MG11 Lecture 1 v2024 Business Organisations & Strategy PDF
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ESCP Business School
2024
Fabrice Léger
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Summary
This document is a lecture on introduction to business organizations and strategy. It outlines the objectives, lecture schedules, and logistics of the course, likely business models as well as sections on evaluation, challenges, and expectations.
Full Transcript
Introduction to Business Organisations & Strategy Lecture #1 Introduction to Business Models Prof. Fabrice Léger Part 1 House keeping & Syllabus 2 Objectives understand the key principles governing the corporate environment learn...
Introduction to Business Organisations & Strategy Lecture #1 Introduction to Business Models Prof. Fabrice Léger Part 1 House keeping & Syllabus 2 Objectives understand the key principles governing the corporate environment learn about the industry analysis tools and models, which are required to understand the environment in which a business operate gain a broad understanding of what a business is and does, and whether they can be profitable or not understand main strategy concepts 3 Lecture schedules 1. Introduction to Business Models 7. Market types, differentiations, and (re)positioning 2. Entrepreneurship and start-ups 8. Innovation in the organisation 3. Conducting an Industry Analysis: Structure, 5-forces, and Competitive environment 9. Organisational Design, structure, and dynamics; Leading the organisation through 4. Resources and Capabilities, introduction to organisational change the Resource-based view of organisations 10. Managing the Human Capital within and 5. Developing Competitive Advantages outside of the organisation 6. Developing a business through a successful 11. Global market expansion product portfolio strategy (BCG, Ansoff and McKinsey Matrix) 4 Lectures Seminars ESTABLISHED COMPANY NEW VENTURE FROM YOUR OWN IDEA How do business concepts apply ? How does it translate into an existing company’s business? Business plan: explain your Presentation business strategy and why it will succeed Demonstrate Act as an entrepreneur to build understanding and a successful business critical thinking about how a business operates Apply the business concepts and tools to your own entrepreneurial project 5 Logistics Practical and technical details on the course can be found in the syllabus Class materials are posted on blackboard 6 Evaluation Assessment Assessment Type Weighting % Pass Mark % Pass/ Fail Component Final exam Written exam 50 40 Yes (90 min exam) Group Project Coursework 40 N/A No Individual Coursework 10 N/A No Participation 7 Challenges and expectations Title Author Publisher The Business Environment Worthington, I. and Britton, Prentice Hall, 6th Ed., C. London, ISBN 978-0-273- 71675-4 (2009) Business in Action Bovee, C.L, Paul, C.A., Pearson, 10th Ed. (2024) and Thill, J.V. How to Think Strategically: Sola & Couturier Financial Times Series Strategy - Your Roadmap to Learn to connect the dots between the Innovation and Results different lectures Strategy: Theory and Practice Stewart R Clegg, Jochen Schweitzer, Andrea Whittle Sage Publishing 4th Edition and Christos Pitelis Exploring Strategy Gerry Johnson, Richard Pearson, 13rd Edition Read textbooks if you get confused Whittington, Kevan Scholes, Duncan Angwin, Patrick Regnér Corporate Communication, Cornelissen, Joep Sage Publishing 7th Edition A Guide to Theory and Practice Chapter 4 and 6 Work autonomously on your group project Competitive Advantage: Porter, Michael Free Press Creating and Sustaining Superior Performance Necessary but not sufficient Eliyahum Goldratt North River Press Refer to the full list on the syllabus 8 Achieving Professionalism Professionalism The quality of performing at a high level and conducting oneself with purpose and pride 9 Elements of Professionalism Being a Team Player Professionals know that they are contributors to a larger cause. Great team players know how to make those around them more effective. Being a team player also means showing loyalty to your organization and protecting your employer’s reputation. 11 Communicating Effectively Listen actively. Provide practical information. Give facts rather than vague impressions. Don’t present opinions as facts. Present information in a concise and efficient manner. Clarify expectations and responsibilities. Offer compelling, persuasive arguments, and recommendations. 12 Demonstrating Etiquette Etiquette The expected norms of behavior in any particular situation 13 Maintaining a Confident, Positive Outlook Successful people are optimistic. Successful people buckle-down and get the job done despite obstacles. Energy, either positive or negative, is contagious. One negative personality can make an office miserable. 14 Part 2 What do businesses do? 15 Understanding What Businesses Do Business Any profit-seeking organization that provides goods and services designed to satisfy the customers’ needs Also called enterprise or firm 16 Understanding What Businesses Do Business Any profit-seeking organization that provides goods and services designed to satisfy the customers’ needs They sell goods to earn a profit Difficult question for startup (e.g.TikTok, Snapchat how do you make this profitable?) What added value do they bring? 