ASSIGNMENT

February 2021
SUBJECT CODE : MSM606
: STRATEGIC MANAGEMENT – ASIAN BUSINESS
SUBJECT TITLE
LEVEL : MASTERS

STUDENT’S NAME : WALIMUNI PRAMUK SAMPATH MENDIS

MATRIC NO. : MBA-20-30-467
PROGRAMME
: MBA
ACADEMIC FACILITATOR : MR. LEWIE DIASZ
LEARNING CENTRE : CAMBRIDGE COLLEGE, SRI LANKA

INSTRUCTIONS TO STUDENTS
1) This assignment consists of TWO (2) parts.
2) Plagiarism in all forms is forbidden. Students who submit plagiarised assignment will
be penalised.
3) This assignment carries 60% weightage toward final grade.
4) References MUST be included and taken from reliable sources. Please use the
APA Referencing Style and cite your work appropriately.
5) The submission date of this assignment is ON OR BEFORE THE 28th of February 2021

THERE IS ONE [1] PAGE OF QUESTION, EXCLUDING THIS PAGE.

DECLARATION BY STUDENT
I certify that this assignment is my own work and is in my own words. All sources have been acknowledged
and the content has not been previously submitted for assessment to Asia e University or elsewhere. I also
confirm that I have kept a copy of this assignment.

W.P.S.Mendis
Signed: _____________________________

Page 1
STRATEGIC MANAGEMENT – ASIAN BUSINESS
MSM606
February 2021
W.P.S Mendis
MBA 20-30-467

1|Page
Contents
1 Question 01- Michael1Porter1argues that a firm1may achieve a1Competitive Advantage through1the
Resourced1Based and the1Positioning Approach .......................................................................................................... 4
1.1 Resource-based view (RBV) ............................................................................................................................ 4
1.2 Positioning Approach for Competitive Advantage.......................................................................................... 6
2 Question 02 ............................................................................................................................................................. 6
2.1 Blue Ocean Strategy ........................................................................................................................................ 6
2.2 Four Action Framework................................................................................................................................... 7
3 Question 03 ............................................................................................................................................................. 8
3.1 Primary Activities ............................................................................................................................................ 9
3.1.1 Inbound Logistic. ..................................................................................................................................... 9
3.1.2 Operation ................................................................................................................................................ 9
3.1.3 Outbound logistic. ................................................................................................................................... 9
3.1.4 Marketing & Sales ................................................................................................................................. 10
3.1.5 Service ................................................................................................................................................... 10
3.2 Support Activity............................................................................................................................................. 10
3.2.1 Firm Infrastructure ................................................................................................................................ 10
3.2.2 Human Resource management............................................................................................................. 10
3.2.3 Technology development...................................................................................................................... 10
3.2.4 Procumbent........................................................................................................................................... 10
4 Question 04 ........................................................................................................................................................... 11
4.1 Activity Map Walmart ................................................................................................................................... 11
4.2 Activity Map – Keells ..................................................................................................................................... 12
4.3 Benchmark Keells with Walmart ................................................................................................................... 13
4.3.1 About Walmart...................................................................................................................................... 13
4.4 Walmart Best Practices ................................................................................................................................. 13
4.4.1 Dealing directly with Manufacture ....................................................................................................... 13
4.4.2 Strategy of expanding around distribution centers (DCs)..................................................................... 13
4.4.3 Electronic data interchange (EDI) with suppliers .................................................................................. 13
4.4.4 The “big box” store format ................................................................................................................... 13
4.4.5 Everyday low prices............................................................................................................................... 13
4.5 Recommendation for Keells .......................................................................................................................... 14
5 Bibliography .......................................................................................................................................................... 15

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Tables
Table 1:MS Threshold Resources Analyzes ..................................................................................................................... 5

