Chapter 9

Question Number 2) The textbook describes a business model as how a company is going to make money. According to Sanjay Brahmawar, CEO of Software AG, his company business model is based on the following:

strong products and employee talent

The strategic management team thinks entering the pod coffee market is the best choice for the company, but asks you to think about the company's internal strengths and weaknesses before they make a final decision. First you decide to look at the company's strengths. Which two of the following four options suggests that Holden Evans has an advantage in this market?

-Country Comfort's ground coffee won the "Coffee of the Year" award from Consumer Reports magazine last year. -Holden Evans is very well known globally as a market leader in cosmetics and skin care products.

Which of the corporate strategy goals should you pursue for Holden Evans?

A corporate strategy that focuses on stability by defending Holden Evans' current market share and maintaining Country Comfort as an industry-leading brand.

You share with Jessica your thoughts on what some of the external threats are for the company and express concern that perhaps you shouldn't seek out new products/opportunities at this juncture. Your advisor reminds you that you also need to consider what external opportunities exist that would aid in moving forward with this new venture. Which of the following suggests an opportunity for Country Comfort?

According to the review of Erudite Beans' pod coffee, the company is charging more for its new pod product. Customers are not happy about the higher cost and are beginning to hesitate at the price.

In your research on external threats, you read a report that the sales of one of your competitors, Erudite Beans, has been on the rise. In addition, Erudite Beans has also indicated in their PR releases that they are planning to move into the pod coffee market. Based on this information, some team members believe that Erudite Beans is likely to be the primary external threat to Holden Evans' new venture. Which of the following, if true, would be the strongest evidence supporting that position?

An industry insider has already published a glowing review of a pod coffee prototype from Erudite Beans in a local trade publication.

Now that you have looked at the company's internal strengths, you turn your attention to its weaknesses. Which of the following would suggest that Holden Evans is not well positioned to enter the pod coffee market?

Country Comfort has been known for decades as the coffee for conservative, "middle-brow" drinkers, who are less likely to be interested in new products.

Question Number 4) Government regulation influences the operations of most businesses. Which regulatory topic did Software AG's CEO briefly discuss?

Data privacy

Which corporate stability strategy will work best for Country Comfort?

Focus on becoming more efficient and "smart" in the way Country Comfort conducts new business, as well as on maintaining the company's current customer base.

Question Number 5) The textbook describes corporate strategy as the businesses a company chooses to be in and what to do with those businesses. Which corporate strategy does Software AG follow?

Growth

Question Number 1) Competitive advantage describes a distinctive edge that a company possesses to set itself apart from the competition. What is Software AG's competitive advantage?

Innovation

Question Number 3) Mergers and acquisitions is one approach a company can use to fuel growth and profitability. How do mergers and acquisitions foster growth?

Partnering

Which competitive strategy best utilizes Country Comfort's core competencies (which include a large and efficient network for obtaining and processing quality coffee beans)?

Use Country Comfort's core competencies to pursue a differentiation strategy in which Country Comfort differentiates its coffee products by packaging them in neon orange packages that consumers can't miss.

Country Comfort Coffee's strategic management team is reviewing the company's mission statement—to produce the world's best-tasting coffee—to determine whether or not their new idea to produce pod coffee matches with the company's core values. Does the pod coffee idea fit with Holden Evans' mission statement?

Yes—you think pod coffee fits well with the company's mission statement.

After discussing the options, the strategic management team has agreed that the pod coffee idea works well with the company's mission statement and decides that the company should move forward in exploring the pod coffee idea. In order to make sure that the pod coffee idea is a good one, and to see if there are other potential future endeavors to pursue, you must analyze the market situation and formulate a strategy. Your boss asks you to start working on the pod coffee idea. What is your first step?

Your first step is to analyze the organization's strengths, weaknesses, opportunities, and threats.