Reference no: EM131706846

Response 1:

I have chosen to answer the question regarding Twitter's strategy. Twitter needs to have a good strategy in place that will drive user rates up that will lead to increased advertising revenue on which Twitter depends on.

A good strategy will relate to certain people who want to capitalize on the capability that Twitter provides. Twitter doesn't provide a product so much as service that gives every account holder the opportunity to provide a brief comment on areas of interest or news items of significant importance. WIthout a clear strategy, Twitter doesn't know where the tradeoffs are and where to spend their resources.

Twitter experienced difficulty in crafting a strategy because they did not diagnose the competitive challenge, did not have an effective guiding policy to address the threats that the competition posed to Twitter, and Twitter did not have a set of coherent actions to implement Twitter's guiding policy. Because Twitter did not address the competition adequately and therefore did not experience an increase in user log-ins, advertisers considered Twitter to be a niche social media service with a limited market. Twitter over-estimated the amount of interest that users would have in regards to how often they would want to log in and check on the feeds of the people they were following.

Some of the pitfalls that a CEO needs to watch out for when crafting and implementing a strategy is ensuring that the strategy is more than a grandiose statement. Having the most number of users was Twitters strategy but having more users doesn't necessarily create value for Twitter if they only log in to their Twitter account once or twice month. Another pitfall to watch out for is to ensure that the strategy offers performance areas that can be measured and used to validate if the strategy is working or needs to be adjusted. A third pitfall that befalls many companies is that the strategy doesn't speak about the value to society that is being provided by the product or service.

Twitter's value is that it gives people an opportunity to comment on current events and provide their perspective in a civil way. People around the world can see the comments and respond to it if they wish. A fourth pitfall is to avoid is a strategy that focus singularly on shareholder value. This puts the company at risk of underperforming, which leads to diminished shareholder value. A good strategy strikes a balance between the customers, employees and shareholders.

Response 2:

I have chosen Sears as my company to analyze for the class project. After review of the current annual reports and a great deal of outside research, it became clear to me that the company was being managed by an executive team with absolutely no retail experience and a recovery methodology that was focused on their rewards program instead of how to position the entire company to compete in the retail market.

The executive team does not appear to me to be focused on retail activities and mainly seems interested in the next most profitable business unit to liquidate in order to pay the current bills.

The team continues to downsize and close stores at a time when the Targets, Lowes, Home Depots and Walmarts' of the world are expanding. This places extreme pressure on the company for a location to attract shoppers in sufficient numbers to drive sales. Although Sears does have an on-line presence, it has relied upon store sales to achieve business success. Sears will not achieve success without a Retail management team in place and a strategy that emphasizes its core business.