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Volume of 1500 – 2000 words (7 pages)
Assignment type : Creative Writing

Description
-No references needs
-take times to read and understand the case study

-What are Cantel Medical’s current business-level and corporate-level strategies?
(What concepts/tools could you use here? Which seminars had relevant theories/frameworks to help you judge what strategies are in place and if they are appropriate?)

-Are they appropriate for the firm’s external environment and internal organisation?
(What concepts/tools could you use here? How can you present a lot of information quickly – can you use a table? Figure? Dot points?)

-What changes would you recommend and why?
(What seminars had content that helps you to identify fit between strategy and the external/internal environment? Can you use a tool/framework/diagram to help articulate your strategy?)
Be sure to draw upon relevant course theory, concepts, and strategy tools in your analysis.

How can Cantel Medical implement your recommended strategy?
(What concepts/tools could you use here? Which seminars had relevant content about implementing strategy using structure and control? How can you use your experience in the simulations in your answer?)
Be sure to explain organisational structure and controls that you might use to implement your business level and corporate level strategy.

What strategic leadership will be required to manage the changes needed to implement your recommended strategy?
Which seminars had relevant content about strategic leadership? What concepts/tools could you use here? )

 Define strategic leadership and explain its importance to a firm’s strategy;
 Describe the role of top-level managers and teams in formulating and implementing strategy and their impact on the firm’s performance;
 Describe the following key strategic leadership actions: 1. determining strategic direction, 2. effectively managing the firm’s resource portfolio; 3. sustaining an effective organisational culture; 4. emphasising ethical practices; and 5. establishing balanced organisational controls;
 Explain why each of the key strategic leadership actions are important and how they interact with each other to influence the achievement of strategic goals and firm performance outcomes; AND
 Analyse the strategic leadership of a firm and evaluate its fit with the firm’s strategy and their effectiveness for: 1. implementing, monitoring and achieving the firm’s strategic goals and performance outcomes; 2. enabling responsiveness to the external environment; and 3. leveraging the firm’s resources and capabilities in the internal environment

Be sure to draw upon relevant course theory, concepts, strategy tools and your experience playing.

QUESTION 1. What are Cantel Medical’s current business-level and corporate-level strategies?
(What concepts/tools could you use here? Which seminars had relevant theories/frameworks to help you judge what strategies are in place and if they are appropriate?) *Draws out the structure for different strategies and mention their controlsrefers to document “business and corporate strategies for delta & signal ”
NOTES that this question is answering Cantel Medical’s current situation!

Business level strategy: choose from “cost leadership; differentiation; focused differentiating; focus leadership”, how well does Cantel Medical’s choice of business-level strategy fit with the results of your external environment and internal organisation? Is it an effective strategy? Does this strategy allow Cantel Medical to exploid opportunities & neutralize threats in the external environments by building on Cantel Medical’s strength & minimizing the impact of weakness?
-explain the relationships between customers, competitive advantage and business-level strategies;
-apply porter’s five forces model to analyse how a firm can use each generic business-level strategy to favourably position itself in an industry
-perform a value chain analysis to identify the primary and support activities necessary to implement different business-level strategies;
AND-develop a business-level strategy for a firm that fits with opportunities and threats in the firm’s external environment and strengths and weaknesses derived from the firm’s resources and capabilities in tis internal environment.

*Lecture notes
Differentiation Strategy and the Five Forces
Rivalry with existing competitors
 well-positioned relative to competitors because brand loyalty to a differentiated product tends to offset price competition.
Bargaining power of buyers
 can mitigate buyers’ power by producing well-differentiated products, reducing customer sensitivity to price increases.
Bargaining power of suppliers
 can mitigate suppliers’ power by absorbing price increases due to higher margins
 passing along higher supplier prices because buyers are loyal to differentiated brand.
Potential entrants
 can defend against new entrants because entrants’ new products must surpass proven products
 entrants’ new products must be at least equal to performance of proven products, but offered at lower prices.
Product substitutes
 well-positioned relative to substitutes because brand loyalty to a differentiated product tends to reduce customers’ testing of new products or switching brands.
Risks of the Differentiation Strategy
Competitive risks of the differentiation strategy:
 the price differential between the differentiator’s product and the cost leader’s product becomes too large
 differentiation ceases to provide value for which customers are willing to pay
 experience narrows customers’ perceptions of the value of a product’s differentiated features
 counterfeit goods replicate differentiated features of the firm’s products at significantly reduced prices.

