POLC model, and PDCA, Strategy and tactic, Business Strategy and policy

After the impressive eight weeks of learning, I think the first thing that came to my mind is that normally I thought strategies are like solving puzzles. You think and you come out with a solution. That's all. However, I was wrong. Business Strategy is a continuous clear set of plans, actions, and goals that outlines how a business will compete in a particular market, or markets, with a product or number of products or services. Moreover, it is also associated with the demand and supply model and also the POLC model(Plan, Organizing, Leading, and Controlling). In addition, there is a concept that I was confused about before. Strategy and tactic. A strategy refers to an organization’s long-term goals and how it plans to reach them and it shows the path to achieve the defined vision. A tactic refers to the specific actions taken to reach the set goals in line with the strategy. 

Business strategy can also be understood as the course of action or set of decisions that assist the entrepreneurs in achieving specific business objectives. It outlines how businesses should be carried out to reach the desired ends. The success of any business is determined by the effectiveness of the strategy it follows. A strategy explains how a company plans to compete in a market and how it intends to grow at a profit. I think business policies and strategies are like the components of a car. How you design it, build it, or what kind of fuel it would consume, depends on what you want it to be. Business Policy offers guidelines for managers to take appropriate decisions. Strategic Management is a means of putting a policy into effect within certain time limits. Business Policy is a general course of action with no defined time limits. 

The idea behind strategic management is that organizations will be better equipped to satisfy the goals and objectives of the owners and managers adopt a clear business philosophy. For many businesses, that philosophy will be to increase their share of the market. Generally, the generic term business policy refers to all of an organization's processes and procedures that range from human resources policies to the company's marketing agenda and its plans for growth and development. 

What I learned that was new to me or things that changed my understanding is that the policies are essentially the strategies put into action. For example, if a strategy calls for an increased market share, the business policies would be constructed to match this strategy. The two terms are so closely intertwined that they are often used interchangeably. I reckon that for a business owner, strategic management is a mindset or philosophy for doing business. Business policies, however, are the specific methods for running the organization on a day-to-day business. 

Personally, I always carry a notepad with me because of the inseparable relationship between a notepad and PDCA

Good product plan to introduce PDCA(Plan, Do execution, Check, Action improvement) into all systems. Notepad is not only a good helper for implementing plans but also a powerful tool to promote circulation. Follow up and check after I made a plan. Simplifying the content can increase the freedom of thinking. The principle of the plan is to record it immediately after any decisions. 

Finally, I would like to share an example. Suppose that you are running a coffee chain like Starbucks or Dutch Bros, and there is a store located near a beautiful landscape with an amazing view that attracts many Instagram users to take photos and share posts or stories. However, this particular store does not earn as much as expected. It costs more money to transport the necessities that it's needed for daily operation. You also have to pay more for hiring baristas to work there. What would you do? Keeping its operation to get the reputation of your brand and earn these free advertisement, or just close it to open another more profitable store? Here is where the strategy comes in. With an organization’s long-term goals, how it plans to reach them, and the path to achieving the defined vision in mind, companies can make better decisions. In this case, we can estimate whether it is worth doing it or not. 

References

What is business strategy and how to devise it in 2022? IMD business school. (n.d.). Retrieved May 29, 2022, from https://www.imd.org/imd-reflections/reflection-page/business-strategy/ 

Strategic Management, by N. Ritson

Corning Incorporated, Growth and Strategy Council

the Telecoms Crash and Corning Incorporated's Growth and Strategy Council

The Telecoms Crash refers to the period of rapid decline in the telecommunications industry during the early 2000s, following the dot-com bubble burst. Many telecommunications companies suffered severe financial losses and were forced to restructure their operations.

Corning Incorporated, a leading manufacturer of glass and ceramics, was one of the companies that was affected by the Telecoms Crash. The company had invested heavily in fiber optics, a key technology for the telecommunications industry, and saw a significant decline in demand for its products as the industry contracted.

In response to the crisis, Corning formed a Growth and Strategy Council to identify new growth opportunities and help the company diversify its product offerings. The council focused on identifying new markets and developing innovative products that could help the company regain its footing. One of the key initiatives that came out of the Growth and Strategy Council was the development of Gorilla Glass, a highly durable and scratch-resistant glass that is used in a wide range of electronic devices, including smartphones, tablets, and laptops. Gorilla Glass has become a major success story for Corning and has helped the company recover from the setbacks it suffered during the Telecoms Crash.

Overall, the Telecoms Crash was a challenging period for many companies in the telecommunications industry, but it also spurred innovation and forced companies to adapt and diversify their operations. Corning's Growth and Strategy Council played a key role in helping the company navigate the crisis and find new opportunities for growth.

References

Henderson, R. M., & Reavis, C. (2009, April 15). Corning Incorporated: The growth and strategy council. MIT Sloan. Retrieved May 27, 2022, from https://mitsloan.mit.edu/teaching-resources-library/corning-incorporated-growth-and-strategy-council 

Litan, R. E. (2016, July 28). The telecommunications crash: What to do now? Brookings. Retrieved May 27, 2022, from https://www.brookings.edu/research/the-telecommunications-crash-what-to-do-now/ 

Lessons from Howard Marks' New book: "Mastering the market cycle – getting the odds on your side". 25iq. (2018, October 6). Retrieved May 28, 2022, from https://25iq.com/2018/10/06/lessons-from-howard-marks-new-book-mastering-the-market-cycle-getting-the-odds-on-your-side/ 

Identify a company in your community and describe the human resources challenges facing it.

 Human resource management challenges that will continue to evolve for years to come as the business landscape is transforming and changing rapidly. HR departments need to be adding real business value to their organizations through an increased emphasis on training and engagement programs or by investing in areas that will optimize expenditure. An integrated technology systems or improved candidate attraction schemes would be helpful. As the business world changes, so does the role of HR professionals. Since human resources is a business-driven function, effectiveness depends on the ability to influence key policies and decisions. 

According to TSMC's HR policy, TSMC emphasizes "Right People with Shared Vision and Values". Through a variety of human resources practices, our employees can bring all their potential into full play in the right position, which contributes to a win-win situation for both our company and employees. However, some challenges are inherently ignoring TSMC.

