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Course: Strategic Management
1. When you are expanding your
organization in a new geography, what are the kinds of environmental
assessments that is recommended?
Answer 1
Introduction
The existing tendency of industrialisation and urbanization in
developing countries has a huge impact on natural and unreal environments.
Pollution sources increase with the event of cities and cause contamination of
air, water, and soil. Lack of urban environmental coming up with and management
methods has diode to higher concern for forthcoming urban growth. Unprecedented growing rates of world human
population and concrete development build tremendous stress on native,
regional, and international air and water quality. A necessity to higher
understanding of the factors that mediate the interactions between urbanization
and variations of environmental quality exists. Land use modification,
urbanization, and
2. How would you use Porters 5-forces
Model for analyzing the strength or weakness of any organization?
Answer 2
Introduction
Porter’s five forces model is an analysis tool
that uses five industry forces to determine the intensity of competition in an
industry and its profitability level.
Concept and Application
These forces verify associate business
structure and therefore the level of competition in this business. The stronger
competitive forces within the business square measure the less profitable it's.
associate business with
3. Case Study Du Pont (E.I. du Pont de
Nemours & Co, of Wilmington, Delaware) was founded as a gunpowder
manufacturer early in the 1800s. Explosives dominated its business through
World War I. After the war, it began to diversify. Acquisitions and joint
ventures became more prominent during the last fifteen years. In 1981 it
acquired Conoco, a major oil company. In 1991 Du Pont joined with prescription
drug company Merck & Co. In1992, in a joint venture with Crop Genetics, Du
Pont moved into the bioinsecticide field. In 1993 it bought Imperial Chemical’s
nylon business, and today it remains the largest chemical company in the United
States. Dow (The Dow Chemical Co. of Midland, Michigan) was formed in the late
1800s. Its first product was chlorine bleach, and numerous others soon
followed. The need for chemicals during each of the world wars resulted in Dow
emerging as the second largest chemical company in the United States. During
the 1980’s Dow made several acquisitions, most notably Merrell pharmaceuticals,
Texise cleaning products, and Essex Chemical, a leading producer of automotive
sealants and adhesives. In the late 1980s, Dow joined with Eli’s Lilly and
Company’s fungicide business to create Dow Elanco, a major producer of
agricultural chemicals. Thus, like Du Point, Dow became a diversified chemical
giant. For more than forty years, both Dow and Du Pont employed a similar
strategy. Both borrowed heavily and used the funds for expansion, relying on
rising demand coupled with price increases to maintain healthy levels of
profit. The huge cash flow necessitated by this strategy could sometimes lead
to problems. If the expansion was more rapid than the increase in demand,
prices would have to be cut and profits would suffer. Although that happened
occasionally, it began to occur more and more frequently by the end of the
1980s. In 1991 Du Pont decided to change its strategy by reducing both capital
spending and costs. This focused the company on getting cash back quickly. By
1993 Du Pont was able to provide for all capital funding without any substantial
borrowing. And 1994 was even better Analysts were
expecting Du Pont to raise its dividend payments to stockholders in 1994. Du
Pont also reorganized. It eliminated nearly 14,000 employees early in 1994. Du
Pont also decentralized into twenty strategic business units (SBUs) based on
products and industry, and it changed its pattern of marketing from a
technology driven approach to a market driven one. Dow, on the other hand,
remained with the traditional strategy. In 1980 it expanded basic chemicals,
and the resulting glut caused a drop in prices. As a result, earnings fell in
1992. To raise cash to cover expansion and dividends, Dow had to sell assets –
a billion dollars worth in 1993 alone. It also announced that it would focus on
global competitiveness and cut back its corporate headquarters workforce.
Thanks to cutting back on spending in 1994 and a rebound in ethylene prices,
Dow was in good financial shape that year, although analysts were not expecting
Dow to be able to raise its dividend payments for several years. Dow did,
however, semi to be recognizing the need to change its strategy too. Du Pont
recognized the need to change strategy before Dow did. Given the high cost of
capital, a strategy of focusing on return on assets seemed to make more sense
than one that focused on market share.
a. Describe the two strategies used by
Dow and Du Pont. What are the advantages and disadvantages of each? Under what
conditions would you use each of the two strategies? Why? Explain your
response. (5 Marks)
b. Can you envision another strategy
that either of these two companies might have used? What changes would you
recommend for the future?
Answer 3
Introduction: For more than forty years, both Dow and Du
Pont employed a similar strategy. Both borrowed heavily and used the funds for
expansion, relying on rising demand coupled with price increases to maintain
healthy levels of profit.
Concept and application
The huge cash
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