Focus Strategy: an integrated set of actions designed to produce or deliver goods or services that serve the needs of a particular segment.
 Examples of specific market segments that can be targeted by a focus strategy are:
 particular buyer groups (e.g., youths or senior citizens)
 different segments of a product line (e.g., professional craftsmen versus do-it-yourselfers)
 different geographic markets.
 Types of focus strategies:
 focused cost leadership strategy
 focused differentiation strategy.
 To implement a focus strategy, a firm must be able to:
 complete various primary and support value chain activities
 develop and sustain a competitive advantage and earn above-average returns
 be watchful about how long competitors overlook small niches.

Competitive Risks of Focus Strategies
 The focuser firm may be ‘outfocused’ by its competitors.
 A firm competing on an industry-wide basis may decide to pursue the niche market of the focuser firm.
Customer preferences in the niche market may change to more closely resemble those of the broader market

Corporate level strategy (describe corporate level strategy and describe its purpose): answer the following 5 points to analyse a firm’s choices of corporate-level strategy for diversification and evaluate their effectiveness in achieving the firm’s strategic goals and fit with the external and internal environment.
1. level of diversification choose from
• Single business
• Dominant business
• Related constrained diversification (e.g. Vertical integration)
• Related linked diversification
• Both related and constrained diversification
• Unrelated diversification
And describe different approach to diversification,
What corporate-level strategies is Cantel Medical using? How well do these corporate-level strategies fit with the results of your external and internal analyses? How do the corporate-level strategies support Cantel Medical’s business-level strategy?

2. What entry modes – exporting, licensing, strategic alliances, acquisitions, new wholly owned subsidiaries? To which contries?

3. Strategic Alliance – choose from
– joint venture
– equity strategic alliance involves two or more firms owning different percentages of the company they have formed by combining some of their resources and capabilities for the purpose of creating a competitive advantage.
– non-equity strategic alliances, involves two or more firms developing a contractual relationship to share some of their unique resources and capabilities to create a competitive advantage. including:
licensing agreements
distribution agreements
supply contracts
outsourcing commitments.

COOPERATIVE STRATEGIES IN DIFFERENT TYPE OF MARKETS
In a slow-cycle market, a firm’s competitive advantages are shielded from imitation for relatively long periods. These markets are close to monopolistic. Slow-cycle markets are becoming rare. Cooperative strategies can help firms transition from sheltered markets to more competitive ones. Fast-cycle markets are hypercompetitive, unstable, unpredictable and complex. Firm’s competitive advantages are not shielded from imitation. These conditions virtually preclude establishing long-lasting competitive advantages, forcing firms to constantly seek sources of new competitive advantages while creating value by using current ones. Collaboration mind-set is paramount. Standard-cycle markets – Competitive advantages are moderately shielded from imitation, typically allowing them to be sustained for a longer period than in fast-cycle market situations. Alliances are more likely to be made by partners that have complementary resources and capabilities.

4. Business-level cooperative strategy: explain how diversification can have value-neutral and value-reducing outcomes and appreciate the contested research evidence on the relationship between diversification and performance

BUSINESS-LEVEL COOPERATIVE STRATEGY:

Vertical complementary strategic alliance – firms share some of their resources and capabilities from different stages of the value chain for the purpose of creating a competitive advantage.
Horizontal complementary strategic alliance – Firms share some of their resources and capabilities from the same stage or stages of the value chain for the purpose of creating a competitive advantage such as joint long-term product development and distribution opportunities.
Competition response strategy – strategic alliances can be used at the business level to respond to competitor attacks.
Uncertainty-reducing strategy – alliances can be used to hedge against risk and uncertainty, especially in fast-cycle markets, and to manage uncertainty when entering new product markets and especially in emerging economies.
Competition-reducing strategy – (1) explicit collusion exists when two or more firms negotiate directly to jointly agree about the amount to produce as well as the price for what is produced and are illegal in most developed economies (except in regulated industries). (2) tacit collusion exists when several firms in an industry indirectly coordinate their production and pricing decisions by observing each other’s competitive actions and responses, used in industries with high degree and concentration and results in production output that is below fully competitive levels and above fully competitive prices. Complementary strategies have greatest probability of producing a competitive advantage and possibly a sustainable one.

