Week 17

Can you think of an organisation that has implemented a ‘high risk strategy’ that has resulted in success (why was it high risk at the time and why was it a success – was it good luck or good judgement

The acquisition of Youtube by Google was a high risk strategy by them. Google purchased Youtube at whopping US$ 1.6 billion back in 2006. At that time it was considered very risky because

1. ·         Youtube was relatively new startup with no profit
2. ·         Youtube had some legal and copy right issues with producers
3. ·         Many considered youtube as non-income generating sever with huge amount of bandwidth expenditure

But now they say rest is history through the clever use of advertisement and placement Youtube generates about U$S 3 billion revenue annually for Google. It was  good judgment because traditionally Google had a good combination of intendant and emergent strategic plan. The top level management had figured out its popularity. They also noticed youtube had a network of community which is even more attractive for netiziens to upload videos than their rivals  

Now, do the same for an organisation who embarked on a high risk strategy that resulted in some sort of failure (why was it high risk and why did it fail – bad luck or poor judgement

The failure of Kingfisher Airline is one of the high risk strategy that resulted into massive failure for the company. It was considered very risky because

1. ·         Airline industry was considered a “sick industry” as only 5 airlines in the world were considering to operate in profit
2. ·         Kingfisher had limited knowledge in this industry
3. ·         There was cut throat competition in this particular segment

1. Kingfisher airline failed because of poor judgment, most notably their decision to purchase heavily debtAir Deccan and (The real reasons behind kingfisher's failure , 2011)their failure to distant Kingfisher jet from the image of Air Deccan. Besides this there was lack of proper delegation form the top level management. As Kingfisher is a more of a beer and spirits manufacturer , they did not had the same kind of expertise in the airline industry. The state of airline industry was also really bad when they purchased it  

Refernces

Baker, L. (2006). 5 Reasons Why Google Will Buy YouTube. Retrieved from SEJ: http://www.searchenginejournal.com/

Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson
Education, Chapter 6

 Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson

Education, Chapter 11

Morati, M. (2012). RISKY BUSINESS: 10 Controversial Tech Decisions That Really Paid Off. Retrieved from Business Insider: http://www.businessinsider.com/