lot or have easy access to important/internal information. The literature prescribed for this module is easier to apply to larger organisations than to small organisations. It is also advisable to select a strategy-related topic of the tourism sector/industry. The aim of this case is to come to well-motivated argument(s)/conclusion in relation to the analysis of one (small) strategic management aspect/issue of an organisation. PESTEL/DESTEP and SWOT are excluded from the choice of tools you are allowed to apply. Objectives The student is able to: Determine a single small strategic issue/question (either related to internal or external environment) for an organisationJustify the necessity for consult on this issue or questionFind a suitable variety of dependent/independent sources for analysisApply the self-chosen theory to a small case issueDetermine suitable conclusions based on the case analysis(depending on chosen case: determine suitable recommendations for the strategic issue)Create a professional infographic The case will be presented in an infographic. Examples of general (not case related) infographics are available on Blackboard. The infographic should be mainly conceptual and merely needs to represent and justify the main findings and your analysis (do not explain theory, but apply it) of the strategic management issue/topic and advice to, or conclude on it, for the organisation. The content of your infographic should include: 24 MP1, 2019-2020 – Strategic Management Yourself as a consultant (e.g. name, logo, expertise, fit to the issue in question, etc.) Organisation you analyse and the strategic management issue in question justified by its urgency/need/point of interest/importanceJustification of methodology/choice of model(s)/concept/toolOverview of the main findings and outcome of the analysisProof of source varietyConclusion (and recommendations if possible/needed as logical follow-up) You can choose any programme you wish to create your infographic. Make sure that the visualisation is self-explaining. Possible (mainly free of charge) programmes are: Piktochart Dipity Canva.com Google Developers Publisher (Microsoft) InFoto Free PowerPoint Vizualize Visual.ly Get About Easel.ly The individual case will be started up during the first CBL class. The case needs to be done individually and will run parallel to the other two group cases. In week 2 there will be a lecture on the concept of consultancy providing extra information for the successful completion of this case.In week 2 there will be a lecture presenting general information about infographics. In week 3 before the CBL class you hand in your ideas to your tutor for feedback. You have to come up with one main question/aspect/issue that you aim to answer, its justification/necessity for consult and describe which specific model/concept/theory you plan to use. In weeks 4 and 5 there will be practical sessions to practice the creation of an infographic. Lecturers will be present to guide and advise you in this process and outcome. As preparation for these sessions every student needs to familiarise with a few tools (the ones presented above or any other tools to create an infographic) and bring a fully charged laptop in order to have a successful session. DEADLINE: The deadline for handing-in this case is Thursday, Week 6 before 23.59 o’clock on Blackboard. 25 MP1, 2019-2020 – Strategic Management Grading Sheet Case 1 Strategic ManagementStudent Name & Rel. No.:Date:Tutor:Grade:WeightTo be improved 1.0-5.4Sufficient 5.5 – 6.9Good 7.0 – 8.4Outstanding 8.5-10.0GradeRemarksRelation & focus of20%No relation betweenRelation between consultantAdequate relation betweenConsultant excellently specifiesconsultationconsultant expertise andexpertise and researchedconsultant expertise andown expertise in relation toresearchedissue/organisation somewhatresearched issue/organisationresearched issue/organisation;issue/organisation visible;indicated;visible;Organisation and researchOrganisation and/orOrganisation and researchOrganisation and researchfocus are excellently defined;research focus unclear;focus are somewhat noticeablefocus are obvious;but lack specifics;Compelling need for researchNo justification of need forGeneral or vague need forAdequate need for research inin relation to organisation isresearch or lacking relationresearch in relation torelation to organisation is wellexcellently justifiedwith organisation and itsorganisation is reasonablyjustifiedsituationjustifiedSynthesis between45%Applied concept/theorySomewhat useful choice ofAdequate choice andExcellent choice and utilisationtheory anddoes not fit the researchconcept/theory and reasonableutilisation of concept/theoryof concept/theory for researchapplicationissue at hand or utilisationutilisation;for research issue;issue;with major mistakes;Results show no or vagueResults based upon basicResults derive from solidResults derive from highlink with applied researchresearchresearchquality researchConclusion (&25%No conclusion or not basedConclusion based on someConclusion based on solidConclusion based on excellentRecommendations)on judgement from results;correct judgement in relationjudgement in relation tojudgement in relation toto results;results;results;(Recommendations notbased on research)(Recommendations partly in(Recommendations generally(Recommendations innovativeline with research)in line with research)and in logical line with theresearch)Design10%Does not meet the rules ofSomewhat meets the ‘rules’ ofMeets the ‘rules’ of anMeets the ‘rules’ of anan infographic (visual,an infographic (visual, amountinfographic (visual, amount ofinfographic (visual, amount ofamount of text, use ofof text, use of symbols)text, use of symbols) in atext, use of symbols) in ansymbols)professional wayinnovative wayIt is unclear what the mainGenerally self-explaining withSelf-explaining, no need forSelf-explaining with antopic is and how sub-topicslittle room for assumptionassumptionsexcellent balance in the level ofrelatedetail A category might only be chosen when all of the mentioned aspects are completed and up to the requested quality 26 MP1, 2019-2020 – Strategic Management 5.2 Case 2: RyanAir (group work) Prior to session 1, you must have read and reread the case descriptions. Every student has to read chapter 1,2,3,4,5,7 and 12 of Johnson, Whittington and Scholes (2017) (JWS) within the first two weeks of this module. Minimal preparation week 1: chapter 2, 3, 4, 5 and 7 JWS. The Strategic Position concept covers the chapters 2-5 (JWS). It is about the organisations’ environment and strategic capabilities and the expectations and purposes of the organisation. In this respect the case of RyanAir is the most appropriate case to cover the different themes within the chapters. It must be said that not every aspect in the theory can be relevant to the case but from an application point of view it is most suitable for the integration of the 4 chapters to better understand Strategic Positioning. Determining the strategic position lays the foundation for strategic decision making and implementation. The RyanAir case challenges you to understand the concepts of strategic decision making. The application part of this case-study is suitable for applying part two of JWS. Part two addresses several topics concerning strategic choices. The strategic choices for RyanAir need to be analysed as part of this case. RyanAir, the Irish based airline, has been at the forefront of publicity the last decades. Not only RyanAir of course; the whole airline industry world-wide has been the subject of concern. An industry which is rapidly undergoing structural changes forms a hurdle for the current competitors within the industry and acts as a deterrent for potential competitors. Where does RyanAir want to be in the market and why? Answers to questions like these are important from a strategic management perspective. According to JWS strategic positioning is concerned with the impact of the external environment, internal capabilities and the expectations and influence of stakeholders on strategy. Strategic positioning according to M.E. Porter is about performing different activities than rivals, or similar activities in different ways. From a strategic management perspective, strategic positioning is useful for managers in any organisation in the same industry since this will determine the attractiveness of the industry and the way in which the organisation might choose to compete. The case RyanAir lends itself to a well-founded understanding of strategic options available to the management, of course based on the position. These and other concepts will be reviewed in depth in addition to understanding more about the industry and partaking in analysis and evaluation. As a consultant, you are to put yourself in the position of the management and view the case situation from the management’s perspective. You learn about the process of making a decision on behalf of an organisation based on a thorough analysis of the factors influencing the competitive position of an organisation. One of these factors is of course the current financial situation of the organisation. Therefore you are supposed to look at the financial situation via for instance the latest annual report. This case study of the module Strategic Management can be found in the 11th edition of the textbook Exploring Strategy, Text and Cases, written by Johnson, Scholes & Whittington (2017), on pages 622-632.The case text, plus older versions of it with essential background information, is published on Blackboard. It is essential to read several versions of the case before the first CBL session since they have been updated over the years according to the development of RyanAir.Under the RyanAir caseheading, more case information can be found. 