CORPORATE-LEVEL COOPERATIVE STRATEGY: strategy through which a firm collaborates with one or more companies for the purpose of expanding its operations – Types = Diversifying strategic alliance to expand product and/or geographic markets; Synergistic strategic alliance to create economies of scope; Franchising to control sharing of resources and capabilities with franchisees.

Lecture notes*
What level of diversification? (single/dominant, related, unrelated) Why?
 A firm’s diversified businesses are related when they share links across:
– products (goods or services)
– technologies
– distribution channels.
 The more links among businesses, the more ‘constrained’ is the relatedness of diversification.
 ‘Unrelated’ refers to the absence of direct links between businesses.

Reasons for diversification

Related Constrained and Related Linked Diversification
• With related diversification firms build upon their resources and capabilities to create value and seek to exploit economies of scope between business units.
– economies of scope are cost savings attributed to transferring the capabilities and competencies developed in one business to a new business
– value is created from economies of scope through operational relatedness and corporate relatedness.
• Operational Relatedness
• Sharing activities requires strategic control over business units.
• It is risky because ties between the business units create links between outcomes.
• Primary and support activities can be shared efficiently.
Primary activities
• Inbound logistics sharing: inventory delivery systems; warehousing facilities; and quality assurance practices.
• Operations sharing: assembly facilities; quality control systems; and maintenance operations.
• Outbound logistics sharing: sales force; and sales service desk.
•

Corporate Relatedness
• Corporate core competencies are complex sets of resources and capabilities that link different businesses, primarily through managerial and technological knowledge, experience and expertise.
• Intangible resources (e.g., know-how) are the foundation of corporate core competencies.
• Unrelated Diversification
• Firms using unrelated diversification strategy cannot transfer core competencies and capabilities to different portfolios.
• Firms gain economies of scale through improved allocation of financial resources, based on investments inside or outside the firm.
Efficient internal capital market allocation
• helps to reduce the business risk for the total corporation
• offers scope to distribute capital to business portfolios to create value for the overall company.
• internal information may be a source of competitive advantage
• firms can make corrections and changes by adjusting managerial incentives or recommending strategic changes in a division
• capital can be allocated according to more specific criteria than in an external market.
• conglomerates have a fairly short life cycle because financial economies are more easily duplicated by competitors than are gains from operational and corporate relatedness
• conglomerates in emerging economies appear to have a longer life cycle than conglomerates in developing and developed economies.
Restructuring of assets
• buying, restructuring and selling businesses in the external market with the intent of increasing the total value of the firm
• under-performing divisions are often sold and the remaining divisions placed under the discipline of rigorous financial controls.
• creating financial economies through the purchase of other companies and restructuring their assets requires an understanding of significant trade-offs
• success usually calls for a focus on mature, low-technology businesses.
•
Value is created through efficient internal capital allocations and purchasing other corporations and restructuring their assets.

 Market development – moving into different geographic markets
 Product development – developing new products and/or significantly improving on existing products
 Horizontal integration – acquiring competitors; horizontal movement at the same point in the value chain
 Vertical integration – becoming your own supplier or distributor through acquisition; vertical movement up or down the value chain

QUESTION 2 -Are the current business level strategy and corporate level strategy appropriate for the firm’s external environment and internal organisation?
(What concepts/tools could you use here? How can you present a lot of information quickly – can you use a table? Figure? Dot points?)

Question 3-What changes would you recommend and why?
(What seminars had content that helps you to identify fit between strategy and the external/internal environment? Can you use a tool/framework/diagram to help articulate your strategy?)
Be sure to draw upon relevant course theory, concepts, and strategy tools in your analysis.

