kacso szilard csaba - bachelor paper

Business Strategies in Experience Economy KACSÓ Szilárd Csaba

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TABLE OF CONTENTS

Abbreviations ................................................................................................................. 3

Introduction .................................................................................................................... 4

Chapter 1 Strategic Management ................................................................................... 7

1.1 About Strategy ...................................................................................................... 7

1.1.1 Definition ...................................................................................................... 7

1.1.2 Importance .................................................................................................... 8

1.2 Generic Competitive Strategies .......................................................................... 10

1.2.1 Overall Cost Leadership Strategy ............................................................... 10

1.2.2 Differentiation Strategy .............................................................................. 14

1.2.3 Focus Strategies .......................................................................................... 17

1.3 Choosing Strategies ............................................................................................ 20

1.3.1 The process of choosing a strategy ............................................................. 20

1.3.2 Choosing from generic strategies ................................................................ 27

Chapter 2 Experience Economy ................................................................................... 30

2.1 The progression of economic value ................................................................... 30

2.2 The characteristics of experiences ...................................................................... 34

2.3 Designing memorable experiences ..................................................................... 36

Chapter 3 Case study: Strategic Management in AIESEC Cluj Napoca ..................... 39

3.1 About AIESEC ................................................................................................... 39

3.1.1 What is AIESEC? ....................................................................................... 39

3.1.2 AIESEC in numbers .................................................................................... 41

3.1.3 Vision .......................................................................................................... 41

3.1.4 Values ......................................................................................................... 42

3.1.5 Product ........................................................................................................ 43

3.2 About AIESEC Cluj Napoca .............................................................................. 48


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3.2.1 Objectives ................................................................................................... 49

3.2.2 Structure ...................................................................................................... 50

3.2.3 Management ................................................................................................ 51

3.3 Strategies ............................................................................................................ 52

Conclusion ................................................................................................................... 60

Bibliography ................................................................................................................ 63

ANNEXES ................................................................................................................... 67


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ABBREVIATIONS

DBA = Doctor of Business Administration

R&D = Research and Development

TN = trainee nominee

LCP = local committee president

VP = vice-president

OD = operational director

ICX = incoming exchange

OGX = outgoing exchange

ER = external relations

TM = talent management

HR = human resource


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INTRODUCTION

Strategic management theories are available to everyone. Since the creation of generic

strategies of Michael Porter, there were several companies that put his theories in

practice. Some of them had success and some of them failed.

There are companies that operate without following a certain or clear strategy and

they are (or were) doing well, because there was a high demand for what they were

offering and there was a low supply and weak competition.

Eusebiu Burcas, manager at DeKlausen, told me that they were conducting a research

before the crisis in Romania, trying to identify the status and development of

Romanian companies. The results showed that very few Romanian companies are

following a certain strategy, or have long term goals. Results also showed that there

are not using any strategic management tools to develop strategies or to evaluate their

performances. But they were generating profits (before the crisis). Their conclusion

was that this is possible because of increased demand and a lower supply.

With the technological advances and globalization, information businesses and their

offerings (commodities, products, services or experiences) became available to

everyone. We are experiencing the globalization of markets, transforming the world

into one single market with the help of the internet and social media. This increases

competition and makes it harder for companies to gain a competitive advantage and

maintain it sustainably.

More than that, people are striving for great, authentic, personal experiences.

Consumers are not buying from you because they have a need. They buy because they


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want to have what you can offer. They desire to have it. We go to amusement parks

because we desire to go on a roller-coaster not because we have a need for that. We

buy a car for the need of transportation from point A to point B, but we buy a BMW

M6 series because we want to have an “ultimate driving experience” or a social status.

This raises a series of questions. What to do now? What strategies to adopt? How to

construct and maintain a sustainable competitive advantage in our fast changing

environment?

In the following pages I will examine and present general concepts about strategy,

followed by the generic competitive strategies of Michael Porter: overall cost

leadership, differentiation and focus strategies. After that, I will present a flow to

choosing strategies.

In chapter 2 I will present the progression of economic value from commodities to

experiences, than we will discuss the characteristics of experiences and how we can

design memorable experiences for our customers.

In chapter 3 I will present a case study about AIESEC. I will demonstrate how a

differentiation strategy or a differentiation focus strategy can work for an NGO in

staging experiences. The methods, models used and implemented by AIESEC are

coming from the corporate sector, through the knowledge of partner companies and

the experience of 62 years of its existence. This demonstrates that a differentiation

strategy can offer a sustainable competitive advantage in the corporate sector as well.

My purpose with this work is to raise awareness on the changing rules in our economy

and on the need of strategic management and a well documented, thought,

implemented and evaluated strategy for every business to be successful on long term.

My motive is to present the new concepts of experience economy and to provide a


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proof that a differentiation strategy can offer a competitive advantage in our days even

in the non-governmental sector.

To present you this, I used a qualitative analysis. I started researching on different

business level strategies (generic strategies), then I started analyzing each option

available. After that I researched the concepts about experience economy and how this

influences competitive advantage and the perception of customers about companies.

In the end I presented a good case practice from the non-governmental sector,

regarding offering experiences and succession with a differentiation strategy.


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CHAPTER 1 STRATEGIC MANAGEMENT

1.1 ABOUT STRATEGY

In order to discuss business level strategies and strategic decisions in the experience

economy, we have to have a common understanding on the meaning of “strategy”,

“strategic management” and “business level strategy”.

1.1.1 Definition

Oxford English Dictionary defines strategy as “a plan of action designed to achieve a

particular goal. The word is of military origin, deriving from the Greek word

στρατηγός (stratēgos), which roughly translates as general”1. Michael Porter defines

strategy as “the creation of a unique and valuable position, involving a different set of

activities”2.

Strategic management is the conduct of drafting, implementing and evaluating cross-

functional decisions that will enable an organization to achieve its long-term

objectives3. Another approach is the process of managing in a way that is consistent

with the corporate strategy or in such a way as to capitalize on the opportunities that

present themselves4.

Strategies can be formulated at three different levels:

Corporate level: these strategies describe and formulate actions taken by the

firm (or corporation) in order to gain a competitive advantage by selecting and

managing different businesses that operate and compete in different markets

with different products and/or services (or staging experiences);

1 Oxford English Dictionary (2 ed.), Oxford, England: Oxford University Press, 1989

2 Michael Porter, What is Strategy, Harvard Business Review November-December, 1996

3 David F., Strategic Management, Columbus: Merrill Publishing Company, 1989

4 http://www.hainescentre.com/strategic-management, accessed at 06.04.2010


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Business level: these are actions taken by the firm in order to gain competitive

advantage in a specific market, with delivering products and/or services (or

staging experiences) based on its core competencies

Functional level: these are specific actions taken by each functional

area/department in the firm

Business-level strategy is an integrated and coordinated set of commitments and

actions the firm uses to gain a competitive advantage by exploiting core competencies

in specific product markets5.

1.1.2 Importance

Now that we understand the terms, we may discuss the importance of strategies at

different levels in the organization.

Corporate level strategies are essential for a firm (usually large corporation that

operates on different markets with different businesses) to decide where to invest, on

which markets to operate, in which type of businesses, what to produce or deliver, etc.

Practically at this level has to decide where to invest its resources in order to gain

competitive advantage and maximize the return on investment. These decisions (as all

types of decisions) require trade-offs, since we have limited resources. This is why a

corporate level strategy is so important in making critical, long term decisions that

will affect the performance of the firm on the long term. “Alfred Sloan, former

President of General Motors, defined the fundamental strategic problem as positioning

the firm in those markets in which maximum profits could be earned. In his great

biography, Sloan laid down the classical profit-oriented goal of strategy”6:

5 Robert E. Hoskisson, Michael A. Hitt, R. Duane Ireland, Competing for advantage (2 ed.), Newgen-

Austin, 2008 6 Richard Wittington, What is strategy, and does it matter? (2 ed.), London, Cengage Learning, 2001


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“The strategic aim of business is to earn a return on capital, and if in any particular

case the return in the long run is not satisfactory, the deficiency should be corrected or

the activity abandoned”7.

After a firm decides its corporate level strategies, it has to define the strategies for

each business it own. This is called the business level strategy. It is essential for every

management to know where the business is heading, how it will gain competitive

advantage on the market and how it will assure a constant grow for the business.

Business level strategies are intended to create differences between the firm‟s position

relative to those of its rivals. “Firms have long attempted to build competitive

advantage through an infinite number of strategies. Competitive strategies are

designed to help firms deploy their value chains and other strengths to build

competitive advantage. Thus, in practice, each company formulates its specific

competitive strategy according to its own analysis of internal strengths and

weaknesses, the value it can provide, the competitive environment, and the needs of

its customers”8.

After a firm has its business level strategy, it is very important to transform that

strategy in every action. This makes critical to define functional level strategies that

make sure that the business level strategy is followed by every functional area in the

business. These functional level strategies have to support business level strategies, so

it is essential that each functional level goes to the “same direction”. More than that,

“strategic fit among many activities is fundamental not only to competitive advantage

but also to the sustainability of that advantage. It is harder for a rival to match an array

of interlocked activities than it is merely to imitate a particular sales-force approach,

match a process technology, or replicate a set of product features. Positions built on

systems of activities are far more sustainable than those built on individual

activities”9.