27 MP1, 2019-2020 – Strategic Management Literature: Johnson G., Whittington, R., Scholes K., Angwin, D., & Regnér, P. (2017). Exploring Strategy, text and cases, 11thedition, Harlow: Prentice Hall (ISBN 978-1-292-14512-9) (it is also fine to use the version without the cases) Extra material (videos, newspaper items, opinion articles, annual reports etc.) on Blackboard and other media. What has to be done? In this case the general objective is to learn how to analyse strategic positioning and from there on determine strategic choices for the future. The end result will be a written consultancy report with a maximum of 8,000 words. You will share your final draft with your fellow students (before Thursday, Week 3, 12.00pm) so they can provide individual peer feedback on your report. You then get the possibility to adapt your report until Thursday, Week 4 (12.00pm) when you need to hand in the final version of the report on Blackboard. This is an assignment per Case Study Team. The individual peer feedback needs to be uploaded on Blackboard for grading before the CBL sessions in week 4. The grading sheet can be found on Blackboard in the sub-section of the case. Objectives All of the following objectives enable the student to determine the strategic position and strategic choices of an organisation, in this case RyanAir. What students need to do with these objectives is twofold; first the students need to understand what is meant with the different terms, secondly the students need to apply the terms to RyanAir. To understand strategic positioning means to understand the importance of the environment, company resources and stakeholder for the positioning. The student is able to: analyse the business environment of a given organisation on different levels determine the competitive position of an organisation by identifying strategic groups, markets, market segments, customer value, opportunities and threats, strategic gaps and Critical Success Factors (CSFs); analyse an organisation’s competencies and capabilities;understand why cost efficiency is a crucial capability;analyse the sustainability of competitive advantage;identify the use and limitations of benchmarking; perform a stakeholder analysis; determine different ethical stances;place an organisation in its cultural context;identify the bases of competitive advantage; explain why focusing on collaboration is crucial;apply game-theory elements;analyse strategy development directions;make a TOWS-matrix and derive strategic options from that;determine suitable methods of strategy development; 28 MP1, 2019-2020 – Strategic Management use success-criteria to determine the likely success of a strategic option Finally: Remember that whichever frameworks for analysis you use; you should use it as a mean towards an end, not as an end itself. Explain why you opt for applying this particular framework in advance, and afterwards conclude your findings. There is no minimum or maximum number of analysis tools to be applied. Hand in this case report to your fellow students for individual peer assessment on Thursday, Week 3 before 12.00 hours. Send it to your tutor as well so he/she is able to check the peer feedback. Your final report should be handed in digitally via Blackboard, on Thursday, Week 4 before 23.59 hours.Case 2 isan assignment per case group! For more details about the deadline procedure, please check paragraph 2.7. Maximum number of words is 8,000. Put the word count on the cover of the report. In case Blackboard is not working send the document to your tutor by email before the deadline. 29 MP1, 2019-2020 – Strategic Management Feedback Sheet Case 2 Strategic ManagementDate:Tutor:Student Names & Rel. No.:WeightTo be improved 1.0-5.4Sufficient 5.5 – 6.9Good 7.0 – 8.4Outstanding 8.5-10.0RemarksIntroduction15%The researchers do notThe researchers do introduce asThe researchers do introduce asThe researchers do introduce asintroduce as consultant; noconsultant, but in anconsultant in a professional way;consultant in a professional way;link between coreunprofessional way; link betweenlink between core competence oflink between core competence ofcompetence of consultantscore competence of consultantsconsultants and the topic isconsultants and the topic is welland the topicand the topic is explained, butexplainedexplainedtoo briefThe topic, context/relevance,The topic, context/relevance, aimThe topic, context/relevance, aimThe topic, context/relevance, aimaim and core problem/issueand core problem/issue areand core problem/issue areand core problem/issue areare narrow and vaguesomewhat defined in athoughtfully developedthoughtfully developed andpreliminary appropriate matterchallenging for the researchersData description10%The research issue is not fullyThe research issue andThe clearly defined researchThe clearly defined research issue isaddressed and required datasupporting questions/aspects areissue is supported by researchsupported by research justificationis not or vaguely describedprovided and clearjustificationand a rational demonstration of theSupporting questions/aspectsSupporting questions/aspectsSupporting questions follow thebackground of the problemare missing, do not follow thefollow the main issue and aremain issue and are adequate,Supporting questions follow thesupporting questions/aspects,adequate and reasonablyjustified and well describedmain issue and are appropriate,or are vague, thedescribed(description of required data andinnovative/challenging, justified andtopic/purpose was notRequired data is somewhatwhy it is needed)very well described (why & howunderstooddefined and justifieddata is needed & revealed)Tools &10%Most of the usedA somewhat meaningfulA meaningful combination ofA strictly meaningful combination ofFrameworkstools/frameworks are notcombination of analysisanalysis tools/frameworks is usedanalysis tools/frameworks is usedlogic to the case or intools/frameworks is used and theand the choice is justified withand the choice is justified withincorrect orderchoice is somewhat justifiedreference to the case and theoryreference to the case and theoryAnalysis30%Not all steps of the model(s)All steps of the model(s) areAll steps of the model(s) areAll steps of the model(s) areapplied or with majormainly properly applied;properly appliedproperly appliedmistakes in the application ofa model; model is incorrectlyunderstoodLimitations of the analysis, theLimitations of the analysis, andLimitations of the analysis, andLimitations of the analysis, and thevalidity or the relevance of thethe validity and relevance of thethe validity and relevance of thevalidity and relevance of the resultsresults is not indicated or haveresults are somewhat indicatedresults are indicatedare clearly indicatedmajor mistakesThe results of the analysis areMost of the results of theAll results of the analysis areAll results of the analysis areincorrectly used in the SWOTanalysis are correctly used in thecorrectly used in the SWOTcorrectly used in the SWOTSWOTTOWS & SAFe20%TOWS is applied with majorTOWS is mainly correctly appliedTOWS is correctly applied andTOWS is correctly applied andmistakes and showsand shows alternative courses ofshows alternative courses ofshows innovative alternativealternative courses of actionaction which are linked toaction which are clearly linked tocourses of action which are clearlywhich are hardly linked toanalysis in earlier partsanalysis in earlier partslinked to analysis in earlier parts,analysis in earlier partsshowing detailed backgroundknowledge 30 MP1, 2019-2020 – Strategic Management Fewer than 3 alternativeAt least 3 alternative courses of4 alternative courses of action5 or more alternative courses ofcourses of action areaction are evaluated on basis ofare correctly evaluated on basisaction are correctly evaluated onevaluated on basis of SAFe;SAFe incl. (dis-) advantages forof SAFe incl. correctly justifiedbasis of SAFe incl. correctly justified(dis-) advantages for eacheach course of action which are(dis-) advantages for each courserelevant (dis-) advantages for eachcourse of action are vague orsomewhat justifiedof actioncourse of actionunrelatedEvaluations show few mistakesEvaluations show majormistakesOne of the alternative coursesOne alternative course of actionThe most suitable alternativeThe most suitable alternativeof action is described in moreis mentioned as most suitablecourse of action is describedcourse of action is very welldetail; justification of researchand reasonable justified byusing reflection and justificationdescribed outstanding justificationanalysis is missing or vague;research results; adequate BEof research results; adequate BEof research results; outstanding BEBE analysis is not included oranalysis explains choices for (dis-)analysis explains choices for (dis-)analysis explains choices for (dis-)with major mistakes;investmentinvestmentinvestmentConclusion &15%Limited evidence of findingsEvidence of findings andClear conclusion, well-argued andAnalytical and clear conclusion, veryRecommendationsand conclusions; conclusion isconclusions; is summary ofbased on results; summariseswell-argued and solely based onsummary of some results; noresults and follows up themain topics and is structuredresults; clear follow-up tologic follow up tointroduction; research issue isfollow up to the introduction;introduction; research issue isintroduction; research issue isaddressedresearch issue is addressedaddressed conciselynot or vaguely addressedconciselyRecommendations are withStrong arguments back up theonly few arguments; most ofRecommendations areGood arguments back up the(SMART) recommendationsthem not realistic or feasiblementioned with arguments; mostrecommendations, which areof them realistic and feasiblerealistic and feasibleNo critical reflection onOutstanding critical reflection onresearch process and results,Critical reflection on some resultsCritical reflection on results andresearch process and results;or still embryonic; no or vagueand parts of process; limitationsprocess; limitations are clearlylimitations clearly mirror completelimitationsare mentioned and somewhat fitstatedunderstanding of results andthe results and processprocessFormat &Max 1English language and grammar show major mistakesReferencingdeductionUnprofessional appearance of report, structure / layout, no page numberson finalIncorrect use of appendixgradeReport is not a consultancy report / no active voice and writing style (‘it was predicted that’ rather than ‘we predict that’)100%Total: A category might only be chosen when all of the mentioned aspects are completed and up to the requested quality 31 MP1, 2019-2020 – Strategic Management 5.3 Case 3: Project X (group work) Internal and external developments or changes continuously require decision making on operational, tactical and strategic level. Organisations in any type of industry constantly face changes in their business environment, coming from multiple directions and affecting different layers of organisational performance. The tourism industry is no exception. Customers developing different values, emerging trends, competitors joining the industry, and technological developments that improve ways of operations are only a few possible aspects to mention. In addition, internal aspects (e.g. rapid growth of an organisation due to increased demand) might pose a challenge as well. To stay in business successfully organisations need to respond effectively to any ongoing influences, keep up with trends or even anticipate them not to miss any key opportunities. This is a booming business for consultancy agencies, which are hired to analyse organisations and their challenges from