-Recommendation of business-level strategy and corporate level of strategy
-Distinguish between different types of strategic alliances as corporate-level cooperative strategies (Joint venture, equity strategic alliance, non-equity strategic alliance rank these three according to preference and give out justification for all of them), how they support accommodation of business-level strategy; how these cooperative strategies can be used in conjunction with other strategies at the corporate level, evaluate the risks and challenges of cooperative strategies; AND analyse a firm’s choices of mergers, acquisitions and cooperative strategies and evaluate their effectiveness in achieving the firm’s strategic goals and fit with the external and internal environment.

QUESTION 4. How can Cantel Medical implement your recommended strategy?
(What concepts/tools could you use here? Which seminars had relevant content about implementing strategy using structure and control? How can you use your experience in the simulations in your answer?)
Be sure to explain organisational structure and controls that you might use to implement your business level and corporate level strategy.

QUESTION 5.
Compare different types of International expansion FOR cantel medical from
• Global strategy
• Transnational strategy
• Multi-domestic strategy
Evaluate the economic and political risks associated with a firm’s international corporate level strategy AND analyse a firm’s choices of international strategies and evaluate the effectiveness of these choices in achieving the firm’s strategic goals and fit with the external and internal environments

1.Define and describe how international strategies can be used as types of corporate-level strategies and to support business-level strategies;
2.Explain the incentives for a firm to diversify their operations geographically and purse an international corporate-level strategy;
3.Compare the different types of international corporate-level strategies: global strategy, multi-domestic strategy and transnational strategy (adopt all of them into Cantel Medical) AND compare the modes of entry available to a firm for international markets: exporting, licensing, strategic alliances, acquistions, and new wholly owned subsidiary;
5. Evaluate the economic and political risks associated with a firm’s international corporate-level strategy;
6. AND analyse a firm’s choices of international strategies and evaluate the effectiveness of these choices in achieving the firm’s strategies goals and fit with the external and internal environments.

QUESTION 6. What strategic leadership will be required to manage the changes needed to implement your recommended strategy?
Which seminars had relevant content about strategic leadership? What concepts/tools could you use here? )

 Define strategic leadership and explain its importance to a firm’s strategy;
 Describe the role of top-level managers and teams in formulating and implementing strategy and their impact on the firm’s performance;
 Describe the following key strategic leadership actions: 1. determining strategic direction, 2. effectively managing the firm’s resource portfolio; 3. sustaining an effective organisational culture; 4. emphasising ethical practices; and 5. establishing balanced organisational controls;
 Explain why each of the key strategic leadership actions are important and how they interact with each other to influence the achievement of strategic goals and firm performance outcomes; AND
 Analyse the strategic leadership of a firm and evaluate its fit with the firm’s strategy and their effectiveness for: 1. implementing, monitoring and achieving the firm’s strategic goals and performance outcomes; 2. enabling responsiveness to the external environment; and 3. leveraging the firm’s resources and capabilities in the internal environment

Be sure to draw upon relevant course theory, concepts, strategy tools and your experience playing.

ACTIONS OF STRATEGIC LEADERS
Determining strategic direction (strategic leaders set long term vision including core ideology and envisioned future)
Effectively managing the firm’s resource portfolio. This includes exploiting and maintaining core competencies (strategic leaders manage the firm’s portfolio of resources by organising them into capabilities and structuring the firm to use the capabilities to develop core competencies and achieve competitive advantage). It also includes developing human capital (Human Capital is knowledge and skills of firm’s entire workforce (strategic leaders will: acquire skills to help develop HC in their areas of responsibility; learn about context-specific issues; provide international work experience; offer management training programs/knowledge development programs/corporate education). Finally, it includes developing social capital (social capital involves relationships inside and outside the firm that help the firm to accomplish tasks and create value for customers and shareholders).
Sustaining an effective organisational culture An organisational culture = a complex set of ideologies, symbols and core values shared throughout the firm. Effective strategic leaders reinforce/maintain supportive cultures and recognise when a change in culture is needed.
Emphasising ethical practices (Strategic leaders establish and communicate organisational goals to describe firm’s ethical standards; continuously revise code of conduct; disseminate the code to all stake-holders; develop and implement procedures to achieve firm’s ethical standards; reward ethical behaviours; create a work environment that treats all people with dignity)
Establishing balanced organisational controls Controls are formal and informal information-based procedures used by managers to maintain or change patterns in organisational activities. Successful strategic leaders balance strategic control and financial control.