Taiwan Semiconductor Manufacturing Company, also called Taiwan Semiconductor, is a Taiwanese multinational semiconductor contract manufacturing and design company. It is the world's most valuable semiconductor company, the world's largest dedicated independent semiconductor foundry, and one of Taiwan's largest companies, with its headquarters and main operations located in the Hsinchu Science Park in Hsinchu. It is majority owned by foreign investors.

However, Taiwan is beefing up efforts to protect what may be the island’s most important resources from being poached by China. In earlier 2022, Taiwan’s cabinet proposed strengthening the country’s National Security Act. The proposals also target Chinese companies that circumvent restrictions on investing and hiring, two common methods of acquiring Taiwanese technology and experience. The reason that is so important for Taiwan and it leading to concerns about leakage of some very important intellectual property. There is a very big fear that if these top engineers are being lured away to China, they will take some trade secrets with them and that could damage the competitiveness of the Taiwanese economy. Despite its success in advanced manufacturing, Taiwan has long struggled with brain drain to China, where students and professionals can access better scholarships, salaries, and benefits than on the island, where wages have largely stagnated over the last 20 years.

Reference

Hale, E. (2022, May 4). Taiwan cracks down on China Poaching Tech Talent. Technology | Al Jazeera. Retrieved May 23, 2022, from https://www.aljazeera.com/economy/2022/5/4/taiwan-is-trying-to-thwart-chinas-efforts-to-poach-tech-talent 

Training Skills, by E. Garner, pages 41-43.

What HR People Do, by T. Greener, pages 57-70.

Digital Divide Data, a case study

Digital Divide Data(DDD) is a social enterprise that delivers digital content, data, and research services to clients worldwide. DDD's innovative social model enables talented youth from low-income families to access professional opportunities and earn lasting higher incomes. This model, established by DDD in 2001, is now called "impact sourcing” and has been implemented by dozens of firms around the world. The company would deal socially and go on to win an award for social entrepreneurship. What started as a small company of a dozen employees has turned into a company with 500 staff with multiple offices in Cambodia and Laos, serving clients in the USA and Europe. In 2008, Digital Divide Data had operating revenues of around $2 million and was providing scholarships to disadvantaged youths. DDD’s mission of providing sustainable sources of employment and education to disadvantaged youth was already validated by nine years of successful operations. Looking towards the future, the decision to expand was motivated by DDD leadership’s desire to lift more people out of poverty and empower disadvantaged youth through market-driven, world-class IT services. Now, selecting the right business model for expansion was the first step toward the development of an achievable expansion strategy to attract more potential donors and supporters.

DDD relied on a small U.S.-based management team, supplemented by expatriate volunteers and short-term assignees on the ground in Cambodia and Laos. Growing the number of paid U.S. staff to manage expansion plans was not very feasible given financial constraints. DDD was eager to design an expansion strategy that could provide the same level of employment opportunities and social programs but would require less infrastructure, resources, and financing than was typically necessary when starting new sites from scratch. But whichever growth strategy they selected—whether it be organic growth, partnerships, joint ventures, or social franchising—DDD’s leadership team knew that more was at stake than mere global scale. 

In 2008 DDD’s board of directors set a goal that was to grow its existing operations to 1500 people. While the main objective was to help more people in farther reaches of the world, the expansion would also add capacity and enable DDD to take on larger contracts in the publishing market. However, DDD’s management was eager to make sure future expansion took place in locations that had been thoroughly vetted. Although its management had already conducted exploratory talks with potential partners in India, China, and Vietnam, they didn’t know whether the partnership was the best approach to expansion. Another decision was on how DDD should start its expansion. While more people would be needed to support a larger organization, DDD has to change its management approaches to keep control over the size of its U.S. staff to minimize costs, potentially further straining local resources. 

sly into its operations and sales force and learn the practices. 

Rank-and-file staffs are the employees in an organization who are not in any leadership or managerial positions. Rank and file employees form the majority of the workforce in the organization as opposed to the leaders such as the department heads, general managers, or presidents. In short, they are the front lines. In DDD, operating a computer, basic business skills, teamwork, email writing, English, and software are required. For DDD the situation posed several human resource management challenges. The company’s limited financial resources made it hard to compete for and attract local management talent. DDD often found that it had to rely on the appeal of the company’s social mission to recruit trained professionals. The company also faced difficulties retaining internally-trained managers and high-performing operators and experienced Cambodia’s IT employees could go elsewhere to earn a higher salary than what DDD could offer. At the same time, skilled managers were hard to find, and expensive because they were in high demand. To fit well with DDD, an individual moreover needed to not only meet the role’s technical requirements but also be passionate about DDD’s social mission. In addition, infrastructure was also a big barrier. DDD’s Battambang office was significantly less developed than Phnom Penh. The majority of roads were unpaved and only a handful had street names. The electricity supply was unreliable and broadband connections were limited and very expensive, and T1 connections, where available, cost several thousand U.S. dollars per month. The poor infrastructure made it difficult for DDD to transfer skills from the Phnom Penh office, as its managerial staff was reluctant to relocate to Battambang. Meanwhile, most of northern Cambodia’s educated workforce tended to move to Phnom Penh rather than stay in the region, so recruiting talented operators and managers locally was a constant challenge. Because DDD depends on a dedicated U.S.-based sales staff to develop Western business contracts and also relied on expatriate project management expertise, standardizing project management and operations processes among the three sites is a strategic decision for its efficiency. To ensure that the training curriculum was standardized and specific to the services each office provided. 

While more people would be needed to support its expansion, to become a larger organization, DDD has to change its management approaches to keep control over the size of its U.S. staff to minimize costs, potentially further straining local resources. Training recruits was a critical component of DDD’s model. DDD trained and employed young Cambodians and Laotians in IT outsourcing, with the goal that they would graduate from DDD and continue to earn competitive wages for themselves and their families. Moreover, DDD also recruited recent high school graduates whose prospects for jobs and post-secondary education were limited, due to lack of resources or disability. In mid-2008, the company began to address some operational issues by recruiting Western expatriate volunteers to work with the current management. Through an internally developed training curriculum, recruits learned basic skills such as typing and how to operate a computer, as well as business-specific skills such as business etiquette, teamwork, and email writing, trainees were expected to learn the basic tools and software that they would use in the course of their work. Moreover, the curriculum has even been customized to reflect each site’s product and service offerings.