different perspectives and on different levels. Like for the RyanAir case you act as professional consultants hired by the management of an organisation. Your first task after defining the issue of investigation is to run an extensive Strategic Positioning analysis as foundation for the creation of possible long-term strategic options. This case challenges you to investigate any given problem occurring due to an external impact. Additionally, compared to the RyanAir case, you have to include Scenario Planning and an implementation plan in this case. Aim Create a consultancy report including an implementation plan for a tourism related organisation to anticipate the long-term business. Throughout the work on this case you will: Determine the strategic position of your chosen organisation by analysing and summarising the internal and external influencing factors on marco, meso and micro level (including an industry analysis, financial analysis, and scenario planning) Use strategic- & change theory as underlying support for your consultancyCreate a variety of possible strategic options to deal with the chosen issue of your organisationEvaluate the most promising strategic optionsDevelop an implementation plan for the best strategic option Objectives You are familiar with the basic terms and concepts of strategic management.You understand the importance of sustainable development in strategic management.You can explain the elements of a strategic management model.You can explain how different strategies develop given a particular organisational context.You are able to describe the various strategy development processes. You know what is meant by strategic capability and how this contributes to the competitive advantage of organisations. You recognise the importance of resources, competences and the core competences of an organisation.You understand the influence of cultural and political processes on strategy development. 32 MP1, 2019-2020 – Strategic Management You know how to conduct a marco, meso, micro analysis and summarise the outcome.You know basic organisational configurations and constructions. You are able to identify stakeholder groups, analyse their expectations regarding the organisation performance and to formulate strategies that take into account these conflicting expectations. You are able to work out a comprehensive implementation plan for the effective implementation of strategies for the future. You are able to think about scenarios for the future from the perspective of strategic management and strategic development processes. This is a case for groups of 3 or 4 students. It is suggested to see first how the RyanAir case is going (in terms of group work before forming the groups for case 3). When groups are formed, find an internationally operating tourism organisation or larger community project (e.g. European Capital of Culture). This is your chance to already work on an organisation you are potentially interested in regarding your future career. You can pick an either private or public sector organisation (except EasyJet); however, make sure you are able to find extensive information (especially internal information). Use your personal network if possible. Examples are: Tour Operator (e.g. Chamäleon, Berlin)Airport (e.g. Fraport, Frankfurt)Airline; non similar to RyanAir (e.g. KLM AirFrance)Hotel chain or group (e.g. Hilton, Double Tree)MICE organisation (e.g. Reed Exhibitions, Congress Center)DMO (e.g. Visit Britain, Merk Fryslan)Transport (DB, NS, Flixbus)Unister Think about the main issue this particular organisation is facing at the moment or in the future. Your tutor needs to approve the organisation and consultancy aspect before you move on. As soon as the organisation and the consultancy issue are approved: Discuss possible main- and supporting questions.Identify the key players and interest groups of your organisation.Discuss the approach to your project.Set up a consultation agency and create your own name, logo, slogan, etc.Define your expertise (be specific) corporate identity, mission and vision. Make a planning for your project. You can take the actions and concepts of the RyanAir case as a basis, however, do not forget that this case additionally includes Scenario Planning (workshops in week 6) and the creation of an implementation plan. Make a weekly/daily planning of your work/tasks and the academic sessions. Do not forget to include the peer feedback and some time for module evaluation during CBL in week 8. It is imperative that your analysis is based on logically chosen and well-argued reasoning, and knowledge of the background and (possible) implications of your organisations. Discuss the above during CBL. Your peers and tutor will react on your project with critical questions, andtrigger you with possible suggestions. 33 MP1, 2019-2020 – Strategic Management Finally Remember that whichever frameworks for analysis you use; you should use it as a mean towards an end, not as an end itself. Explain why you opt for applying this particular framework in advance, and afterwards conclude your findings. There is no minimum or maximum number of analysis tools to be applied. Your final report should be handed in digitally via Blackboard, on Monday week 9 before 23.59 hours.Case 3 is an assignment per case group! For more details about the deadline procedure, please check paragraph 2.7. Maximum number of words is 8,000! Put the word count on the cover of the report. In case Blackboard is not working send the document to your tutor by email before the deadline. 34 MP1, 2019-2020 – Strategic Management Grading Sheet Case 3 Strategic ManagementDate:Tutor:Grade:Student Names & Rel. No.:WeightTo be improved 1.0-5.4Sufficient 5.5 – 6.9Good 7.0 – 8.4Outstanding 8.5-10.0GradeRemarksIntroduction15%The researchers do notThe researchers do introduce asThe researchers do introduce asThe researchers do introduce asintroduce as consultant; noconsultant, but in anconsultant in a professional way;consultant in a professional way;link between coreunprofessional way; link betweenlink between core competence oflink between core competence ofcompetence of consultantscore competence of consultantsconsultants and the topic isconsultants and the topic is welland the topicand the topic is explained, butexplainedexplainedtoo briefThe topic, context/relevance,The topic, context/relevance, aimThe topic, context/relevance, aimThe topic, context/relevance, aimaim and core problem/issueand core problem/issue areand core problem/issue areand core problem/issue areare narrow and vaguesomewhat defined in athoughtfully developedthoughtfully developed andpreliminary appropriate matterchallenging for the researchersData description10%The research problemThe Problem Statement andThe clearly defined ProblemThe clearly defined Problem(Problem Statement) is notResearch Questions are providedStatement is supported byStatement is supported by researchfully addressed and requiredand clearresearch justificationjustification and a rationaldata is not or vaguelydemonstration of the background ofdescribedthe problemResearch Questions follow the PSResearch Questions follow the PSResearch Questions follow the PSResearch Questions areand are adequate and reasonablyand are adequate, justified andand are appropriate,missing, do not follow the PS,describedwell described (description ofinnovative/challenging, justified andor are vague, theRequired data is somewhatrequired data and why it isvery well described (why & howtopic/purpose was notdefined and justifiedneeded)data is needed & revealed)understoodTools &10%Most of the usedA somewhat meaningfulA meaningful combination ofA strictly meaningful combination ofFrameworkstools/frameworks are notcombination of analysisanalysis tools/frameworks is usedanalysis tools/frameworks is usedlogic to the case or intools/frameworks is used and theand the choice is justified withand the choice is justified withincorrect orderchoice is somewhat justifiedreference to the case and theoryreference to the case and theoryScenario Planning is notScenario Planning is included, butScenario Planning is correctlyScenario Planning is correctlyincluded or not understoodwith minor mistakesincludedincluded and innovativeAnalysis30%Not all steps of the model(s)All steps of the model(s) areAll steps of the model(s) areAll steps of the model(s) areapplied or with majormainly properly appliedproperly appliedproperly appliedmistakes in the application ofa model; model is incorrectlyunderstoodLimitations of the analysis, theLimitations of the analysis, andLimitations of the analysis, andLimitations of the analysis, and thevalidity or the relevance of thethe validity and relevance of thethe validity and relevance of thevalidity and relevance of the resultsresults is not indicated or haveresults are somewhat indicatedresults are indicatedare clearly indicatedmajor mistakesThe results of the analysis areMost of the results of theAll results of the analysis areAll results of the analysis areincorrectly used in the SWOTanalysis are correctly used in thecorrectly used in the SWOTcorrectly used in the SWOTSWOT 35 MP1, 2019-2020 – Strategic Management TOWS & SAFe20%TOWS is applied with majorTOWS is mainly correctly appliedTOWS is correctly applied andTOWS is correctly applied andmistakes and showsand shows alternative courses ofshows alternative courses ofshows innovative alternativealternative courses of actionaction which are linked toaction which are clearly linked tocourses of action which are clearlywhich are hardly linked toanalysis in earlier partsanalysis in earlier partslinked to analysis in earlier parts,analysis in earlier partsshowing detailed backgroundknowledgeOne of the alternative coursesOne alternative course of actionThe most suitable alternativeThe most suitable alternativeof action is described in moreis mentioned as most suitablecourse of action is describedcourse of action is very welldetail; justification of researchand reasonable justified byusing reflection and justificationdescribed outstanding justificationanalysis is missing or vague;research results; adequate BEof research results; adequate BEof research results; outstanding BEBE analysis is not included oranalysis explains choices for (dis-)analysis explains choices for (dis-)analysis explains choices for (dis-)with major mistakesinvestmentinvestmentinvestmentImplementation plan is mainlyImplementation plan is mainlyImplementation plan is based onImplementation plan is correct andincomplete or with majorcomplete and includes cost/timewell-argued cost/time estimationbased on very well arguedmistakes; information isestimation, actions, responsibleand include a table for actions ofcost/time estimations; timetable forassumed / not