MM34020 Business Strategy Coursework Assignment 2013 Title No. 4
Transcript of MM34020 Business Strategy Coursework Assignment 2013 Title No. 4
2
List of Content
1. Introducing the Company 3 2. The Importance of Strategy 4 3. SB.TV’s Use of Strategy 6 Part I: SB.TV’s early stages 6 Part II: SB.TV’s changed perception of strategy 9
4. Concluding Statement 14 Reference List 15
3
1. Introducing the Company In 2006 it used to be a hobby of Jamal Edwards, who has always been passionate about music, so
he turned it into his calling to go out and film rappers, singers as well as MC’s he wanted to listen
to. His passion and network acted as a stepping-‐stone, when he realised there was a market gap
throughout the media platform of YouTube. (SB.TV, 2013) Taking advantage of this gap, his idea
experienced phenomenal feedback and so the invention SB.TV came to life in 2008. Edwards,
also known as “SmokeyBarz”, was a rapper himself and in 2011 SB.TV launched its own music
label named “Just Jam Records”, where Edwards became CEO. (Rai, 2011)
In the beginning Edwards organised the channel and its fans on his own on a trial and error
basis and learned about the business as it was growing. In 2010, however, a team of 10 members
had been constructed due to growth and higher ambitions. Throughout the past five years SB.TV,
which is a business funded by online advertisements and revenues generated from video shoots,
became one of the most famous digital platforms with over 50 million views on YouTube. (Rai,
2011) Nowadays, it is referred to as “UK’s leading online youth broadcaster”. (SB.TV, 2013)
SB.TV established several services for its viewers as well as customers and with customers
SB.TV means talented young individuals, who are passionate about music. The channel offers
three core services: Broadcasting, Production and Editorial – giving its customers the chance to
engage and broadcast themselves. The company evolved from only being a grime freestyle
channel to being a diverse lifestyle broadcaster presenting interviews, competitions, music
videos, and tailored commissions as well as advertising virals. (SB.TV, 2013) Edwards plays a
role model in success as he started his career as a teenager and evolved towards a “ground-‐
breaking entrepreneur”. (Allen, 2013) Having succeeded with SB.TV and now branching into
comedy and fashion online TV, Edwards feels obligated to assist the youth to comparable
success. (ibit)
The following portfolio emphasises how vital a business strategy is and describes the
importance and interrelation between strategy and its core components. It explains SB.TV’s
change in strategy and why this brand has potential to expand on a global spectrum and to be
more than just a digital platform.
4
2. The Importance of Strategy According to the Business Dictionary, a strategy is “The art and science of planning and
marshalling resources for their most efficient and effective use.” (BusinessDictionary) This basic
definition differs completely compared to authors, which are well read within the topic of
strategic management. Lynch describes strategy as the core concepts in the means of either
plans or patterns integrated within the company in order to achieve its mission and vision and
thus its goals and objectives. (Lynch, 2003) Yet, definitions among well-‐read authors are
different. Taking Porter’s definition into account, strategy is the tool of creating competitive
advantage and to differentiate your business from others. (Porter cited in Henry, 2008, p.5)
Having in mind these different ways of defining strategy, it does not appear to be
straightforward finding one universal definition as it depends on different perspectives taken on
by its authors. This debate might be the result of strategy being complex, depending on an
organisation’s choice as well as the fact that strategies appear to be different for each and every
single business regarding its business model. (Henry, 2008) Nevertheless, the main aspect,
which they all agree upon, is that strategy is an outline leading an entity to achieve an aim.
Having a coherent strategy, which is internalised by every individual, enables an increase in
internal efficiency whilst making use of opportunities within the external environment.
