Business Strategy

There are various methods for a company to achieve a competitive advantage over its rivalries. Two common ways are through cost leadership and differentiating. A company may become a cost leader through the efficient use of their facilities, supply system, and reduction in cost of production. This will allow them to undercut their competitor prices, but still offer at a comparable quality. A company that uses the differentiation strategy will try to make their product unique to its competitor in justifying the higher price. This is achieve through R&D, marketing, product design, and etc.

Two example of cost leaders are Dell and Wal-Mart. Dell became a major player in the personal computer industry through the use of direct-sales over the internet and its Just-In-Time inventory policy. Through the use of the internet and J-I-T policy, they have abandoned the traditional brick and mortar business. This eliminates inventory holding charges and retail markup prices. The computers are made only after a customer’s order, so there won’t be obsolete inventory. They also have one of the best supply systems of any company. Through these various cost cutting strategy, they are able to sell there product at a lower cost and obtain a competitive advantage.

Wal-Mart became a cost leader through its efficient management system and technological advantage over their competitors. Wal-Mart’s motto is “Every Day Low Prices,” so how did they achieve this. They eliminate the need for sales, coupon, advertisement, and other marketing tool that is traditionally been very expensive to maintain. What made them very efficient is the use of their automation technology. It allows the manager and suppliers to closely monitor the inventory level, in doing so it helps them maintain a very low inventory and eliminate overhead processing cost.

Two examples of companies using differentiation to gain a competitive edge are Starbucks and Hummer. Starbucks success is attributed to its quality and brand image. They offer a wide variety of premium coffee that no other companies could match. The company is focus more on brand image than anything else. They want to make drinking coffee a “coffee shop experience.” They were able to entice their customers to come back even though at a higher price.

The Hummer is like no other SUV, it is particularly advertise toward the affluent males. This “war machine” is as macho as it gets, it’s suppose to give the driver a feeling of power, control, and invincibility. It’s supposed to offer superior-off road capabilities that will let people travel any where. What they lack in quality and efficiency is made up in appearance and brand image. Through strong marketing and brand image its was able to capture their market.

Porter's Five Forces

Porter’s Five Forces Analysis- Soft Drink Industry

Barriers to Entry

• Size is a crucial factor in this industry. It’s important to have a larger economies of scales so the cost of production per unit is minimizes.

• A large capital requirement in production and distribution system is necessary for them to be successful.

• The biggest hurdle when entering this industry is the brand loyalty. Taking business way from these establishes companies like Coca-Cola will be tough.

• The learning curve within this industry is relatively low compare to others. The industry technology and the manufacturing process system is not that complicated.

• Government regulation within this industry is moderate. Their biggest hurdle over the years is the approval of sweeteners by the government.

• The switching cost for customers (retailers) is high. (explain further in the Buyer Power section)

• It is critical to have an efficient distribution channel in this industry. New entries will have a hard time completing for shelves space during the beginning stages.

High

Rivalry

• This industry is dominated by two companies Coca-Cola and PepsiCo and with a distant third in Dr. Pepper.
• The soft drink industry has matured already, so the there is minimal growth. Their demand has actually decreased over the years due to substitutes.
• With the large capital requirement and their contractual agreement with the distributors, exiting the industry is really hard.
• Brand identification, fixed cost on the rise, and high switching cost for distributors.

Moderate – High

Supplier Power

• Most of the material needs to produce a soft drink are commodities, so it is readily available and less chance of being over price.

• Some suppliers is highly depend on the soft drink industry because they purchase a large portion of there sells. Companies like the plastic bottle industry are at the mercy of the soft drink industry.

Low

Buyer Power (Distributors or Retailers)

• A lot of retailers have a contractual agreement with certain soft drink companies, which might bind them to the company.

• Even thought there is a lot of a substitute out on the market. The switching cost is still relatively high. The legal cost to get out of a contractual agreement and the cost of searching for a new deal.

• Lager retail stores are at an advantage when they are able to purchase a large volume of soft drink at a discount. This power is lessens for small retail stores.

• The soft drink industry needs the retailers because they ultimately sell the product to the end consumers. So it is important to have a strong relationship with the retailers because they indirectly affect the company’s reputation.
  

• Brand loyalty minimizes product switching by the consumer.
  

Moderate

Threat of Substitutes

• This industry is more susceptible to product substitutes than any other industries.