researched,staff, and financial and humanimplementation, who isactions, responsible staff, financialand not realistic or feasiblecosts; the provided information isresponsible and indication ofand human costs are realistic andsomewhat realistic and feasiblefinancial and human costs onfeasible, and show excellentrealistic and feasible basisbackground understandingConclusion &15%Limited evidence of findingsEvidence of findings andClear conclusion, well-argued andAnalytical and clear conclusion, veryRecommendationand conclusions; conclusion isconclusions; is summary ofbased on results; summariseswell-argued and solely based onsummary of some results; noresults and follows up themain topics and is structuredresults; clear follow-up tologic follow up tointroduction; PS is answeredfollow up to the introduction; PSintroduction; PS is answeredintroduction; PS is not oris answered conciselyconciselyvaguely answeredRecommendations are withRecommendations areGood arguments back up theStrong arguments back up theonly few arguments; most ofmentioned with arguments; mostrecommendations, which are(SMART) recommendationsthem not realistic or feasibleof them realistic and feasiblerealistic and feasibleNo critical reflection onCritical reflection on some resultsCritical reflection on results andOutstanding critical reflection onresearch process and results,and parts of process; limitationsprocess; limitations are clearlyresearch process and results;or still embryonic; no or vagueare mentioned and somewhat fitstatedlimitations clearly mirror completelimitationsthe results and processunderstanding of results andprocessFormat &Max 1English language and grammar show major mistakesReferencingdeductionUnprofessional appearance of report, structure / layout, no page numberson finalIncorrect use of appendixgradeReport is not a consultancy report / no active voice and writing style (‘it was predicted that’ rather than ‘we predict that’)100%Total: A category might only be chosen when all of the mentioned aspects are completed and up to the requested quality 36 MP1, 2019-2020 – Strategic Management 5.4 Proposed planning for weekly CBL sessions Below is an indication of how the weekly CBL sessions could be filled in. However, each group is invited to anticipate own work and adjust the planning accordingly. Session 1 (Week 1) Start-up of case 1: Discuss the details of the individual case. Make sure you discuss the expectations and planning (including lectures & workshops) for this case; prior to the session you should have read the description of case 1. Start-up of case 3: Idem case 1 General discussion to familiarise with the case (do not create case groups at this moment) Start-up of case 2: In session one the discussion of the case (part 1), the formulation of a key main question (part 2) and a discussion on literature (part 3) are the main objectives. However, preparation is imperative, it is not important that you are able to report everything by heart. It is fine to read from the literature during the session. Make sure you have read the material before the session! The first session is an open book session. The goal of session one is that everybody understands the different concepts described in the case and the literature. Your tutor will help you with understanding the key concepts. After understanding the key concepts in the case and the literature, the group will start working on a main question which needs to be answered in your case-study report. Part 1) Discussion of the RyanAir case Discuss and analyse the following elements of the case: 1)History;7) Mergers, Alliances & Acquisitions;2)Objectives (mission statement);8)European market (including competition);3)Scope of activities;9)EU legislation;4)Key stakeholders;10) The business model;5)Costs and operations;11) Current problems;6)Flotation/public offering; Part 2) Formulation of an overall main question; After discussing the case, it is time to discuss possible main- and supporting questions (in academic research referred to as problem statement and research questions). Your main question should cover three elements: It can be analysed using strategic decision-making theory from JWSIt gives cause to saying something about the future (specify!)It emphasises the main problem(s)/challenges/threats of the case/organisation Part 3) Discuss some of the following concepts; When reading the literature, were there any theoretical concepts you did not fully understand or that need more attention in general? The chairperson should lead the discussion and pose critical questions. 37 MP1, 2019-2020 – Strategic Management Chapters 2/3Chapter 4Chapter 5Chapter 7Macro/meso environmentStrategic CapabilityStrategic PurposeBusiness-Level Strategy2 & 3.5 Opportunities &4.3 Distinctive resources &5.2 Stakeholders (10th ed.7.2 Generic competitivethreats (10th ed. 2.5)capabilities as a basis of …4.4)strategies (10th ed. 6.3)(10th ed. 3.3)3.2 & 3.3 Competitive4.4 Diagnosing resources5.3 Corporate governance7.3 Interactive strategiesforces & Industry typesand capabilities (10th ed. 3.4)(10th ed. 4.3)(10th ed. 6.4)(10th ed. 2.3)3.4 Competitors & markets4.5 Dynamic capability (10th5.4 Social responsibility and7.4 Business models(10th ed. 2.4)ed. 3.5)ethics (10th ed. 4.5) Information for preparing for session 2 Management consulting (sometimes also called strategy consulting) refers to both the practice of helping companies to improve performance through analysis of existing business problems and development of future plans, as well as to the firms that specialise in this sort of consulting. Management consulting may involve the identification and cross-fertilisation of best practices, analytical techniques, change management, coaching skills, technology implementations, strategy development or even the simple advantage of an outsider’s perspective. Management consultants generally bring formal frameworks or methodologies to identify problems or suggest more effective or efficient ways of performing business tasks. In session 2 you will discuss the application of the macro environmental analysis to the case as well as the strengths and weaknesses RyanAir has in comparison to its competitors. Prepare this up front with your case group in order to have a fruitful and in-depth discussion on this. For the business economic analysis, which is obligatory for every team, your goal is to provide insight in RyanAir’s financial health in general and opportunities to invest for future strategies. Session 2 (Week 2) Analysis of external and internal environment Discussion on application of the macro environmental analysis to the case Discuss strategic capabilities and resources. What are strengths and weaknesses of Ryanair in comparison to its competitors? Use appropriate theoretical models for your analysis. Do not forget the Financial Analysis. Information for preparing for session 3 Before session 3, you should have finalised your analysis of the external and internal environment. You can conclude the internal and external analysis with a SWOT, referring to the models you have applied. Each group needs to present their SWOT analysis so you can work out the TOWS matrix with your case group. Also already start thinking about which possible strategic option(s) RyanAir could follow is/are most suitable, acceptable and feasible (chapter 12). Make sure you hand in your research setup for the individual case to your tutor well before CBL so it can be discussed during the following session. Make sure you hand in your case 3 setup to your tutor by the end of the week. 38 MP1, 2019-2020 – Strategic Management Session 3 (Week 3) Part 1: Discussion of the SWOT Analysis The SWOT analysis of each case group will be discussed. The SWOT for each group then in turn serves as input for a general discussion on the strategic options. Your task then is to confront the internal strengths and weaknesses (SW) with the external opportunities and threats (OT) in a TOWS (or confrontation) matrix – to be found in JWS. Part 2: Strategic options After you have come up with your TOWS matrix you will then discuss about the strategic choices for RyanAir further. Ultimately (for this session), each group selects one or two options derived from the TOWS analysis for further investigation. Is this option suitable, feasible and acceptable for key stakeholders? Make sure you are familiar with the theory on quality criteria. You should know how to conduct a risk assessment from a financial point of view, so be sure to also take this into account. Part 3: Case 1 Briefly discuss the research setup for the individual case and/or issues in relation to this case. Information for preparing week 4 Finalise your report and prepare questions about last bits and uncertainties. Hand in the peer feedback for case 2 on Blackboard before the start of session 4. Week 4 to 8 (during CBL) Once every week each case group has 30-40 minutes to present their findings and discuss them with peers and tutor, who will act as critical assessors. For each concept you wish to use in your report find several different approaches (theories/models/tools). Critically discuss these and decide which you apply for your case. Session 4 (Week 4) During CBL week 4 you will receive feedback on your draft RyanAir case report from your peers. Each student will be given a couple of minutes to informally present his/her feedback on the RyanAir case report. The feedback reports will be shared with the groups. Hand in the finalised case 2 report on Thursday by 23:59 Week 4 & 5 In each of these weeks an open session (WINFO) for the creation of Infographis is offered. Please familiarise with a few tools for the creation of infographics and bring your research for case one. At this point you should have completed the research and analysis for the case so that you can start visualising this during the sessions. Session 6 (Week 6) During this week two Scenario Planning workshops will be offered (WETFI). A mandatory part of the consultancy report is that you not only do some forecasting based on either current or past impacts, but also anticipate future possible influences. Next to your general strategic analysis, these workshops will help you to develop additional possible strategic options based on a different approach. 