WEEK 7 Islam View and Relations in Strategic Management and Operation

Question : Is there any strategic management used in Prophet Muhammad S.A.W time? Is it practiced by his companions? Discuss 😌😀 

This lecture is based on the recent book, "Strategic Planning and Implementation for Islamic Organizations", by Professor Rafik Beekun, and is part of the Islamic Management Series of lectures. These lectures are in a DVD Set which can be ordered either from Dr. Beekun's online store at: http://www.theislamicworkplace.com/Bo... or from http://www.shuracouncil.org.

week 5: Typology of Alternatives Strategies : The SWOT matrix ( How to draw it)

While many can quickly understand what SWOT analysis stand for (Strengths, weaknesses, Opportunities and Treats), many too forget the need for matching the external (opportunities and treats) with the internal ( Strength and weakness) factors to generate the appropriate strategies.

Hello guys, today i want to share about the SWOT matrix to you all.  I use to refer the Strategic Management book second edition wrote by Prof Zainal Abidin Mohamed and friends.

So, for the introduction, lets me explain what is the purpose of SWOT Matrix. SWOT matrix proposes is to merely  to match the external and internal factors that are compatible to  generate a strategic option. 

So, that is how the position is look. So as i has mention before, the SWOT Matrix purposes it  to ,match the internal and external factors which compatible to generate a new strategies option. Picture below explain how to draw it.

That all what i want to share. Hope this picture can help you all to understand how to draw it. Thank you.

This time when my friends and i were completing the Swot Matrix task 😅😆😆

Porter's 5 forces model (Competitive Model)

According to the mba-tutorials.com website, the porter five forces model was developed  in 1979 by Michael E.Porter from Harvard University. The purpose of this model is to analyze the industry in order to determine the level of intensity regarding the competition and attractiveness of the industry. The attractiveness of an industry is measured in terms of profit; more profitability means a more attractive industry and low profitability means a low attractive industry.

This five forces model comprises of a treat posed by new entrants, bargaining power of suppliers and buyers, substitutes products and intensity of rivalry among competitors.

(Picture from mba-tutorials.com)

Threat of New Entrants

It is normal to say that the profitable industry will attract other firms into the industry. A new entrant to the industry can increase the competition and substantially erode the existing market share position which then reduce the attractiveness of the industry. 

The factor why the industry can attract to the new entrant because the profit earn by new firms are relatively high and encourage many other new entrants operating elsewhere to enter the industry. Besides, the market for the industry is relatively untapped and there are considerable marketing opportunities. On top of that, it also easy for new firms to enter the industry because it has low entry barrier.

Bargaining Power of Suppliers

The suppliers are important to the organization to obtain the inputs such as raw material, labor and any parts that needed to produce the goods and services. 

Supplier can be powerful when the suppliers outputs are really needed to the buyers marketplace success. Besides, when the inputs required by buyers are unique, it will make it costly to switch from one suppliers to another suppliers and the inputs also only available from a small group of suppliers.

 Beside that, the suppliers can be powerful when the buyer's inputs do not present a significant portion of the supplier's business and the suppliers can sell directly to the firm's customers, bypassing the need from the firm.

Bargaining Power of Buyers

Customers or potential buyers are really important for a firm in the industry. The power of buyers can effect the profitability of the business. Buyers have the most power when they are large and purchasable most of the industry's output. It also increase the power of buyers when the industry has many small suppliers supplying the product and the quantity of buyers are large. 

Next, the products represent a relatively large expenses for customers and sales of the product being purchased account for a significant portion of the seller's annual revenues. Apart of that, they have access sufficient information and are able to evaluate the competitive offerings.

Beside that, the buyers could switch to another product without incurring significant switching cost because the supplier's products are not unique and undifferentiated. Lastly, the buyers could make the product themselves.

Substitutes Products

This is the common problems that occur in the existing business. The one product from one business can be replaced by products from another. Generally, product substitutes present a high treat to  a firm when the customers can obtain a product which is almost of the same quality or almost similar functions as the product of the industry produces but with the lower price. 

Substitutes products can really be a treat when the products is undifferentiated and the customers can easily switch away from one supplier to another suppliers with little switching costs. It also more treaty when the customers are price sensitive and have a little brand loyalty.

In addition, the unreal benefit offered by the products in the industry and at the same time the customers can do without the product offered by the industry also increase the power of the substitutes products.

Rivalry Among Competitors

There will be many competitors producing the similar almost similar goods in the industry. So, it is important to understand the nature of the competition in a particular industry as this will determine the strategies undertaken by the firm.

Rivalry among competitors is often the strongest of the five competitive forces and can vary widely among the industries. However, it can be more intense when the industry has two or three dominant firms which battling to be the dominant firms in the industry.

Besides, there are numerous competitors in the industry and the competitors are relatively equal in size and power. In can be more worse when the firms are competing in a slow and shrinking industry. 