• The list of substitutes is endless. Some example are tea, coffee, distill water, sport drink, juice, milk, healthy drinks, and etc.

• There is a trend in coffee (Starbucks) and toward healthy drinks, which has fewer calories and more nutrition.

High

Based on the analysis this industry is unattractive. There is too much product substitutes and barriers to entry.

Harley Davidson's Mission Statement

Harley Davidson’s Mission Statement

A mission statement may consist of four parts task, vision, values and goals. The function of a mission statement is to articulate the purpose of the company, the future of the company, and the method of achieving this future position. A company mission statement should be unique to its competitors. In constructing a mission statement, it should be motivational and inspiring.

Vision is the broad perspective of the company, while a goal is the short term outlook to its vision. Their goals should be realistic and attainable. It should be clearly stated and quantifiable. A well constructed goal should motivate and inspire the employee and management toward a common vision. If a goal is farfetched, a company could lose it credibility. Values are what the companies is committed to. One company may value customer services, while others may value efficiency. Company has to portray themselves to the public in a way that it would attract or inspire different customers. Company should avoid over exaggerating their values, they should only commit what they can offer.

We live in a dynamic environment; a company’s mission statement may become irreverent over time. For a mission statement to be successful it must be broad enough to meet the customer’s changing expectation. Common mistakes are limiting your mission statement to the company’s area of services and expertise. When writing a mission statement it should be free of jargons. It should be succinct and clear in stating the nature of the company. It should clearly state the target audience in it mission statement.

Mission Statement

“We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments.”

Value Statement

“These are our values. They are the heart of how we run our business. They guide our actions and serve as the framework for the decisions and contributions our employees make at every level of the Company.”

• Tell the Truth.
• Be Fair.
• Keep Your Promises.
• Respect the Individual.
• Encourage Intellectual Curiosity.

This mission statement by Harley Davidson is sound because it is concise and informative. It clearly stated their targeted audience and its task. It expresses their goal and vision of expanding the Harley Davidson experience. Based on the mission statement, the company is marketing their motorcycle as a luxury item to it customers. It is intended to motivate and inspire the individual to buy the motorcycle. Their value statement conveys the notion of a honest employee, whom the customer could trust.

Introduction

Name : Hao Chen

Major: Accounting, what was I thinking, after three and a half year the only things I have learned is adding, subtracting, credit and debit.

Minor: History, that’s right history. You should be contemplating why an accounting major would choose history as their minor. I could sum this up in three words history is interesting. Many people find history boring because he or she is unwilling to sit down and read or keep awake in a history class.

Interest
Sports: I’m a diehard Yankees and Giants fan.
Video game: Metal Gear Solid, Final Fantasy, NBA Live, Madden and etc.
T.V.: Scrubs, Chuck, Las Vegas, any sports program, and etc.
Texas Hold’em
Mahjong a.k.a. MJ: For those people who don’t know what this is. This a Chinese game that involves tiles with symbols inscribed on it. An individual needs to arrange these tiles in a particular order to receive points. Money is awarded base on the amount of point an individual received. There are varies versions to this game, so getting more in detail with this game would require me staying up all night. A word of caution, don’t get involve in this game, this is more addictive than the other MJ that one might refer to.

These five activities should consume 99% of my free time. The other 1% is devoted to studying.

Post Graduation

Scenario 1: Graduate from Baruch with a BBA and MS in taxation. Pass the CPA exam and after gaining enough experience start up a small CPA firm. Then live happily ever after. (30% of occurring)

Scenario 2: I get so depress while studying for the CPA, I realize this is not my career path. After months of soul searching I finally found my true calling, the culinary art. Unwilling but forced into another four years of schooling. In the end I found myself opening up my own Chinese take out restaurant. I have finally achieved the American Dream. Is this what I want from eight years of schooling? Of course not, my goal is to work under a world renown chef. Then maybe one day I could open up a French cuisine restaurant myself or head a five star restaurant. This has always been my dream and I regret not pursuing it. (70% of occurring)

Scenario: 3 At a ripe age of 22, I found life in my throwing arm. My fastball went from 70 mph to 100 mph. Complement with a plus plus slider and change combo. The New York Yankees sign me to to the largest contract in baseball history 350 millions over 8 years. I quickly accept and lead the Yankees to ten World Series championship. One could always dream.