RECOMMENDATIONS FOR STRATEGIC LEADERSHIP
What characteristics should the company Mobileye pay attention to when recruiting and selecting managers for the top management team?

Strategic Leadership Action:
Determining strategic direction – strategic leaders set long term vision including core ideology and envisioned future How?

Strategic Leadership Action:
Effectively managing the firm’s resource portfolio – exploiting and maintaining core competencies, developing human capital and social capital – How?

Strategic Leadership Action:
Sustaining an effective organisational culture –a complex set of ideologies, symbols and core values shared throughout the firm. Effective strategic leaders reinforce/maintain supportive cultures and recognise when a change in culture is needed. How?

Strategic Leadership Action:
Emphasising ethical practices – Strategic leaders establish and communicate organisational goals to describe firm’s ethical standards; continuously revise code of conduct; disseminate the code to all stake-holders; develop and implement procedures to achieve firm’s ethical standards; reward ethical behaviours; create a work environment that treats all people with dignity – How?

Strategic Leadership Action:
Establishing balanced organisational controls – Controls are formal and informal information-based procedures used by managers to maintain or change patterns in organisational activities. Successful strategic leaders balance strategic control and financial control. Consider also Balanced Scorecard (financial, customer, internal process, learning and growth objectives and metrics).How?

LECTURE NOTS*

Strategic Leadership and Style
Strategic leadership is the ability to anticipate, envision, maintain flexibility and empower others to create strategic change as necessary
The crux of strategic leadership is the ability to effectively influence human behaviour in uncertain environments
Strategic leadership is multi-functional, complex and requires an understanding of how to influence human behaviour.
Strategic leaders:
• are willing to make candid, courageous and pragmatic decisions
• seek corrective feedback from others.
• Strategic leaders should have the attributes of a transformational leadership.
• Transformational leaders:
• develop and communicate a vision
• formulate a strategy to achieve the vision
• make the followers continuously strive for higher levels of achievement
• have high emotional intelligence.

The Role of Top Level Managers
 Managers often use their discretion (or latitude for action) when making strategic decisions.
 Top executives must be action oriented and consider the entire enterprise rather than just a sub-unit.
 The primary factors affecting the amount of decision-making discretion include:
• external environmental sources
• characteristics of the organisation
• characteristics of the manager.

Factors affecting managerial discretion

The top management team is composed of the key managers who are responsible for formulating and implementing the organisation’s strategies.
• a heterogeneous top management team is composed of individuals with different functional backgrounds, experience and education
• the more heterogeneous a top management team is, the more capacity it has to provide effective strategic leadership in formulating strategy.
• Heterogeneous and large top management teams have more difficulty implementing strategies effectively due to communication difficulties.
• Research shows that heterogeneity among top management team members promotes debate and may force members to ‘think outside the box’.
• More heterogeneous top management teams are associated positively with innovation and strategic change.
• Diverse backgrounds may inhibit the process of decision-making

The CEO and Top Management Power
 Higher performance is achieved when the board of directors is more directly involved in shaping strategic direction.
 A powerful CEO may:
• appoint sympathetic outside board members
• have inside board members who report to the CEO
• have significant control over the board’s actions.
 They may also hold the position of chairman of the board. This is more common in the USA than it is in Australia where – in listed companies – it is rare.
 The most effective forms of governance share power and influence among the CEO and Board of Directors
 Duality (where one person serves as both CEO and chair of the board of directors) often relates to poor performance and slow response to change.
• CEOs of long tenure can also restrict the breadth of an executive knowledge base
• long-tenured managers can exercise power and effective control, thereby obviating the need for board members involvement.
 Volatile and uncertain environments may create situations where a powerful CEO is needed to move quickly.
 A diverse team may create less cohesion among team members.