Figures
Figure 1:VRIN Frame work .............................................................................................................................................. 4
Figure 2:Typology of resources ....................................................................................................................................... 5
Figure 3: Keells Strategy Canvas...................................................................................................................................... 7
Figure 4: Porters Generic Strategies ............................................................................................................................... 8
Figure 5: Lakmee Value Chain ......................................................................................................................................... 9
Figure 6: Walmart Activity Map (Walmart,com, 2021)................................................................................................. 11
Figure 7:Keells Activity Map .......................................................................................................................................... 12

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1 Question 01- Michael1Porter1argues that a firm1may achieve a1Competitive
Advantage through1the Resourced1Based and the1Positioning Approach
1.1 Resource-based view (RBV)
Resource-based view (RBV) and positioning methods are the utmost common approaches to strategy formation
(Hooley et al, 2000). Their differences and peculiarities generate a substantial ground to uphold competitions
and competitive advantages among firms.

Applying Barney's (1991) VRIN1framework can determine1if a resource is a1source of sustainable1competitive

advantage. To serve1as a basis for sustainable1competitive advantage,1resources must be

Figure 1:VRIN Frame work

The criteria1of the VRIN1Framework clearly rules out best1practices as a source of1competitive advantage. If
other firms1can easily understand1and copy1a capability, it is not1a source of advantage.

In this RBV approach, company need to convert threshold resources in to unique resources and threshold
competencies in to core competencies. It is best utilization of firm’s assets and resources, which1include in-
house1knowledge of. Technology, skilled1work force, brand name and1unique technology process. These
resources can be alienated as tangible and intangible resources. Turning resources in to capabilities is one of the
key process to achieve competitive advantage

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 Figure 2:Typology of resources

Microsoft have successfully evaluated firm resources and have identifies its threshold resources which are need
to convert in to core competencies. Then MS successfully converted its threshold resources to core
competencies to gain competitive advantage over its rivals

Threshold resources Action Taken to convert in to core competencies

Low partnership network withvarious MS start to partnership with tech giants such as
manufacturers/Tech Giant Intel/Apple/Facebook (microsoft, 2021) (intel, 2021)
Low AI capabilities MS hire top engineers to build AI capabilities
(microsoft, 2021)
Less desktop support app from other tech giants Agreement with WhatsApp/Instagram and create
(Only phone base apps) desktop supported app (Instagram
desktop/WhatsApp desktop) (microsoftedge, 2021)
No online platform (Cloud base application) MS office has converted to cloud base application
Extensive low-restriction distribution network Created extensive high-restriction distribution
network
Table 1:MS Threshold Resources Analyzes

The RBV approach is beneficial to the extent that it enables to reduce of operating costs, establish the highest
standards in the workplace, and improve time-efficiency (Barney, 1991)

Damro is one of Sri Lankan Furniture and appliances manufacture. Damro utilized it resources and capabilities
to outperformed its main competitors Arpico and Singer. Damro has unique product portfolio and unique sales
and after sale service, which could not be imitate or copied. Quality branded products with competitive pricing
have given very competitive advantage to Damro.

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1.2 Positioning Approach for Competitive Advantage
Positioning approach is how the firm position its product and services or brand in customer mind. Positioning
base competitive advantage is temporarily and short term. Mass media advertisement, bill board, event
sponsoring can be considered as positioning approach to gain competitive advantage. As positioning approach
is temporary and short term, firm need to turn threshold competencies in to core competencies and resource
base approach need to overtake positioning approach to sustainable competitive advantage.

For an example, a fresh production bakery can be launched with massive marketing activities to position it brand
name and trademark in its target customer segment. However, to gain sustainable competitive advantage,
bakery product needs to produce with unique quality, competitive prices, with unmitigable service standard and
customer experience, where threshold competencies convert in to core competencies and RB positioning take
over positioning approach.

2 Question 02
2.1 Blue Ocean Strategy
Over the past decades. Many industries have turned into overcrowded sectors, and, to stand1apart in these
matured1markets, companies are required to1be dynamic1and creative by developing a successful Value-
oriented strategy.