17 Cette photo par Auteur inconnu Ecosystem Companies are often in chains They make choices about what they will do to generate revenue 18 Adding Value: The Business of Business (1 of 2) Revenue Money that a company brings in through the sale of goods and services Business model A concise description of how a business intends to generate revenue 19 Adding Value: The Business of Business (2 of 2) Profit Money left over after all the costs involved in doing business have been deducted from the revenue Amazon’s figures (source: United States Securities and Exchange Commision) Profits = revenues - costs 2014 Revenue: US$ 88.0988 billion Net income: US$ -241 million 2015 Revenue: US$ 107 billion Net income: US$ +596 million 20 Competing to Attract and Satisfy Customers Competitive advantage Some aspect of a product or company that makes it more appealing to its target customers Some businesses are nonprofit Not-for-profit organizations Organizations that provide goods and services without having a profit motive; these are also called nonprofit organizations Must operate efficiently and effectively to achieve their goals 22 Identifying Major Types of Businesses (1 of 2) Goods-producing businesses Companies that create value by making “things,” most of which are tangible Manufacturing, construction, mining, agriculture … Name a few. Goods-producing businesses are often capital-intensive businesses Think of goods business model, what is good or difficult about it? 23 Identifying Major Types of Businesses (2 of 2) Service businesses Companies that create value by performing activities that deliver some benefit to customers Finance, insurance, entertainment, maintenance and repair, healthcare … Name a few. Service businesses tend to be labor-intensive businesses In developed countries, the service sector now accounts for 75% of a nations economic output Think of service business model, what is good or difficult about it? 24 Categorize the firms Company Goods Services Both M&M / Mars Apple Ford Motor Company Laundry Detergent A local landscape contractor 25 Risk and Reward 26 Business Sales models A business can sell to Another business: B2B Examples? Consumers can sell as well to: A consumer: B2C Other consumers: C2C Examples? Examples? A business: C2B Examples? 27 Big companies and their profits Apple (2020 figures) Revenue: $274.515 B Profit: $104.926 B Industry: Technology Founded: 1976 by Steve Jobs and Steve Wozniak Employees: 147000 Walmart (2020 figures) Site web: www.apple.com Revenue: $523.964 B Profit: $20.568 B Industry: Retail Founded: 1962 by Sam Walton Exxon-Mobil (2017 figures) Employees: 2,300,000 (1,500,000 US Based) Revenue: $237.1 B Site web: www.wamlartstores.com Profit: $12.07 B Industry: Oil and gas Founded: Exxon and Mobil merged in 1999 Employees: 69,600 Site web: www.exxonmobil.com 28 Positive and Negative Effects of Business Part 3 Business core functions 30 Major Functional Areas in a Business Enterprise Major Functional Areas in a Business Enterprise (1 of 6) Research and development (R&D) Functional area responsible for conceiving and designing new products Information technology (IT) Systems that promote communication and information usage through the company, or that allow companies to offer new services to their customers 32 Major Functional Areas in a Business Enterprise (2 of 6) Manufacturing, production, or operations An area where the company makes whatever it makes (for goods-producing businesses) or does whatever it does (for service businesses) Purchasing, logistics, facilities management Major Functional Areas in a Business Enterprise (3 of 6) Marketing Charged with identifying opportunities in the marketplace Working with R&D to develop the products to address those opportunities Creating branding and advertising strategies to communicate with potential customers, and setting prices Major Functional Areas in a Business Enterprise (4 of 6) Finance and accounting Responsible for virtually every aspect of a firm’s finances Ensuring that the company has the funds it needs to operate Monitoring and controlling how those funds are spent Drafting reports for company management and outside audiences such as investors and government regulators Major Functional Areas in a Business Enterprise (5 of 6) Human resources (HR) Responsible for recruiting, hiring, developing, and supporting employees Major Functional Areas in a Business Enterprise (6 of 6) Business services Exist to help companies with specific needs in law, banking, real estate, and other areas Part 4 The Economic Environment – Key Definitions 38 What Is This Thing Called The Economy? (1 of 2) Economy The sum total of all the economic activity within a given region Economics The study of how a society uses its scarce resources to produce and distribute goods and services 39 What Is This Thing Called The Economy? (2 of 2) Microeconomics The study of how consumers, businesses, and industries collectively determine the quantity of goods and services demanded and supplied at different prices Macroeconomics The study of “big picture” issues in an economy, including competitive behavior among firms, the effect of government policies, and overall resource allocation issues 40 Factors of Production Factors of Production (1 of 4) Natural resources Land, forests, minerals, water, and other tangible assets usable in their natural state Human resources All the people who work in an organization or on its behalf 42 Factors of Production (2 of 4) Capital The funds that finance the operations of a business as well as the physical, human-made elements used to produce goods and services, such as factories and computers Entrepreneurship The combination of innovation, initiative, and willingness to take the risks required to create and operate new businesses 43 Factors of Production (3 of 4) Knowledge Expertise gained through experience or association 44 Factors of Production (4 of 4) The Economic Impact of Scarcity Scarcity A condition of any productive resource that has finite supply Opportunity cost The value of the most appealing alternative not chosen 46 Economic Systems (1 of 2) Economic system The policies that define a society’s particular economic structure; the rules by which a society allocates economic resources Free-market vs planned 47 Economic Systems (2 of 2) TO DO for F2F lecture session Pick a large company of your choice and be ready to discuss: The industry, the sector, the value they add Bring your questions Be able to define with your own words the key concepts 49 Apply what you’ve learned 1. Define a business with your own words 2. Explain the concept of adding value in a business 3. Identify the major types of businesses and their specifics 4. Explain the purpose of the six major functional areas in a business enterprise 5. Explain the factors of production 50