A set strategy is from high importance in order to gain coordination and control over a business’
operations. It serves a company with long-‐term directions, gives its management as well as
employees a motivational impulsion and embodies the common thread they can hold onto and
can be led by to achieve desirable objectives. It simply is crucial for businesses to develop and
expand. (Johnson et al., 2010)
In order to lead a business to strategic success, a clear but broad vision as well as willingness to
flexibility are needed. According to Henry (2008) a vision “is often associated with the founder if
an organisation and represents a desired state that the organisation aspires to achieve in the
future.” (Henry, 2008, p.11) Visions do not change as much as targets and objectives and have to
realise employees’ values and goals in order to be adopted so that a company’s aspiration can be
accomplished. (Henry, 2008) These aspects are comprehended by SB.TV’s vision shown in
Figure 3. Additionally, a mission statement should exist, which simply explains a business’
existence and “is often seen as the overriding raison d`être for the business.” (Thompson &
Martin, 2010, p.271) It is also connected to a business’ stakeholders and states how it will serve
and satisfy them. Formulating these statements in a positive and thriving manner, they are more
likely to have positive affects on employees as well as the business as a whole. Again, in Figure 3
5
it can be seen that SB.TV created a solid mission approaching several stakeholders and
containing positive aspects in order to motivate. Well-‐developed statements are an equation to
the direction you want to go when entering a roundabout by car. “The signposts are only useful
if you know where you want to go.” (Murphy cited in Thompson & Martin, 2010, p.271) The
mission and vision are inherently tied to a formulated strategy. Formulating a desired state in
the future and a business’ overriding purpose will serve companies with an advantage of a
profound vision and mission statement that constitute a core concept allowing them to execute
their goals. (Johnson et al., 2010)
6
3. SB.TV’s Use of Strategy
Part I: SB.TV’s early stages A strategy has to be revised and improved constantly so it is able to move in conjunction with
the demand and development of the external environment. (Henry, 2008) When presenting
SB.TV’s strategy a huge change in usage can be revealed. SB.TV’s perception of strategy up to its
official recognition through its website in 2009 will be explained with the aid of a model called
5P’s. This tool was created by management expert Mintzberg in 1987 and helps to understand a
business’ approach to develop its strategy. Figure 1 shows the model suggesting five different
approaches to strategy.
Each approach is used as a viewpoint helping businesses to establish a profound strategy.
(Mintzberg, 1987) In this context, it is the most fitting model as it underpins which school of
thought is being conveyed by SB.TV.
Under the approach of a plan, strategies are consciously established in advance with a specific
purpose to handle certain situations. (Mintzberg, 1987) In regards to SB.TV, Edwards identified
a market gap within the media of YouTube when realising he could not find what he was
interested in. Taking advantage of this gap, he started a YouTube channel, where videos of
known as well as upcoming artists of the grime genre could be viewed. Here, it is important to
mention that no profound business model had been made up at this point as it started out as a
hobby. (SB.TV, 2013)
Figure 1
7
Strategies, in the means of a ploy, are management approaches to overcome competitors’
strength, often by expressing threats. (Mintzberg, 1987) Since YouTube has only existed for a
year, when SB.TV started to evolve, there was no major threat of existing competitors other than
individuals who already had been subscribed to YouTube. So it is assumable that approaching
strategy as a ploy will only become relevant to talk about within part II of the analysis, once
SB.TV became an attractive brand and faced the threat of copycats.
When choosing the approach of a pattern, a strategy does not evolve from an advanced
established plan, but rather from an accumulation of actions. These streams of actions create
patterns of appreciating past success, which might lead to success in future. (Mintzberg, 1987)
SB.TV made use of its strategy in the means of patterns since its beginning and still does. He
learned how to manage the channel strategically as it was growing on a trial and error basis.
(SB.TV, 2013) Once SB.TV gained positive feedback and the channel got famous, the patterns,
which have leveraged this success, were taken on further in order to guarantee future success.
Approaching strategy as a position, companies concentrate on the relation to its market place
and competition. (Mintzberg, 1987) As SB.TV is an audience driven channel, in which the
audience itself is able to participate in and can define the channel’s content, it has created a new
era of a digital platform. From the beginning, SB.TV placed itself in a position, competitors might
be nearly incapable to conquer due to differentiation.