Most of the company’s focus on their competitor and always try to figure out how to do business better than
the competitors. Firms tries to use different strategies to differentiate product and services and earn a high-
profit margin. In this term following facts has absolute value addition to the product. Such as cost and quality.
Considering those factors, the firm needs to analyze whether the firm competitor uses the same techniques or
attributes to counterpart firm product and services. How can a firm can overcome that, or how can the firm set
strategies to differentiate from competitors? It is mandatory to always find new marketplaces or opportunities
in the scope of the business. As mentioned in Kim and Mauborgne (2005), the Blue ocean strategy1follows
differentiation1and the low-cost simultaneously. It means concurrently firm require to bring the cost down
while increase value for the consumer.

To fight the competition1is1not valid any longer, what companies1have to1do is to radically outperform rivals,
to make them irrelevant, by conceivably developing and executing a value1Innovation strategy, leading to
pursue an uncontested1market space usually so-called as Blue Ocean

Strategy Canvass is an action framework where you can compare competing factors and the offering level.
Competing Factors are the fundamentals in which the industry contests and capitalizes.

With fast technological development in retail industry let’s take an example from retail industry and let’s identify
critical success factors for supermarket. Let’s analyze how Keells can outperform it competitors and drive in to
blue ocean.
I. Price
II. Product Range
III. Availability
IV. Freshness and quality
V. Location
VI. Marketing Activities
VII. Customer Service

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 VIII. Customer Loyalty Card
IX. Online ordering
X. Product Delivery
XI. Self-checkout
XII. Food on the go (Bakery/Restaurant)

Figure 3: Keells Strategy Canvas

Above canvas clearly show Keells created bule ocean and below is the four-action framework
2.2 Four Action Framework

Eliminate Raise
Product Unavailability Customer Service

Waiting time for utility payments Product Quality/Availability

Customer Loyalty

Online ordering and Product delivery

Reduce Create
Price Self-Checkout

Plastic usage Nexus APP

Customer waiting at checkouts Green Store Concept

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3 Question 03
According to Michal porter’s any firm has to select whether to serve a broad or narrow market segment. Porter’s
(1980) framework states four strategies to follow to have significant competitive advantages by practicing Cost
Leadership, Differentiation, Cost Focus, and Differentiation Focus.

To have a competitive advantage by implementing a generic strategy, the selected strategy needs to interlink with
value chain theories. It is also mandatory to understand its core strength and core competencies to align to a generic
strategy and then interlink it with the company value chain.

Lakmee is Sri Lankan Soya meat manufacturing company and producing Soya meat under the brand name of
Dadayambatta for over 15yeears. The company-new strategy is to follow cost leadership to outperform its main
competitors, Delmage, and Raigam soya, as main competitors for Lakmee. The value chain linked to cost leadership
strategy for Lakmee as follows.

To have a completive advantage using cost leadership, Lakmee mainly focuses on the following key points to have
economies of scale

1. Supply chain Management

2. Lean Management

By better supply chain management, Lakmee would achieve economies of scale by adequately planning,
procurement, production, sales, and return aspects.

Lean management will help Lakmee eliminate time and money wasters and only focus on producing what is
compulsory to produce and practice best practices to mitigate costs.

SCM
Plan
Source
Manufacture
Deliver
Return

Lean Management
Value
Value Stream
Flow
Pull
Continues
Improvement
Figure 4: Porters Generic Strategies

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Below value chain for Lakmee is created, aliened SCM and lean management to support cost leadership strategy
to gain competitive advantages.

Figure 5: Lakmee Value Chain

3.1 Primary Activities

3.1.1 Inbound Logistic.
Lakmee need to focus on following points

I. Build bigger centralized warehouse to accommodate large stock of Raw materials to get economies of
scale
II. The warehouses should prepare to accommodate palletized deliveries
III. MOQ system should Implement to inventory management.
IV. HACCP system and FIFO to control expiry and damage.