7 Alfred Sloan, My years with General Motors, New York, Doubleday, 1963

8 Jeff Bordes, Strategic Management assignment - building and sustaining competitive advantage,

Atlantic International University, Honolulu, 2009 9 Michael Porter, What is Strategy, Harvard Business Review November-December, 1996


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1.2 GENERIC COMPETITIVE STRATEGIES

Firms choose business level strategies to establish and defend their desired strategic

position against rivals10

. According to Michael Porter, there are four potentially

successful generic strategic approaches to outperforming other firms in an industry11

:

Overall cost leadership;

Differentiation;

Focus;

Integrated cost leadership/differentiation;

These strategies are called generic, because they can be used in any business and in

any industry. Each business level strategy helps the firm to establish and exploit a

competitive advantage within a particular competitive scope12

.

1.2.1 Overall Cost Leadership Strategy

Cost leadership strategy is based on a firm‟s ability to provide a product or service at

a lower cost than its rivals. The basic operating assumption behind a cost leadership

strategy is to acquire a substantial cost advantage over other competitors that can be

passed on to consumers to gain a large market share. A cost leadership strategy

produces competitive advantage when the firm can earn a higher profit margin than

results from selling products at current market prices. In many cases, firms attempting

to execute cost leadership strategies aim to sell a product to “average” customers in a

broad target market.

“A central premise of the low-cost leadership strategy is the following: by making

products with as few modifications as possible, the firm can exploit the cost reduction

benefits that accrue from economies of scale and experience effects”13

.

10

Robert E. Hoskisson, Michael A. Hitt, R. Duane Ireland, Competing for Advantage (2 ed.), Newgen-

Austin, 2008 11

Michael Porter, Competitive strategy, The Free Press, New York, 1980 12

Robert E. Hoskisson, Michael A. Hitt, R. Duane Ireland, Competing for Advantage (2 ed.), Newgen-

Austin, 2008


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Having a low-cost position results in higher revenues for the firm, even in very

competitive markets. Its reduced costs gives the firm a defense against its competitors,

because reduced costs means that can have higher profit margins or offer the same

products or services at a lower price that its competitors. A low-cost position also

defends the firm from powerful buyers because buyers can use their power to reduce

prices only to the level of the next most efficient competitor. This strategy can also be

used by a firm to defend itself from powerful suppliers, by providing more flexibility

if input costs increase14

. This strategy also results in entry barriers for competitors: in

terms of scale economies or cost advantages. At the end, a low cost strategy helps a

firm to maintain its advantage against substitutes as well.

Cost leadership strategy is possible if a firm has a great efficiency. Recall that

efficiency is defined as output divided by input. Therefore, such a firm often strives to

produce at large volumes to take advantage of economies of scale. It does this by

targeting the average consumer knowing that while the product may not be exactly

what each consumer wants, it has broad enough appeal to create demand for a large

volume production. Efficiency is commonly obtained from each of the functional

areas, economies of scale, and learning effects. Each functional area of the firm (e.g.

marketing, production, etc.) is a potential source of efficiency. If economies of scale,

unit cost reductions as output expands, are present then there are opportunities for cost

leadership to be especially effective. Similarly with learning effects, which represent

cost savings from learning by doing15

.

This strategy often requires a high relative market share or other advantages, such as

favorable access to raw materials. It may well require designing products for ease in

manufacturing, maintaining a wide line of related products to spread costs, and

serving all major customer groups in order to build volume. For this reason, low-cost

13

Jeff Bordes, Strategic Management assignment - building and sustaining competitive advantage,

Atlantic International University, Honolulu, 2009 14

Michael Porter, Competitive Strategy, The Free Press, New York, 1980 15

Scott Gallagher, Why does firm performance differ? - Business level strategies, Course support

material, 2004, James Madison University, Internet: http://falcon.jmu.edu/~gallagsr/ , accessed at

06.04.2010


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producers usually produce and sell standard products and put emphasis on “reaping

scale or absolute cost advantages from all sources16

.

“In turn, implementing the low-cost strategy may require heavy up-front capital

investment in state-of-the art equipment, aggressive pricing, and start-up losses to

build market share. High market share may in turn allow economies in purchasing

which lower costs even further. Once achieved, the low-cost position provides high

margins which can be reinvested in new equipment and modern facilities in order to

maintain cost leadership. Such reinvestment may well be a prerequisite to sustaining a

low-cost position”17

.

If a firm can build up a successful cot leadership strategy and maintain its position

over time, it will be an above-average performer in its industry provided it can

command prices at or near the industry average. If the firm has equivalent or lower

prices than its competitors, the cost-leader‟s position translates into higher profits18

.

Until now, we may say that cost leadership is a powerful and frequently used business

level strategy. However, it is undermined by technological change, loss of focus on

customers, and imitation of a cost advantage some other way. We may consider that

technology and how work is done determines the slope of an economy of scale curve.

Therefore, economies of scale may increase or decrease with technological change

rendering earlier cost advantages obsolete. Even worse, radical technological change

might occur that totally changes how the product or service is currently produced (ex:

machine made ice versus natural ice). Another issue is not paying attention to

customers. This can also undermine a cost leadership strategy. While focusing on

efficiency, it is very easy to ignore customer demands and supply. While this can

work when demand is very high (ex: Henry Ford's famous dictum about "any color

you want as long as it's black”), it can lead to a firm's downfall if competitors have

16

Michael Porter, Competitive advantage, The Free Press, New York, 1985 17


Michael Porter, Competitive advantage, The Free Press, New York, 1985


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nearly matched a cost advantage and can offer more product diversity. It is also

possible for competitors to imitate another firm‟s cost advantage somehow. The most

commonly used strategy in this case is the use of low cost foreign labor coupled with

low trade barriers19

.

This is why a cost leader can never ignore the bases of differentiation. If a firm‟s is

not perceived as comparable or acceptable by buyers, a cost leader will always be

forced to discount prices below competitors‟ to be able to sell its products and gain

market share. This is a very serious risk in nullifying the benefits of its favorable cost

position. Northwest Airlines is a low-cost firm that fell into this trap, but “recognized

its problem in time, and has instituted efforts to improve marketing, passenger service,

and service to travel agents to make its product more comparable to those of its

competitors”20

.

Therefore, “in pursuing a cost-based advantage, no firm can obviously ignore such

product attributes as quality, service, and reliability. If it does, its offering may

become so unacceptable that consumers will refuse to buy it or will buy it only if the

price is reduced to a level below what is needed to sustain profitability. A firm

pursuing a cost-based advantage must therefore strive to achieve some degree of

quality parity or proximity with other firms that have defined the standards of product

quality valued by customers”21

.

“Parity in the bases of differentiation allows a cost leader to translate its cost

advantage directly into higher profits than competitors‟.” Parity implies either an

identical product offering to competitors, or a different product combination of

product attributes and qualities that are equally important and preferred by customers.

“Proximity in differentiation mans that the price discount necessary to achieve an

19



06.04.2010 20



Atlantic International University, Honolulu, 2009


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acceptable market share does not offset a cost leader‟s cost advantage and hence the

cost leader earn above-average returns22

.

“A cost leadership strategy can sometimes revolutionize an industry in which the

historical bases of competition have been otherwise and competitors are ill-prepared

either perceptually or economically to take the steps necessary for cost

minimization”23

.

Willis Fischer, general manager of Harnischfeger‟s Hydraulic Equipment Division

said:

“We didn‟t set out to develop a machine significantly better than anyone else but we

did want do develop one that was truly simple to manufacture and was priced,

intentionally, as a low cost machine”24

.

1.2.2 Differentiation Strategy

The second generic strategy is differentiation strategy. In a differentiation strategy

firms attempt to have their products be perceived as unique in order to obtain a

premium price. Brand loyal customers are often a sign that this strategy is working.

While the underlying foundation of differentiation is not as well understood as cost

leadership, generally any aspect of the product or service a customer is willing to pay

a premium for is the foundation of this strategy. Therefore, firms seeking to

implement this strategy should focus on quality, innovation, and/or customer

responsiveness. Innovation is especially common and useful to differentiators and

firms should take special efforts to not punish failure since most innovations, e.g. new

products, fail25

.

22



Harnischfeger’s Dramatic Pickup in Cranes, Business Week, August 13, 1979 25



06.04.2010


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According to Tom Peters, if you want to adopt differentiation strategy, “figure out the

one or two things that you can do better than anybody else… and keep doing the hell

out of them.”26

The means for differentiation can vary from industry to industry. It can be based on

several factors: the characteristics of the product or service, the design of the product,

the quality of the product/service, advanced raw materials, the delivery system by

which is sold, the marketing approach, the after sales services, guarantees, etc. “In

construction equipment, for example, Caterpillar Tractor‟s differentiation is based on

product durability, service, spare parts availability, and an excellent dealer network. In

cosmetics, differentiation tends to be based more on product image and the

positioning of counters in the stores”27

.

Differentiation strategies are based on providing buyers with something that is

different or unique, that makes the company‟s product or service distinct from that of

its rivals. The key assumption behind a differentiation strategy is that customers are

willing to pay a higher price for a product that is distinct (or at least perceived as

such) in some important way. Superior value is created because the product is of

higher quality, is technically superior in some way, comes with superior service, or

has a special appeal in some perceived way. In effect differentiation builds

competitive advantage by making customers more loyal-and less price-sensitive-to a

given firm‟s product. Additionally, consumers are less likely to search for other

alternative products once they are satisfied28

.

Therefore, this strategy is a viable strategy for earning above-average returns in an

industry because defends the firm against the five competitive forces (potential entry

of new competitors, rivalry among competing firms, potential development of

26

Top Peters, Re-Imagine! Business Excellence In a Disruptive Age, Dorling Kindersley Limited,

London, 2004 27





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substitute products, bargaining power of consumers, bargaining power of suppliers),

but in a different way than cost leadership strategy29

.

