Professional Documents
Culture Documents
PRELIM TOPICS
Summary of Key THE Characteristics and their Cases that covers various facets of tourism,
Implications for Managers hospitality and events management provide an
illustration of the specific strategies management
There are 11 characteristics of THE identified challenges that managers face in these contexts.
in this section. Some characteristics are common Case studies are thus a valuable tool in several
to the service industry , but some are particularly ways. Case Studies:
important to THE settings. It is important that • Provide experience of organizational
managers working in the THE are aware of these problems and issues that it might not be
factors and consider the managerial implications possible or feasible to encounter directly.
that are associated with each. The strategy which • Serve to illustrate the theory and
organizations put in place should reflect an concepts of strategic management
understanding of these characteristics and the applied to relevant examples from THE
impacts they might have on the organizations • Allow active participation in strategic
concerned (Evans, 2015). analysis, choice and implementation and
of presenting results persuasively
A summary of the key characteristics of THE • Illustrate the linkages inherent in
and their implications for managers is provided strategic management in that internal
below: decisions have impacts on other parts of
the organization and on external
A summary of the key stakeholders
character • Illustrate the holistic nature of strategic
management in that decisions often
require knowledge of other subject fields
such as marketing, finance, and human
resource management.
3. Conduct Strategic Analyses Recall that the solution you proposed must
• The first step is to determine which solve the problem you identified. Make a logical
strategic issues are involved. Is there a argument that shows how the problem led to the
problem in the company's competitive analysis and the analysis led to the
environment or is it an integral recommendations you are proposing. Remember,
problem? an analysis is not an end in itself; it is useful only
• Once you have identified the issues that if it leads to a solution.
apply to the case, conduct the analysis.
For example you may need to conduct a LESSON 3: VISION AND MISSION ANALYSIS
five-forces analysis or SWOT analysis
Learning Objectives:
4. Propose Alternative Solutions 1. Describe the nature and role of vision and
It is important to remember that in strategic mission statements in strategic management.
management case analysis, there is rarely one 2. Identify the components of mission statements
right answer or one best way. Therefore, it is 3. Discuss how clear vision and mission
helpful to consider several different solutions. statements can benefit other strategic
After conducting strategic analysis and management activities
identifying the problem, develop a list of 4. Evaluate mission statements of different
options. What are the possible solutions? What organizations
are the alternatives? First, generate a list of all the
options you can think of without prejudging any I. VISION VERSUS MISSION
one of them. This point illustrates the purpose of
developing alternatives: to evaluate what will
happen if a company chooses one solution over
another.
Competitive Intelligence (CI) helps firms define Different macro-environmental factors can affect
and understand their industry and identify rivals business strategies. So, it is vital to follow the
strengths and weaknesses. This include the PESTEL framework. The aim is to assess how
intelligence gathering associated with collecting exactly the factors influence business
data on competitors and interpreting such data. performance.
Done properly, competitive intelligence helps a
company avoid surprises by anticipating Political Factors
competitors moves and decreasing response Politics plays an important role in business. This is
time. because there is a balance between systems of
control and free markets. As global economics
Environmental Forecasting involves the supersedes domestic economies, companies
development of plausible projections about the must consider numerous opportunities and
direction, scope, speed, and intensity of threats before expanding into new regions. It also
environmental change. Its purpose is to predict applies to firms identifying optimal areas for
change. It asks: How long will it take a new production or sales. Political factors may even
technology to reach the marketplace? Will the help determine the location of corporate
present social concern about an issue result in headquarters.
new legislation? Are current lifestyle trends likely Some of the political factors you need to watch
to continue? Some forecasting issues are much are:
more specific to a particular firm and the industry · Tax policies
in which it competes. · Stability of government
· Entry mode regulations
II. THE GENERAL ENVIRONMENT (PESTEL · Social policies (e.g. social welfare etc.)
FRAMEWORK) · Trade regulations (e.g. the EU & ASEAN)
If you handle only some powerful purchasers, The new businesses can swiftly enter the market
they often dictate the terms to you. and weaken your position. However, if the
market has strong and durable barriers to entry,
Competitive Rivalry you can maintain a favourable position.
The critical thing to consider here is the number
and capability of your business competitors. If How does Porter’s Five Forces Model vary from
there are many competitors and if they offer SWOT
equally appealing products and services, you will SWOT is one of the most commonly used
perhaps have very little power. This is because businesses tool. Both the analyses in discussion
suppliers and buyers will choose the competing can portray the strengths and weakness of your
companies if they do not like the deal you are business. However, there are some major
offering. distinctions. The level of specificity, competition
and time orientation are some differences.
You will be very powerful if your product or
service is unique. If competitors cannot offer SWOT can be described a more general and
what you provide, you will have immense overall assessment. Typically, the Five Forces
strength. In short, the factors to be considered in model focuses on a single growth decision. SWOT
this step are: is often used to get a picture of firm’s current
• The number of competitors position. After conducting the SWOT analysis, you
• The quality different between your can consider future strategic options. Five Forces
product and competitor’s product
assesses the viability of a specific product or Example of External Factor Evaluation (EFE
service. Matrix)
Rating
The ratings in CPM refer to how well companies
are doing in each area. They range from 4 to 1,
where 4 means a major strength, 3 – minor
strength, 2 – minor weakness and 1 – major
weakness. Ratings, as well as weights, are
assigned subjectively to each company, but the
process can be done easier through
benchmarking. Benchmarking reveals how well
Critical Success Factors companies are doing compared to each other or
Critical success factors (CSF) are the key areas, industry’s average. Just remember that firms can
which must be performed at the highest possible be assigned equal ratings for the same factor. For
level of excellence if organizations want succeed example, if Company A, Company B and Company
in the particular industry. They vary between C, have the market share of 25%, 27% & 28%
different industries or even strategic groups and accordingly, they would all receive the rating of 4
include both internal and external factors. In our rather than receiving ratings 2, 3 & 4.
example, we have included 11 CSF, which is
usually not enough. The more critical success Score & Total Score
factors are included the more robust and The score is the result of weight multiplied by
accurate the analysis is. The following list rating. Each company receives a score on each
provides some of the general CSF, but the list is factor. Total score is simply the sum of all
not definite and you should include industry individual score for the company. The firm that
specific factors in your matrix: receives the highest total score is relatively
stronger than its competitors. In our example, the
strongest performer in the market should be
Company B (2.94 points).