3.1.2 Operation
I. 90% production inputs should be automated and robotic to maintain quality and product standards.
II. 80% packing and storing with automated for cost reduction
III. The final product should be palletized and customer orders should be linked to pallets quantity

3.1.3 Outbound logistic.

I. Select Region wise distributors with large warehouse capacity.
II. Delivery Map to cover maximum delivery points with single delivery
III. Palletize product delivery to control damages and minimize loading unloading costs and time waste
IV. ERP(Extra-link) to connect with distributors and Lakmee to control out of stoke and over stock situation

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3.1.4 Marketing & Sales
I. Sales Price to match lowest market price
II. Additional discount on Quantity base purchase
III. Rebate to offer for annual purchase value to retailer and distributor.
IV. Special national promotion in every quarter.
V. Mass media advertising
VI. Mass distribution of products – General and modern trade store
VII. Additional incentive for distributors, retail shop owners and store managers on volume base sales
VIII. Free Sampling

3.1.5 Service
I. WEB site to introduce customer support
II. Product training/Storage training/ Sale techniques training for distributors.
III. Seminars and Training on product quality management to retailers.

3.2 Support Activity

3.2.1 Firm Infrastructure
I. High quality automated manufacturing plant to reduce labor cost
II. Develop IT system and accounting system to capture market information (Reduce credit dates/understand
average movement/Competitor activities/Sales team visits/Effect of marking activities etc.)
III. Warehoused to build to support with palletize packing/ and loading/Unloading to reduce cost and time
wasting
IV. Market research to be conducted regularly to understand product quality and service quality of the Lakmee
brand and for new product development.

3.2.2 Human Resource management.

I. Recruit high skill staffs for technical, management and for sales team (Reduce unnecessary manpower with
qualified team)
II. Continuous training for general staffs on safety at work, Food hygiene and on processes.
III. Continues Training to Sale team, distributors on sale techniques and motivate them with positive thinking
IV. Implementation of KPI for performance measurement.
V. Performance base incentive for staffs to increase motivation and staff’s retention rate.

3.2.3 Technology development

I. Integrated supply chain management system and ERP (To eliminate unnecessary processes and time
wasters)
II. Continuously invest on research and development of the products and system.
III. Product packing re-design to base on market research to attract mass customers.

3.2.4 Procumbent
I. Long term agreement with Key supplier for raw materials
II. Low-cost AMC with manufacture for all machineries
III. Purchase and production agreement with farmers for production of soya beans other raw materials
IV. Long term lease with warehouses for cost
V. Annual vehicle rental agreement for low-cost transportation.

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4 Question 04
4.1 Activity Map Walmart

Figure 6: Walmart Activity Map (Walmart,com, 2021)

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 4.2 Activity Map – Keells

Figure 7:Keells Activity Map

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4.3 Benchmark Keells with Walmart
4.3.1 About Walmart
On July 02, 1962, Walmart 01st store was open at Rogers, Arkansas by Sam Walton. It has rich heritage over 60years.
In 2002 it became fortune 500 companies in the world. It has over 10,800 retail stores and club under 51banners
across the globe and have employed over 2.2millions associates. Nearly 230millions customers are visiting Walmart
per week.

4.4 Walmart Best Practices

4.4.1 Dealing directly with Manufacture
Walmart began dealing directly with1manufacturers in1the 1980s, giving suppliers the task of managing1inventory
in their1warehouses. As a result, so-called Vendor Managed Inventory (VMI) has been formed. This smoothed out
the irregularities in inventory flow and guaranteed that products were1always1on the shelves.

This process involved alliance and collaboration1with suppliers who created a1more1efficient supply chain using
technology that interconnects everything.

4.4.2 Strategy of1expanding1around distribution1centers (DCs)

Expanding its operation around distribution centers is central to1the way1Walmart enters a1new geographical
market. The firm looks for zones that can backing a group of1new1stores, not just a single1new store. Walmart then
constructs a new distribution center at a central location in the area and commences operation in its first1store at
the1same time. The DC1is the1supply-chain stepping-stone into1the new territory. Its backings the opening of1more
new1stores in the area at a very1low additional1cost. Those1savings are passed1along to1the customers.