Due to its small size, partnerships were very important to DDD. Among the available options, a partnership or joint venture was a good one. Although selecting the right partner and negotiating the terms of an agreement was time-consuming, a partnership would give DDD access to a committed local partner with detailed knowledge of the local labor pool, legal requirements, and business practices, and facilitate the expansion. However, DDD would have to develop processes for incentivizing partners to follow DDD’s standards for recruitment, social programs, and most importantly quality control. Moreover, DDD’s board was also considering social franchising, a method of expansion for social enterprises. It works similarly to commercial franchising and enables a not-for-profit organization to scale and expand the reach of the operations and provide the same services in new markets and locations working with a local social franchisee partner. Social franchising required the development of a standardized set of manuals and procedures for recruitment, training, project management, and daily operations. Basically, it is like a social edition of McDonald's or Starbucks. DDD would help franchisees establish their business and also provide ongoing support, just like McDonald's provides support for its franchises. But, the franchisee selection process is also time-consuming and DDD’s management felt franchisees needed to be incentivized to develop local revenue sources, rather than rely on DDD’s U.S.-based sales and fundraising teams. In this case, determining where work would be allocated could prove challenging in the more loosely controlled structure of a franchise network. In addition to the partnership, collaborating with international organizations was also a good option. Since such a partner would already know the business, DDD could potentially tie more seamlessly into its operations and sales force and learn the practices. 

References

Digital Divide Data, a case study by Mathew, A., Rod, G., Villalobos, J. & Yates, D., pages 1-12. 

Strategic Choices | Digital Divide Data, a case study by Mathew, A., Rod, G., Villalobos, J. & Yates, D.

 Digital Divide Data(DDD) is a social enterprise that delivers digital content, data, and research services to clients worldwide. DDD's innovative social model enables talented youth from low-income families to access professional opportunities and earn lasting higher incomes. This model, established by DDD in 2001, is now called "impact sourcing” and has been implemented by dozens of firms around the world. The company would deal socially and go on to win an award for social entrepreneurship. What started as a small company of a dozen employees has turned into a company with 500 staff with multiple offices in Cambodia and Laos, serving clients in the USA and Europe. In 2008, Digital Divide Data had operating revenues of around $2 million and was providing scholarships to disadvantaged youths. DDD’s mission of providing sustainable sources of employment and education to disadvantaged youth was already validated by nine years of successful operations. Looking towards the future, the decision to expand was motivated by DDD leadership’s desire to lift more people out of poverty and empower disadvantaged youth through market-driven, world-class IT services. Now, selecting the right business model for expansion was the first step toward the development of an achievable expansion strategy to attract more potential donors and supporters.

Strategic Choice 1 | Social Mission

A mission-oriented global IT services enterprise or a profit-seeking company? Canadian-born Jeremy Hockenstein, DDD’s CEO and a co-founder, had visited Cambodia in November 2000 on vacation from his job as a McKinsey consultant in the United States. Hockenstein was struck by the level of poverty in the country, and the lack of opportunities for young people to build careers. He was able to build a successful business since he concluded that Western demand for IT outsourcing services could be satisfied by Cambodian workers, given the right resources and training. However, he decided to run DDD as a social enterprise. That's why DDD’s social mission was to help economically disadvantaged or physically disabled young adults. 

Strategic Choice 2 | Recruit, Train, and Operation

Training recruits was a critical component of DDD’s model. DDD trained and employed young Cambodians and Laotians in IT outsourcing, with the goal that they would graduate from DDD and continue to earn competitive wages for themselves and their families. Moreover, DDD also recruited recent high school graduates whose prospects for jobs and post-secondary education were limited, due to lack of resources or disability. In mid-2008, the company began to address some operational issues by recruiting Western expatriate volunteers to work with the current management. Through an internally developed training curriculum, recruits learned basic skills such as typing and how to operate a computer, as well as business-specific skills such as business etiquette, teamwork, and email writing, trainees were expected to learn the basic tools and software that they would use in the course of their work. Moreover, the curriculum has even been customized to reflect each site’s product and service offerings. 

Strategic Choice 3 | Combine Degree & Experiences

I reckon that this is a pretty smart decision which means that after you graduate from DDD, you already have working experience and a university degree. After three to four years working at DDD, the operator would then complete his or her university degree and graduate from DDD. Graduates either were promoted within DDD or left to join other organizations that valued their professional experience and technical skills. 

Strategic Choice 4 | To Expand Outside The Capital City

Although staying inside Phnom Penh was an option, DDD still decided to open two new offices outside of Phnom Penh to reach disadvantaged youth who were unable to move to the capital city to further their education at the end of 2003. But, where should be the next? Among so many options, DDD chose Battambang, Cambodia’s second-largest city of nearly one million people, located roughly 180 miles northwest of Phnom Penh since human resources are vital to DDD.

Strategic Choice 5 | Differentiate 

In 2003, DDD also opened an office in Vientiane, Laos. Creating new sites allowed DDD to differentiate each office’s services, as well as to seek local work to bolster the offices’ revenue. As a result, DDD was breaking even on its operating expenses at the start of 2009 and secured several large multi-year contracts from U.S. and European clients.

Strategic Choice 6 | Donations

To maintain its swelling social programs, training, and operator scholarships, as well as its fundraising and expansion planning, DDD continued to rely on donations and sponsorships in 2009. It was similar to the University of The People which was launched by educational entrepreneur Shai Reshef in 2009. 

Strategic Choice 7 | Standardization

Because DDD depends on a dedicated U.S.-based sales staff to develop Western business contracts and also relied on expatriate project management expertise, standardizing project management and operations processes among the three sites is a strategic decision for its efficiency. To ensure that the training curriculum was standardized and specific to the services each office provided. 

Strategic Choice 8 | Partnership

Due to its small size, partnerships were very important to DDD. In 2008, DDD began a partnership with the Center for Information Systems Training (CIST) in Phnom Penh. CIST is a French NGO that provided two-year IT training scholarships to disadvantaged Cambodian youth and helped them find jobs in the local IT market after graduation. CIST agreed to select and train affiliates of DDD operators for three to six months, with the cost shared between the two organizations. In addition, DDD also leveraged these partnerships to learn about new digitization processes that it could build on to win future work.

