Unit 12 Strategy

1. Unit 12 Strategy Overview Starting up Vocabulary: Different strategies Discussion: Mission statements Reading: Company mergers Language review: Dependent prepositions Listening: Developing a strategy Skills: Decision-making Case study: Texan Chicken

2. Teaching objectives • 1. To enable Ss to talk about “strategy” • 2. To familiarize Ss with vocabulary related to “strategy” • 3. To make Ss grasp the dependent prepositions • 4. To develop Ss’ listening and reading skills • 5. To improve Ss’ decision-making techniques • 6. To enhance Ss business writing techniques by writing a press release

3. Assignments You are members of the management consultant team called in by Eva and Roman Martinez to advise them on their future strategy. Discuss the options below. Consider any other ideas for improving profitability. Work out a plan of action which will turn the company round.

4. Quotation ‘Strategies are okayed in boardrooms that even a child would say are bound to fail.The problem is, there is never a child in the boardroom.’ ---- Victor Palmieri, Italian turnaround expert boardroom n. the room where the members of a board meet turnaround n. the time receiving an order for goods, dealing with it, and sending the goods to the customer; a complete change from a bad situation to a good one （货物、订单等的）周转过程；好转，转机

5. Startingup A. What is strategy? Which of these definitions do you prefer? Why? 1. Strategy is making predictions based on analysis. 2. Strategy is having a clear plan, then putting it into action. 3. Strategy is continually adapting to change.

6. Whatisstrategy? Overall Definition Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows: “Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations”.

7. What is strategy? Strategy at Different Levels of a Business Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it. • Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a “mission statement”.

8. What is strategy? • Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc. • Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.

9. What is strategy?

10. Vision and Mission External Analysis Opportunities and Threats Strategic Choice SWOT Internal Analysis Strengths and Weaknesses Business Strategy Strategy Implementation/Tactics Organizational Structure Succession Planning Designing Control Systems Feedback

13. Startingup B. Which groups below should be involved in deciding strategy? Why?

14. Vocabulary：Different strategies A. Match the terms with the definitions. Then use three of them to complete the newspaper extract. 1. d 2. b 3. a 4. c

15. Vocabulary：Different strategies cost cutting: reducing operation or production costs a demerger: the undoing of a merger（将一公司）分离 rationalisation: the making of changes in order to increase efficiency 整顿；合理化改革 a sell off: an asset which is being sold (perhaps a little cheaply) （廉价）出售的资产 a disposal: an asset which is being or has been sold off 处理，出售 an economy drive: an organised effort to save time, money,resources 经济动力 acquisition: buying or taking over another company 收购

16. Vocabulary：Different strategies B. 1. Which strategies can be used by companies to a) get bigger b) get smaller c) become more efficient acquisition a demerger, a disposal, a sell off cost cutting, rationalisation and an economy drive

17. Vocabulary：Different strategies B. 2. Which are likely to result in people losing their jobs? They are all likely to result in people losing their jobs.

18. Vocabulary：Different strategies C. Make word partnerships by combining the verbs with the nouns and write five sentences.

19. Vocabulary：Different strategies • The company has achieved its target of 20% market share. • It is time we reviewed our departmental objectives. • The management consultants are at this moment developing a new corporate strategy. • The company is scheduled to implement its expansion plan in the autumn. • The new head of personnel is very keen that we set ourselves new goals for the coming months. • If our competitor employs new tactics, we will have to respond.

20. Discussion：Mission statements A. Some companies state their strategy publicly in mission statements. What are the advantages and disadvantages of doing this? mission statement: a statement of the aims, purpose and future activities of an organisation 宗旨说明，任务说明

21. Discussion：Mission statements A.The main advantage of a publicly stated mission statement is that the company’s sense of direction and values are clear to everyone both inside and outside the company. The main disadvantage is that the company’s corporate strategy – and degree of success or failure in achieving it – is open to all to judge.

22. Discussion：Mission statements B. Read these mission statements. What is each company trying to achieve? 1.The business of Newcastle United is football – our aim is to play attractive football to win trophies, to satisfy our supporters and shareholders and to continually improve our position as a top European club. (Newcastle United plc) Aims to achieve revenue growth through winning games and trophies, by being the best at what it does.

23. Discussion：Mission statements B. Read these mission statements. What is each company trying to achieve? 2.Glaxo Wellcome is a research-based company whose people are committed to fighting disease by bringing innovative medicines and services to patients throughout the world and to the healthcare providers who serve them. (Glaxo Wellcome) Aims to benefit humanity through research and product innovation; stresses its commitment to global humanitarian cause.

24. Discussion：Mission statements B. Read these mission statements. What is each company trying to achieve? 3. Pret creates handmade, natural food, avoiding the obscure chemicals, additives and preservatives common to so much of the ‘prepared’ and ‘fast’ food on the market today. (Pret a Manger) Aims to differentiate itself from other fast food retailers by stressing its commitment to using only natural healthy ingredients.

25. Discussion：Mission statements C. Discuss these statements. Do you agree with them? Give your reasons. 1. ‘Small is beautiful’ is a better strategy in business than ‘big is best’. 2. Big companies should aim to gain market share rather than make profits. 3. Companies should focus on what they do best rather than diversify.

26. Reading：Company mergers A. Discuss these questions. 1. Why do firms merge? 2. What problems can arise before and after a merger takes place?

27. Reasons for mergers and acquisitions (M & A) 1.Synergy:The most used word in M&A is synergy, which is the idea that by combining business activities, performance will increase and costs will decrease. Essentially, a business will attempt to merge with another business that has complementary strengths and weaknesses. http://www.investopedia.com/ask/answers/06/m&areasons.asp

28. Reasons for mergers and acquisitions (M & A) 2. Diversification / Sharpening Business Focus:These two conflicting goals have been used to describe thousands of M&A transactions. A company that merges to diversify may acquire another company in a seemingly unrelated industry in order to reduce the impact of a particular industry's performance on its profitability. Companies seeking to sharpen focus often merge with companies that have deeper market penetration in a key area of operations. 