39 MP1, 2019-2020 – Strategic Management For the first ETFI workshop please prepare a scenario cross with 4 scenarios as you have learned in year 2 of your study and bring this to the workshop. We will continue with the scenarios to create strategic options which you have to add to your case report. Some information to fresh up your memory will be provided on Blackboard as preparation. Do not forget to sign up on Progress for the exam offered in week 9 and hand-in your infographic on Thursday, Week 6 by 23:59. Session 7 (Week 7) By the end of this week your case 3 report should be close to finished. Ask yourselves: “Have we found a satisfying solution to our problem and is this based on the logically built-up analysis?” Hand in your case report to your fellow students for individual peer assessment on Thursday, Week 7 before 12.00 hours. The grading sheet can be found on Blackboard in the sub-section of the case. Hand in the peer feedback for case 3 on Blackboard before the start of session 8. The feedback will also be presented during CBL in week 8. Your tutor will be present to guard the quality of the feedback. Session 8 (Week 8) Next to receiving feedback from your peers, in this session the module will be evaluated as well. Please send the minutes to the module coordinator ([email protected]). Discuss the following aspects in the evaluation: Cases and CBLPeer feedback assignmentsStudent-led workshopsBusiness Economics workshopsAirline Game (including Calculair, Annual Report and Interview)LiteratureLectures and teachingOverall organisation of the module (including module book)Fit with other modulesWorkloadOverall learning 5.5 Peer feedback on case reports 2 and 3 One of the most important study skills you are developing in the third year is evaluation. Whatever you do, you should be critical towards your own and towards other’s work. For this assignment, you need to have a comprehensive insight in strategic management theory and report writing skills. You need to arrange to send the case reports to all group members by Thursday, week 3 and Thursday week 7. Most commonly, the structure would be: Each individual student from case group A gives peer feedback on report case group B Each individual student from case group B gives peer feedback on report case group C Each individual student from case group C gives peer feedback on report case group A 40 MP1, 2019-2020 – Strategic Management Your assignment is to grade your fellow team’s case report and to provide feedback. You should substantiate your arguments with peer feedback on a minimum of 1 and a maximum of 2 A4. Focus on general remarks, refer to examples in the case report and provide specific suggestions for improvement. Stay objective and try to see both, the greater picture with its links throughout the whole case but also the parts themselves concerning application of theory. Therefore, in your peer feedback do not solely focus on aspects such as English, layout technicalities, etc. It is important that you give feedback on the content of the reports, meaning aspects such as used models and theories, structure and the application of theory and models are important to assess. You will have to hand in your peer feedback on case report 2 on Blackboard before the start of the CBL session in week 4 and for case report 3 before the CBL session in week 8. The feedback will be individually presented to the case group in the CBL sessions and shared with the other teams. The tutor grades the case 3 report in the end, but may be influenced by the peer feedback. 5.6 Individual short answer test (SAT) In week 9 you will have to write an individual short answer test. The main idea behind this test is that we want you to individually show you master strategic management theory and application. You should have studied the theory throughout the first 8 weeks of the module, to be able to apply it in your assignments. This test will examine both knowledge as well as application of the theory. The answers you give should be brief (3-4 sentences max). Some sample questions are published on Blackboard to give you an idea what kind of questions you can expect. Strong insight in the literature is absolutely necessary to obtain a good grade. In week 7 an exam training is offered. During this training some former test questions will be presented. You get the chance to test your knowledge and understanding of the theory and its application. The lecturer will discuss all questions and their answers with you. 41 MP1, 2019-2020 – Strategic Management AIRLINE GAME 6.1 Introduction The management simulation game “Airline” plays an important role in this module. It gives you the possibility to apply the theoretical knowledge you have gained in earlier modules. The link with the theory which is discussed in this module is very clear. By participating in this simulation, you will have to make all sorts of strategic decisions. Strategic issues that you are going to deal with are the positioning of the firm, analyses of the environment, price-setting, purchasing, etc. Educational research has consistently shown that the most expeditious method of learning is “learning by doing”. This is what a management game does: it allows you to learn the various facets of strategic management while “doing”. The Airline Consultants have put a lot of energy in preparing this game-version for you and hope that you will have a valuable learning experience. In the module ‘Strategic Management’ you must train yourself in applying strategic issues in the management game ‘Airline’. ‘Airline’ is a big case study of a real airline. It lets you try out a strategy in a going concern. The simulation has the following objectives: Practice decision making skills in a group setting;Understand the importance of strategic management; Learn how to forecast demand in a turbulent market;Experience the various ‘stakeholders’ influences and interests in a business; andPractice skills required in operations management. As a team (company) you will compete with other teams in the fast-paced, turbulent airline industry. Each team consists of 4 – 7 students. You will have to fulfil the following jobs: PresidentPlanningFinanceMarketing Human Resource ManagementMaintenance To facilitate the carrying out of the game, you will be offered: lectures about the game during the first two weeks of the module,lectures about different assignments consultancy sessions for the game online access to the results of every quarter Lectures about the game. In week A and B there will be lectures about the simulation by the game coordinator. The game coordinator will explain the game and will give many practical tips. 42 MP1, 2019-2020 – Strategic Management Lectures about different assignments. For Calculair you can attend the Calculair lecture in week B. For investment selection weekly workshops are scheduled as BE classes. In order to be able to produce an annual report, once per two weeks Q&A lectures will be scheduled. Consultancy. Once a week every team can get help from the game co-ordinator to give the project groups support regarding the content of the game. It is not a lecture, but a session during which the groups can discuss issues or ask the game coordinators questions. The group must discuss the issues and questions before the consultancy session takes place and to formulate them clearly. 6.2 Information about simulation Teams will be formed by the module coordinators on Monday week 1. Your team (firm) will compete with other teams in the fast-paced, turbulent airline industry. Teams will establish objectives, plan the strategy to accomplish these objectives, and then operate the airline on a quarter to quarter basis. Of course, all these parts of your strategy must be well documented! Decisions are submitted through the program periodically and are entered online. The programme generates a report of each team’s financial results and this is returned to each team. Your team analyses the results and takes a new round of decisions for the next decision period. More detailed information, based on problems students encountered in the past: You must fill in decisions on average twice a week.Always keep an overview of your decisions! 6.2.1 Things to do (week 1) for the Airline Game: read the material that will be sent to you by the publisher (Interpretive Solutions)organise the teamplan the strategyname the businesstake decisions for a test roundfill in your decisions in the Airline programme. TIP: make use of the decision and analysis forms 6.2.2 Playing the Game; deadlines; procedures: In the first weeks two trial rounds are scheduled. These trial rounds will give your team the possibility to practice your strategic skills. This trial round has no other function than to gain experience with the game (and to check your Calculair assignment, see below). Do not worry too much about a consistent strategy at this point. It could prove quite valuable to follow an extreme strategy and to study the results very carefully. Fill in your decisions of the first trial round (week 1) before Thursday, week 1, 12.00 hours and those of the second trial round Wednesday, week 2, before 12.00 hours as well. (These deadlines are applicable to all game-rounds in the game). 43 MP1, 2019-2020 – Strategic Management In the second week a lecture is scheduled. The game coordinator will analyse the test round and will give many practical tips for the real game. You can use the opportunity to ask questions during consultation-hours as well. After this feedback every team must: plan the strategymake a mileage analysis prepare the Decisions Form for the first round. Furthermore, every team is strongly advised to: make a market profitability analysis make a financial plan (Calculair containing a.o.: pro forma balance sheet, income statement and cash budget) make a financial ratio analysisfill in an airline simulation decision log 6.2.3 The start of the real game The decision of round 1 must be filled in before Thursday 12.00 hours (week 2). Results are ready at 15.00 hours. In week 3, the decision of round 2 must be sent before Wednesday 12.00 hours (results 15.00 hours). The decision of round 3 must be sent before Thursday 14.00 hours. Results are ready at 15.00 hours. In the following weeks (week 4 up to 7) this procedure will be repeated. The deadlines for the decisions are 12.00 hours (results 15.00 hours). In Week 8 the deadline for the decisions of round 12 is Wednesday 12.00 hours. 