Strategic Choice 9 | Outsource

Because the recruitment and training practices in Phnom Penh differed from those of Battambang and Laos, DDD had very few company-wide guidelines on recruitment. Therefore, in Phnom Penh, the recruitment and training were outsourced to CIST, but in Battambang, it was done in-house. 

Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company's own employees and staff. Outsourcing is a practice usually undertaken by companies as a cost-cutting measure. For its financial health, outsourcing to CIST was a good choice compare to fully performed in-house.

Strategic Choice 10 | Allocation

How works were allocated among DDD’s offices was a strategic choice. These offices were largely specialized. The Laos office primarily performed xml tagging services, Battambang academic data entry and survey work, and Phnom Penh digitization of print publications. Retraining the operators and project managers in Battambang to take on some of the work from the Phnom Penh office was not considered a viable option as it would require considerable financial and human resources. Of course, DDD can reform these offices to be consistent instead of specialized. However, that means the different types of resources will be used to do the same tasks. 

Strategic Choice 11 | Other Countries

In 2008 DDD’s board of directors set a goal that was to grow its existing operations to 1500 people. While the main objective was to help more people in farther reaches of the world, the expansion would also add capacity and enable DDD to take on larger contracts in the publishing market. However, DDD’s management was eager to make sure future expansion took place in locations that had been thoroughly vetted. 

Although its management had already conducted exploratory talks with potential partners in India, China, and Vietnam, they didn’t know whether the partnership was the best approach to expansion. Another decision was on how DDD should start its expansion. While more people would be needed to support a larger organization, DDD has to change its management approaches to keep control over the size of its U.S. staff in order to minimize costs, potentially further straining local resources. 

Strategic Choice 12 | Strategies for Expansion

Developing a coherent global strategy and business model was critical for securing fundraising and donor support. DDD’s board of directors identified four potential strategies for expansion. Organic growth, partnership(with a local entrepreneur, an international NGO, or outsourcing firm), social franchising. 

Organic growth is the growth a company achieves by increasing output and enhancing sales internally. This does not include profits or growth attributable to mergers and acquisitions but rather an increase in sales and expansion through the company's own resources. Such a strategy could be initiated immediately, as DDD would not have to go through some time-consuming processes such as negotiating with potential partners. In addition, DDD would be in complete control of the strategy and management. However, it would put a severe strain on the company’s managerial resources. Without a local partner, DDD would have to lay out significant capital upfront to develop sites and local management teams. 

Another option was a partnership or joint venture with a local entrepreneur. Although selecting the right partner and negotiating the terms of an agreement was time-consuming, a partnership would give DDD access to a committed local partner with detailed knowledge of the local labor pool, legal requirements, and business practices, and facilitate the expansion. However, DDD would have to develop processes for incentivizing partners to follow DDD’s standards for recruitment, social programs, and most importantly quality control. 

Moreover, DDD’s board was also considering social franchising, a method of expansion for social enterprises. It works similarly to commercial franchising and enables a not-for-profit organization to scale and expand the reach of the operations and provide the same services in new markets and locations working with a local social franchisee partner. Social franchising required the development of a standardized set of manuals and procedures for recruitment, training, project management, and daily operations. Basically, it is like a social edition of McDonald's or Starbucks. DDD would help franchisees establish their business and also provide ongoing support, just like McDonald's provides support for its franchises. But, the franchisee selection process is also time-consuming and DDD’s management felt franchisees needed to be incentivized to develop local revenue sources, rather than rely on DDD’s U.S.-based sales and fundraising teams. In this case, determining where work would be allocated could prove challenging in the more loosely controlled structure of a franchise network.

In addition to the partnership, collaborating with international organizations was also a good option. Since such a partner would already know the business, DDD could potentially tie more seamlessly into its operations and sales force and learn the practices. 

References

Chen, J. (2022, February 8). Organic growth. Investopedia. Retrieved May 21, 2022, from https://www.investopedia.com/terms/o/organicgrowth.asp

Digital Divide Data, a case study by Mathew, A., Rod, G., Villalobos, J. & Yates, D., pages 1-12. 

After studying the Pakistan case study (the ePlanet Ventures fund company), Pakistan: A Story of Technology, Entrepreneurs and Global Networks, describe the company’s strategic choices. What perceived cultural and political dynamics of Pakistan impact ePlanet’s strategic choice? Is there other country’s experience been similar to Pakistan’s experience?

Pakistan | The History

Pakistan became an independent nation on August 14, 1947, when British India gained independence from British rule. Although founded on democratic principles, Pakistan’s political history had been tumultuous and half of its short life was under military rule. When Prime Minister Nawaz Sharif was deposed by General Musharraf in a 1999 military coup, Pakistan was on the verge of bankruptcy and in danger of becoming a failed state. Between 2000 and 2007, Pakistan’s per capita GNI grew from $480 to $800 and its GDP growth rate went from 4.9% to 6.9%. 

Venture capital (VC) | The Industry

Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. However, it can also be risky for investors who put up funds, the potential for above-average returns is an attractive payoff. For startup companies or ventures that have a limited operating history, venture capital is an essential source for raising money, especially if they lack access to capital markets, bank loans, or other debt instruments. Venture capital is a subset of private equity that can be traced back to the 19th century after World War II.

ePlanet Capital | The VC Company

ePlanet Capital is a venture capital company that provides venture capital for telecom, media, and technology companies. It was founded in 1999, in California, United States by Asad Jamal and Tim Draper. As of January 2020, the company has made 39 exits 86 investments, and over 99 companies from Baidu in China to Virgin Mobile in Latin America. 

The Contemplation | Maximize Profits & Minimize Risks

Now, we know what ePlanet Capital was doing. Let's discuss the decision on its investment. Should ePlanet be one of the first VC entrants into the Pakistani market? The shortest words, yes or no, are those which require the most thought. Generally, venture capital companies are all trying to maximize their return on investment and minimize the risks at the same time. In this case, Asad was considering the risks and also did not want to lose the opportunity if it was a big one. Adobe and Qualcomm had already invested in Pakistani companies, and ePlanet had the opportunity to make its first investment. 

