Brand Evolution & Strategic Management

This assignment examines the evolution of top global brands between 2010 and 2017. It analyzes the performance of major brands, focusing on the decline of Johnson & Johnson and the unprecedented rise of social media platform Facebook to a position among the world's top ten brands. The report delves into strategic management principles and how they influence brand success and adaptability over time.

Running Head: STRATEGIC MANAGEMENT 1
Strategic Management

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Answer 1)
The latest issue of Wall Street Journal has presented a News Article about Tesla building a
factory in China. The electric-car maker Tesla has agreed to set up a factory in shanghai which is
a strategic decision of the organization. The present deal is a strategic decision for the
organization as it will give access to the company to the growing electric vehicle market of
China. The present arrangement will be focused to build a wholly owned subsidiary which will
slash the production cost of the organization. However, China will lose the import tariff by 25%.
The organization will get benefit from the largest electric vehicle market of the world. The
Chinese government will target the sales of seven million electric vehicle cars by 2025. The
strategic move of the company will reduce the production cost of the company by 33% as it can
avoid the shipping cost and the import duties. Currently, the company is serving the niche market
of luxury vehicles; however, the prices will be strategically reduced with the action. As a result,
the company can move beyond the luxury niche market in the country.
This move has also strategically propelled the market value of the shares of Tesla by more than
50%. It has become the rival of General Motors Co., one of the largest automaker in the world.
Last year, China circulated a proposal which will assist the electric-car makers to operate in the
country without the need of the local partners. In this regard, the country has planned to
introduce about ten free trading zones in the country. Till now, the foreign auto makers of the
company have to make joint ventures with the local partners (Varbanova, 2013). The foreign
companies can avoid 25% tariff on automobiles; however, they will split the profits and sharing

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of technology. The free-trade agreement will be able to leverage better access to Chinese market
in the future.
It is a strategic decision of the organization as it will expand the business operations of
the organization in one of the major markets for the electric vehicle. It will reduce the excise
duty of the organization and the company can reduce the production cost be 33%. Entering into
the free trade zone in Chins will also establish cordial relationships with the Chinese government
which will be beneficial for the organization while operating in the Chinese market. It is a
strategic move at the functional level of the organization as the company will shift its
manufacturing plant at a different location. The organization will be able to reduce the
production cost as well as increase export tariff in the country.
It can be assessed that the decision will be able to increase the demand of the product. The
company can strategically reduce the cost of the product which will be beneficial for
manufacturing the product at a large scale (Jeffs, 2008). The organization can reduce the cost of
the product by 33% which will allow it to target the niche non-luxury market of the country. The
proportion of middle-class customer segment is very high in comparison to the luxury market.
Therefore, the sales of the product can be increased drastically by reducing the product price.
Answer 2)
Johnson & Johnson is a medical devices, pharmaceutical and consumer packaged goods
manufacturing company. The company was at the fourth position in the fortune’s world’s most
admired brands in 2010. The company dropped to number 13 at the fortune’s list of 2017. There

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were a number of reasons which led to the decline of the organization in these years. The
company suffered from a number of controversies, regarding the baby powder and vaginal mesh
implants. It resulted in numerous law suits from the customers (Freeman, 2010). Other than that,
creating an extremely diversified portfolio has also increased declined the image of the
organization as several of the products of the organization are not at par in quality.
Other than that, there are a large number of organizations which are present in both the list of
2010 as well as 2017. Some of the common names are Apple, Google (Alphabet) and Berkshire
Hathaway. These organizations have remained among the top ten brands from 2010 to 2017.
Apple has been a renowned brand from 2010 to 2017. It has sustained the top position due to its
unique brand image. The organization has created a very strong brand identity and focuses a lot
on the brand marketing. As a result, the craze for iPhones is same today as it was in the past
years.
Facebook is on the ninth number in the list of the most admired companies in 2017.
Undoubtedly, the company has made a distinguished place for itself in the last year (Haberberg
& Reiple, 2008). Today, it has become a common household name and almost every person has
a Facebook account. The company has given birth to the social media and used an innovative
idea to build the world’s leading business. The organization was founded in 2004 and in a few
years, it became the leading business organization across in the social media industry. Today, it
ranks 2 in the social media industry. These selected companies operate in different domains;
however, they are the most popular brands in the organization (Hiriyappa, 2013).