Managerial Succession
 Organisations select managers and strategic leaders from two types of managerial labour markets:
• internal managerial labour market
• external managerial labour market.
 Advantages of the internal managerial labour market:
• experience with the firm and industry environment
• familiarity with company products, markets, technologies and operating procedures
• lower turnover among existing personnel.
 Advantages of the external managerial labour market:
• long-tenured insiders may be ‘stale in the saddle’
• outsiders may bring fresh perspectives.

Effects of CEO succession and top management team composition on
strategy

Determining Strategic Direction
 Determining strategic direction involves specifying the image and character the firm seeks to develop over time.
 Ideal long-term vision has two parts:
• core ideology
• envisioned future.

Effectively Managing the Firm’s Resource Portfolio
 Strategic leaders should have the ability to manage the firm’s portfolio of resources by organising them into capabilities and structuring the firm to use the capabilities to achieve competitive advantage.
 Resources can be categorised as:
• financial capital
• human capital
• social capital
organisational capital.

Exploiting and Maintaining Core Competencies
 Leaders must ensure that the firm capitalises
on its functional skills and develops core competencies.
 Leaders must oversee the effective development and exploitation of core competencies across the different functional units.
 Core competencies can only be developed and exploited by developing the capabilities of human capital.

Emphasising Ethical Practices
 In ethical organisations leaders:
• establish and communicate organisational goals to describe the firm’s ethical standards
• continuously revise the code of conduct
• disseminate the code of conduct to all stakeholders
• develop and implement methods and procedures to achieve the firm’s ethical standards
• reward ethical behaviours
• create a work environment in which all people are treated with dignity.
Establishing Balanced Organisational Controls
 Controls are an important part of strategy implementation processes. They are formal and informal information-based procedures used by managers to maintain or change patterns in organisational activities.
 Successful strategic leaders balance strategic control and financial control.
 Controls help strategic leaders to:
• build credibility and demonstrate the value of strategies to the firm’s stakeholders
• promote and support strategic change.

• Need to understand the strength and weakness of the company

EXTERNAL ENVIRONMENT ANALYSIS
General Environment: What forces in the general environment are most relevant for Cantel Medical? Consider factors that might be present in the political, legal, economic, sociocultural, technological, natural/physical environmental, etc.

Legal/Political

Economic

Sociocultural

Technological

Natural/Physical environment

Industry Environment: What industry is Cantel Medical in and how attractive is that industry?
Consider Porter’s 5 forces: Potential new entrants, Bargaining power of buyers, Bargaining power of suppliers, Threat of substitute products, Intensity of rivalry among competitors

Competitor Environment:
Who are Cantel Medical’s direct competitors? What is each competitor’s objectives, strategies, assumptions and capabilities?

Example*:

INTERNAL ORGANISATION ANALYSIS:
1. VRIO ANALYSIS: What core competencies and potential sources of competitive advantage does CANTEL MEDICAL have?
Description of Capability
(What resources and capabilities does CANTEL MEDICAL have? Test CANTEL MEDICAL’s capabilities by evaluating them against the VRIO criteria to assess whether they are core competencies and potential sources of competitive advantage). Is it Valuable?
(Will the capability help neutralise threats or exploit opportunities?) Is it Rare?
(Is the capability possessed by only a small number of other firms?) Costly to imitate?
(Is capability the result of unique historical conditions? AND/OR Does it have an ambiguous cause? AND/OR Is the capability the outcome of social complexity?) Organised to capture value?
(Is the firm organised to capture the value of the resource/s? NB: Is CANTEL MEDICAL able to fully realise the potential of its valuable, rare and costly to imitate resources and capabilities).
Capability =

Capability =

Capability =

Capability =

Capability =

2. VALUE CHAIN ANALYSIS: How does Cantel Medical use its primary and support activities to create value

Firm infrastructure

Human resource management

Technology development

Procurement

Primary Activities
Inbound logistics

Operations

Outbound logistics

Marketing and sales

Service

Example of value-creating activities associated with a differentiation strategy