Maximize Profits | Opportunity I

To maximize the profit on this investment, Asad has to understand the scale of the market companies were targeting. According to the Pakistan Software Export Board, as of 2006, Pakistan was the 6th most populous country in the world with an increasingly empowered middle class whose needs were starting to resemble those of the West, from basic things such as access to satellite TV and the Internet. These factors mean great demand and opportunities. It was an evolving market that business owners do not want to miss. As a venture capital, ePlanet Capital was able to gain profits by providing startup companies or other small businesses desire to build their empires with capital before they file for IPO. Recall the demand and supply model we learned in economics theories, ePlanet Capital is the supplier that supplies startup companies and other small businesses, the demanders, with capital. Unlike typical businesses that supply products or services, ePlanet Capital's major clients are businesses that want to provide products or services. The more small companies came to ePlanet for capital means more demands, and more demands will increase the prices. In this case, the prices are the return ratio and the profits.

Maximize Profits | Opportunity II 

Since 2002, Pakistan had seen strong GDP growth, averaging around 7% per year, an attractive number compare to developed countries which are around 2% per year. In addition, aggressive tax policies, restructured public enterprise, and banking sectors stimulated growth and resulted in a consumer boom. Moreover, Pakistan's policy trends of liberalization and deregulation appeared to have had an impact, according to the World Bank's Doing Business 2008 report.

Maximize Profits |  Opportunity III

The introduction of the Private Equity and Venture Capital Funds Act of 2007 also provided an enabling regulatory environment for the capital markets, making it easier for funds outside of Pakistan to invest in the country with full protection as well as providing full tax exemption until 2014. 

Maximize Profits |  Opportunity IV

The world was now a global village, particularly in the consumer Internet/web 2.0 space, many distance issues were now almost moot. For example, by promoting its product through YouTube, Scrybe demonstrated that it did not matter that it was located in a leafy suburb of Islamabad; it had wanted 5,000 users for its beta, yet it got close to 100,000. Naseeb Networks located in Lahore had hundreds of thousands of users.

Minimize Risks |  Threats I

To minimize the risks, Asad has to research the weakness and threats of this investment. Although Pakistan had been politically stable and even prosperous since 2000, it was still uncertain whether the political turmoil was around the corner or not. Politically, whether enough had been done to make Pakistan’s economy sustainable and able to weather any upheaval still remains unidentified. 

Minimize Risks |  Threats I

Venture capitals generally look at the bigger picture and the long-term success of their investment. Therefore, Asad was concerned with the ability to scale. Mass production, expansion, and hiring more and more employees when a company trying to grow, were where the challenge lay. If you own a cafe', you probably spend all of your time there. However, if you own a coffee chain like Starbucks, which runs more than 32,000 stores in 80 countries, the management would be very different. Nonetheless, the common belief was that trusted management was hard to come by in Pakistan, and therefore the culture was still one of the family-owned businesses with limited professional management. It would be impossible to scale new ventures without addressing this issue. 

Minimize Risks |  Threats II

Economic activity takes place when resources such as capital goods, labor, manufacturing techniques, or intermediary products are combined to produce specific goods or services. Therefore, infrastructure is always a crucial factor in economic activities. The unreliable supply of electricity, water, and other utilities, meant companies had to build redundant systems into their infrastructure, which would be costly.

Maximize Profits |  Strength I

There is a voluntary non-profit organization, The Organization for Pakistani Entrepreneurs (OPEN), formed by a group of U.S.-Pakistani entrepreneurs at MIT in 1998 to facilitate and encourage the growth of Pakistani entrepreneurs and professionals. It provided networking and enhanced business opportunities for entrepreneurs and professionals in the high-tech, energy, and life sciences fields. In addition, this organization collaborates with the MIT Entrepreneurship Center to actively educate Pakistani-based entrepreneurs. 

Maximize Profits |  Strength II

Ultimately, venture capitals all want to take their anticipated profits and move on to the next projects. An efficient capital market such as the stock market is helpful. The Karachi Stock Exchange (KSE) was the biggest and most liquid exchange in Pakistan and was declared to be the Best Performing Stock Market in the World by Business Week in the year 2002. 

Maximize Profits |  Strength III

In the technology space alone, Pakistani universities were producing upwards of 20,000 English-speaking graduates per year. These young technically trained graduates started turning to new horizons.

Minimize Risks |  Weakness I

There were only three Pakistani companies listed on the London Stock Exchange, but none of them were technology companies. No Pakistani companies as yet had been listed on NASDAQ or any of the other U.S. exchanges. There are relatively fewer experiences and successful examples to encourage and stimulate new startups.

Minimize Risks |  Weakness II

Given the political concerns in the country, if a business is based on outsourcing and 90% of its clientele is abroad, there would be big trouble when the exports and imports policies or regulations be changed. Whereas if a business is domestically-focused, it can continue to thrive despite the political situation but it would somewhat limit itself to one country.

Now, if we combine all these reflections, it would become the SWOT Analysis that outlined the Strength, Weaknesses, Opportunities, and Threats, for Asad to make the decision.

Strategic Choice I | Ignore the distance & focus on the potential

In Asad's opinion, the distance was an element of the shortsightedness that prevailed in the VC industry. The world was now a global village and, particularly in the consumer Internet/web 2.0 space, this distance issue was now almost moot. By promoting its product through YouTube, Scrybe demonstrated that it did not matter that it was located in a leafy suburb of Islamabad.

Strategic Choice II | Ally and Networks

The OPEN provided networking and enhanced business opportunities for entrepreneurs and professionals in the high-tech, energy, and life sciences fields. By collaborating with the MIT Entrepreneurship Center and actively educating Pakistani-based entrepreneurs, Asad was able to discover more opportunities.

Strategic Choice III | Learn from the successful examples

With India, China, and Dubai on Pakistan’s doorstep, Asad was reassured somewhat. Pakistan traditionally had strong relations with China and the UAE, and his gut told him Pakistani businesses would be well received in those regions, as long as the product offerings were of high-enough quality. Pakistan was a seething cauldron of opportunity and potentially the next frontier for technology-based entrepreneurship. China had been done. India had been done. 