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In the present section, research has been conducted for aforementioned companies, namely,
Johnson & Johnson, Apple and Facebook.
Johnson & Johnson is the leading and one of the largest business organization in the
pharmaceuticals and the consumer product market. The core competency of the company is its
brand image. Johnson & Johnson is famous all across the globe for its innovative and unique
consumer products. Other than that, the organization also has significant resources in financial
and natural resources (Teece, 2008). The organization has an extensive research and
development facility which has assisted the organization in creating innovative and unique
products. These core competencies distinguish the company from its competitors. Firstly, the
company has a very strong brand presence and global brand image. The business model of the
organization is unique as it has achieved economy of scale with the help of its production
facility. The marketing of the company is also unique and the company has created a unique
marketing strategy which has assisted it in securing the top position in the market.
Strengths
 Strong brand name
 Presence in more than 100 countries
 Loyal customer following
Weakness
 Recent scandals
 Reduced customer trust
Opportunities
 Market penetration as a large number
of customers are avoiding the
company’s product due to a recent
controversy
 The organization can also explore
other industrial avenues as it has
ample resources to enter into
Threats
 New competitors in the developing
and the developed markets (Ginter,
2013)
 Competition from generic drugs
manufactured by different companies.
These drugs are comparatively

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diversified fields cheaper in rate.
Apple is the leading business organization in the smart-phone and other technical device
manufacturing. The company has a combination of several core competencies. It is a very robust
brand and the imitation of the products is very difficult. Another core competency is the
capability of the organization to innovate constantly. It is considered as the most innovative
company across the globe. It also has abundant financial resources which can be used for
attaining the service of highly skilled persons. The company is also very consistent in its product
portfolio development which has assisted in keeping its customers loyal.
Strength
 Advertising skills which can increase
the brand awareness and demand for
the products of the company
 Extensive network of distribution
channels
 Brand reputation
 Strong financial assets
Weakness
 Dependence on a single product
 Incompatibility of the product with
other operating systems
Opportunities
 Adoption of new technologies such as
virtual technology or Internet of
Things
 Diversification to other products, such
as health-related wearable (Swayne,
Duncan &, Ginter, 2012)
Threats
 Intensification of the competition
which has reduced the market share,
revenue and the profits of the
organization
 Lawsuits regarding intellectual
property theft and patent infringement
(Pynes & Lombardi, 2011)
Facebook is a social media networking site and one of the most common websites in the social
media. It is the largest social media website and has over one billion users. The organization has

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over one million users and it is its core competency. No other organization would be able to shift
this level of customer base to other social media website. Other than that ease of use, flexibility
in the use of website and low-cost operations is the core competency of the organization. Over
the years, the organization has built a strong brand image and customer base (Kotler, Shalowitz
& Stevens, 2011). It is really difficult for the any other organization to break the strong image of
the organization. In the following section, SWOT analysis is conducted on the organization to
examine the strengths and weaknesses of the organization.
Strengths
 It can be easily integrated with other
websites and applications.
 It has more than one billion active
users
 Excellent user experience
Weaknesses
 Only one primary source of income
 Lack of concern for the user privacy
 Issue of website customization
Opportunities
 Market penetration by increasing the
number of users who access the device
with the help of mobile phones
 Diversification of the revenue stream
 Expansion to other countries and
markets (Wilson & Gilligan, 2012)
Threats
 Increasing the number of mobile
internet users (Proctor, 2014)
 Users can other extensions.
 Slow revenue income from online
advertising
 Identity issues
Answer 3)

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In the present section, a hypothetical organization has been created which will sell smart phones
to the customers. The organization will sell competitive smartphones which can compete with
other leading business organizations in the same industry. The name of the organization will be
Cherry Inc. and all the mobile phones will be named as Cherry phones.
The company will be dedicated to sell low cost phones to different customers so that people from
all income backgrounds can use smartphones with the advanced features. The mission of the
organization is to make smartphones available to all people across the globe. The objectives of
the organization is to inspire the world to create a better place for the future (Drummond, Ensor
&, Ashford, 2010).
This vision of the organization will reflect the commitment of the organization to inspire the
communities and use the key strength of the company such as technology, innovation capabilities
and creative solutions to create new values for the organization. It will create new value for the
different stakeholders such as industry, partners and employees of the organization and create a
better world with rich experience (Ranchod, & Marandi, 2007).
The external environment has a strong impact on the operations and the functioning of the
organization. The external environment of the organization is scanned with the help of PEST
analysis. It evaluates that the political, economic, social and technological aspects of the
external environment. There are regulations related to intellectual property and patent in the
telecommunication industry. Other than that, there are certain other regulations related to
bandwidth usage and allocation. It impacts on the overall performance of the telecommunication