“Differentiation provides insulation against competitive rivalry because of brand

loyalty by customers and resulting lower sensitivity to price. It also increases margins,

which avoids the need for a low-cost position. The resulting customer loyalty and the

need for a competitor to overcome uniqueness provide entry barriers. Differentiation

yields higher margins with which to deal with supplier power, and it clearly mitigates

buyer power, since buyers lack comparable alternatives and are thereby less price

sensitive. Finally, the firm that has differentiated itself to achieve customer loyalty

should be better positioned vis-à-vis substitutes than its competitors”30

.

In differentiation strategies is very important for firms to pay attention to product

quality and service in order to build a sustainable competitive advantage. “For

example, firms may improve a product‟s quality or performance characteristics to

make it more distinctive in the customers‟ eyes, as Lexus does with its sleek line of

automobiles. The product or service can also embody a distinctive design or offering

that is hard to delicately, thus conveying an image of unique quality; as with Krups

coffee and espresso makers or with American Express in travel services and charge

cards. After-sales service, convenience, and quality are important means to achieve

differentiation for numerous firms, such as for IBM in computer and electronic

commerce technology or Hewlett-Packard in desktop printers and digital imaging

technologies”31

.

A firm that can differentiate itself from its competitors and maintains that position

will be an above-average performer in its industry if its price premiums exceed the

costs that occur in order to build and maintain its uniqueness. Therefore, a

differentiator (or product leader) must always seek ways of differentiating that result

29






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in a greater price premium than the cost of differentiating. “A differentiator cannot

ignore its cost position, because its premium its premium prices will be nullified by a

markedly inferior cost position. A differentiator thus aims at cost parity or proximity

relative to its competitors, by reducing cost in all areas that do not affect

differentiation”32

.

Achieving differentiation may sometimes be a barrier to gain high market share. It

often requires a perception of exclusivity, which is incompatible with high market

share. “More commonly, however, achieving differentiation will imply a trade-off

with cost position if the activities required in creating it are inherently costly, such as

extensive research, product design, high quality materials, or intensive customer

support. Whereas customers industry -wide acknowledge the superiority of the firm,

not all customers will be willing or able to pay the required higher prices”33

.

“The logic of differentiation strategy requires that a firm choose attributes in which to

differentiate itself that are different from its rivals‟. A firm must truly be unique at

something or be perceived as unique if it is to expect a premium price. In contrast to

cost leadership, however, there can be more than one successful differentiation

strategy in an industry if there are a number of attributes that are widely valued by

customers”34

.

1.2.3 Focus Strategies

Te third generic strategy is focus strategy. Focus strategies are used to help a firm

focus on a specific niche within an industry. Both differentiation and cost leadership

strategies target a wide range market, strive to get a high market share, but focus

strategies aim at specific and typically small niche of the market. These niches could

be selected considering different criteria: a particular buyer group, a narrow segment

of a given product line, a geographic or regional market, or a niche with distinctive,

32





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special tastes and preference. “The basic idea behind a focus strategy is to specialize

the firm‟s activities in ways that other broader-line (low-cost or differentiation) firms

cannot perform as well. Superior values, and thus higher profitability, are generated

when other broader-line firms cannot specialize or conduct their activities as well as a

focused firm. If a niche or segment has characteristics that are distinctive and lasting,

then a firm can develop its own set of barriers to entry in much the same way that

large established firms do in broader markets”35

.

The focus strategy has two variants: cost focus and differentiation focus. In cost focus

strategy, a firm seeks a cost advantage in its niche market segment, while in

differentiation focus a firm seeks differentiation in its niche market segment. In both

cases, the focus strategy is based on differences between a firms niche market

segment and other segments in the whole industry where is activating. The target

segments must either have buyers with specific needs or the production and delivery

system must be different from that of the other industry segments. Cost focus strategy

exploits differences in cost behavior in some segments of the market, while

differentiation focus exploits the special needs of buyers in certain market segments.

Such differences imply that the segments are poorly served and their needs are not

satisfied by broadly targeted competitors who serve them at the same time as they

serve others. The focuser thus can achieve competitive advantage by dedicating itself

to the segments exclusively. The essence of focus is the exploitation of a narrow

target‟s differences from the balance of the industry36

.

As is stated above, this strategy rests on the premise that focusing on a niche market.

A firm is able to serve its narrow strategic market more efficiently or more effectively

than its competitors who are competing for a wider range of the market. In this way, a

firm may differentiate itself by meeting the needs (more specific needs) of a particular

segment of the market, or by having lower costs by serving a niche market, or by

both. Even though the focus strategy does not achieve low cost or differentiation from

35


Atlantic International University, Honolulu, 2009 36



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the perspective of the market as a whole, it does achieve one or both of these positions

vis-à-vis its narrow market target37

.

A focuser can take advantage of the incapability of its competitors to serve very

specific needs of niche segments. Competitors may underperform in meeting the

needs of a particular segment in the market, which opens the possibility for a

differentiation focus strategy. On the other hand, if a competitor is overperforming in

meeting the needs of a specific segment (they deliver things that are not essential for a

specific niche segment), a cost focus strategy can assure the satisfaction of that

specific niche with lower costs.

“Focus may also be used to select targets least vulnerable to substitutes or where

competitors are the weakest”38

.

“If a firm can achieve sustainable cost leadership (cost focus) or differentiation

(differentiation focus) in its segment and the segment is structurally attractive, then

the focuser will be an above-average performer in the industry. Segment structural

attractiveness is a necessary condition because some segments in an industry are

much less profitable than others”39

.

Generally in an industry there are very different customers and segments that require

different products and services and different delivery and after-sales systems and

services. This makes the focus strategies a very viable and opportune one for most

industries.

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1.3 CHOOSING STRATEGIES

Choosing strategies is not an easy job to do. There should be a lot of information

available and management should be able to analyze and cross-reference those data.

More than that, management should be able to make predictions concerning:

economies, markets, competitors, politics, technological advances, social changes,

consumer behavior, cultures, etc.

We stated in chapter 1 that strategies basically are means or concrete actions by which

an organization is trying to gain competitive advantage and thus reach its objectives.

This means that strategies are future oriented and affect an organization‟s long-term

performance: strategies may make the difference between success and failure on the

long run.

1.3.1 The process of choosing a strategy

Strategy formulation on a business-level should start with developing a vision and

mission for the organization that is communicated to all members of that organization,

than identifying internal strengths and weaknesses of the organization, establishing

long-term (strategic) objectives, generating multiple strategies than finally choosing a

strategy to be implemented.

Strategy formulation issues include deciding:

What new business to enter

What business to abandon

What markets to enter

How to reach the customers

How to allocate resources

Whether to expand operations or diversify

Whether to enter international markets

Whether to merge or form a joint venture

Whether to expand on a franchise model

How to avoid a hostile takeover


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A firm and any other organization is born from two major reasons: either there is a

problem that can be solved by the establishment of that organization or there is an

unsatisfied need which can be satisfied with the activities of a new organization. At

the birth there should be a vision, a future state where the organization wants to arrive

(or the management of that organization).

If this vision does not exist, or it is not clear to everyone, the first step in strategy

formulation is the development of a vision statement. Vision statement should answer

the following questions: “What do we want to become?” “Where do we want to

arrive?” The vision statement should be short, preferably one sentence and as many

managers as possible should have input into developing the statement.

After having a vision, a future state where our organization wants to be, we may

develop a mission statement which describes our core business: “What is our

business?” “What are we doing?” A clear mission statement is essential for effectively

establishing objectives and formulating strategies. It is important to develop as many

managers as possible in the process of developing a mission statement, because

through involvement, people become committed to an organization.

The next step in the strategic formulation process is the establishments of a core set of

values. These values have to be accepted by every single member of the organization

and the actions of every individual and the actions of the organization as a whole has

to be correlated with those values. Values may offer a constraint in the actions and

decision of the organization and also help connect with stakeholders.

After the construction of the identity of the organization (vision, mission and values),

it is important to establish long term objectives (that refer to a period longer than 1

year) that allow to set a direction, a desired state in the future that can be measured,

and to reveal priorities. Long term objectives also provide a basis for effective

planning, organizing, motivating and controlling activities. It is essential to be able to


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measure the progress in time, the performance of the organization and also to identify

the state when objectives are reached. Therefore, those objectives should be SMART:

Specific

Measurable

Achievable

Realistic

Time-framed

After having an identity and a desired state in the future that also can be measured, the

organization has to develop certain possibilities to reach its objectives and then

choose one strategy that will be implemented. We call this process strategic planning.

There are ten different schools that see strategic management and strategic planning in

different ways40

:

The Design School: strategy formation as a process of conception

The Planning School: strategy formation as a formal process

The Positioning School: strategy formation as an analytical process

The Entrepreneurial School: strategy formation as a visionary process

The Cognitive School: strategy formation as a mental process

The Learning School: strategy formation as an emergent process

The Power School: strategy formation as a process of negotiation

The Cultural School: strategy formation as a collective process

The Environmental School: strategy formation as a reactive process

The Configuration School: strategy formation as process of transformation

From these ten different schools, The Design School is the most often used in the

strategy-formulation process. Basically, this school proposes a model of strategy

making that tries to match or fit internal capabilities of the firm and external

40

Henry Mintzberg, Bruce Ahlstrand, Joseph Lampel, Strategy safari, The Free Press, New York, 1998


23 | P a g e

possibilities. In the words of this school‟s best-known proponents, “economic strategy

will be seen as the match between qualifications and opportunity that positions a firm

in its environment”41

. The Basic Deign School, model is illustrated on the figure

above.