Strategic Choice III | Cultural

Due to its historical, geographical, and ethnic diversity, Pakistan’s culture is a melting pot of Indian, Persian, Afghan, Central Asian, South Asian, and Western Asian influences. Family comes first in Pakistan due to religious, cultural, economic, and societal values. Pakistani society is not led by individualism but rather by collectivism, where family and other relationships stand strong. Although there were logical business considerations for investing in Pakistan, such as a large market, cost-base, and talent, in addition to reasons based on cultural or family connections, expats used to the work culture of the US or Europe may struggle slightly to do the way of doing business in Pakistan. As mentioned earlier, trusted management was hard to come by in Pakistan, and therefore the culture was still one of the family-owned businesses with limited professional management. It would be impossible to scale new ventures without addressing this issue. However, the empowerment of a growing middle class and a trend for overseas Pakistanis to return home led Asad to believe that this problem would be resolved eventually. 

Strategic Choice III | Political

Historically, Pakistan had been politically stable and even prosperous since 2000, albeit under a military dictatorship. Asad feared that political turmoil was around the corner and he doubted whether enough had been done to make Pakistan’s economy sustainable and able to weather any upheaval. Strategically, he has the right concern. Political stability would largely influence economic development, especially in developing like Pakistan.

Taiwan | Political & Semiconductor Industry

Finally, similar to Pakistan’s experience, Taiwan also has its political concern due to the military threat from China. Even though it was a great market and opportunity, this kind of threat did destroy many international investors' interests. Moreover, the Taiwanese semiconductor industry, including IC manufacturing, design, and packing, forms a major part of Taiwan's IT industry. Due to its strong capabilities in OEM wafer manufacturing and a complete industry supply chain, Taiwan has been able to distinguish itself from its competitors and dominate the global marketplace. But, it wasn't always so painless.

In the early 1970s, Taiwan was struggling on its way to success. Events such as withdrawing from the United Nations and breaking formal relations with China and Japan. In the meantime, the whole world was in a recession, and Taiwan was greatly affected. At this time, Taiwan decided to invest in the semiconductor industry by introducing semiconductor design and manufacturing technology from the United States. During this period, the semiconductor industry gathered expats in the United States to set up a Technical Advisory Committee (TAC) to provide technical direction and consultation. In 1980, the government established the Science Park to introduce science and technology talents. In 1981, under the leadership of the Institute of Electronics, Industrial Technology Research Institute, United Microelectronics Corporation (UMC) was established, which was a joint investment of the government and private capital. The Taiwan Semiconductor Manufacturing Company (TSMC) was established by the Institute of Electronics in 1987 to enhance the private integrated circuit manufacturing capacity. TSMC is the world's first professional wafer foundry, and its establishment represents the emergence of a new division of labor in the semiconductor industry.

References

Gulwani, N. (2017, December 23). 13 things you should know about Pakistani culture. Culture Trip. Retrieved May 13, 2022, from https://theculturetrip.com/asia/pakistan/articles/13-things-you-should-know-about-pakistani-culture/ 

Hayes, A. (2022, March 24). What is venture capital? Investopedia. Retrieved May 11, 2022, from https://www.investopedia.com/terms/v/venturecapital.asp 

Pakistan: A Story of Technology, Entrepreneurs and Global Networks, a case study by Sabir, S., Aidrus, T., & Bird, S., pages 1-13.

Culture is largely invisible to individuals. Just as the sea is invisible to the fish swimming in it. How does the culture of the organization affect the way it makes decisions?

 Culture is largely invisible to individuals. Just as the sea is invisible to the fish swimming in it. An organization's culture will influence its strategy, its way of doing business, and the way it responds to changes. There are many successful examples of having strong and appropriate cultures such as 3M, Dyson, and Google. Their cultures were part of the key elements that contributed to their success.

3M

3M’s unique 15% Culture encourages employees to set aside a portion of their work time to proactively cultivate and pursue innovative ideas that excite them. Whether it’s experimenting with new technology, forming a special interest group around a fresh idea, or finding a new way to run a process, its 15% Culture gives employees in all areas the license to innovate. 

Google

In September of 1998, two Ph.D. students Larry Page and Sergey Brin laid the foundation of today's tech giant Google. Back then, it was started as a Ph.D. research project at Stanford University to create an unconventional search engine. In 2021, Google is the world's most popular search engine. Google's culture is a leading example of a healthy work environment. Their employees get the privilege to work in the latest technology and are deeply involved in solving the world's huge problems with the best possible use of technology. Moreover, this tech giant has successfully created an innovative and fun working environment for its employees. This increases team efficiency improves employees' productivity and helps them get rid of boring cubicle space, dull meeting rooms, or a formal corporate environment.

Dyson

Dyson, a name that has become synonymous with vacuum cleaners, is a brand that demonstrates how apt management and marketing techniques can transform a brilliant engineering idea into a bright success. Dyson’s remarkable success can be attributed to the corporate culture that flows directly from the founder’s personality. Problem-solving through creativity and innovation, research orientation, and an unremitting spirit of evolution and revolution. The consistency in personality and the open culture embedded in the very fabric of the organization where mistakes are not punished but rather valued because of a potential to be turned into success have made James Dyson a visionary and highly respected entrepreneur in the business community worldwide. 

Finally, I think leaders are often confounded by culture because much of it is anchored in unspoken behaviors, mindsets, and social patterns. Culture and leadership are inextricably linked. Founders and influential leaders often set new cultures in motion and imprint values and assumptions that persist for decades. Over time, an organization’s leaders can also shape culture, through both conscious and unconscious actions.

