MM34020 Business Strategy Coursework Assignment 2013 Title No. 4

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MM34020 Business Strategy Coursework Assignment 2013 Title No. 4 Katharina Schwitalla

Transcript of MM34020 Business Strategy Coursework Assignment 2013 Title No. 4

 

MM34020  Business  Strategy  Coursework  Assignment  2013  Title  No.  4  

Katharina  Schwitalla  

     

                   

         

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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        

                   

         

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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.  

   

                   

         

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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  

                   

         

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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)  

   

                   

         

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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  

                   

         

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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  

                   

         

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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)  

                   

         

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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  

                   

         

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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)  

                   

         

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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  

                   

         

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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)  

 

   

                   

         

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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  

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