Professional Documents
Culture Documents
Ch 4 -1
Ch 4 -2
Internal Assessment
Great
spirits have always encountered violent opposition from mediocre minds. Albert Einstein
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Internal Audit
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gathered from:
Management Marketing Finance/accounting Production/operations Research & development Management information systems
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Internal Audit
Involvement in performing an internal strategic-management audit provides a vehicle for understanding the nature and effect of decisions in other functional business areas of the firm
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Ch 4 -10
Internal Audit
Managers
team of managers then selects 10 to 15 key organizational strengths and weaknesses to focus on
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Internal Audit
Financial Ratio Analysis
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organization as it learns to cope with its problem of external adaptation and internal integration . . . is considered valid and taught to new members as the correct way to perceive, think, and feel
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Strength Weakness
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Heroes
Cultural Products
Rites
Symbols
Myths
Rituals
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Miss external changes due to strongly held beliefs Natural tendency to hold the course even during times of strategic change
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Management
Functions of Management
1. 2. 3. 4. 5.
Management
Function Planning Organizing Motivating Staffing Controlling
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Strategy Implementation
Strategy Implementation
Management
Planning
Beginning of management process Bridge between present & future Improves likelihood of attaining desired results
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Management
Developing a mission Forecasting future events and trends Planning Establishing objectives Choosing strategies to pursue
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Planning
Synergy
Can develop through planning Exists when everyone pulls together as a team that knows what it wants to achieve
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Management
Organizing
Achieves coordinated effort Defines task & authority relationships Determines who does what Determines who reports to whom
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Management
Organizing
Breaking down tasks into jobs Combining jobs to form departments Delegating authority
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Management
Motivating
Management
Staffing
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Management
Staffing
Management
Controlling
Establishing performance standards Ensure actual operations conform to planned operations Taking corrective actions
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Management
Controlling
1. Establish performance standards 2. Measure individual and organizational
performance
3. Compare actual performance to
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Marketing
Customer Needs or Wants for Products and Services
1. Defining 2. Anticipating 3. Creating 4. Fulfilling
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Marketing
Marketing Functions
1. Customer analysis 2. Selling products/services 3. Product & service planning 4. Pricing 5. Distribution 6. Marketing research 7. Opportunity analysis
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Marketing
Customer surveys Consumer information Customer Analysis Market positioning strategies Customer profiles Market segmentation strategies
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Marketing
Selling Products/Services
Advertising Sales Promotion Publicity Personal Selling Sales force management Customer relations Dealer relations
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Marketing
Test marketing Brand positioning Devising warranties Packaging Product features/options Product style Quality Deleting old products Providing for customer service
Product/Service Planning
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Marketing
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Marketing
Distribution
Warehousing Distribution channels Retail site locations Sales territories Inventory levels Transportation Wholesaling Retailing
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Marketing
Gather data
Marketing Research
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Marketing
Assessing costs
Cost/Benefit Analysis
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Marketing Audit
1. Are markets segmented effectively? 2. Is the organization positioned well among
competitors?
3. Has the firms market share been
increasing?
4. Are the distribution channels reliable &
cost effective?
5. Is the sales force effective?
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Marketing Audit
6. Does the firm conduct market research? 7. Are product quality & customer service
good?
8. Are the firms products and services
priced appropriately?
9. Does the firm have effective promotion,
Marketing Audit
budgeting effective?
11. Do the firms marketing managers have
as compared to rivals?
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Finance/Accounting
budgeting)
2. Financing decision 3. Dividend decision
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Leverage Ratios
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Ratios
Inventory turnover Fixed assets turnover Total assets turnover Accounts receivable turnover Average collection period
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Ratios
Gross profit margin Operating profit margin Net profit margin Return on total assets (ROA)
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Ratios Return on stockholders equity (ROE) Earnings per share Price-earnings ratio
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Ratios Sales Net Income Earnings per share Dividends per share
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Growth Ratios
Ratio
Annual percentage growth in Total sales Profits EPS Dividends per share
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Finance/Accounting Audit
1.
2. 3.
4. 5.
Where is the firm financially strong/weak as indicated by financial ratio analysis? Can the firm raise needed short-term capital? Can the firm raise needed long-term capital through debt and/or equity? Does the firm have sufficient working capital? Are capital budgeting procedures effective?
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Finance/Accounting Audit
6. 7.
8.
9.
Are dividend payout policies reasonable? Does the firm have good relations with its investors and stockholders? Are the firms financial managers experienced and well trained? Is the firms debt situation excellent?
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Production/Operations
Production/Operations Functions
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Production/Operations Audit
Are Are suppliers suppliers of of materials, materials, parts, parts, etc. etc. reliable reliable and and reasonable? reasonable? Are Are facilities, facilities, equipment, equipment, machinery, machinery, and and offices offices in in good good condition? condition? Are Are inventory-control inventory-control policies policies and and procedures procedures effective? effective?
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Production/Operations Audit
Are Are quality-control quality-control policies policies & & procedures procedures effective? effective? Are Are facilities, facilities, resources, resources, and and markets markets strategically strategically located? located? Does Does the the firm firm have have technological technological competencies? competencies?
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Development of new products before competitors Improving product quality Improving manufacturing processes to reduce costs These functions can be done internally or externally
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Budgeting relative to competitors How many successful new products are needed
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Do all managers use the information system to make decisions? Is there a CIO or Director of Information Systems position in the firm? Are data updated regularly? Do managers from all functional areas contribute input to the information system? Are there effective passwords for entry into the firms information system?
Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -71
Are strategists of the firm familiar with the information systems of rival firms? Is the information system user-friendly? Do all users understand the competitive advantages that information can provide? Are computer training workshops provided for users? Is the firms system being improved?
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Ch 4 -74
Value Value Chain Chain Activities Activities Are Are Identified Identified and and Assessed Assessed
Core Core Competencies Competencies Arise Arisein inSome Some Activities Activities
Some SomeCore Core Competencies Competencies Evolve Evolveinto into Distinctive Distinctive Competencies Competencies
Some Some Distinctive Distinctive Competencies Competencies Yield Yield Sustained Sustained Competitive Competitive Advantages Advantages
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1. List key internal factors 2. Assign a weight ranging from 0.0 to 1.0 3. Assign a 1 to 4 rating to each factor 4. Multiply the weight times the rating 5. Sum the weighted scores
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Introduction Input stage External Audit Opportunities and threats CPM, EFE Internal Audit Strengths and weaknesses IFE Matching stage-- Minor problems and Major problems Decision stage-Current Copyright 2011 Pearsonstrategies Education, Inc. Ch 4 -77
Publishing as Prentice Hall
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