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network. The smartphones must be designed such that it is compatible for different users of the
organization.
The economic factors also impact on the business operations of the organization. If the
purchasing power of the customers is high than they will be able to purchase smart phones with
best features. The organization can also attract investment from other companies if the financial
conditions of the organization is good.
Social factors impact significantly on the business operations of an organization. The interest of
the customers and their preference is influenced by the social factors. The latest trends and the
lifestyle factors influences on the choice of the customers. The preference of the customers
influences on the choice of product and the brand. Therefore, it is important to identify the latest
trends and choice of the customers and design products according to these factors. The
technology is another factor which impacts on the manufacturing and the infrastructural
development of the organization. The manufacturing facility of the organization is influenced by
the transportation system and other technological infrastructure of the country (Egen & Thomas,
2010). If the location has proper technology and infrastructure then the manufacturing process of
the organization eases.
The internal corporate environment plays a critical role in achieving the objectives of the
organization as well as adapting to the future requirements of the organization. The strengths of
the organization is its cost leadership and qualitative products. The organization is offering
products at a comparatively low price to the customers.

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However, the quality of the product is not compromised. The organization produces smartphones
which are high-quality in nature and are equipped with all the essential features. However, there
are certain weaknesses of the organization too. Such as it is a new organization; therefore, the
organization is not that much popular. It is important that the organization should focus on
building the brand image of the organization. The business organization should focus on each of
its customer so that the organization can build a strong reputation in a small duration.
There are several opportunities for the organization in the developing countries, wherein the
organization can expand its customer base. There are a large number of customers who want to
switch to high-feature mobile phones or are eager to buy a new one. The company should target
all these customers for expanding its market share.
It can be identified that the organization has opportunity to expand the unexplored market and
the price-sensitive customer segment. The organization can adopt cost leadership management
strategy to attract the target customers towards the business organization.
It can be concluded that the strategic management is important for the business
organization for effective management of business. The strategic management is the process of
designing the strategies for the future management of the organization. The management of the
organization requires effective long-term strategies which can assure that the organization will
operate properly in the future. In the present report, the top brands of the in 2010 and 2017 have
been evaluated. In the report, the decline of the major brand Johnson & Johnson has been
examined. Other than that, the report has examined the sudden rise of the social networking site
Facebook as one of the top ten brands in the world.

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References
Fortune. (2010). Most Admired Brands 2010. Retrieved 25 October 2017 from
http://archive.fort/une.com/magazines/fortune/mostadmired/2010/
Higgins, T., & Moss, T. (2017). Tesla Strikes Deal With Shanghai to Build Factory in China.
The Wall Street Journal. Retrieved 25 October 2017 from https://www.wsj.com/articles/tesla-
strikes-deal-with-shanghai-to-build-factory-in-china-1508670181
Fortune. (2017). The world’s most admired brands 2017. Retrieved 25 October 2017 from
http://fortune.com/worlds-most-admired-companies/list/
Varbanova, L. (2013). Strategic Management in the Arts. Routledge.
Jeffs, C. (2008). Strategic Management. SAGE.
Freeman, R.E. (2010). Strategic Management: A Stakeholder Approach. Cambridge University
Press.
Haberberg, A., & Reiple, A. (2008). Strategic Management: Theory and Application. OUP
Oxford.
Hiriyappa, B. (2013). Strategic Management and Business Policy. Booktango.

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Teece, D.J. (2008). Technological Know-How, Organizational Capabilities, and Strategic
Management: Business Strategy and Enterprise Development in Competitive Environments.
World Scientific.
Ginter, P.M. (2013). The Strategic Management of Health Care Organizations. John Wiley &
Sons.
Swayne, L.E., Duncan, W.J., &, Ginter, P.M. (2012). Strategic Management of Health Care
Organizations. John Wiley & Sons.
Pynes, J.E., & Lombardi, D.N. (2011). Human Resources Management for Health Care
Organizations: A Strategic Approach. John Wiley & Sons.