6.2.4 Marketing activities In your organisation marketing may play a crucial role in gaining a sustainable competitive advantage. In weeks 2 to 7 your organisation has the possibility to undertake several marketing activities: 44 MP1, 2019-2020 – Strategic ManagementWeek 2Name, Logo & SloganWeek 3Billboard / PosterWeek 4Direct MailWeek 5Press ReleaseWeek 6Small Present/GiftWeek 7On Board Magazine Some general information about criteria can be found on Blackboard. However, marketing activities are merely an application of earlier content of the study. Your management-team has enough knowledge of marketing (for instance by studying Principles of Marketing by Kotler) to come up with creative and exciting ideas. In addition, many real-life examples can be found online. In general, it can be said that the most important factors which play a role in the effectiveness of your activities are the way in which the marketing activity differentiates the company from its competitors as well as the fit between the message and the strategy of the company (a discounter needs to focus on completely different aspects in its marketing activities as opposed to a luxury airliner). The deadline for the marketing activities is on Wednesdays (weeks 2 until 7) before 23.59 hours for digital items (all except the Small Present/Gift). Hand in your products using the hand-in option under Blackboard/Strategic Management/Airline/Marketing. This means that almost all your products are digital. The only other requirement is that the file has to be saved in the following format: airlinename_type_assignment.docx. Example: falconair_luxury_directmail.docx. If this is not done, you will get a fine of $10.000! Exception to the above is your incentive in week 6 on Wednesday. Hand in this incentive before 14.00 hours. The reward for a mix of perfect marketing activities is a maximum amount of $100,000 under “other income” in the “Friday quarters”, followed by a maximum amount of $50,000 in the “Wednesday quarters”. The reason for this is the diminishing effect of campaigns, so in the second quarter after launching it, the reward will be 50% of the reward of the first quarter. You will receive (brief) feedback on your activities on Blackboard. 6.2.5 Consultation After your analysis of the results, you can get help from the game coordinators. Check your timetable for more details. During weeks A and B consultation sessions will be held in two CBL groups. During weeks 3 until 7 you will need to enlist for consultation since the game has started and discussing information in a large group will provide competitors with valuable information. For enlistment for the consultation hours you will have to follow the following procedure: Sign in for consultation on a list hanging outside the teacher’s office space. Your team can only sign in once per day. Your team has 10 minutes to ask questions. There is no time for small-talk. Your team is expected to prepare questions before the consultation hour. Do not expect your consultant to give advice. He will only answer your questions. Not showing up for consultation (while the consultant is expecting you) will cost you money. A fine of $100.000 is set for this type of negligence. 45 MP1, 2019-2020 – Strategic Management 6.2.6 Interview In week 8 there will be an interview. During this interview you and your fellow management team members will have to answer questions from your Board of Commissioners. Since the purpose of the interview is to measure team performance all team members should be present. If anybody is missing without giving notice with a good reason, all team members will get zero points, since the interview cannot take place. The Board of Commissioners will evaluate your performance by asking questions about all functional areas within your organization (HRM, planning, maintenance, strategy, finance and marketing). For this interview you will be rewarded with interview points (0 – 10). As you can see the questions relate to the function you have fulfilled during the game; therefore, you only have to prepare for the questions relating to your position. Of course, your president is expected to have basic knowledge in all the fields mentioned! Examples of questions you can expect during this interview on: Financial management: Explain: the connection between loans, equity and line of creditthe way you are charged with income taxes why depreciation is part of your income statement but not of your cash-flow analysisthe way you are charged with interest expenses the relationship between the sources of funds and your decision to buy or lease your planes the relationship between ‘common stock’ on your balance sheet and ‘shares of stock outstanding’ as mentioned in the other data sheet the way in which a Sources and Application of Funds Statement worksthe relationship between income statement, balance sheet and cash flow analysishow to calculate the cost of cabin service about investment yield standards and the way in which you used them to decide for an investment in a certain type of aircraftwhy you used the sources of funds you usedhow to calculate the financial ratios that are mentioned in the management game the connection between load factor, revenue passenger miles, gross revenue and other related itemsabout the different ways in which you can give a dividend to your shareholders if you used promotional fares, the way in which gross revenue reacted or, in other words, does the demand for flights appear to be elastic or not? Flight scheduling: Explain: which type of aircraft is most suitable for which market typewhich type of aircraft is most suitable for which type of airline companyhow to establish the attractiveness of a certain market number (route)how to establish the most effective use of a planehow to calculate the maximum mileage once you’ve established your flight schedulehow to calculate available seat miles 46 MP1, 2019-2020 – Strategic Management how your flight schedule relates to the strategy you chose (e.g. did you concentrate on certain market types?) if it is possible to establish the passenger load factor of your competitors and, if it is, how to do thatwhat market information is needed to answer question 8how the market profitability analysis should be carried outhow to arrive at a utilization % of your planes that is as near as possible to 100% Strategy: Explain: the long-term strategy of your airline, including goals, mission statement and SWOT-analysisyour objectives for the next yearyour marketing strategy in terms of Porter and Ansoffyour advertising campaign in relation to your target groupyour target group in more detailyour human resources strategy; include your figures on turnover, salaries and trainingyour future investments and the way you’re going to finance them. Questions about marketing and HRM are not included in these examples but will be part of the interview. 6.2.7 Performance points Performance points are cumulative stock price to date, with some points subtracted for poor cash management in any quarter that cash is 0 or greater than $ 350,000. Performance points give a game-to-date evaluation while stock price indicates the team’s short-term position. Every team gets a maximum of 10 points for the management game. The module points are calculated as follows performance points of your team ———————————————————- * 7 + 3 performance points of the best team 6.2.8 Extra information: Quarters linked to seasons Reliability of your company is affected by the weather. In autumn and winter periods your aircraft have problems with slippery runways and stormy weather. Also, in your marketing efforts it will help considerably to know in which season your company is operating (for instance to prevent the development of a marketing campaign with Santa Claus in the middle of summer). For these reasons, knowledge about seasonality in the game may prove to be valuable. However, the manual does not give clear information about this. To help you with your struggles to make the right decisions you are provided with this information here: Quarter 1 = spring quarter 2 = summer, quarter 3 = autumn, quarter 4 = winter. 47 MP1, 2019-2020 – Strategic Management 6.3 Calculair (by Dr. Anu Jossan) Based on the first trial round! One of the problems you will have to deal with is the uncertainty of the outcome of your decisions. In order to predict this outcome as accurately as possible, you are required to develop several spread-sheets using Microsoft Excel: Fleet Status Report Flight Overview Balance sheet Cash Flow Analysis Income Statement Other data: Number of aircraft, seats, passengers and miles flown,Maximum mileage,Available seat miles,Revenue passenger miles,Passenger load factor,Yield per revenue passenger mile,Number of employees and employee turnover,Fuel spot price and contract price,Line of credit,Short term interest rate,Shares of stock outstanding. The contents of the other overviews can be found in the information manual. How should you plan this activity and how can you check what you have done? Well, immediately at the start of the module you can look at the protected spreadsheets on Blackboard. You can study the contents and structure of the spreadsheets. You will see that these are very similar to those in the Airline Manual. At the end of week 1, you must fill in your first Airline decisions for the first trial round. During this week you must figure out how the overviews work and how they are related to each other. You will get some instructions during a lecture by Mr. Bos and Mr. Wassens. At Thursday afternoon (still week 1), you will get the results of the trial round. This is in fact a tutor instruction: the formulas that you use in your spreadsheets should lead to approximately the same numbers as you see on the official results. Why approximately? The game works with the actually average seats sold per day, e.g.: 24.49. However, this will show in the program as 24 seats sold, so that is what you must work with in Excel. Hence rounding off errors up to 3 % are possible, without you making any mistakes. If you achieve that, you will have a perfect tool to predict the future results, except for one thing: predicting the number of passengers that will fly with you will always be tricky! Do not forget to print the results of this first trial round since you have to hand them in to enable grading! During week 1 and 2 you will have the possibility to ask questions during the consultation hours for airline. 