11 Oct Write?a 2- to 3-page memo to the CEO of the company youve been assessing throughout the course, outlining your plan to create economic, social, and environmental value. In your memo, incl
PLEASE REVIEW THE ATTACHMENTS. THEY ARE VITAL TO THE PROPER COMPLETION OF THIS ASSIGNMENT.
Write a 2- to 3-page memo to the CEO of the company you’ve been assessing throughout the course, outlining your plan to create economic, social, and environmental value. In your memo, include the following items:
- An executive summary of the memo
- A summary of the organization’s strengths and weaknesses, and recommendations for converting weaknesses into strengths
- A summary of your Wk 3 findings on Porter’s Five Forces
- A summary of your Wk 4 findings on the Diamond of National Advantage
- A summary of your Wk 5 analysis of the firm as a learning organization
- Strategic recommendations based on your previous work in this course. Include the opportunity identified in Wk 2, the move into the country identified in Wk 4, and any recommended moves toward being a learning organization. Provide a rationale for each recommendation.
Cite references to support your assignment.
Format your citations according to APA guidelines.
MGT/576 v1
Porter’s Five Forces
MGT/576 v1
Page 2 of 2
Porter’s Five Forces
Complete the table below . For the company you’ve decided to assess in week 1, determine the strength of each of Porter’s Five Forces and of the complementors.
Justify your determination with examples.
|
Industry force |
Strength |
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|
High |
Medium |
Low |
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|
Example |
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Threat of new entrants |
x |
Healthcare industry is expanding everyday and threatening the existence of old players in the market. One PwC survey of 1,000 adults found that nearly half of them would consider getting minor problems handled outside of traditional venues, such as buying strep throat kits at home or getting skin rash evaluations online, and many are also willing to get more complex services at home, online or in retail settings if it's more convenient and affordable. This is why I believe it is a strong force. |
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|
Power of buyers |
x |
Patient needs and preferences heavily impact CVS operations and processes. Digital health startups focused on women's health care pulled in $1.3 billion in funding across 26 deals by October 2021—nearly doubling all of 2020's funding with four months still left to go, according to digital health venture fund Rock Health. This is why I believe it is a strong force. |
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Power of suppliers |
x |
The demand for healthcare continues to rise regardless of rising costs because citizens and government have a greater interest in health and quality of life. Market suppliers have a moderate influence because there are many suppliers. |
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Power of substitutes |
x |
Prescription medicines are preferred by customers because they are cheaper. It is easy for consumers to find cheaper prices anywhere there are pharmacies and medicine distributors, so substitutes have limited power. There are many pharmacies and medicine distributors in the industry, so substitutes have limited power. |
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|
Rivalry among competitors |
x |
The healthcare industry faces intense competition. The healthcare industry led other companies in margin according to a 2008 report. Market competitors compete aggressively based on services provided and operating strategies. I believe that this is one of the reasons why competition has a greater power. |
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|
Complementors |
x |
Many sectors of the economy and society are being dominated by digital platform based markets. Connected preventive healthcare markets are thriving thanks to platforms like Apple Healthkit and Google Fit. Companies are combining their products and services to improve overall outcomes. A number of complementary products and services are emerging in the healthcare industry to enhance one another's offerings. It implies that complementors have a greater power than complements (Coffey et al., 2015). |
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|
References Coffey, C., Fraser, K., Lee, H., & Kelsay, W. (2015). CVS. CVS Corporation, 1-64. Landi, H (2022). Women are the 'power buyers' of healthcare. https://www.fiercehealthcare.com/tech/fierce-jpm-week-women-are-power-buyers-healthcare-and-market-evolving-to-serve-them-founders#:~:text=Women%20are%20the%20%22power%20buyers,cash%20into%20this%20growing%20market. |
Copyright 2020 by University of Phoenix. All rights reserved.
Copyright 2020 by University of Phoenix. All rights reserved.
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Expanding the Organization
David Leonard
University of Phoenix
MGT/576
1 OCT 2022
1
Agenda
Identifying the country that CVS will expand into.
Assessing the prospective global market by considering the four elements of the Diamond of National Advantage.
Assessing the factors both in the domestic and international market that will assist the corporation succeed.
Assessing the factors that may impede its success.
Evaluating four modification leaders must make when expanding.
Leadership Action needed.
Recommending whether the company should expand into the country.
2
Identifying the Country
China has a large population.
CVS company has a greater possibility of becoming profitable.
American and Chinese societies are strikingly comparable.
Access to a larger talent pool.
Integration would facilitate the negotiation of cultural distinctions.
