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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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