Strategic Analysis

Strategic Analysis Summary
Learning goal
Write a useful, concise analysis of the strategic advantage or disadvantage of a possible strategic change that will provide helpful insights to executives of the firm.

Typographical format and length
• No more than two (2) pages, double-spaced, 12-point font, 1” margins all around, stapled.
• Author’s full name and section day at the top of every page.
• Why so short? Because in today’s business world no one reads past the first page if it doesn’t grabtheir attention, so you must learn how to get your ideas into a short format that will entice people to read more or better yet, come ask for your input and help. But if you can’t get past the first page, it doesn’t matter how brilliant the rest of it is.
• Everything should look clear and professional, including no misspellings, obvious grammatical problems, etc.

Audience
Top executive with strategic responsibilities or interests in the firm. The paper should give insight into what is not said or easily identified, not a summary of explicit facts that these executives already know. The best strategic analyses are ones that even when the top executive disagrees with the conclusion, he or she was able to understand the situation better.

Question and justification
You will be asked a question about a business case. The question will require a “yes” or “no” answer, followed by the explanation of why you chose that answer. Do not do additional research to answer the question – use information from the case and discussion only.

Format of paper (FOLLOW THIS STRICTLY)
First sentence: Answer “Yes” or “No” to the question, then have one or two-line summary of why you chose that answer.

Rest of papers: Argument followed by support.

The rest of the paper should be paragraphs that are arguments. The first sentence should be an argument about why this is a good or bad strategic move, and the following sentences should support that argument with analysis and data. Some common arguments that you could use, but do not have to use, might include:
a. This new strategy supports the current strategy of the firm….
b. The firm lacks (or has) the necessary Capability X to do the new strategy….
c. The competition faced by pursuing this new strategy is high (or low) because…
d. The risk of this new strategy is greater (or less than) the potential reward….
e. Etc.

Aldi is continuing to expand to more locations in more states within the United States. Costco wants to increase the revenues of each of its stores by increasing the number of people that visit nearby and thus will stop in and purchase more impulse buys. So top management at Costco approaches Aldi and suggests a joint venture between the two firms. Costco would build Aldi stores next door in places where Costco has enough extra land to build the stores. Costco would take a small percentage of Aldi revenues and Aldi would not have to pay for their new stores. Costco explains to Aldi that they believe this would increase traffic to both stores.

Pick one of the two companies – either Aldi or Costco – and answer this question about that one firm: will this arrangement improve – or harm — the competitive advantage of the firm you chose in the next one to three years?