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Strategy

Planning
- strategic
- emergent
- contingency plans
Objectives: LT, ST
Mission statement
Environmental analysis (SWOT)
Competitive analysis (Porter’s 5 forces)
Portfolio analysis
Identifying Mission Statement Components:
A compilation of Excerpts from Actual Corporate
Mission Statements
1. Customer- We believe our first responsibility is to the doctors, nurses, and
market patients, to mothers and all others who use our products and
services. (Johnson & Johnson)
To anticipate and meet market needs of farmers, ranchers, and
rural communities within North America. (CENEX)

2. Product- AMAX’s principal products are molybdenum, coal, iron, ore,


service copper, lead, zinc, petroleum and natural gas, potash, phosphates,
nickel, tungsten, silver, gold, and magnesium. (AMAX)

3. Geographic We are dedicated to the total success of Corning Glass Works as a


domain worldwide competitor. (Corning Glass)
Identifying Mission Statement Components:
A compilation of Excerpts from Actual Corporate
Mission Statements (cont’d)
4. Technology Control Data is the business of applying microelectronics and
computer technology in two general areas: computer-related
hardware and computing-enhancing services, which include
computation, information, education, and finance. (Control Data)
The common technology in these areas relates to discrete particle
coatings. (NASHUA)

5. Concern for In this respect, the company will conduct its operation prudently,
Survival and will provide the profits and growth which will assure Hoover’s
ultimate success. (Hoover Universal)

6. Philosophy We are committed to improve health care throughout the world.


(Baxter Travenol)
We believe human development to be the worthies of the goals of
civilization and independence to be the superior condition for
nurturing growth in the capabilities of people. (Sun Company)
Identifying Mission Statement Components:
A compilation of Excerpts from Actual Corporate
Mission Statements (cont’d)
7. Self-concept Hoover Universal is a diversified, multi-industry corporation with
strong manufacturing capabilities, entrepreneurial policies, and
individual business unit autonomy. (Hoover Universal)

8. Concern for We are responsible to the communities in which we live and work
public image and to the world community as well. (Johnson & Johnson)
Also, we must be responsive to the broader concerns of the public,
including especially the general desire for improvement in the
quality of life, equal opportunity for all, and the constructive use of
natural resources. (Sun Company)
This exercise should help you think about
1) your long-term personal goals, and 2)
companies you might want to work for
1. What do you want inscribed on your
gravestone?
What would be your primary goal if you
were told you had 18 months to live?
If you had a child, what is the most
important lesson that you would like him or
her to know?
Book says, “…every organization has a
mission statement that defines its
purpose and answers the question ‘what
business are we in?’
Use the answers to the above questions to write
a personal mission statement/paragraph that
should specify your life’s goal!
Consider:
Values: what’s important to you, e.g. health,
friends
Principles: guidelines to follow, e.g. fairness,
quality, service
Strengths: your qualities, e.g. adaptable,
confident
Blockers: what’s stopping you? e.g. shyness,
laziness

Next write a paragraph describing the mission of


a company you would want to work for.
SWOT analysis
Environmental Scan – Both internal and external factors
need to be considered:

1. Internal factors – characteristics in the firm


(management, mission, resources, systems process,
and structure) that can be considered strengths or
strong points and weaknesses or weak points.

2. External factors - characteristics in the environment


that are “outside” the firm (customers, competitors,
suppliers, labor force, shareholders, society,
technology, the economy, and governments) that
represent opportunities to tap or threats to flank.
Starbuck’s
Five-Force
Competitive
Analysis

Exhibit –5
Portfolio Analysis: BCG Matrix

Exhibit 5–11
INDUSTRY ATTRACTIVENESS
BUSINESS STRENGTH
Organizational Strategies occur on 3 levels:
Grand, Business, and Functional
A. Grand level strategies:
- 1. Growth (a. concentration; b.
diversification)
- 2. Retrenchment
- 3. Stability (status quo)
- 4. Combination (multiple strategies)
1a. Growth through concentration – concentrating on
your existing specialization

i. market penetration – aggressively targeting current


markets with existing product specialties
ii. market development/geographic expansion – expanding into
new markets
iii. market segmentation – dividing existing
markets
iv. product development – modify existing
products, or develop new but related
products
1b. Growth through diversification – branching out
into new areas

i. horizontal integration – expanding across the general


industry (e.g. Coke acquires Minutemaid).

ii. vertical integration – expanding into industries populated


by suppliers/buyers (e.g. Ford buys steel plant).

iii. conglomerate diversification – expanding into unrelated


industries (e.g. GM buys Hershey’s candy).

iv. joint venture – expanding together with another


company in order to diversity efficiently.
2. Retrenchment

i. Turnaround – downsizing existing


company/divisions

ii. Divestiture – selling off existing


divisions/subdivisions

iii. Liquidation – Chapter 11 bankruptcy


3. Stability - maintain status quo (e.g.
continuous improvement)

4. Combination – multiple use of strategies


B. Business level strategies

1. Michael Porter’s Competitive Strategies:


i. low cost (e.g. Wal-Mart)
ii. differentiation (Volvo/Mercedes)
iii. focus (Penny’s/Pea in a Pod)

2. Adaptive business level strategies:

a. prospecting
b. defending
c. analyzing
B. Business level strategies (cont’d)

3. Product life cycle

i. introduction stage
ii. growth stage
iii. maturity stage
iv. decline stage
Product Life Cycle: Starbucks
C. Functional level strategies

i. Marketing

ii. Manufacturing

iii. Human resources

iv. Etc.
Strategy Formulation is followed by
Implementation
Seven S Model of Implementation

STRATEGY

SKILLS STRUCTURE

SHARED
VALUES

STAFF SYSTEMS

STYLE
Seven S Model
1. Strategy – Plan or course of action leading to the allocation of firm’s
resources to reach identified goals.
2. Structure – The ways people and tasks relate to each other. The basic
grouping of reporting relationships and activities. The way separate
entities of an organization are linked.
3. Shared Values – The significant meanings or guiding concepts that give
purpose and meaning to the organization.
4. Systems – Formal processes and procedures, including management
control systems, performance measurement and reward systems, and
planning and budgeting systems, and the ways people relate to them.
5. Skills – Organizational competencies, including the abilities of
individuals as well as management practices, technological abilities, and
other capabilities that reside in the organization.
6. Style – The leadership style of management and the overall operating
style of the organization. A reflection of the norms people act upon and
how they work and interact with each other, vendors, and customers.
7. Staff – Recruitment, selection, development, socialization, and
advancement of people in the organization.
Figure 4.
Contingency

Constrained
Coefficients.