4.4.3 Electronic data interchange (EDI) with suppliers

The use of electronic data interchange with suppliers provides the company with two1significant advantages. First,
it reduces1the transaction costs1associated with ordering and billing of products. Ordering groceries and paying1bills
are, for the1most part, well-defined and1routine processes1that has made more productive1and efficient with EDI.
Another advantage is that this electronic communication with1suppliers allowed Walmart to have a higher degree
and1coordination1in product delivery planning and procurement. All of this helps ensure1a steady flow1of the right
products1at the right time1delivered to1the right1DC by Walmart suppliers.

4.4.4 The “ big box ” store1format

Walmart's “big box” store format1allows Walmart1to, in effect, combine a store1and a1warehouse in a1single facility
and get1significant operating1efficiencies. The big1box store1model is big enough to hold1large amounts1of
inventory like1a warehouse. And because this1inventory is kept in the same place where1the1customer buys it, no
delay or price will be associated with the products from the warehouse to the store. Again, these1savings are
passed1along to1the customer.

4.4.5 Everyday low-prices

“Everyday1low-prices” are always1of doing two1separate tasks. The first message1is to1tell its1price-conscious
customers that Walmart always offers the1best price; Hence, customers need not1look elsewhere or1wait for special
promotions. As a result, it helps Walmart accurately forecast sales and other core activities related to supply chain
management. Customer purchasing trends make demand forecasting much more complicated, and this affects
supply chain planning. Eliminating special sales and assuring1customers1of low prices1smooths out demand swings,
making1demand1steadier and more1predictable. Walmart store is more1likely to have what consumer requires
when they are looking to purchase.

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Walmart uses above concepts to mitigate costs and to maintained accurate Inventory in any Supply Chain to build
trust, to maintain low price and availability withing its targeted customer segments.

4.5 Recommendation for Keells

Keells Need to apply above key concept of Walmart to have sustainable future growth and to create powerful retail
business model in Sri Lanka to become market leader to overtake it main competitor Cargills.

Use the1strategy of expanding around central1DCs to mitigate transportation1costs.manpower cost and

maintenance cost etc. This enables1a “hub and1spoke” distribution model1where a central1fleet of delivery trucks
efficiently1services a ring of1surrounding stores. This strategy will help Keells to increase the level of product
availability and reduce the product price by eliminating unnecessary costs.

Keells need to implement Electronic data interchange (EDI) or other electronic communication connections between
suppliers1enables just-in-time delivery1schedules. Set up delivery1schedules in SCM Globe use the economic order
quantity (EOQ) equation to set delivery1amounts and frequencies to minimize1on-hand1inventories and meet
demand with JIT deliveries1to cut Inventory1and Operating Expenses to have competitive advantages against main
competitors

Keells needs to look for new store model similar to Walmart big box type of store1format by1expanding storage
space at the1store facilities will enable Keells to maintain a significant on-hand inventory to meet1high levels
of1demand. This further enables1fewer and1larger deliveries to the stores from the DCs and that minimize the
transportation costs and other relevant costs pertaining to supply chain. This will help Keells run low-cost operation
and further will help to reduce prices.

Keells also need to negotiate and have long term trade agreement (TA) with local/International supplier and
manufacture to lower price of inventory purchase. It also highly recommended to Keells to look for opportunities to
do acquisition or join venture with Laugh and Lak Sathosa supermarket chains, which are not doing good with
business. This will help Keells to enter in to lager market with no time and have economic of scale. This will further
help Keells to mitigate operational cost and benefit of it could directly pass to customers to have highly competitive
advantages.

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5 Bibliography
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researchgate. (2021, February 22). Retrieved from https://www.researchgate.net:

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