This model places emphasis on the appraisal of the external and internal situations,

firstly indentifying the internal strengths and weaknesses of the organization, than the

external opportunities and threats that may occur (SWOT analysis).

41

Christensen, Andrews, Bower, Hamermesh, Porter, Harvard policy textbook, 1982

External appraisal Internal appraisal

Threats and opportunities in the

environment

Strengths and weaknesses in

the organization

Key success factors Distinctive competencies

Creation of STRATEGY

Evaluation and choice of

STRATEGY

Implementation of

STRATEGY

Social

responsibility

Managerial values

Basic Design School Model


24 | P a g e

External opportunities and external threats refer to economic, competitive, social,

political, cultural, demographic, legal, governmental, environmental and technological

trends and events that could be a possible harm (threat) or benefit (opportunity) to the

organization. These trends and events are external, which means that the organization

have no influence or control over them. The organization should capitalize on external

opportunities and eliminate or reduce the hard of external threats (risk management).

In annex number 1 you may find an environmental variables checklist.

Internal strengths and weaknesses refer to an organization‟s processes or activities

that are performed good or bad. These can be controlled by the organization.

Strengths and weaknesses refer to: management, human resources, structure,

subsystems, other resources, marketing, finance, production or operations,

information systems, research and development, etc. Identifying these strengths and

weaknesses should be made at the organization level, but most importantly on each

functional area (or subsystems) of the organization. In annex number 2 you can find a

strengths and weaknesses checklist.

Internal strengths than can be very useful in the strategy-formulation process because

the strategy has to be formulated in a way to capitalize on these strengths. These may

be differentiate the organization from its competitors or may be the bases to create

unique selling points. Internal weaknesses should be eliminated.

After making the SWOT analysis, comes the creation of possible strategies or

analyzing several possibilities. In this phase all the data are used: the identity of the

organization (vision and mission statements, values), objectives that has to be reached

and data coming from SWOT analysis. “Richard Rumelt (1997), a DBA from the

Harvard General Management group, has perhaps provided the best framework for

making this evaluation, in terms of a series of tests42

:

42



25 | P a g e

Consistency: the strategy must not present mutually inconsistent goals and

policies.

Consonance: the strategy must present an adaptive response to the external

environment and to the critical changes occurring within it.

Advantage: the strategy must provide for the creation and/or maintenance of a

competitive advantage in the selected area of activity.

Feasibility: the strategy must neither overtax available resources nor create

unsolvable subproblems.

After evaluating multiple possible strategies, the organization (more specifically the

management) chooses the strategy that will be used and implemented. This means that

the organization has to establish its annual and quarter objectives, mobilize and

motivate managers and employees to put the strategy in action, and also allocate

resources that allow the implementation of the strategy.

The implementation stage is considered to be the most difficult stage of strategic

management, because includes a number of difficult issues: developing a strategy-

supportive culture and mindset, creating an effective organizational structure,

redirecting marketing efforts, preparing budgets, developing and utilizing information

systems, offering the necessary toolset for employees, preparing employees, linking

employee compensation to organizational performance, etc.

There are number of premises presented by the design school. List of seven of seven

of those premises is presented in the following list43

:

1. “Strategy formation should be a deliberate process of conscious thought.” In

other words, strategist needs to know as much as possible of the variables

involved in the strategy making process and then calculatingly implement that

knowledge to the strategy.

43



26 | P a g e

2. “Responsibility for that control and consciousness must rest with the chief

executive officer: that person is the strategist.” There is no room for team or

multiple individuals in the strategy formation in the eyes the design school.

3. To fit in to the mind of single strategist strategy must be kept simple.

4. “Strategies should be one of a kind: the best ones result from a process of

individualized design.” The strategy formation should be tied to the outcomes

of the analysis.

5. “The design process is complete when strategies appear fully formulated as a

perspective.” There is no room for strategy enhancement after its initial

implementation.

6. The strategy needs to be articulated to the organization so it can‟t be too

complex.

7. Strategy is a two part play where on the first part the strategy is conceived and

on the second part it is implemented. There is no room for parallel processes.

Strategy evaluation is the final process in strategic management. This stage is

increasingly important because internal and external factors are constantly changing.

It offers the possibility to adopt strategies or change them, if necessary. Strategy

evaluation activities include:

Reviewing internal and external factors that are the basis for current strategies

Measuring performance (a balanced scorecard may also be used as a tool)

Taking corrective actions

According to Michael, three key principles underline strategic positioning44

:

1. “Strategy is the creation of a unique and valuable position, involving a

different set of activities. Strategic position emerges from three distinct

sources”:

Serving few needs of many customers

Serving broad needs of few customers

44

Michael Porter, What is Strategy, Harvard Business Review November-December, 1996


27 | P a g e

Serving broad needs of many customers in a narrow market

2. “Strategy requires you to make trade-offs in competing - to choose what not to

do.” There are competitive activities that are incompatible with each other. In

every situation, a gain or advantage in one area can be achieved only at the

expense of another area.

3. “Strategy involves creating <<fit>> among a company‟s activities.” “Fit” has

to do with ways a company‟s activities interact, reinforce and support each

other; they have to go in the same direction (strategy).

1.3.2 Choosing from generic strategies

Each generic strategy has a different

approach to creating and maintaining a

competitive advantage in a market.

“Usually a firm must make a choice

among them, or it will become stuck in

the middle”45

.

The benefits of choosing a focus strategy are based on the fact that the organization

will be able to serve specific needs of its customers or stakeholders. This cannot

happen if an organization is simultaneously serving a broad range of segments. For

broader segments there should be implemented a cost leadership or differentiation

strategy. In some cases, an organization may be able to create two or more different

business units (with focus strategies) that have different strategies that operate on

different segments.

Achieving cost leadership and differentiation usually are inconsistent because

differentiation is usually costly. On the other hand, cost leadership often requires an

organization to forego some differentiation in order to be able to sustainably maintain

its competitive advantage.

45


Generic Strategies Matrix


28 | P a g e

Differentiation does not mean that firms are not allowed to reduce costs.

Organizations are more than welcome to reduce their cost by cost reduction, but not

by cost cutting. The difference is that cost cutting eliminates the biggest cost drivers

(which may be supporting differentiation), but cost reduction reduces costs that are

not supporting differentiation and the core of the business (or organization), without

affecting its differentiators.

In order to have success on the long run, an organization must commit itself to one of

the generic strategies and implement it sustainably.

From the point of view of required skills and resources, we can identify some

essentials for every strategy46

:

a) Cost Leadership:

Sustained capital investment and access to capital

Process engineering skills

Intense supervision of labor

Products designed for ease in manufacture

Low-cost distribution system

b) Differentiation:

Strong marketing abilities

Product engineering

Creative flair

Strong capability in basic research

Corporate reputation for quality or technological leadership

Long tradition in the industry or unique combination of skills drawn

from other businesses

Strong cooperation from channels

c) Focus:

Combination of the above policies directed at the particular strategic

target

46

Michael Porter, Competitive Strategy, The Free Press, New York, 1980


29 | P a g e

Implementing one of the three generic strategies also need some organizational

requirements47

:

a) Cost Leadership:

Tight cost control

Frequent, detailed control reports

Structured organization and responsibilities

Incentives based on meeting strict quantitative targets

b) Differentiation:

Strong coordination among functions in R&D, product development,

and marketing

Subjective measurement and incentives instead of quantitative

measures

Amenities to attract highly skilled labor, scientists, or creative people

c) Focus:

Combination of the above policies directed at the particular strategic

target

In order to implement different generic strategies, besides different skills, resources

and organizational requirements, there may be the need for a different leadership style

that can build up the required organizational culture, atmosphere and to attract

required profile people into the organization.

There are 2 major risks also in using generic strategies that must not be ignored:

failing to attain or sustain the strategy and losing the competitive advantage provided

by the strategy, in case the industry is evaluating. According to Michael Porter, “the

three strategies are predicated on erecting different kinds of defenses against the

competitive forces, and not surprisingly they involve differing types of risks. It is

important to make these risks explicit in order to improve the firm‟s choice among the

three alternatives”48

.

47




30 | P a g e

CHAPTER 2 EXPERIENCE ECONOMY

2.1 THE PROGRESSION OF ECONOMIC VALUE

Over the last two

hundred years, we

have seen a shift

from an agrarian

economy based on

extracting

commodities, to an

industrial economy

based on

manufacturing

goods, to a service

economy based on delivering services, and now to an experience economy based on

staging experiences49

. You can find a table in annex number 3 about economic

distinctions between commodities, gods, services and experiences.

Commodities are materials/resources extracted from the natural world. These include

animals, minerals and vegetables. People raise them on the ground, or dig for them

(mine) under the ground, or grow them in the ground. After extraction, companies

usually process or refine them in order to yield certain characteristics.

By definition, commodities are fungible (they are what they are). Because

commodities can hardly be differentiated, companies sell them largely into nameless

markets where some other company purchases them on the price determined by

supply and demand. Because of this, every company on a commodity market is a

price taker. When demand exceeds supply, there is the possibility to price increase,

which assures increased profits for suppliers. On the other hand, when supply is

49

James H. Gilmore, Frontiers of the experience economy, Batten Briefings, Darden Graduate School

of Business Administration, 2003 autumn, available at

http://www.darden.virginia.edu/batten/pdf/bf_gilmore.pdf , accessed at 18.05.2010

The Progression of Economic Value


31 | P a g e

greater than demand, prices and profits will decrease for suppliers. This means, that

on the long run, price is determined by the invisible hand of the market as it

encourages companies to move in or out of commodity businesses50

.