Last but not least, perspective stands for the corporate culture’s influence and how individuals
are united. (Mintzberg, 1987) The idea to create a digital platform for individuals interested in
music has evolved from a single character. (SB.TV, 2013) For several years, Edwards has been
managing the channel on his own and thus strategy as a perspective had been easy to assess.
Edwards, always being highly passionate about music and innovation, did not have to arrange
for a team to follow the same passion and values as he operated independently. Thus, it had
been easy for SB.TV to maintain a well performing entity and a coherent culture influencing the
channels success positively.
Summarizing the outcomes of this analysis, an underlying perception of strategy for SB.TV’s first
half of existence, up to the expansion of the managing team, can be concluded: An emergent
strategy (Figure2). This is a type of strategy “where managers use their experience and learning
to develop a strategy that meets the needs of the external environment” (Henry, 2008, p.22)
Often strategies are established intentionally but occasionally and in the case of SB.TV, strategies
8
emerge from the choices made due to on-‐going uncertainty (Figure2). (Thompson & Martin,
2010) Mintzberg also emphasises that strategies can evolve without intention but through the
process of learning. (Mintzberg cited in Henry, 2008) So throughout the beginnings of SB.TV, the
company did not follow a planned strategy but rather acted on events in regards to Edwards’
experience and feedback given by the channel’s audience.
Figure2 (Mintzberg 1987)
9
Part II: SB.TV’s changed perception of strategy Realising how positive SB.TV’s acknowledgement became has increased the company’s demand
for growth and further success. Often it may not be that businesses have written down their
strategies, which has been the case for SB.TV in its early stages. (Johnson et al., 2010) However,
“As the business grows, so does the need for coordination.” (Financial Times cited in Henry,
2008, p.6) So SB.TV realised the importance of a coordinated strategy and thus, Figure 3 and 4
are part of SB.TV’s business plan representing its mission and vision, aims, targets and
objectives
Figure3
10
In order to outline SB.TV’s changed way of viewing strategy, as well as emphasizing the
interconnection between aims, targets and objectives with the strategy chosen, the Mc Kinsey 7S
framework will be utilized. Two business consultants named R. Waterman and T. Peters created
the model in 1980 so companies can analyse their position in regards to goals. (Waterman et al.,
1980) Recently, this model is often used in combination with other tools such as the balanced
scorecard, as some suggest that the structure is not able to solve the issue about coordinating
resources, actions and incentives within larger companies. (Kaplan, 2005) Since SB.TV, however,
is a physically small company with a current team of 10 managers, this framework will give
great detail about how the company operates across each factor. Figure 5 shows the framework
with each factor being connected to one another. This connection underpins the need of
alignment among these organisational elements if a company is to be successful. (Waterman et
al, 1980)
Figure5 (Waterman et al, 1980)
11
Regarding SB.TV the current situation will be analysed to show how the company is operating,
organisational elements are interrelated and strategy aims to achieve the company’s targets and
objectives.
Strategy: Lately, SB.TV views strategy more as an intended plan (see Figure 2) and ploy trying to scare off
rivalry to defend their market position, due to the facts that SB.TV’s business model became
more attractive for others to copy and numbers of online resources has grown. SB.TV’s strategy
evolves from the need to achieve its aim, target and objectives emphasising an existing
interrelation between them. In other words, strategy is a tool of how to realise set targets and
objectives and to do justice to formulated vision and mission statements. (Henry, 2008) In order
to become a 360-‐degree media lifestyle platform (Figure6), the company needs to expand its
market and its services need to be upgraded and differentiated even more. So SB.TV follows two
generic competitive strategies: First of all, a corporate strategy of Growth is utilized. Directing
“its energies to internal growth” SB.TV tries to increase its market share by pursuing the target
to challenge top brands and to inspire the youth. (Henry, 2008, p.221) In order to pursue that,
SB.TV sets objectives to develop its market as well as product by willing to expand to New York,
develop a smart phone app and to organise more live events (Figure 4). Secondly, a business
strategy of Differentiation is being used, as they want to evolve towards a 360-‐degree media
platform. “A differentiated product has the opportunity to meet different customer needs more
closely.” (Henry, 2008, p.186) Setting the target/objective to challenge top clothing and
broadcasting brands, SB.TV tries to be one for all. Customers would need to use several
providers to get informed, whereas SB.TV has it all. How these strategies are being pursued will
be explained by analysing the other six framework components.