References

Google - A Tech Titan with the best corporate culture. Resume Review, Mentorship, Mock Interview, etc. (n.d.). Retrieved May 14, 2022, from https://faangpath.com/blog/google-a-tech-titan-with-the-best-corporate-culture/ 

How leaders can change company culture: Lessons from 3M and Six sigma. Network for Business Sustainability (NBS). (2022, February 21). Retrieved May 14, 2022, from https://nbs.net/other/the-challenge-of-change-3m-six-sigma-and-corporate-culture/ 

Ltd, A. A. (2021, December 31). Dyson Company Analysis: Industry and Culture. UK Essays. Retrieved May 14, 2022, from https://www.ukessays.com/essays/business/examining-the-rise-of-the-dyson-company-business-essay.php 

A Local company and its choice to expand into other markets. 85°C, Gourmet Master Co. Ltd, and its expansion

 On July 28, 2004, the first 85°C store opened on Baoping Road, New Taipei City, Taiwan. As its products became more popular, the second store opened in the same year and open for franchises. In 2004, "Gourmet Master Co. Ltd." was established in Taiwan and registered in the Cayman Islands. In September 2008, its parent company, a shareholding company, was established due to the reorganization. In 2010, it became a publicly-traded company and its shares were listed on Taiwan Stock Exchange. It opened 300 branches in three years and then started its oversea expansions. The brand name came from the belief, that "coffee tastes best at 85 degrees Celsius". As of May 2018, 85°C has opened 589 stores in China, a central kitchen, 11 logistics centers, 435 stores in Taiwan, and 44 stores in the United States. Most of its stores are franchises.

Its Strategic Choices

The first strategic choice was to reorganize its structure for the tax benefit that would down from 40% to 20% since it was registered in the Cayman Islands and treated as a "foreign issuer" in Taiwan. Secondly, the central kitchen. One of the most recent trends that have proven to save money and waste in the long term is central kitchens. Central kitchens not only can cut staff costs, food costs, and equipment and location costs, but also decrease waste. Thirdly, its expansion. Most of its stores are opened in China which is the biggest coffee market in the world. Moreover, geographically it is closer to Taiwan, not to mention that it is also a Chinese-speaking country. Therefore, China was the top priority when Gourmet Master Co. Ltd started its expansion. 

Reference

Home. 85C Bakery Cafe. (2022, May 7). Retrieved May 9, 2022, from https://www.85cbakerycafe.com/ 

85 degrees cafe australia 85C. 85 Degrees Cafe. (n.d.). Retrieved May 9, 2022, from https://www.85cafe.com.au/ 

What are the strategic choices available? What are the driving forces behind the choices? Compsis at A Crossroads

 Founded in 1989 in the Brazilian industrial city of São José dos Campos, Compsis is an electronic toll collection (ETC) service company that had gained the dominant share of the Brazilian market and had even managed projects in Australia and India. In 2004, however, it appeared that Compsis’s success might be in jeopardy. Revenue fell due to the Brazilian government’s prolonged delay in awarding new toll road construction rights to concessionaires. Despite considerable efforts by the business development team, Compsis had been unable to win new ETC projects outside Brazil, not only in Latin America but in Europe and India as well. Compsis's strength was mostly on turning its ETC software, the SICAT, into a simpler, more flexible product. However, this strength would be useless if it is hard to convince existing customers to upgrade. 

Therefore Compsis stood at a crossroads. In 2005, the Brazilian government was expected to award more concessions, the new SICAT version would be completed, and Compsis would be ready to test new products ranging from traffic management systems to magnetically guided buses. On the other side of the road, Compsis could ill afford to depend solely on the vagaries of the Brazilian market. The company could try to expand elsewhere in Latin America and other developing ETC markets, or Compsis could turn to a mature market, a country where experienced toll system buyers demanded and paid for cutting-edge technology from industry leaders such as the United States.

As 2004 drew to a close, Ailton knew that Compsis had several months of operating cash in the bank to support the decision. Now, the options were to wait out the current drought and expect that the Brazilian government’s funding for toll concessions would rebound as predicted, or to do it ultimately has to do, international expansion since Brazil was a limited market. If it chooses to expand internationally, which one would be better for this time? Compsis hadn’t been perfectly successful in its earliest international projects, but the team had learned crucial lessons about project management, cultural differences, and the complexities of finding a local partner. Was Compsis ready to expand to the United States, where it could probably match the quality and beat the price of its competitors? Let's discuss the options of which road should Compsis choose? Before we make any decision, we must know what available options we have. This is important because oftentimes we made bad decisions due to we overly limited ourselves, or give ourselves too many choices and causing time-wasting. Of course, there are always driving forces behind choices. 

In 1996, Compsis decided to expand its technology strategy into a new area, Intelligent Transportation Systems(ITS). Compsis stuck to its core skills, integrating complex hardware and software systems. This strategy sought to win contracts from a range of Brazilian ITS projects. Moreover, since the SICAT(Electronic Toll Audit) was the most demanded, Compsis designed its SICAT software and outsourced the hardware to local suppliers to increase its operating efficiency. It is similar to Apple Inc. outsourcing its hardware manufacturing globally, mostly in China, to reduce the cost, but the core skills do not. 

In my opinion, the main reason that contributed to Compsis's success was that Compsis was able to take the advantage of its core skills to widen its product lines, gain its flexibility of service and products, and catch up with the good timing to expand its business. Nonetheless, some of Compsis's success was learned from its failures. Unlike customers in mature countries who could afford costly systems, the Indian toll market was sensitive to price. Its India project was a wash, with no loss, but also no profits. It was a pricy lesson that Compsis learned from expanding in a developing country. In this case, we can understand that widening the product lines and gaining flexibility is crucial when expanding globally.

References

Compsis at a Crossroads, a case study by Lehrich, M. J., Paredes, P. J., & Ravikumar, R

Compsis at A Crossroads, A Case Study

 Usually, there are always some reasons why businesses make strategic choices, either due to their own ambition or failure. Therefore, let's look at some issues it was facing, before we discuss the decisions the Compsis made and why it was at such a crossroads. It is not only good to know the advantages and disadvantages of these strategic choices, but it is also helpful when we know the reasons behind these decisions.

The Issues

In 2004, its revenue fell primarily due to the Brazilian government's prolonged delay in awarding new toll road construction rights to concessionaires and also unable to win new ETV projects outside Brazil. Even though Compsis was making progress in turning its ETC software(SICAT) into a flexible product, it would be difficult to convince existing customers to upgrade.

The Crossroads

The CEO Ailton de Assis Queiroga and his fellow Compsis leaders anticipated that 2005 would be a better year since its new SICAT system would be ready when the Brazilian government was expected to award more concessions. However, if we look at the other side, the alternative is to expand its business elsewhere in Latin America or other developing ETC markets which are highly price-sensitive. Or, a mature market that is more likely to demand and pay for such as a cutting-edge product, the United States. In addtion, To widen its product suite by focusing more on other services and products such as ATMS, SMV, or SGM, it could broaden its portfolio and spread the risk. But if Compsis desire to grow, then Brazil was ultimately a limited market. Its relatively inexperienced with international and public RFP processes and small will be a big weakness.