With the industrial revolution, we shifted from agrarian economy to an industrial

economy. This implies using commodities as row materials, processing them and

transforming them into goods. These tangible items respond to a need of customers by

using them as they are, without transforming them into something else. This is why

consumers value them more than commodities and are determined to pay a price

premium for them.

There was low or no differentiation between goods. Mass production allowed the

standardization of processes and products, resulting in layoffs of factory workers.

Service economy was on the way: in the second part of the 20th

century, in most

developing and developed countries, services overtook more than 50% of the

economy.

“Services are intangible activities customized to the individual request of known

clients”51

. Service providers usually use different products to perform operations

(deliver services) on a particular client. In this way, every single client is part of the

service delivery process; every client passes through a change. It is a participant and

not only a consumer. Services accomplish specific tasks that customers want done,

but don‟t want to do themselves. In this sense, goods only supply the means of

delivering services.

Ina a service economy, individuals desire service. Whether personal consumers or

businesses, they always try to save on purchasing goods (purchasing in cheap outlets

or big retail centers, or negotiate with suppliers) in order to save money for

50

Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations (5 ed.), Methuen and

Co. Ltd., London, ed. Edwin Cannan, 1904 51

Joseph Pine II, James H. Gilmore, The Experience Economy, Harvard Business School Press, Boston,

1999


32 | P a g e

purchasing services (eating at a restaurant, travelling, etc) they value more highly.

This is the reason for many manufacturers to finding their goods commoditized.

“In a service economy, the lack of differentiation in customers‟ minds causes goods to

face the constant price pressure indelibly associated with commodities”52

. This result

in customers making their purchasing decisions related goods based solely on price

and availability.

To escape this commoditization trap, manufacturers often deliver additional services

to their core products. This offers better and more complex services to customers and

their desires can be matched more easily.

Experiences are a distinct economic offering, as distinct from services as services are

from goods. When someone buys a good, he receives a tangible thing; when he buys a

service, he purchases a set of intangible activities carried out on his behalf. But when

he buys an experience, he pays for a memorable event that a company stages to

engage him in an inherently personal way.

“An experience occurs when a company intentionally uses services as the stage, and

goods as props, to engage individual customers in a way that creates a memorable

event. Commodities are fungible, goods tangible, services intangible, and experiences

memorable”53

.

Prior economic offerings (commodities, goods, and services) are external to the buyer,

experiences are very personal and subjective. Experiences are only in the mind of an

individual who has been engaged on an emotional, physical, intellectual or even

52


1999 53

Joseph Pine II, James H. Gilmore, Welcome to the experience economy, Harvard Business Review

July-August, 1998


33 | P a g e

spiritual level. Considering this, we can state that no two people can have the same

experiences, because each experience results from the interaction between the staged

event (ex: theater, driving a BMW) and the individual‟s state of mind.

Experiences have always been at the heart of entertainment business, but today the

concept of staging and selling an experience is appearing also in businesses that are

far from theatres or amusement parks. “New technologies, in particular, encourage

whole new genres of experience, such as interactive games, internet chat rooms and

multiplayer games, motion-based simulators, and virtual reality”54

. This can happen

because of the growing technological advances and the increasing processing power

of computers and other electronic devices.

In a speech made at the November 1996 COMDEX computer trade show, Intel

chairman Andrew Grove declared: “We need to look at our business as more than

simply the building and selling of personal computers. Our business is the delivery of

information and lifelike interactive experiences”.

Experiences are not exclusively about entertainment. We can speak about staging

experiences whenever an organization engages customers in a personal, memorable

way.

What British Airways does, according to former chairman Sir Colin Marshall, is “to

go beyond performing a function and to compete on the basis of providing an

experience”55

.

54


July-August, 1998 55

Competing on Customer Service: An Interview with British Airway’s Sir Collin Marshall, Harvard

Business Review November-December, 1996


34 | P a g e

2.2 THE CHARACTERISTICS OF EXPERIENCES

In order for a company to charge admission fees, it must design and stage an

experience that customers worth paying for. Marketing, design and delivery will be

crucial for experiences as well, as they are for goods and services. Innovation and

excellence will always drive and increase in revenues for companies, but experiences,

like goods and services, have their own distinct characteristics and qualities and their

own challenges as well.

We can think about experiences across two dimensions: customer participation and

connection.

When we speak about customer participation, we can imagine a spectrum with two

ends. “At one end of the spectrum lies passive participation, in which customers don‟t

affect the performance at all. Such participants include symphony-goers, for example,

who experience the event as observers or listeners. At the other end of the spectrum

lies active participation, in which customers play key roles in creating the

performance or event that yields the experience”56

. But even people, who just observe

a performance, contribute to the visual and aural event that others experience.

The second dimension of experience describes connection that unites customers with

the event or performance. “At one end of the connection spectrum lies absorption, at

the other hand, immersion. People viewing the Kentucky Derby from the grandstand

can absorb the event taking place beneath and in front of them; meanwhile, people

standing in the infield are immersed in the sights, sounds, and smells that surround

them”57

. Another example would be watching a film in a cinema, on a large screen,

with Dolby Surround sound, which is more immersing than watching a film at home.

56




1999


35 | P a g e

We can sort experiences in four

different categories, considering

the spectrums of these two

dimensions58

.

The usual understanding of

experiences is entertainment (ex:

attending a concert, going to

theater, watching television). In

these cases customers participate more passively than actively and their connection

with the event is more likely one of absorption than of immersion.

Educational events (ex: attending a class, taking a swimming lesson, participating at

trainings) tend to involve more active participation, but participants (or students) are

more outside the event than immersed in the action (they tend to listen to the professor

or speaker).

Escapist experiences can offer the same educational experiences as educational events

can and offer entertainment as well, but they involve greater customer immersion.

Acting in a play or playing in a rock band involves both active participation and

immersion in the experience.

In cases where customers‟ participation is minimized and they are immersed in an

activity or environment, but have no or little effect on it, we can speak of esthetic

experiences. A tourist who views the Grand Canyon from the distance or a visitor at

an art gallery participates in esthetic experiences.

58


1999

The Four Realms of an Experince


36 | P a g e

Generally, we can find the richest and most memorable experiences around the

middle, where the spectrums meet. These experiences usually encompass aspects of

all four realms of an experience. But the most important question that has to be

answered by managers is “What specific experience will my organization offer?”59

Like in every case, organizations have to respond to needs or desires of their

customers or create those desires by educating the market. From this point of view,

“experiences, like goods and services, have to meet a customer need; they have to

work; and they have to be deliverable. Just as goods and services, result from an

interactive process of research, design, and development, experiences derive from an

interactive process of exploration, scripting, and staging - capabilities that aspiring

experience merchants will need to master.”60

2.3 DESIGNING MEMORABLE EXPERIENCES

Creating meaning can be described as a process, starting as perception through the

senses (see, hear, smell, touch, taste) to emotions. Experiences occur in a process in

which interactions take place in a certain setting – whether or not a physical one –

between the individual and other people, including perhaps the offering party, which

can be an economic party. This makes experiences, just like services, intangible.

The European Centre for the Experience Economy describes the characteristics of an

experience based on an extensive literature study from the perspective of the

individual61

:

“There is a heightened concentration and focus, involving all one‟s senses.”

“One‟s sense of time is altered.”

“One is touched emotionally.”

“The process is unique for the individual and has intrinsic value.”

59


1999 60



Albert Boswijk, Thomas Thijssen, Ed Peelen, A new perspective on the experience economy, The

European Centre for the Experience Economy, The Netherlands, Internet:

http://freeforone.com/zakelijk/artikelen/New%20perspective.pdf , accessed at 18.05.2010


37 | P a g e

“There is contact with the „raw stuff‟, the real thing.”

“One does something and undergoes something.”

“There is a sense of playfulness.”

“One has a feeling of having control of the situation.”

“There is a balance between the challenge and one‟s own capacities.”

“There is a clear goal.”

Every meaningful experience must satisfy these characteristics. There has to be an

experience setting, where an individual (or group of individuals) and the organization

that stages the experience meet. “That is the environment in which the interaction can

take place between the individual and the offering party (or parties).”62

There should be expected that experience design will become as much a business art

as product design as process design. From this perspective, there are five key

experience-design principles63

:

“Theme the experience”: build every detail of the experience around a specific

theme.

“Harmonize impressions with positive cues”: to create the desired

impressions, companies must introduce cues that affirm the nature of the

experience to the guest; each cue must support the theme.

“Eliminate negative cues”: companies must eliminate anything that

diminishes, contradicts, or distracts from the theme.

“Mix in memorabilia”: offer goods to be purchased for the memories they

convey (ex: T-shirts, hats).

“Engage all five senses”: stimulate all five senses in order to enhance and

support the theme.

62

Albert Boswijk, Thomas Thijssen, Ed Peelen, A new perspective on the experience economy, The

European Centre for the Experience Economy, The Netherlands, Internet:

http://freeforone.com/zakelijk/artikelen/New%20perspective.pdf , accessed at 18.05.2010 63


July-August, 1998


38 | P a g e

To design a rich, engaging and memorable experience, organizations have to use an

experiential framework, not just one realm, as a set of prompts that help them to

creatively explore the aspects of each realm.

According to Joseph Pine II and James H. Gilmore, “when designing your experience,

you should consider the following questions64

:

“What can be done to improve the esthetics of the experience?” Esthetics is

what determines the customers to take a look at the stage. Organizations have

to make environment more inviting, interesting, or comfortable; an atmosphere

where is a pleasure to be.