There is no country in the world with a larger potential for sales than China, which has a population of 1.38 billion people. A company's main demographic would be the middle class. It is estimated that there are now around 500 million individuals entering the middle class (Galvin, 2017). Due to China's role as the third-largest distributor of U.S. goods, the firm has a better chance of success and growth. Although their histories are divergent, China and America share a goal-oriented and successful culture in all areas that would benefit the company. As well as tapping into a broader pool of untapped talent, the company may also be able to expand into other cultures with the assistance of highly skilled and creative individuals.
3
Diamond of National Advantage
Factor Endowments
China's large population density.
Large and cost-effective workforce accessibility.
Strategic locale with natural assets.
Availability of financial assets.
A rapid population increase.
CVS Corporation has a good chance of achieving its business goals since both the United States and China are abundant in raw materials. Yang, Puia, & An (2016) mention that the firm has been able to reach its target market because of the canal as well as other natural resources. Organizations have access to equity capital and loans as well as other types of capital resources. In spite of China's huge population, CVS expects its Chinese employees to contribute high levels of expertise and productivity even as it faces challenges in recruiting and retaining qualified staff. As a result of the anticipated population increase, the company would have a sizable pool of both employees and consumers to maintain its current level of efficiency.
4
Industry Rivalry
Assists the company in its preparation for competition.
Competition among local adversaries that is fierce.
Competition from internationally active players.
Management structure of the CVS corporation.
The organizational hierarchy of the prospective client.
The company will gain a better understanding of the competition it will face by analyzing the industry's rivals in detail and by preparing its own strategy. Firms need to constantly come up with new ways to incorporate these strategies into their day-to-day operations to stay competitive with nearby businesses (Yang, Puia, & An, 2016). This puts them under constant pressure to formulate and focus their strategy. Both local and foreign competitors fiercely compete with the organization, forcing it to adopt new procedures and technologies. Because of these competitive advantages, the company has acquired a broader customer base thanks to its unique cost advantage and competitive advantages.
5
Demand Conditions
The demand conditions that are most important to consider are those in the domestic market.
Size of the national market.
Discerning and demanding domestic customers.
The desires of the customers.
The conduct of the customers.
Lowering of the interest rate.
In order for CVS to strategize and plan its operations in China effectively, the firm must take into consideration two factors: the growth of the local market and the relevance of domestic consumers to the firm's understanding of the larger markets. The company's growth and increasing domestic market share have provided an ideal environment for evaluating its performance and making improvements. A firm and its brand should think about expanding into other parts of the world due to the larger scale of markets like China's. A solid understanding of the home market and consumer trends is necessary for accurately predicting consumer behavior and demands in international markets (Yang, Puia, and An, 2016). Because of the input it receives from its American customers, CVS has been able to influence Chinese clients' buying behaviors.
6
Related and supporting industries
Largest energy consumer.
The most extensive manufacturing base.
Existence of competing business sectors.
Existence of reliable suppliers located all around the world.
Strong customer base and consistently stable market
As a company, CVS produces several items for mass distribution, then sells them through retail outlets. The vast majority of people believe that China uses and produces the most energy in the world. In this way, China consumes more than 70% of its total energy from manufacturing. CVS Corporation may be able to benefit from economies of scale if the country's manufacturing sector and energy demand continue to grow. Since China's population is rapidly aging, incomes are increasing, business climates are becoming more open, and consumer spending has increased, western firms are becoming increasingly interested in the country's market (Rottig & de Oliveira, 2019). In response to declining domestic demand, many Western companies have opened offices in China.
7
Factors to Promote Success
Capability to negotiate the nuances of cultural norms and expectations.
Access to strategically important partners in the area.
Obtaining permissions and licenses from the government.
A powerful factor in the expansion of the economy.
Integrative power and a thorough understanding of the regional markets.
The company would benefit from interacting with and selecting a local business that is well established and operating locally in order to achieve a smooth and efficient branch development. As well as management's ability to navigate the country's political system, the company's performance is determined by its skills in dealing with its employees. For the group's growth and regional adaptability, Galvin (2017) stresses the importance of managing development in China, particularly economic development. They have a significant impact on A company's chances of success. This will be determined by whether or not the government is willing to provide the company with the necessary licenses and assistance.
8
Forces that can Impede Success
Policies adopted by the government that are protectionist (Burkus, 2012).
An accusation of engaging in unethical business practices.
A market that is constantly shifting, as well as the demands of customers.
Difference in cultures.
The rivalry between regional businesses
While CVS might succeed in China for a variety of reasons, it may also encounter challenges and obstacles (Burkus, 2012). As the market rapidly changes and consumers' needs and expectations continue to rise, CVS could struggle to expand its operations across the rest of the nation. It is doubtful that customers in the nation will be interested in buying its products in the near future, considering how similar the firm is to Ikea, which sells a variety of items that require manual assembly. Because Ikea failed to anticipate the needs of its consumers, its early attempts in China were mostly unsuccessful. The company's impact on impacted individuals would be exacerbated by cultural differences between the West and China (Galvin, 2017).