Beside that, the product are undifferentiated and are viewed by customers as commodities. Since customers view the products as commodities, the buyers purchasing decision is based on primarily on the price and less on product characteristics. Moreover, the high fixed cost of production and for exiting the business such as social or government restriction also cause companies to remain in an industry.

References: 

1) http://www.mba-tutorials.com/strategy/65-porters-five-forces-model.html

2) Strategic Management. Z.Abidin.M & H. J. Ann & W. F.Yee. 2014. Second Edition. P. 43-48

WEEK 4 

DIFFERENT LEVEL OF STRATEGIES

The are 3 categories of strategies consider that the decision-making process is done at different level or under three different circumstances  within the organization. 

1) Corporate Level Strategies- Considered for the overall movement of the organization. As looking from helicopter perspective, looking at overall and not giving the small components (department and product lines) much emphasis. It will give the priority to the movement of the entire organization and decision will the have to be made at the top of corporate level with the inputs and participation from the various divisions. Thus, overall the company should chosen between growth, stable growth and turnaround or combination strategy.

2) The Business Level Strategies - Look at the organization from the perspective of handling the competition. A competitive environment requires the organization to think of ways to outwit the competitors general. Thus, the corporate level strategies on their own are insufficient to handle the competitors when dealing with the business operations. Rationally, the recommendations made based on Porter's Competitive Model ( I will show in another post). has been the major reference and they are the business strategies of differentiation, cost leadership, and focus.

3) Functional Level Strategies - Consider actions to be taken at the various functional or operational levels of the organization. Specifically, the organization has t o look at its management, marketing, financial, and operation/production divisions to realize overall corporate level strategies that have been decided at the higher level. At this functional level, the strategies will be selected based on the situational analysis of the organization's activities.

CORPORATE LEVEL STRATEGIES

Corporate level strategies is attempts to identify strategies that corporations or organizations decide to pursue for the benefit of the whole organization.

There are various level of strategies which divided into 3 major which is the grand strategies, secondary level strategies and the last one is tactical level strategies. All three are relates among its.

1) Grand Strategies

a) Growth - Next year growth rate is higher than the previous year

b) Stable Growth - Next years's growth rate is the same as the previous year.

c) Turnaround - The growth rate is positive as compared to the previous year.

d) Combination - Organization adopt a few strategies combining some of the three strategies ( growth, stable growth and turnaround)

2) Secondary Level Strategies

a) Expansion Strategies - To increase activities so that the volume of the output is increased in term of numbers, weight, size, branch, etc.

b) Integrate - Integration strategies which is to have more control of the production or services such as through the control of resources (backward integration strategy) or the added value of down the line activities as in warehousing, wholesaling and retailing (forward integration strategy).

c) Diversify - Basically, the diversification strategic the increase in the number of outputs produced or services rendered. The diversification strategy can be divided into concentric (increase variety products manufactured that related to it present operation), conglomerate (adding variety in unrelated sector), horizontal (diversified because of requests by its regular clients) and geographical (Being new variety as it carry out to from origin to new country) diversification strategy.

d) Reduce - Reduction or Turnaround strategies is all off the strategies grouped together as they all represent actions that are commonly used in corporations facing some difficulties on their operations as reflected in their negative performance indicators.

3) Tactical Level Strategies

a) Organically -  For example grow by using the available resources like setting branch and allocating required personnel from existing establishments while recruiting and training some more.

b) Joint Venture - Two or more company setting up new company with equity participation from involved parties. The name of the equity provider ( companies) still exist.

c) Merger - Vice versa from joint venture, merger type is setting up new company while the names who involved in merger will not exist anymore.

d) Acquisition - or takeover is when one company negotiated to takeover another company. Similar to buying of the majority equity of the company.

e) Reverse Take Over - For example company A is acquired company B. But the company B management manages company A which now the management of company B own company A which the company A is a listed company. The management of company A has agreed before they acquired that they will allow its management be taken over by staff from company B.

f) Strategic Alliance - understanding between two or more parties that decided to work together to achieve their respective objectives without any structural changes. It also termed as smart partnership or win-win situation.

g) Licensing/ Franchising - Licensing is a tactical strategy to seek permission to run a business based on that of the licensor. When the permission obtained, the company allowed to manufacture or do the business on the licensed product or service. For franchising, it is a strategizing for the company through this mode that allows it to practice not only the product or service but also the whole operating system even to the extent of the advertisement being done centrally by the company and the colour scheme  and decor of the set up as well.