So, which road would you prefer to choose if you are the CEO of Compsis? Remember, the resources are limited and it would be costly when you made your choice and regret it, or even try to turn back your wheel.

Understanding The Industry and The Markets

A modern toll plaza is broadly classified into three categories, manual, semi-automatic, and fully automatic. A manual toll collection booth accepted cash. A semi-automatic toll lane allowed cash collection, credit cards, coupons, and drive-through using RFID transponders. A fully automatic, unmanned toll booth only permitted vehicles that were RFID-equipped, and also linking the various lanes was a complex and integrated system of wires, detection devices, and software, both to monitor drivers and employees and to audit the receipts. Clearly, Compsis's advanced product was the third one, the fully automatic.

In Brazil, where Compsis was majorly operating in, most road operators were private concessionaires who collaborated with the government under the authorized contracts. In the US, the operators are not private since they perceive the road as a public good. Generally, globally, in this market, depending on the local competitors, there might be enough roads and contracts to uncover.

The Strategic Choices 1: Develop and Switch

In 1996, Compsis decided to expand its technology strategy into a new area, ITS(Intelligent Transportation System) particularly, the Electronic Toll Audit(SICAT), which provides integrated real-time management of all the processes of automation, accounting, and auditing of revenues at highway toll plazas. Switching its hardware business to software business. Rather than manufacture transponders, Compsis stuck to its core skills to integrate complex hardware and software systems. It was a strategic choice to switch to the low-margin business of hardware manufacturing. By 2004, the Compsis was deriving the majority of its revenue from SICAT implementation and maintenance.

The Strategic Choices 2: Outsourcing

Compsis designed its own SICAT software and then sub-contracted the hardware manufacturing to local suppliers, the sensors, high-resolution cameras, toll gates, and more. Outsourcing is a practice usually undertaken by companies as a cost-cutting measure.

The Strategic Choices 3: Flexibility and Benefit The Partners

In the fall of 2001, Compsis began to upgrade its SICAT software even better. For a large toll road project in New Delhi, Compsis used early Java tolls to develop SICAT India, which introduced business intelligence tools to ease the operator’s tasks. Compsis designed its new SICAT, the SICAT XP, to be Web-based and flexible enough to be sold in modules, a more powerful, flexible, and user-friendly product.

The Strategic Choices 4: Expand for Survival

Compsis decided not to rely solely on its Brazilian SICAT business since its CEO Ailton and its board of directors strongly believe that any technology-based company in Brazil would be vulnerable if it were to depend solely on a single product line. Therefore, the company started to invest significantly in new product lines. Oftentimes, it is a necessary step for most businesses. For example, the energy giant Exxon Mobil and traditional auto manufacturers now have to transfer their business into the clean energy industry and electric vehicle business. In this case, Compsis was trying to broaden both its product lines and its geographical ranges.

The Strategic Choices 5: Alliance and International Expansion(Australia)

In 1999, Compsis collaborated with a technology firm, Philips, to implement its advanced SICAT systems for a toll plaza in Australia. Philips handled the hardware, the local operating contracts, and Compsis set up the software. It was quite a successful international expansion. In contrast to the work with Philips, in Brazil, Compsis had not formed commercial partnerships, even though it has strong relationships as a supplier to highway construction and maintenance companies. 

The Strategic Choices 6: The Developing Country, India

In India, Compsis was not doing so well as it was in Australia. Not only the local contractors were unable to do the job smoothly, but also it was a very price-sensitive market. The same strategy Compsis adopted in Australia was not going so well while expanding to a developing country like India due to the economic situation and the culture. Moreover, it was a costly decision. Compsis have run out of the total budget for its engineering segment and even did not see any profit.

The Strategic Choices 7: The Latin American

According to the research that Compsis conducted, the Latin American market was projected to be small but growing rapidly. Countries such as Bolivia and Peru would like to purchase relatively simple and cheap solutions which are easy to implement. By partnership with the local commercial partners to win those projects, Compsis was able to obtain the growth.

The Strategic Choices 7: The United States

Putting its eyes on the United States was a reasonable thought because it was a huge ETC market, even larger than the sum of all the Spanish-speaking Latin American countries. In addition, it was a mature and growing steadily market that was dominated by several providers. Moreover, the major customers in this market are the Transit Agencies such as the Department of Transportation, which were line agencies of the federal or the state government. Those agencies may issue bonds to fund their expenditure on public construction. However, to enter this market, Compsis has to understand the RFPs processes(the open Requests for Proposals), a competitive, well-regulated bidding process with clear guidelines and procedures. Those procedures are considered mostly on the ability, quality, past performance on similar tasks, technical proposal, and cost of the project. Clearly, Compsis is pretty good at these evaluation criteria. However, in light of the size and complexity of the market, the Compsis directors knew that it would be no trivial matter to find and obtain ETC projects in the United States. Despite its strong quality reputation among industry competitors, as a market entrant Compsis would be virtually unknown among the transportation agency and authority buyers in the U.S. Moreover, to enter the U.S., Compsis was considering a broad range of approaches, including opening its own sales office in the U.S., partnering with a U.S. firm, pursuing a preferred vendor status with a construction company, or selling through a value-added reseller.

In conslusion, resources are so precious in the business world. We all desire to have a infinity symbol in our bank account but it is so hard to get all the things we want. Rather than rely on day dream, make a real plan to achieve each of them is a more achievable idea. In this case, Compsis could not win all the market it wanted by one single solution. Therefore, putting more budgets on the highest yield project is a rational choice. However, these kind of choices sometimes mean missing the best opportunity to expand and grow. As 2004 drew to a close, Ailton knew that Compsis had several months of operating cash in the bank. Perhaps the best option was to wait out the current drought, expecting that the Brazilian government’s funding for toll concessions would rebound as predicted. 

References

Compsis at a Crossroads, a case study by Lehrich, M. J., Paredes, P. J., & Ravikumar, R