Blog #2: Internal Organizational Analysis and Developing Strategic Options

Blog #2: Internal Organizational Analysis and Developing Strategic Options

Both of the week's readings deal with examples of companies deviating too far from their strategic plan or executing a flawed strategy, whether it is in the form of over-confidence or disregarding external forces. Once one or more of these internal “sirens’ goes off business must understand and assess the possibility of failure. The companies used in the reading over-estimate or just do not understand that not all aspects of strategy can be duplicated or executed at the same capacity once the company has changed product/services markets, location, or is reacting to changes in technology or legislation.

One example of this Dunkin’ Donuts in Japan. In the 1970’s Dunkin Donuts entered the Japanese market along with Mister Donut as the first donut franchises (1). Dunkin’ was the bigger player and was expected to be more successful than Mister Donut. Dunkin’ offered its standard U.S. menu to Japanese customers, while Mister Donut catered to Japanese tastes, the result was Dunkin’ left Japan in 1998(1). Going to a Mister Donut in Japan is quite different than walking into a Krispy Kreme or Dunkin’ in the U.S. The experience is more of a sit-down restaurant or cafe feel, where you can order pasta and rice dishes. The donuts are not as sweet, and the flavors are different. It really seems like a restaurant that serves donuts, rather than a donut restaurant.

This example highlights the 3^rd recipe of disaster cited by the Carroll and Mui reading, of “overestimating the strength or importance of the capabilities in a core business” (Carroll and Mui). Some companies fail to not treat a move into a new industry, location, or acquisition of another company with a completely blank slate. I think this plays on the heuristic that if I can do X activity/service in place Y, I should be able to do the same X activity /service in place Z. I think one of the key takeaways from the reading is the utilization of a devil’s advocate and the process of a conduct review. The review of an independent and objective body evaluating business decisions can add insightful perspectives and if needed, a reality check on the prospects of a flawed strategy. But even with all of these historical examples, the same mistakes are still being made today. The word hubris comes to mind, and maybe the bigger you are the harder you need to examine the internal strategy devolvement decisions you make.

Another part of the Dunkin’ failure might be due to the topic of “The Coherence Premium “reading, the idea that companies are “succumbing to intense pressure for top-line growth and chase business in markets where they don’t have the capabilities to sustain success” (Leinwand, Mainardi). I think in the Dunkin’ case their capabilities coherence in understanding Japan was poor. In the U.S., more specifically in the North, Dunkin’ seems to have a loyal following. People value Dunkin’ coffee, donuts, and now more breakfast and espresso drink options. Their reputation for this is what keeps customers returning, but in 1970 was the question asked do we have the same loyal following in Japan?  

The reading also mentions Coca-Cola as a winner in CPG, citing its “focus on beverage creation, brand proposition, and global consumer insights” (Leinwand, Mainardi). I think this is a great example of a company that understands its Internal Organizational Strategy. Whenever I leave the country, I love trying new drinks, and Coca-Cola in almost every country/region has some unique drink sold in that area. I do not particularly love sodas, but I enjoy trying new things. I think that adaptation to new and specific markets is a great insight that probably originated from some form of internal analysis and strategic planning.

1.      Case Study: A Tale of Two Doughnuts, MNC Success is Being Both Global and Local (https://www.google.com/search?sxsrf=ACYBGNRR4nzWVsQmA2WIQmYEFWkYrHt6Lw%3A1568653112783&ei=OL9_XZexL6jv_Qbipp7YDA&q=dunkin+donuts+in+japan+case+study&oq=%5Ddunkin+donuts+in+japan+case&gs_l=psy-ab.1.0.0.2878375.2879890..2881105...0.0..0.152.539.5j1....2..0....1..gws-wiz.......0i20i263j0i7i30j0i8i30j0i333j0i22i30.T9rSQIAdtI4#)