9
Recommendations
Comprehending the Chinese way of life.
A comprehension of the wishes of the customer.
Modify US retail outlets in order to better serve Chinese customers.
Understand the economic, political and social differences.
Make preparations for an efficient entry approach.
To efficiently develop into the Chinese market, it should examine the following aspects and suggestions. Among these are things like making an effort to comprehend Chinese culture as well as the requirements and wishes of the customers. Although doing so would provide CVS business with an advantage inside the retail industry, doing so would require a significant investment of both time and resources. Therefore, the company has the option of adapting the format of its store in the United States in order to better serve its Chinese customers by gaining an understanding of both its potential customers and its products (Liu et al., 2016). Additionally, CVS needs to have an understanding of the cultural, economic, and political differences that exist between countries. Additionally, it must comprehend that the cumulative effects of these distinctions are an increase in both costs and dangers. In general, CVS ought to have a good entry strategy that it may use to ensure that it continues to be successful in the new market.
10
Rationale
The nation's place in the global strategic order.
Market that is both accessible and substantial.
A favorable environment for the company's commercial activities
The economy is thriving and developing at a rapid rate.
Availability of abundant and reasonably priced labor.
The country's strategic location has made it more approachable to the rest of the world, making it an appealing investment destination. China is also regarded as the biggest market in the world, which is vital for the operations of CVS company, and as a result, presents increased chances for commercial success due to the country's rapidly expanding population. In addition, the business environment provided by the corporation is favorable since there is an abundance of labor that is both low-cost and highly skilled. This factor is essential for the efficiency with which the company operates (Zhu, 2016). In addition, the availability of low-cost labor is critical to the success of the organization because it enables the enterprise to achieve large cost savings and provides a means of subsistence for the employees.
11
Conclusion
The expansion contributes to an increase in the company's revenue.
It strengthens the company's presence across the globe.
Because it involves a diversified portfolio, this strategy reduces the risk of adverse outcomes.
Before investing, companies should do research on the countries.
Increases the firm's ability to compete effectively as a result.
When a company tries to raise its market shares, increasing their competitiveness by expanding into robust and alternative markets, an institution's expansion into an international market can help them achieve this goal. In addition to this, it would make certain that the market is sufficiently varied for the organization to be able to mitigate any risks that may arise in the event that one of the firm's branches operating in other regions does not attain the requisite income stream. However, the company should carry out research on the chosen country and market in order to make sure that the market it intends to develop into possesses the necessary characteristics. It would have no trouble establishing its activities in the country and carrying on with its economic operations there.
12
References
Burkus D. (2012). A review of barriers and adjustments for international expansion. International Management Review.
Rottig, D., & de Oliveira, R. T. (2019). International expansion of Chinese emerging market multinational corporations to developed markets: a qualitative analysis of post-acquisition and integration strategies. In Chinese acquisitions in developed countries (pp. 37-53). Springer, Cham.
Yang, X., Puia, G. M., & An, W. G. (2016). International Business and Multinational Corporations in China. Financial Markets and Foreign Direct Investment in Greater China, 269.
Zhu, Z. (2016). China's new diplomacy: Rationale, strategies and significance. Routledge.
Liu, M. T., Yan, L., Phau, I., Perez, A., & Teah, M. (2016). Integrating Chinese cultural philosophies on the effects of employee friendliness, helpfulness and respectfulness on customer satisfaction. European Journal of Marketing. Retrieved from: https://www.emerald.com/insight/content/doi/10.1108/EJM-01-2015-0025/full/html
Galvin, J. (2017, Oct 19). “The Challenges and Benefits of Expanding a Business to China”. Retrieved from: https://www.linkedin.com/pulse/challenges-benefits-expanding-business-china-john-galvin/
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MGT/576 v1
Learning Organizations
MGT/576 v1
Page 3 of 3
Learning Organizations and Value Creation
Review the 6 key elements of a learning organization (Ch. 11 of Strategic Management, by Dess).
Complete the table below. Evaluate the extent to which the company you’ve selected to assess in this course epitomizes each of the 6 elements.
Justify your determination with examples.
|
Learning Organization Element |
Extent to which the company epitomizes this element |
Provide a sentence justifying your determination |
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|
High |
Medium |
Low |
||
|
Example |
x |
[This] is why I believe it is medium. |
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|
Inspiring and motivating people with a mission or purpose |
x |
CVS Health has been successful because it has developed long-term, strategic programs that uphold company values and encourage excellence in employees. CVS Health takes a more hands-on approach to monitoring and supporting its staff, with the goal of fostering an environment where workers may thrive and thrive, and where they are given the autonomy, responsibility, and training they need to do their best work. |
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Developing leaders |
x |
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