References and text: Strategic Management Z.Abidin.M & Ho Jo Ann & Wong Foong Yee. 2014. Second Edition. p 78-92

  

WEEK 3 External Environmental Analysis

 External environmental analysis reveals:

– Opportunities: External environment factors which   can help the organization improve its performance and achieve its strategic objectives

  – Threats: External environment factors which can hinder an organization’s performance and prevent the organization from achieving its strategic objectives

😉Based on the external environmental analysis, managers formulate strategies that:

– Take advantage of opportunities

– Avoid/reduce impact of threats

😉Sources of information for external environmental analysis include customer surveys, market surveys, periodicals, journals, reports, books, newspapers, conferences and the Internet.

Factors in the General Environment

Industry Environment Analysis/Competitive Analysis:  Michael Porter’s Five-Forces Model

WEEK 2

VISION AND MISSION STATEMENT

Vision and mission statement often can be found in the firm's annual report. They are often placed in the front or beginning of the annual report. Most of the tie they are displayed throughout a firm's premises and are distributed with the company information sent to constituencies.

VISION
A vision statement is a statement about what your organization wants to become. It should involve all members of the organization and help them feel they are a part of the organization. A vision should stretch the organization's capabilities and image itself. It guide us, shape us, gives us direction and purpose, and can serve as a powerful motivator for those around us and ourselves.

Therefore, a vision must be aligned with the core  values of both the individuals and the firm and be effectively communicated to and accepted by everyone involved in the firm.

For example, a simple and precise vision statement of a local institution, Universiti Sains Islam Malaysia (USIM), is shown as follows"

"Integrating Naqli (revealed) and Aqli (human) knowledge to transform and create value for country, ummah and humanity."


MISION

Basically, a mission statement is the purpose or reason for the organization's existance. While a vision statement is what do we want to become, a mission statement deals with the way not to the future but to the present. For example mission statement will deal with the question like "what is our business?" or "why do we exist?. A mission is a way of behaving. it also concerned with the way an organization is managed today, with it purpose or reason for being.
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The organization mission is the purpose or reason for organizations existence. Without the mission, the work of the organization can be unproductive. This is because it is said that a mission statement is essential for creating applying and analyzing the business of an organization.

For example of mission statement of a local institution, Universiti Sains Islam Malaysia (USIM):

"Committed to be an advanced knowledge institution based on Islamic Studies, and to spearhead new knowledge using cutting edge technologies to produce innovations, which can transform the country, the ummah and humanity." 


OBJECTIVES
As a addition, the objectives is a desired or specific result of a planned activity that should be achieved by a specific time. It is a value sought by an individual or a group in the organization. An objective should be specific, measurable, attainable or achievable, realistic and time phased.

The achievement of objectives should result in the fulfillment of a mission. In addition, objectives may be short, medium or long term.

sources: Strategic Management second edition by Zainal Abidin Mohamed, Ho Jo Ann and Wong Foong Yee.

ONLINE FORUM 1 - MY VISION - KMD

Monday, 11 September 2017, 2:35 PM

What is your vision and mission coming to the university?

How do you strategize your action towards achieving those vision and mission?

What is your vision and mission coming to the university?

Vision=  Success in this life and here after

Mission=

1) Achieve my parents hope ( graduate with first or second upper class)

2) Get a good result

3) Get enough skills for work

4) Always learn to behave with good manner

5) Get the reward at here after from what i do at university

6) Hope to get better job after graduate

7) People always says to seek knowledges..okay

How do you strategize your action towards achieving those vision and mission?

1)Set the true intention and goals

2) Learn and Understand the university learning style and subject

3) Identify my weakness

4) Set a future goals after learning as a motivation

What I have learn in Week 2?

Value Chain of Article of Digital Age

THE VALUE CHAIN SUPPORT ACTIVITIES		FIRM INFRASTRUCTURE 1.       General Management 2.       Planning Management 3.       Legal 4.       Accounting 5.       Planning Management 6.       Finance					COMPETITIVE ADVANTAGE
		HUMAN RESOURCES MANAGEMENT 1.       Recruitment and training 2.       Reward and Incentive Program 3.       Quality or environment
		TECHNOLOGY DEVELOPMENT 1.       Product design 2.       Servicing procedure (Mudah.com) 3.       Create Advertising 4.       Porter Customer Services 5.       E book service
		PROCUREMENT 1.       Supplier
PRIMARY ACTIVITIES	INBOUND LOGISTICS Warehousing or storage		OPERATIONS publishing and publisher services Editing and Printing services Translating	OUTBOUND LOGISTIC Distributing process Storing and Shelving Distributing process Sales agents	MARKETING AND SALES Promotion Book fair Advertisement through IKIM fm Collaborated with Bank Islam and Bank Rakyat	SERVICES Buying site (mudah.com) Website company Subscription

Value Chain of Article of Digital Age

Value chain was based on Porter's value chain:
Step 1– Identify sub-activities for each primary activity.

Step 2 – Identify sub-activities for each support activity.
Step 3 – Identify links.
Step 4 – Look for opportunities to increase value.