“Once there, what should your guests do?” The escapist aspect of an

experience draws the guest further, immersing them in activities.

“What do you want your guest to learn from the experience?” The educational

aspect of the experience requires the full participation of the learner.

“What can you do by way of entertainment to get your guests to stay?”

Entertainment is a passive aspect of experience where guest respond to the

experience (ex: laugh).

If an organization manages to address successfully to these issues, it can start

competing on the basis of an experience:

“No, your ultimate goal is not to sell T-shirts (if your company sells T-shirts). No, it‟s

not to check out books (if you‟re a library). It‟s to enchant and captivate your users.

Why? Because if you can figure out how to enchant and captivate your users, then the

other parts (buying and checking out) will be easy. You will have turned those

customers into evangelists, and your evangelists will do much of your marketing for

you”65

.

64


1999 65

Joseph Pine II, James H. Gilmore, The Experience Economy, Harvard Business School Press,

Boston, 1999


39 | P a g e

CHAPTER 3 CASE STUDY: STRATEGIC MANAGEMENT IN

AIESEC CLUJ NAPOCA

3.1 ABOUT AIESEC

3.1.1 What is AIESEC?

AIESEC (originally “association internationale des étudiants en sciences économiques

et commerciales”, but now it is a proper name) is the world‟s largest student-run

organization. It is a global, non-political, independent, not-for-profit organization run

by students and recent graduates of institutions of higher education. Its members are

interested in world issues, leadership and management. AIESEC does not discriminate

on the basis of race, color, gender, sexual orientation, creed, religion, national, ethnic

or social origin.

AIESEC‟s innovative development process consists of unmatched leadership

experiences, international opportunities and a global learning environment.

Global – AIESEC has a global scope and is represented in all continents of the world.

One of the most valuable and unique aspects that our organization has is its global

network. AIESEC should make the best use of this global network to enhance the

understanding between cultures by running activities that foster participation and co-

operation among different countries in the network. Without any doubt our exchange

programs create the best conditions for this.

Non-political - AIESEC does not have a pre-defined or officially accepted political

tendency or subscription.

Independent - AIESEC is not a subsidiary or dependent entity of any other bodies in

its work, sustainability or decisions.


40 | P a g e

Not-for-profit - AIESEC is not an organization that exists to generate profit for

shareholders. The bottom-line for AIESEC is not money but people that are

developing themselves as leaders. It is important of course to have enough resources

and be sustainable to ensure we are having the desired impact in society and invest in

further improvements for the organization. However, we are guided by the ways to

generate more impact and have maximum financial sustainability rather than to

simply generate more money.

Run by students and recent graduates of institutions of higher education – Students of

higher education students and recent graduates manage and run all the activities of the

organization. The members of AIESEC are current (includes the ones who have given

a break to their studies to dedicate themselves to AIESEC work) or recently graduated

students of institutions of higher education.

Its members are interested in world issues, leadership and management – Today

AIESEC has expanded its reach to a wide range of student backgrounds. Our

membership base has expanded to university students that are interested in more than

just economics.

AIESEC does not discriminate on the basis of race, color, gender, sexual orientation,

creed, religion, national, ethnic or social origin - AIESEC is an organization that

enjoys and lives diversity, and will not reject participation or contact with people for

any of the reasons mentioned above.

Its international platform enables young people to discover and develop their potential

to provide leadership for a positive impact in society.


41 | P a g e

AIESEC provides its members with an integrated development experience comprised

of leadership opportunities, international internships and participation in a global

learning environment.

3.1.2 AIESEC in numbers

Global network run by more than 40000 students and recent graduates

Active in 1 700 universities across 110 countries and territories

7 700 leadership opportunities annually

5 500 global internships annually in business, technical, education and

development sectors

Has more than 4000 partners/sponsors globally

Organizes 470 conferences annually

Has more than 1 million alumni

Has 62 years of existence

3.1.3 Vision

“Peace and Fulfillment of Humankind‟s Potential”. In today‟s context, „peace‟ should

not be interpreted necessarily as absence of a major war. „Peace‟ symbolizes a world

that does not have conflicts that arise from cultural, religious, or other aspects of

differences in humanity.

AIESEC envisions a world where its inhabitants are working together for common

goals to ensure prosperity for all. AIESEC wishes to see the world as a community

where its people respect, enjoy, and understand each other. Through “Fulfillment of

Humankind‟s potential” AIESEC expresses its aim to develop individuals who have

the knowledge, skills and determination to develop their communities.


42 | P a g e

AIESEC‟s aim is to offer as many opportunities as possible for young people to

develop their potential; people who are responsible, entrepreneurial, culturally

sensitive and thirsty for learning more! Furthermore, AIESEC wants young people to

learn and contribute to the learning of others so that it helps the development of their

communities.

3.1.4 Values

“Activating Leadership”: we lead by example and inspire leadership through our

activities. We take full responsibility for developing the leadership potential of our

members.

“Demonstrating Integrity”: we are consistent and transparent in our decisions and

actions. We fulfill our commitments and conduct ourselves in a way that is true to our

ideals.

“Living Diversity”: we seek to learn from the different ways of life and opinions

represented in our multicultural environment. We respect and actively encourage the

contribution of every individual.

“Enjoying Participation”: we create a dynamic environment created by active and

enthusiastic participation of individuals. We enjoy being involved in AIESEC.

“Striving for Excellence”: we aim to deliver the highest quality performance in

everything we do. Through creativity and innovation we seek to continuously

improve.

“Acting Sustainably”: we act in a way that is sustainable for our organization and

society. Our decisions take into account the needs of future generations.


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The shareholders of AIESEC are:

Members

Enablers: mentors, TN takers, learning and content partners

Supporters: sponsors (financial and in-kind), boards (advisory and

governance), support groups, university, government

Impact: the community, alumni

3.1.5 Product

AIESEC Experience is the core product

of AIESEC. Different facets of AIESEC

Experience are sold to different

stakeholders who customize their own

experience.

In “Intro to AIESEC” stage, students get knowledge about the organization, about its

vision, values and how it works and also get some preparation on soft skills.

At the “Taking Responsibility” stage they participate actively in departments and

projects, so they take some responsibilities. At this stage they can try themselves and

develop on personal and professional sides, which contribute to the “fulfillment of

humankind‟s potential” part of the vision.

Then they have the possibility to take a “Leadership” opportunity and to become team

leaders (middle management), organizing committee presidents (middle management)

or executive board members (top management). At this stage they will learn about

leadership, management and will have the possibility to coordinate different teams

which have specific task and objectives. They can try themselves on how to be a

leader and develop their leadership skills, which also contributes to the “fulfillment of

humankind‟s potential” part of the vision.

The AIESEC Experience


44 | P a g e

Another option is to participate in the international “Exchange” program and go

abroad to do an internship. This will take participants away from their comfort zone,

and offer them multicultural experiences, the possibility to learn about other cultures

and civilizations, to live cultural shocks and also to gain professional experience. This

stage contributes to “peace” because participants become more tolerant towards

different cultures, religions or ways of thinking, and to “fulfillment on humankind‟s

potential” through their professional experience.

There are 4 different types of internships:

MT - management traineeship at companies, which includes marketing,

business administration, public relations, human resources, project

management, etc

TT - technical traineeship at companies, for informational technology and

computer science students

DT - development traineeship in NGOs or other institutions, which helps their

development with the help of international volunteers

ET - educational traineeship, which offers the possibility to teach foreign

languages or other subjects in organizations institutions (ex: kindergarten,

schools, universities)

In annex number 4 you can find more details about the exchange program.

The “Heading for the Future” stage is a transition stage, where members finish their

activities in AIESEC, and learn how to use their experience in their lives.

After completing all the stages, members will become change agents, who will make a

positive impact in society, contributing to the vision of the organization.


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In order to make this experience more qualitative, the concept of learning

environment was created. This learning environment has 6 elements through which

every member can learn about a specific issue or functional area. These elements are:

There are the five principles which should guide people through the AIESEC

Experience. Everybody who joins should have them in mind before joining AIESEC

and also during the actual AIESEC experience:

1. Take an active role in your learning and the learning of others

What – you are in charge of your own learning and also to help others learn

Why is it important to the outcome of the Learning Process?

o Our education system teaches us to be passive towards learning (take

what is given)

o The world is dynamic and one must always be proactively learning

o It is the only way people will be really committed to the process

Where this principle shows up in the process

o Become more involved with organization prior to going on the

traineeship and you help out with one of the functional areas

Individual discovery

and reflection

Mentoring

Learning Circles

T

Team Experiences

Conferences and

Seminars

Virtual Spaces; forums,

blogs, resource sharing


46 | P a g e

o People are informed before entering of what it takes to do an exchange

and then have time to get needed skills and resources

o Encouraging reflection on goals and persional vision

o Joining a learning network

2. Challenge your worldview

What – All new information is interpreted through the worldview of the

person, including emotions, attitudes, values, passed experiences, and as a

result, motivation and action. It affects a lot how and to what we direct our

attention and action in different situations. We want to create situations that

broaden and challenge how a person thinks and helps them to see the

connection between these elements, their actions, and results.

Why is it important to the outcome of Learning Process?

o It is not sufficient to be aware of the problems of the world to achieve

change, you must also understand the causes and possible solutions and

this requires thinking about and understanding many different points of

view. It requires skills, confidence and “shaking” experiences to build

a worldview oriented towards positive changes.