Structure: SB.TV has different media usage such as their YouTube channel, website, Facebook and Twitter,
which are in need of structured sustainability. Additionally, there are the numbers of artists
being represented at the channel arranging SB.TV’s fame, who need to be organised as well as
taken care of. Even though Edwards is the founder and CEO of SB.TV, the channel is organised
and maintained as a team. (SB.TV, 2013) SB.TV being a virtual platform most of the work is done
and organised by electronic devices such as computer, phones and tablets. Since the channel
offers three core services, responsibilities are divided among team members accordingly to their
skills and interests. The working structure at SB.TV is highly characterised by limitless
boundaries “allowing us creative freedom when producing (…)” (SB.TV, 2013) Since SB.TV
12
introduced a merchandise online store the structure of simply producing a service has expanded
to also deliver physical products. (SB.TV, 2013)
Systems: SB.TV’s formal daily activities and procedures contain maintaining all networking platforms, as
these are the main contact points between the channel and its viewers. When updating them, the
team has to make sure all content communicated to the virtual world generates a coherent
impression of SB.TV’s trusted style.
Style: SB.TV’s style of management can be explained by the unitarism belief, which assumes
management and employees are working together towards the company’s good and welfare.
(Beardwell & Claydon, 2010) At the same time, Edwards tries to lead its team by example
encouraging them to think out of the box and acting as a role model, so that SB.TV as a whole is
seen as an inspiration for young entrepreneurs. An ecology called “The Jamal Edwards’ Effect”
has emerged, which is all about Edwards’ inspiration towards a new future generation of media,
where mutual promotion among different media channels is realised. (Burrell, 2013) Edwards’
success should be seen as a symbolic behaviour, the team and anyone else should feel motivated
to live up to.
Staff:
The team is seen as the most important asset of SB.TV, which needs to be invested in. This type
of staff management is related to the soft model of human resource management. (Beardwell &
Claydon, 2010) SB.TV favours to enhance the teams commitment and quality of skills.
Skills:
SB.TV’s most crucial quality is a team consisting of experts on social media content, who have a
strong commitment to music, fashion, film and lifestyle. The team is skilled to spot the next big
hit and are professionals when talking about the music business. Additionally, some are experts
in media design as well as production in order for SB.TV to have a sophisticated digital image.
Since the managing team has emerged from one to ten members, SB.TV has been in the need of
being mindful at all times, to hire only individuals sharing the same interests, values and goals.
The team only exists of “talented, highly skilled, passionate young adults” in order to guarantee a
corporate team united by common behaviour and thinking. (SB.TV, 2013)
13
Superordinate goals:
This element represents the “guiding concepts -‐ a set of values and aspirations (…).” (Waterman
et al., 1980) The core values in Figure 6 are the main principles for SB.TV serving a perception of
the future direction. These values are the reason why the team has been working together
successfully and having achieved such a rapid growth in brand value within the last years. Music
and peace are of higher order, as this is what SB.TV is all about.
Figure6
14
4. Concluding Statement Starting with no profound business plan what so ever, SB.TV has now turned into an extremely
competitive company, with highly ambitious aims and objectives, which result from a powerful
vision and mission statement as well as SB.TV’s strategic performance. Yet, SB.TV looks to grow
and diversify within the future. Having analysed the company’s change in organisational
behaviour and the way they view strategy, it is assumable for SB.TV to accomplish their current
aim of turning into a 360-‐degree media lifestyle platform and achieve their objectives within
near future. Having a vision as well as mission statement, gives the company an incentive to
work even harder as they have a fundamental aim they can work towards. The aim, targets as
well as objectives are the driving force for SB.TV’s current use of strategy.