48 MP1, 2019-2020 – Strategic Management You have to use the protected spreadsheet available on Blackboard. The use of any other spreadsheet will be rewarded with 0 points. However, you are allowed to expand the spreadsheet if you feel that it will work better for your company. You can earn a maximum of 10 points. Hand in this report digitally via Email to Dr. Anu Jossan on Thursday week 2 between 10.00 and 12.00 hours. Also hand in via screenshots: a copy of your decisions of the first trial round and a copy of the results of the first trial round! Reminder: do this as soon as trial round one is over, since the results will be removed from the site after the trial rounds are over! This is an assignment per management team! 6.4 Annual report (by Dr. Anu Jossan) Introduction A lot of groups in our society have a financial interest in the conduct of affairs in companies. Parties concerned are shareholders, creditors, suppliers, clients and employees. The Annual Report is considered an important means of communication between the management and the parties concerned. In the Annual Report management renders an account of its policy. At the same time information about the financial position and the results of the concern is supplied. Based on the data in the Annual Report the parties concerned form an opinion about the achievements of the management and draw their conclusions. Drawing up and publishing an Annual Report is not a simple undertaking. There are conflicting interests. The suppliers of the financial information will be reserved. The published data is also accessible for competitors. The users of the financial information want to form the best possible view on the returns and the risks. On account of these conflicting interests the government has issued regulations on the required content of an Annual Report. After quarters 5 up to and including 8 your team has to produce an Annual Report. The Annual Report should contain the following: Key figures for 3 years inclusive. Quarter 0 can be interpreted as representative for a whole year! A Report of the Executive Board: the situation of the concern: products, development of the market, realized investments, structure of the organization, personnel, Research & Development. A paragraph about the future: pushing down or starting up important activities, information about big investments, financing in the future, personnel An Annual Account: Balance-sheet Income Statement explanation 49 MP1, 2019-2020 – Strategic Management Cash flow statement Other data events after balance date (for quarter 9) etc. N.B.: Airline is a Public Company (Plc.). The Annual Report is a kind of business card. The contents and the layout must be of a high standard. The Annual Report has no confidential character. The maximum number of words is 5,000 (including numbers). 150-300 extra: -1 point; 300-500 extra: -2 points; more than 500 extra: no points given! Q&A lectures Questions are dealt with during Q&A lectures during weeks C, E, G and H. You will only be allowed access if you mailed questions at least one day before. Presence will be checked in order to prevent that teams that do not attend will ask questions outside these classes!! Check your schedule for the time and location of these lectures. You are strongly advised to start early with the preparations for the annual report. These additional lectures give you the possibility to ask questions to the author of the assignment. You can earn a maximum of 10 points for this assignment. Send the Published Annual Report to Dr. Anu Jossan via E mail on Thursday of week 9 before 12.00 hours. You also need to hand in a digital version of the report on BLACKBOARD (before Thursday week 9, 23.59): open the course Strategic Management, use the option ‘Handing in’ in the menu and follow the onscreen instructions. Without a digital version your report will not be graded. This is an assignment per management team! For more details about the deadline procedure, please check paragraph 2.7. 50 MP1, 2019-2020 – Strategic Management BUSINESS ECONOMICS Business Economics; Investment Yield Standards (Dr. Anu Jossan You will gain insight into different investment yield standards: the payback period, average return on book value, net present value and internal rate of return. Before you are able to apply these methods, you will start making some interest calculations. When you are able to do that, you will have to calculate the payback period, the average return on book value, the net present value and the internal rate of return of specific investment proposals. Last but not least you will have to use the capital asset pricing model in order to decide whether to invest in the investment proposal or an alternative. Mastering this subject will help you to take decisions on buy/lease issues in the Airline management game. After using these methods you have to decide which investment is preferable when you take into account that the future is always uncertain. Some companies are more risk avoiding than others so they will invest in different investment proposals. In order to be well prepared, you have to solve problems before attending the workshops: Week 1, 2 : Interest calculations Week 3, 4 : investment yield standards Week 5, 6 : uncertainty The business economics part will be tested as a short answer test as a component of the module test in week 8. 51 MP1, 2019-2020 – Strategic Management Week 1 Compound interest, future and present value (1) Background: If you go back to your childhood you will probably remember that you could buy much more for €10 than nowadays. Because of inflation money loses part of its value. Even if that would not be the case, you would probably prefer to have received €100 10 years ago instead of now. If you would have put your money in your bank account ten years ago you would have much more now because of the interest. Because of these two effects (interest and inflation) you cannot simply compare the same amount at different moments in time. Before you can tell whether €100 today is worth more or less than €80 five years ago, you first have to find a way to calculate the value of these two amounts at the same moment in time. To do this, you have two possibilities: Either you calculate the Future Value (FV) of the the €80, óryou calculate the Present Value (PV) of the €100. Explanation: Let us suppose that you want to know how much money you will have after five years, if you would put €80 on your bank account today. The bank tells you that they will give you 6% interest per year. There are two different types of interest: singular interest and compound interest. Singular interest would have to be applied if you take the interest out of your account every year. We will use it only once. It means that you will get interest over the original amount only. Singular interest: In our little example this would mean that you would have in your bank account after five years: 6% * €80 = €4.80 per year. So after five years you have received 5 * €4.80 = €24. In total you would have €80 + €24 = €104. Compound interest: The more frequently used method of giving interest on savings is compound interest. This means that you get interest over the original amount, but also over the interest that you received in the previous year(s). This means that compound interest will always result in a higher FV than singular interest. Let us check this statement: After one year you would have: €80 + 6% = €80 + €4.80 = €84.80 After two years you would have: €84.80 + 6% = €84.80 + €5.088 = € 89.888 After three years you would have: €89.888 + 6% = €89.888 + €5.39328 = € 95.28128 After four years you would have: € 95.28128 + 6% = € 95.28128 + € 5.7168768 = € 100.9981568 52 MP1, 2019-2020 – Strategic Management And finally after five years you would have: € 100.9981568 + 6% = € 100.9981568 + € 6.059889408 = € 107.06. As you can see, this method is very time consuming. There should be an easier way and there is: if you think for a while you could come up with a faster calculation. Adding 6% to a certain amount is the same as multiplying it with 1.06. So the long calculations above could have been done faster like this: After one year you would have: €80 *1.06 = €84.80 After two years you would have: €84.80 * 1.06 = € 89.888 Etc…. Eventually you will figure out the € 107.06 after five years again, but if you would have to do this on the test for e.g. 54 years, you are bound to make a mistake somewhere. However, we can do it even faster. If you look closely at the last two calculations, you will see that we in fact started with the € 80 and multiplied it with 1.06 twice! So: after two years, we will have: € 80 * 1.06 * 1.06 = € 89.888. Even this will take you a lot of time, until you realize that this is the same as: €80 * 1.062 = € 89.888. This makes the calculation very easy to do, regardless of the number of years: After five years we will have: € 80 * 1.065 = € 107.06. In general: FV = Original amount * (1 + i)n In which: i is the interest percentage (so with 5% interest it will be: 1 + 0.05 = 1.05 and n is the number of periods. “DEAR DONALD,CAN YOU IMAGINE THAT I STARTED 12 YEARS AGO WITH ONLY MY LUCKY DIME”? 53 MP1, 2019-2020 – Strategic Management Although everybody is probably familiar with the concept of the future value (simply think of a savings account with the bank), the opposite situation seems a bit weird at first sight: if we calculate the present value of an amount it means that we want to know the value of a certain amount that we need or want in the future at the present, so right now. So: TodayFive years from nowPresent Value (PV)€ 5,000 E.g.: if you want to go traveling for a year, some years after graduation and you have figured out that you will need € 5,000 by then, it would be wise to go to the bank and ask how much money you should put in your savings account right now in order to have enough money e.g. five years from now. If you understand the calculation for the future value it should be easy to understand that we now have to divide the amount we know with (1 + i)n instead of multiplying. Let’s suppose that we again have 6% interest; then our calculation will be: € 5,000 / 1.065 = € 3,736. 29 In general: PV = FV / (1 + i)n In which: i is the interest percentage (so with 5% interest it will be: 1 + 0.05 = 1.05 and n is the number of periods. 54 MP1, 2019-2020 – Strategic Management Problems to prepare (prior to the session!!): 1.1Calculate the future value of €30,000 invested for 8 years, assuming a(a)4% compound interest per year.(b)1% compound interest per quarter.(c)4% singular interest per year.(d)1% singular interest per quarter.(e)What are your conclusions about the results (a) up to (d)?1.2(a)Calculate the future value of €15.000 invested for 8 years, assuming an annualcompound interest rate of 7%.(b)Calculate the future value of €20,000 invested for 12 years, assuming acompound interest rate of 5% (5 years) and 6% (7 years).(c)Calculate the present value of €20,000, receivable in 5 years, assuming acompound interest rate of 7%.(d)Calculate the annual compound interest rate if a present value of €30,000 willyield €73,798 after 11 years.(e)Calculate in how many years €1,000 will increase to €2,000, assuming acompound interest rate of 7%. (Trial and error method is allowed.) Future value Present value 55 MP1, 2019-2020 – Strategic Management 1.3 What do you prefer to pay: 4% compound interest per half year, or 8.1% compound interest per year? Give reasons for your answer. 1.4 Calculate the present value of €34,000 receivable in 6 years, assuming an annual compound interest rates of 6%. Do the same for an annual compound interest rate of 8%. Give a general rule for the relationship between interest rates and the present value of discounted future amounts. 