Where does this principle show up in the process?

o Certain experiences, such as doing an exchange, have the intensity to

“shake up” the worldview. Other experiences include:

Having a positive impact on a person

Experiences of failure and success

Forming and exchange ideas with people from different

backgrounds

Intense teamwork experience

3. Meta-cognition and personal reflection skills


47 | P a g e

What is it? – refers to the capacity to recognize and evaluate your own

thoughts, values, emotions, motives, goals and actions.

Why is it important to the process?

o These skills allow someone to really take advantage of the AIESEC

experience, since it allows them to analize their actions and those of

others.

o Facilitates the creation and completion of goals

o Facilitates the creation of values and the will to follow them

Where does this principle show up in the process?

o Giving space to reflect on what one has learned or wants to learn

o Giving space to share visions and learning experiences with others

o Through the role of a mentor

4. Increasing Practical and Theoretical Knowledge

What is it? – the opportunity to gain professional and personal skills and to

apply them

Why is it important to the outcome of the learning process?

o With more skills, one increases the capacity to have an impact in the

world

o Fills a flaw in our education system in which most students to know

have the opportunity to gain practical experience

o Learning increases when there is an opportunity to apply and put into

practice what you have learned in theory

Where does this principle show up in the learning process?

o Experience working as a member in the area of public-speaking, sales,

planning, marketing, team management, leadership, budgeting, etc.


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o During the traineeship

o On a theoretical level during conferences or learning activities

5. Creating a network of contacts

What is it – a group of like-minded people who are interested in seeing you make

the change you want to see in the world

Why is it important to the outcome of the AIESEC Learning Process?

o Because it helps to have contacts and support from all of the world

when trying to change it

Where does this principle show up in the AIESEC Learning Process?

o Through running the exchange program and attending conferences you

are put into contact with people from all over the world

o The ability to be in contact with people of similar interest through

learning networks

3.2 ABOUT AIESEC CLUJ NAPOCA

AIESEC Cluj Napoca was established as an initiative of 5 students in 1994. It was

recognized as a legal entity in 1997. Since then it developed, reaching more than 150

members in present, offering more than 70 leadership and 60 exchange opportunities a

year.

AIESEC Cluj Napoca has its own set of values also (SIGPE DACIM):

Sharing Development

Inspiring Action

Getting Connected

Performing Intelligence


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Exploring the Mind

3.2.1 Objectives

AIESEC measures its performance by the following organizational objectives:

Number of Exchanges: Incoming and Outgoing

Number of members that complete a Leadership experience

Number of students that had a Leadership and an Exchange experience as well

Number of Members

In 2005 AIESEC International, together with representatives from each member

country, made a planning for the 2005-2010 period regarding its objectives as follows:

Objective Number

X 8000

Members 40000

Leadership 9600

Exchange and Leadership 5000

Countries and Territories 110

For AIESEC Cluj Napoca, the objectives and some performance indicators are:

Objective/Year 2005 2006 2007 2008 2009 2010

X 36 42 37 51 66 81

Outgoing 29 32 25 35 46 55

Incoming 7 10 12 16 20 26

Members 61 82 74 100 132 162

Member / Exchange 1.69 1.95 2.00 1.96 2.00 2.00

Leadership 35 33 25 34 44 54

Member / Leadership 1.74 2.48 2.96 2.94 3.00 3.00

Exchange and Leadership 5 10 10 17 27 39

% Exchange and Leadership 17.24% 31.25% 40.00% 48.57% 58.70% 70.91%

Growth Ratio 2005 2006 2007 2008 2009 2010

Exchange

16.67% -11.90% 37.84% 29.41% 22.73%

Incoming

10.34% -21.88% 40.00% 31.43% 19.57%

Outgoing

42.86% 20.00% 33.33% 25.00% 30.00%

Members

34.43% -9.76% 35.14% 32.00% 22.73%

Leadership

-5.71% -24.24% 36.00% 29.41% 22.73%

Exchange and Leadership

100.00% 0.00% 70.00% 58.82% 44.44%


50 | P a g e

The new Executive Board (the top management) reviewed these objectives,

considering the external reality and the organizational health, and modified them for

their term (15.04.2009 - 15.04.2010) as follows:

Objective Number

Exchange 109

Outgoing 63

Incoming 46

Members 184

Member / Exchange 1.69

Leadership 68

Member / Leadership 2.7

Exchange and Leadership 15

% Exchange and Leadership 23.8%

Financial Reserve €2000

3.2.2 Structure

AIESEC Cluj Napoca has an Executive Board (top management) which has a Local

Committee President, 7 Vice Presidents and an Operational Director. Each vice

president is responsible for one department (area) and the operational director is

responsible for all the projects. The departments are:

Outgoing Exchange

Incoming Exchange Corporate

Incoming Exchange Non-Corporate

Talent Management

External Relations

Communication

Finance


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In some departments there are different teams, coordinated by team leaders. These

teams are responsible for different processes in the department. This structure

supports the core of AIESEC, which differentiates it from other organizations:

integrated leadership, international and learning environment experiences.

3.2.3 Management

In order to manage all the processes and every stage of the AIESEC Experience (the

product), there are some tools and principles which are used.

First of all, in order to offer high quality experiences, the Talent Management

department makes an analysis of the human resource needs, taking into consideration

the objectives, activities and projects. As a result, they create the profile of the

members and the number of students who should be recruited. This is very important

in order to offer relevant opportunities for members who are willing to consume some

parts of the AIESEC Experience.

Another step is to make training and development planning for every quarter, and

standardize development packages for each stage of the AIESEC Experience.


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In order to measure the quality of the experiences on each stage and the satisfaction of

the members (customers), there are some surveys which have to be completed on the

online international platform (www.myaiesec.net) in order to pass from one stage to

the other. This is the same for companies and NGOs who take interns (exchange from

the incoming side) into their organization.

Another tool which measures the activity of each member on each department and

project is used to ensure that everyone has qualitative experiences on their stage:

Member tracking

Member Position Member

Activity Objective Deadline for objective Result

Besides these tools, there are specific tools for planning the activities of each

department and project, in order to assure that everyone, every time has a relevant

experience (product to consume). These include general planning of the organization,

planning of processes on each department, project management tools for projects, etc.

3.3 STRATEGIES

In order to achieve its goals until 2010, AIESEC adopted a differentiation strategy.

This strategy usually implies: strong innovation and marketing, to operate on dynamic

markets, focus on development, innovation and design, high margins, educating the

market and risk taking.

Because every local committee has its own authority, we can speak about focus

differentiation strategy at every local level.


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One aspect of this strategy is that AIESEC Cluj Napoca needs to be always sure about

its product portfolio and the value that products offer. This implies constant evolution

and development of the portfolio and training its members on marketing and sales.

Because of its focus differentiation strategy, AIESEC is aware that the product

(experience) it offers is not desired by everyone.

Another important aspect is the brand. AIESEC needs to have an extremely strong

and reputed brand which transmits the core of AIESEC and the quality of experiences

that offers. This is very important because a strong brand attract talented people and

other organizations towards consuming the AIESEC experience.

In order to support the implementation of

strategy, AIESEC structured its activities in

subsystems. The AIESEC sub-systems model

outlines the core activity & process structure of

the organization. Each of the sub-system is

separate but they are all interdependent on each

other.

The heart of the organization is the vision, nature, role, core-work and values, which

form the organizational identity. The identity gives the organization reason to exist

and defines the unique role that it is playing – “creating impact on society through

development of Change Agents”. The strategy puts the vision into practice.

AIESEC Experience is a unique leadership development experience, which enables

the development of individuals into Change Agents. It is the core-work, the core

deliverable of the organization and defines what happens in the sub-systems.


54 | P a g e

The 5 sub-systems of AIESEC create a logical internal system, which is the

mechanism to deliver core-work – The AIESEC Experience. All the 5 sub-systems are

required for AIESEC to be able to respond to the needs of our environment and create

more & more of AIESEC Experiences.

Exchange Management System:

Promotion (Messages & Campaign)

Market Research & Segmentation (& external input)

Product Development

Delivery Process

Marketing/Selling

Internship Preparation

Reception

Adaptation & Integration

Customer Relationship Management (AIESEC involvement & on-going

support during the internship)

Quality Measurement

Re-integration

People System:

Recruitment & Marketing Messages/Campaign

HR planning & allocation (AIESEC‟s Talent Management System)

Selection Criteria & System

Defined Induction Process

Competency Model – defined profile for each position

Member Education Cycle (training & education)

Individual Goal Setting

Capturing personal learning/experience

Member Performance Appraisal

Mentoring

Individual Reward & Recognition

Alumni – H4TF Opportunities


55 | P a g e

Transition Tools & Systems

Structure System:

Compendium

Membership Criteria (Local Committee/Members)

Organizational Structure (Local Committee/National Committee/Support

Bodies etc.)

Role & responsibilities of different bodies

Governance – accountability to external bodies

Organizational Planning & Review (Goal setting & planning for the entire

organization – all the different sub-systems)

System of review & assessment (all kinds of performance, health & strategic

indicators)

Organizational Reward & Recognition

Conference Cycle (fitting the Member Education Cycle & the Planning

Process)

Legal Administration

Expansion of the AIESEC network

Information System:

IS Infrastructure

Online Collaboration & Networking

Communication

Membership Management

Business Intelligence (for business management & review)

Aiding individual experience

Education & competence development (e-learning aspect)

Exchange Management

Relationship Management

External Interfaces

Knowledge Management

Help Desk – user support & education

Revenue Generation


56 | P a g e

Financial System:

Budgeting & Review

Cash Flow Management

Book-keeping

Diversification of Revenue

Financial Reporting Structure – Audits (internal & external)

Fund-raising

ER products

ER Principles – sharing companies, territories

Financial Reserves Management

Restricted Funds Management

Investments Management

Infrastructure

The visual representation of the strategy, how is going the organization to achieve its

vision, is presented in the strategy map:


57 | P a g e

You can also find the destination statement of AIESEC Cluj-Napoca in annex number

5.