By conducting the McKinsey 7S framework within certain time intervals over and over again,
patterns of success and failure can be determined helping SB.TV to realise its aim in a
sustainable and efficient manner. As the managing team has internalised SB.TV’s core values, the
businesses forecast to diversify even more by offering further services such as a smart phone
app or a wider range of news topics, the objective to be under the top 10 brands is likely to be
accomplished. Completing each and every objective, target as well as aim would also let SB.TV’s
vision and mission statement thrive to more credibility, which in turn would let SB.TV’s success
grow again.
15
Reference List
Books Beardwell, J. and Claydon, I. (2010) Human Resource Management: A Contemporary Approach Harlow: Prentice Hall Henry, A. (2008). Understanding Strategic Management. Oxford: Oxford University Press Johnson, G., Scholes, K., & Whittington, R. (2011). Exploring Corporate Strategy: Text and Cases. Harlow: Prentice Hall Lynch, R. (2003). Corporate Strategy. London: Financial Times Management Thompson, J. L. & Martin, F. (2010). Strategic management awareness and change. Andover: South-‐Western Cengage
Electronic Sources SB.TV (2013). Found at SB.TV website (www.sbtv.co.uk). Retrieved 23 November 2013 from http://sbtv.co.uk/2013/11/jamal-‐edwards-‐invention-‐sbtv-‐2/ http://sbtv.co.uk/about-‐2/, http://sbtv.co.uk/about-‐2/what-‐we-‐do/ and http://sbtv.co.uk/about-‐2/partners/ Rai, R. (Sept. 2011). Jamal Edwards … the Action kid and his media empire. London Evening Standard. Retrieved 22 November 2013 from http://www.standard.co.uk/lifestyle/jamal-‐edwards-‐-‐the-‐acton-‐kid-‐and-‐his-‐media-‐empire-‐6445541.html Allen, K. (Feb. 2013). Virgin signs digital business title by Jamal Edwards. The Bookseller. Retrieved 22 November 2013 from http://www.thebookseller.com/news/virgin-‐signs-‐digital-‐business-‐title-‐jamal-‐edwards.html BusinessDictionary (N. d.). Found at BusinessDictionary website (www.businessdictionary.com). Retrieved 22 November 2013 from http://www.businessdictionary.com/definition/strategy.html Mintzberg, H. (1987). The Strategy Concept I: Five Ps For Strategy. California Management Review 30(1): 11-‐24. Found at mbakku website (www.mbakku.com). Retrieved 24 November 2013 from http://www.mbakku.com/STD/CourseSyllabus1-‐52/1_52/sm-‐Tanai/5ps%20of%20strategy.pdf Waterman, R. H., Peters, Jr. T. J., Phillips, J. R. (1980). Structure is not organization. Found at tompeters website (www.tompeters.com). Retrieved 24 November 2013 from http://www.tompeters.com/docs/Structure_Is_Not_Organization.pdf Kaplan, R. S. (2005). How the balanced scorecard complements the McKinsey 7-‐S model. Strategy and Leadership 33(3): 41-‐46. Found at emeraldinsight website (www.emeraldinsight.com). Retrieved 24 November 2013 from www.emeraldinsight.com/journals.htm?articleid=1500390&show=pdf Burrell, I. (Sept. 2013). The Jamal Edwards Effect: Generation success – the media savvy stars taking over the world (wide web). Found at The Independent website (www.independent.co.uk). Retrieved 24 November 2013 from http://www.independent.co.uk/arts-‐entertainment/tv/features/the-‐jamal-‐edwards-‐effect-‐generation-‐success-‐-‐the-‐media-‐savvy-‐stars-‐taking-‐over-‐the-‐world-‐wide-‐web-‐8844505.html