1.5 Assuming annual compound interest of 5%, calculate the present value of €6,000 receivable in 5 years. Do the same for a period of 7 years. Give a general rule for the relationship between the present value and the term of discounted investments. 56 MP1, 2019-2020 – Strategic Management Week 1 Discount rate, Present value (2), cash flow Background: In week 1 we figured out how to calculate the future or present value of one amount. In order to be able to do this it is crucial for you to understand the difference between interest and discount. In general the difference is that interest is added as a percentage to the present value to arrive at the future value, while discount is exactly the opposite: it is deducted as a percentage from the future value to arrive at the present value. The first example after this background part will deal with this problem. But off course we should also be able to figure out the present and future value for a series of amounts. E.g.: the whole idea of paying premiums for your pension is based on this idea. From the age of 67 on, you would like to get some money every month and the insurance company has a hard job to figure out how much premium you should pay now every month. Luckily we won’t make it nearly as complicated as that. We’ll stay with our main topic of investing in planes. If we invest in a plane we expect future income from it, not once, but on a daily basis. We will simplify this a little bit, by assuming that we will receive money on a yearly basis. Like in the previous chapter, we will start with an example on the future value first. Example relationship between interest rate and discount rate Let us start easy: On January 1st you received €600 as a loan. At December 1st you have to pay back €750. We will calculate the interest rate first: The total interest that has been added during the year is €750 – €600 = €150. This amount has to be expressed as a percentage of the original amount, so: 150 / 600 * 100% = 25% To calculate the discount percentage we have to use a slightly different approach: the question is how much percent we should deduct from €750 to get to the present value of €600. The amount is off course again €150: €750 – €600. As a percentage of the €750 this is: €150 / €750 * 100% = 20%. 57 MP1, 2019-2020 – Strategic Management Conclusion: apparently 25% interest equals 20% discount. If this would be true, you should be able to solve the next problem: calculate the discount rate that is equal to 25% interest, without any further knowledge about the amounts involved. Solution: with 25% interest, 100% will increase to 125%. So the discount percentage would be: 25%/125% * 100% = 20%. If the problem would be reversed, the solution is: with 20% discount: the discount will be withdrawn from the future value of 100% to arrive at the present value of 80%. So if we calculate the interest percentage it would be 20% / 80% * 100% = 25% interest. Example future value: Calculate the future value (FV) on December 31st 2020 when €1,500 will be invested for a period of 5 years, each year, starting January 1st 2015, assuming an annual compound interest rate of 5%. Situation: 1,5001,5001,5001,5001,5001/1/151/1/161/1/171/1/181/1/191/1/2031/12/20 Solution: We know how to calculate the FV of one amount, so we would have to add the outcomes of the following calculations: FV = 1,500 * 1.056 (count carefully!!!) FV = 1,500 * 1.055 FV = 1,500 * 1.054 FV = 1,500 * 1.053 FV = 1,500 * 1.052 Off course it is possible to do these calculations and then add the five answers to each other, but imagine you would have to do this for 54 years, like will be asked on the test……There must be a shortcut??? Yes, there is!!!! Our first step will be to rewrite the calculations written above: FV = 1,500 *(1.056 + 1.055 + 1.054 + 1.053 + 1.052) This equation has to be solved. Equations do have some nice characteristics. One of them is that you can do with them whatever you want, as long as you do it on both sides, it will still be a good equation! What we will do is multiply both sides of the = sign with 1.05. The result is given below in a second equation: 1.05 FV = 1,500 * (1.057 + 1.056 + 1.055 + 1.054 + 1.053) The third step is now to deduct the first formula from the second one, resulting in: 0.05 FV = 1,500 * (1.057 – 1.052) 58 MP1, 2019-2020 – Strategic Management Summarized, we have done this: FV = 1,500 *(1.056 + 1.055 + 1.054 + 1.053 + 1.052) Both sides * 1.05 : 1.05 FV = 1,500 * (1.057 + 1.056 + 1.055 + 1.054 + 1.053) Deduct:0.05 FV = 1,500 * (1.057 – 1.052)Our last step has to be to calculate the FV itself, instead of 0.05 FVSo:FV = 1,500 * (1.057 – 1.052) / 0.05= € 9,138.01In order to fully understand this, it is necessary to follow through every step givenabove!!!!As in week 1, the calculation of the present value is the opposite of calculating the future value:Example present value:In this example the results are presented in a much more summarized way. The idea is that you checkagain thoroughly whether you understand what has been done!!!Calculate the present value (PV) on January 1st 2014 when €1,500 will be invested for a period of 5years, each year, starting January 1st 2015, assuming an annual discount rate of 5%.Situation:1,5001,5001,5001,5001,5001/1/141/1/151/1/161/1/171/1/181/1/19Solution: PV = 1,500 * (1/1.05 + 1/1.052 + 1/1.053 + 1/1.054 + 1/1.055) Both sides * 1.05 :1.05 PV = 1,500* (1 + 1/1.05 + 1/1.052 + 1/1.053 + 1/1.054)Deduct:0.05 PV = 1,500* (1 – 1/1.055)So:PV = 1,500 * (1– 1/1.055) / 0.05= € 6,494.22 59 MP1, 2019-2020 – Strategic Management Problems to prepare (prior to the session): 2.1On January 1st. you received €800 as a loan. At December 31st. you have to payback € 1,000. Calculate the interest rate (as a percentage)Calculate the discount rate (as a percentage) For question c and d the information given above should not be used anymore. Calculate the annual discount rate equivalent to 8% interest a year. Calculate the annual interest rate equivalent to 6% discount per year. 2.2 (a) Calculate the future value (PV x (1+i)n on December 31st. 2015 when you will invest €1,000 every year during 7 years, starting January 1st. 2008, assuming an annual compound interest rate of 8%. = 1713.82 Calculate the future value (PV x (1+i)n on January 1st. 2015 when you will invest €1,000 every year during 7 years, starting January 1st. 2008, assuming an annual compound interest rate of 5%. = 2.3(a)Calculate the present value on January 1st. 2009 when you want towithdraw €500 from your account every year, for a period of 7 years,starting January 1st. 2010, assuming an annual compound discount rate of 7%.(b)Calculate the present value on January 1st. 2010 when €500 willbe withdrawn for a period of 5 years, each year, starting January 1st. 2010,assuming an annual discount rate of 6%.2.4Calculate the present value on January 1st. 1980 when during a period of 10years €100 will be withdrawn (each year), starting January 1st. 1981, and €200 will bewithdrawn during the next period of 10 years (each year), starting January 1st. 1991. The annual discount rate is 7%. 60 MP1, 2019-2020 – Strategic Management Week 2 Cash flow, Present value (2), Net present value Background Now we know how to calculate the value today of a series of amounts that we will receive in the future. In other words: we can calculate the PV of a series of cash flows. But: I think you will have some questions, like: How will we establish those cash flows?, andWhat is the use of calculating the PV? andWhat is the difference between the cash flow and profit? We will try to clarify these questions for you. First of all the cash flow and profit can be calculated as follows: Expected turnover (= sales) Expected costs excluding depreciation (why excluding depreciation????) =Cash flow DepreciationNet profit Example: You are considering investing €1,000,000 in new technology to increase the quality of your service. During the economic life span of 10 years annual sales are expected to increase with €150,000. The extra costs (excluding depreciation) would be €30,000. The residual value will be 15% of the investment. Solution: Sales€150,000–Costs (excluding depreciation)€ 30,000=Cash flow€120,000–Depreciation (1,000,000 – 150,000) / 10 (150,000 = residual value!!!)€ 85,000=Net profit€ 35,000 The answer to the second question is again related to the topic of investing. If you decide to invest, you generally have to pay a lot of money in the beginning of the project. You cannot simply compare that payment to the money you will receive later: money loses value over time (inflation!!). But now you know how much money you will receive, expressed in the value of money today, the moment you invest. In other words: if you want to know whether you should invest or not, you should compare the investment to the PV of all cash flows. Summarized: NPV (Net Present Value) = PV of all cash flows – investment. 61 MP1, 2019-2020 – Strategic Management As small question in between: in which case would you invest????? Example: A company is considering an investment in a building costing €400,000. The residual value after 5 years will be 20% of the initial expenditure. Expected sales from the building will be €150,000 per year. The yearly costs (excl. depreciation) are €60,000. The discount rate is 5%. The question is whether this investment should be done or not, from a financial point of view. Solution: The first step to take is to visualize, by drawing a timeline: – 400,00080,00012345 This is just a “translation” of the information provided. The 80,000 is the residual value, so 20% of €400,000. Now we first have to calculate the yearly cash flow: Expected turnover (= sales)150,000–Expected costs excluding depreciation60,000=Cash flow90,000 So we are now able to calculate the Present Value of the cash flows (see week 2): PV = 90,000 * (1 – 1/ 1.055) / 0.05 = € 389,652.90 Now we should not forget that at the end of the last (5th) year we will also receive the residual value. So we have to calculate the PV of that amount as well: PV= € 80,000 / 1.055 = €62,682.09. The total value of all our receipts, expressed in the value of today, is € 389,652.90 + € 62,682.09 = €452,334.99 NPV = PV – Investment, so €452,334.99 – € 400,000 = € 52,334.99. This means that we receive more money over the five years than we have to pay now. Furthermore we already took into account that we are losing money, because the invested money is no longer in our bank account! Despite this interest loss of 5% we still have a positive NPV, which means that we should invest. Conclusion: If NPV >0, one should invest, if NPV

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