The logical flow of all these is that through differentiation, AIESEC will grow and

attract more customers to consume the AIESEC Experience, more companies and

students will join the organization, who will experience different stages of the

AIESEC Experience.

AIESEC is also measuring its performance on the strategy with some Critical Success

Factors and Key Performance Indicators:


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After changing the strategy and the concept in 2005, there appeared changes in the

product packaging and selling methods as well. The differences between the “old

way” and the “experience way” are shown in the table below:

Question Old way of selling The experience way

What is AIESEC?

AIESEC is the world‟s

largest student-run

organization. We are based in

110 countries and our main

focus is to do bi-lateral

exchanges between these

countries.

We provide youth a platform to

discover and develop their potential

to have a positive impact on society.

This platform includes exchange,

leadership opportunities,

conferences, and learning networks.

What does AIESEC

do?

We facilitate a bi-lateral

exchange program between

our 110 countries, these

internships can be in

management, economics,

engineering, social issues etc.

We have a huge base of 5000

students with varied skills

and interest.

AIESEC provides an integrated

development experience which

includes a variety of forms of

learning such as team experiences,

mentorship, personal reflection,

seminars and conferences, and other

ways in which we can grow our own

leadership and connect to a diverse

array of partners.

We also integrate management and

leadership roles in the organization

itself with international internships

which is the key role our 3500

corporate partners around the world

provide as an experience.

Why does AIESEC

do this? To develop leaders.

We believe that this process has

been designed in way, that if a

student goes through this process, he

would have had experience to be a

change agent who provides positive

change in society.

What are the

Benefits you can

offer us?

AIESEC provides you

• Cost-effective

• International perspective

There are 2 types of benefits:

1. Why take an intern?

2. What is the advantage of taking


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• AIESEC takes care of

logistics

an intern through AIESEC?

Why take an intern?

- We offer individuals who are

currently going through a leadership

development experience and thus

their motivation and commitment

would be of the highest quality.

- This would be your opportunity to

connect with students in this city

and work with them in the future.

- An international intern adds a

different perspective in the office

place and thus a more international

culture/work-ethic is formed for the

organization.

(Diversity rather than just

international)

What is the advantage of taking an

intern through AIESEC?

- AIESEC takes care of all the

logistics of bringing the intern.

- Adapting the intern in the

city/culture.

- You choose the kind of intern you

need based on your organizations

requirement/need.

- You also select when and for how

long you need the intern.

- You are the end decision-maker on

selecting the intern you want.

- Our main objective for doing this –

is the opportunity of self

development of the individual and

thus you might perceive these

internships as cost-effective.


60 | P a g e

Considering all, we can state that AIESEC differentiates itself from other student

organizations through having good systems, tools, processes and structures

implemented in the organization, which makes it more alike to a corporation, rather

than a student organization. More than that, what differentiates AIESEC from its

competitors is the experience that it offers: leadership experience, international

professional and personal experiences and a global learning environment, all in one

place. AIESEC experience offers a complex frame for development, making contacts,

and gaining professional experience on different functional areas, all in one with

enjoyment of participation.


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CONCLUSION

Today we are facing a lot of challenges. From environmental, through social, to

economical challenges. These challenges force us to be creative, to generate solutions

and to change things.

One strategy that is still very popular (in Romania is the most popular strategy that is

used, if any), is the cost leadership strategy. Being cheap, offering discounts, offering

one more for free, being the cheapest is still popular. The problem with this strategy is

that commodities a firm‟s offerings, and decreases their value.

Another problem with this strategy is that makes customers loyal to the price. Not to

the company, brand, product/service or experience; to the price. This means that if

someone comes tomorrow (and it will!) and offers the same for less money or even

something better for less money, our customers will disappear. The only solution is to

decrease prices more…but where is the limit? Where can we operate on profit? How

can we increase our businesses in terms of customers and profits if we are always

forced to operate at the lowest profit margin possible?

I presented all generic strategies of Michael Porter and the appearance or

transformation of our economy into an experience economy.

The study case demonstrated that a differentiation or differentiation focus strategy can

work. It can work in an NGO that is constantly changing, evaluating and growing for

62 years now. You may think that managing an NGO is different from managing a

business, and it is much easier. The fact is, that every single concept and model that is


62 | P a g e

adopted and used in AIESEC, came from the corporate sector. Partners of AIESEC

helped the development and implementation of those business models and strategies.

It makes no difference where we implement strategies. It can be any kind of

organization. The difference between AIESEC and companies is that they are working

for different kind of objectives and they use different motivators.

AIESEC measures its performance in number of members, number of leadership

positions and experiences that are realized, number of exchanges that are realized

(both incoming and outgoing) and number of whole experiences realized (leadership

and exchange by the same person). AIESEC uses mostly non-financial motivators,

because it is a voluntary work.

Companies usually measure their performance in number of clients, number of

products or services sold or experiences staged, return on investment and profits that

were generated. Companies can use all kinds of non-financial motivators and financial

motivators as well.

I am not saying that an overall cost leadership strategy cannot work. There are

examples where companies have success. But I truly believe that we have to start

thinking strategically, on the long term. We have to maintain our competitive

advantages, and for this reason, staging experiences is the answer. Swift from offering

only products and services and transform into “stagers of experiences”. Figure out a

couple of things that we can do better, that differentiates us from our competitors, and

keep doing them better and better every day.


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BIBLIOGRAPHY

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64 | P a g e

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Philip Rosedale on Second Life

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Seth Godin on standing out

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ANNEXES

Annex Number 1.

Environmental Variables Checklist66

1. Societal Changes

Changing customer preferences - Impacting product demand or design

Population trends - Impacting distribution, product demand or design

2. Governmental Changes

New legislation - Impacting product costs

New enforcement priorities - Impacting investments, products, demand

3. Economic Changes

Interest rates - Impacting expansion, debt costs

Exchange rates - Impacting domestic and overseas demand, profits

Real personal income changes - Impacting demand

4. Competitive Changes

Adoption of new technologies - Impacting cost position, products quality

New competitors - Impacting prices, market share, contribution margin

Price changes - Impacting market share, contribution margin

New products - Impacting demand, advertising expenditures

5. Supplier Changes

Changes in input costs - Impacting prices, demand, contribution margin

Supply changes - Impacting production processes, investment requirements

66

Power at al., 1986 in Henry Mintzberg, Bruce Ahlstrand, Joseph Lampel, Strategy safari, The Free



68 | P a g e

Changes in number of suppliers - Impacting costs, availability

6. Market Changes

New users of products - Impacting demand, capacity utilization

New markets - Impacting distribution channels, demand, capacity utilization

Product obsolescence - Impacting prices, demand, capacity utilization

Annex number 2

Strengths and Weaknesses Checklist67

1. Marketing

Product quality

Number of product lines

Product differentiation

Market share

Pricing policies

Distribution channels

Promotional programs

Customer service

Marketing research

Advertising

Sales force

2. Research and development

Product R&D capabilities

Process R&D capabilities

67

Power at al., 1986 in Henry Mintzberg, Bruce Ahlstrand, Joseph Lampel, Strategy safari, The Free



69 | P a g e

Pilot plant capabilities

3. Management information systems

Speed and responsiveness

Quality of current information

Expandability

User-oriented system

4. Management team

Skills

Value congruence

Team spirit

Experience

Coordination of effort

5. Operations

Control of raw materials

Production capacity

Production cost structure

Facilities and equipment

Inventory control

Quality control

Energy efficiency

6. Finance

Financial leverage

Operating leverage

Balance sheet ratios


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Stockholder relations

Tax situation

7. Human resources

Employee capabilities

Personnel systems

Employee turnover

Employee morale

Employee development

Annex number 3

Economic Distinctions68

Economic

offering

Commodities Goods Services Experiences

Economy Agrarian Industrial Service Experience

Economic

function

Extract Make Deliver Stage

Nature of

offering

Fungible Tangible Intangible Memorable

Key attribute Natural Standardized Customized Personal

Method of

supply

Stored in bulk Inventoried

after

production

Delivered on

demand

Revealed over

a duration

Seller Trader Manufacturer Provider Stager

Buyer Market User Client Guest

Factors of

demand

Characteristics Features Benefits senstaions

68


1999


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Annex number 4

The exchange flow and duration in AIESEC

Action

Optimistic case Pesimistic case

1 AIESEC contacts the company

The company agrees to participate in the program

and fills in a form and makes the job description for

the trainee.

START

2

AIESEC selects possible candidates from its

international database, based on the criteria

established by the company.

3 weeks 8 weeks

3

AIESEC presents 2-3 candidates for the company

(CV, other information), based on the profile

provided by them.

The company selects an intern after finishing the

selection process (usually interview).

1 week 4 weeks

4

AIESEC deals with legal issues (preparing and

sending documentation for visa). After arrival, the

trainee signs a collaboration contract with the

company.

- The company assures all living costs for the trainee

- The company pays all administrative costs for

AIESEC

6 weeks 12 weeks

STARTING the internship

Total 10 weeks 24 weeks


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Annex number 5

Destinations statement of AIESEC Cluj-Napoca

kacso szilard csaba - bachelor paper

Documents

business strategies

generic strategies

focus strategies

aiesec cluj napoca

generic competitive

differentiation strategy

strategic management

characteristics of experiences