Critical Thinking Assignment

Module 09: Management of Innovation and Vertical Integration

This module begins our emphasis on corporate strategy. So far, we have discussed business strategy, which focuses on what the company should do to reach competitive advantage. This module takes a broader look at the competitive environment to explore the boundaries of firms.

Question Requirements:

Eni is Italys largest and most profitable company. The case traces Enis 50-year history from its founding as a state-owned oil and gas company, through its privatization and restructuring during the 1990s, to its growth and success under its present CEO, Vittorio Mincato. The case surveys the state of Eni during the early part of 2003 and considers some of the challenges facing Mr. Mincato as he seeks to sustain and continue Enis outstanding financial and operating performance under a strategy of disciplined growth and core business focus. The case deals with the analysis of corporate strategy for a large corporation. (By 2003, Eni was among the top-50 global corporations whether measured by sales or market capitalization.) Eni is vertically integrated, international, and diversified across several industrial sectors. The case requires students to identify and analyze the rationale behind Enis current corporate strategy and make recommendations for how Eni should allocate its resources across its different vertical levels, business sectors, and geographical areas of operation in the future. A key challenge of the case is that Eni is currently performing exceptionally well. Hence, there is a tendency among many students to recommend Keep up the good work, Mr. Mincato without looking deeply at the company and its business. In fact, Eni faces a number of key challenges, which must be addressed if Enis recent success is to be sustained.

This case is used to develop students skills in the following:

• Identifying, articulating, and analyzing a companys corporate strategy.
• Analyzing the fit between a companys corporate strategy and (a) its external environment and (b) its resources and capabilities
• Combining quantitative, qualitative, and historical information to build a profile of a companys resources and capabilities.
• Examining the structure, systems, and culture that an organization needs to support its corporate strategy.

1. What is Enis corporate strategy?
2. Evaluate Enis corporate strategy. How well aligned is Enis strategy with (a) the characteristics and requirements of its industry environment and (b) Enis resources and capabilities?
3. Looking ahead over Enis next four-year planning period (20047), what are the main issues that face the company? How should Eni allocate its resources across its different businesses and between different geographical areas? In particular: a) Should Eni divest its chemicals business? What about its engineering, construction, and oilfield services subsidiaries? b) Should Eni seek to establish itself as a major supplier of electrical power? Should it invest in renewable energy sources (e.g. wind power)? c) What should Enis international strategy be especially in relation to its downstream businesses (Refining and Marketing; Gas and Power)?
4. What organizational changes should Mincato pioneer, especially with regard to organizational structure, management systems, and corporate culture?

Note: Answer the Critical Thinking Assignment mainly based on the Module 9 Case . Chapter 5 ” Analyzing Resources and Capabilities” of the textbook is also relevant to this case. Optionally, feel free to support your reasoning with additional valid academic sources using SEU e-library.

Directions:

• Write an essay that includes an introduction paragraph, the essays body, and a conclusion paragraph to address the assignments guide questions.

Your well-written paper should meet the following requirements:

• 5 pages in length, which does not include the title and reference pages, which are never a part of the content minimum requirements.
• Use Saudi Electronic University academic writing standards and APA style guidelines.
• Support your submission with course material concepts, principles, and theories from the textbook and at least two current, scholarly, peer-reviewed journal articles. Current articles are those published in the last five years.
• Ensure zero plagiarism. (very, very important)

In advance of submission, review the grading rubric to see how you will be graded for this assignment.

Learning Outcomes

1. Examine the linkage between innovation and competitive advantage and the determinants of the profitability of innovation.
2. Identify alternative strategies to exploit an innovation.
3. Argue the impact of technology on the rapid evolution of industry structure and changing key success factors.
4. Determine the impact of standards on markets.
5. Examine vertical integration decisions.

Readings

Required:

• Chapter 9 Technology-based Industries and the Management of Innovation & Chapter 10 Vertical Integration and the Scope of the Firm in Contemporary Strategy Analysis
• Chapters 9 & 10 PowerPoint slides in Contemporary Strategy Analysis
• Munir, S., Rasid, S. Z. A., Aamir, M., & Ahmed, I. (2022). Big Data Analytics Capabilities, Innovation and Organizational Culture: Systematic Literature Review and Future Research Agenda. 3C Tecnologia, 209235.

Recommended:

• Chen, Y. (2021). A Systematic Literature Review of Disruptive Innovation and Strategic Alliance. Proceedings of ISPIM Conferences, 114.