29. Reasons for mergers and acquisitions (M & A) 3. Growth:Mergers can give the acquiring company an opportunity to grow market share without having to really earn it by doing the work themselves - instead, they buy a competitor's business for a price. Usually, these are called horizontal mergers. For example, a beer company may choose to buy out a smaller competing brewery, enabling the smaller company to make more beer and sell more to its brand-loyal customers.

30. Reasons for mergers and acquisitions (M & A) 4. Increase Supply-Chain Pricing Power:By buying out one of its suppliers or one of the distributors, a business can eliminate a level of costs. If a company buys out one of its suppliers, it is able to save on the margins that the supplier was previously adding to its costs; this is known as a vertical merger. If a company buys out a distributor, it may be able to ship its products at a lower cost.

31. Reasons for mergers and acquisitions (M & A) 5. Eliminate Competition:Many M&A deals allow the acquirer to eliminate future competition and gain a larger market share in its product's market. The downside of this is that a large premium is usually required to convince the target company's shareholders to accept the offer. It is not uncommon for the acquiring company's shareholders to sell their shares and push the price lower in response to the company paying too much for the target company.

32. Problems before merger Before a takeover can happen, in many cases the company sees a decline despite it being in a potentially profitable industry. This is due to mismanagement of the assets, failure to get more clients and customer service issues. The stagnant industry can’t grow and expand simply because the leaders don’t know what they are doing or have become complacent.

33. Reading：Company mergers B. Read an interview with John T. Chambers, Chief Executive of Cisco Systems and note down the arguments for and against the merger with a larger company in the same industry.

34. Reading：Company mergers Cisco Company: a US company, involved in data networking equals (line 1): two people or things with no difference in status or rank widen your customer base (line 10): extend the number/nature of your potential customers distribution channels (line 11): ways of delivering products or services to the marketplace initiate (line 18): set in motion, introduce momentum (line 31): impetus, pace 冲劲，动力，势头 disservice (line 40): opposite of service, harmful or unhelpful action 危害，损害，伤害

35. Reading：Company mergers

36. Reading：Company mergers

37. Reading：Company mergers C. When Cisco Systems buys another company it pays special attention to: a) the money it has spent. b) the staff it acquires. c) the opinions of its shareholders.

38. Language review：Dependent prepositions A. Match the verbs to the correct prepositions. 1. build a) to b) up c) of 2. responda) to b) on c) at 3. focus a) to b) with c) on 4. incorporate a) to b) into c) at 1. build up 2. respond to 3. focus on 4. incorporate into

39. Language review：Dependent prepositions B. Complete these sentences with a verb and a preposition from each box.

40. Language review：Dependent prepositions • The CEO thinks a joint venture is the best way to break into the Russian market, but I don’t ____________ him. • Did you ____________ the alliance between Lufthansa and SIA. • If you _________ the annual report it clearly sets out the facts. • What do you ___________ the latest news on the proposed merger. • The chairman had to ___________ misleading the shareholders at the AGM. agree with hear about refer to think about apologise for

41. Language review：Dependent prepositions D. Complete the letter to shareholders. 1. consists of 2. advise on 3. budgeted for 4. invest in 5. spend on 6. compete with 7. combine with 8. succeed in 9. account for 10. rely on

42. Listening：Developing a strategy A. Choose the best definition for each of the underlined words below. 1. The assets of a company are a) the customers they have. b) the things they own. c) the markets they are in. 2. If a company improves its cash generation a) it increases its workforce. b) it has more money available at all times. c) it invests more in its business. √ √

43. Listening：Developing a strategy 3. If a company disposes of an asset, it a) values it. b) keeps it. c) sells it. 4. If companies have an authoritarian way of management a) the management give responsibility to workers at lower levels. b) the management keep tight control over everyone and everything. c) the management have many ways of communicating with employees. 5. If you stitch two materials together, you a) separate them. b) cut them c) join them √ √ √

44. Listening：Developing a strategy B. Listen to the first part of interview with Marjorie Scardino, Chief Executive of the media group Pearson plc., and complete the summary of what she says.

45. Listening：Developing a strategy

46. Listening：Developing a strategy C. Listen to the second part of the interview. Which of the trends below are mentioned? • Companies are becoming more international. • Employees are becoming more valued by management. • People are working more in teams. • Management are having more control over staff. • Management are changing their style. Marjorie Scardino mentions 1，2，3，5.

47. Listening：Developing a strategy D. Answer these questions. • What strategies impress Marjorie Scardino? • What three points does she make about Coca-Cola’s strategy? Strategies that are extremely clear and define a very unique goal. It has a clearly defined product. It is aimed at a worldwide market. It emphasizes effective distribution.

48. Skills：Decision-making A. Discussion Is decision-making only about sensible, rational choices? Should emotion play a part? What about choosing the following?

49. Skills：Decision-making B. Which ideas below do you agree with? Which do you disagree with? Why? 1. Before making a decision: a) write down the pros and cons. b) try to reduce stress. c) take a long time. d) have a sleep or rest. e) consult a horoscope（占星术）. f) ask as many people as possible. 2. If a choice has cost you a lot of time and money, stick to it. 3. Rely on the past to help you make a decision. 4. Reduce all decisions to a question of money. 5. Be totally democratic in group decision-making.

50. Skills：Decision-making C. Listen and tick the expressions in the Useful Language box that you hear.