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STRATEGIC MANAGEMENT SEMINARS. October 13, 2011 Week 1. Our goal? Practice all steps of strategic planning process. Choose a company for which to formulate a strategic business plan Identify / formulate: - mission statement – framework w/in which strategy shall be crafted

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STRATEGIC MANAGEMENT SEMINARS

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Strategic management seminars

STRATEGIC MANAGEMENTSEMINARS

October 13, 2011

Week 1


Our goal practice all steps of strategic planning process

Our goal? Practice all steps of strategic planning process

  • Choose a company for which to formulate a strategic business plan

  • Identify / formulate:

    - mission statement – framework w/in which strategy

    shall be crafted

    - corporate vision – where do we want to be in # years

    - business aims -> specific objectives

  • Scan the environment – carry out external, internal & industry

    analysis -> situational analysis

    -> Internal analysis - core business & competencies, resources

    available, corp. structure, required inputs,

    corp. culture

    => IFAS (Internal Factor Analysis Summary)


Our goal practice all steps of strategic planning process1

Our goal? Practice all steps of strategic planning process

  • Environment scanning cont’d:

    -> External analysis - PEST(LE) => EFAS (External Factor Analysis Summary)

    - Industry Analysis (task environment):

    -> Porter’s Five (Six) forces => Industry Matrix

    - Situational Analysis – finding a strategic fit b/w external opportu-

    nities & internal strengths

    - mitigating harmful effects of external threats

    due to internal weaknesses

    => SFAS (Strategic Factor Analysis Summary) => SWOT analysis


Strategic management model

Strategic Management Model

Existing business model

Existing

Mission, vision, goals, objectives, corp. values

SWOT => Strategic choice

External analysis -> opportunities, threats

Internal analysis -> strengths, weaknesses

Functional-level strategies

Business-level strategies

Corporate-level strategies

Strategy implementation


Strategic management cycle

Strategic Management Cycle


Which sector what company your choice

Which sector? What company? … your choice

  • http://www.top500.de/g0037200.htm

  • http://www.europages.co.uk/

  • http://www.hbi.cz/index.php?Lang=en

  • http://www.hoovers.com/

  • http://www.marketresearch.com/

  • http://www.business.com/

  • http://www.expats.cz/directory/#482

  • http://www.rusmarket.com/

  • http://www.thomasnet.com/

  • http://no1construction.com/

  • http://dir.yahoo.com/business_and_economy/directories/companies/


Which companies do these mission statements represent

Which companies do these mission statements represent?

  • "To experience the joy of advancing and applying technology for the benefit of the public“

  • "To build a place where people can come to find and discover anything they might want to buy online."

  • "To produce high-quality, low cost, easy to use products that incorporate high technology for the individual. We are proving that high technology does not have to be intimidating for non-computer experts.


Mission statement kodak vs polaroid

Mission statementKodak vs. Polaroid

KODAK:

“We will build a world-class, results-oriented culture based on our six key

values:

- respect for the individual, uncompromising integrity, trust, credibility,

- continuous improvement and personal renewal

- recognition and celebration of achievement

through which we will grow more rapidly than our competitors by providing

customers and consumers with solutions they need to capture, store, process,

output and communicate images to people and machines anywhere,

anytime.”

POLAROID:

“… to put the latest cutting edge technology in the peoples’ hands and give them the power to use it comfortably, affordably… and in an instant.”


Mission statements

Mission statements

Take a wild guess

  • BMW vs. Mercedes

  • McDonalds vs. KFC

  • IBM vs. Apple

  • Acer vs. Dell

  • Google vs. Yahoo


Mission statement samples

Mission statement samples

BMW:

"The BMW Group is the world's leading provider of premium products and

premium services for individual mobility.“

Mercedes:

“We invented the automobile - now we are passionately shaping its future. As

a pioneer of automotive engineering, we feel inspired and obliged to continue

this proud tradition with groundbreaking technologies and high-quality

products.”


Mission statement samples1

Mission statement samples

McDonalds:

“to provide the fast food customer food prepared in the same high-quality manner

world-wide that is tasty, reasonably-priced & delivered consistently in a low-key décor

and friendly atmosphere."

KFC:

“to sell food in a fast, friendly environment that appeals to pride conscious, health

minded consumers.”


Mission statement samples2

Mission statement samples

IBM:

"At IBM, we strive to lead in the invention, development and manufacture of the

industry's most advanced information technologies, including computer systems,

software, storage systems and microelectronics.

We translate these advanced technologies into value for our customers through

our professional solutions, services and consulting businesses worldwide."

Apple:

"To produce high-quality, low cost, easy to use products that incorporate high

technology for the individual. We are proving that high technology does not have to

be intimidating for noncomputer experts."


Mission statement samples3

Mission statement samples

Dell:

"To be the most successful computer company in the world at delivering the best

customer experience in markets we serve.“

Acer:

"Measuring and tracking the effects of climate change demands accurate reporting.

ACER believes in a grassroots approach - utilizing citizen scientists to conduct such

measurement in a scientifically sound manner.”


Mission statement samples4

Mission statement samples

Google:

“Google’s mission is to organize the world‘s information and make it universally

accessible and useful.”

Yahoo:

1. “To connect people to their passions, communities, and the world’s knowledge.”

  • "Yahoo's mission is to be the most essential global Internet service for consumers

    and businesses."


Mission statements conclusion

Mission statements – conclusion?

Questions to consider

  • Why are some mission statements similar?

  • Why do they look so broad or general?

  • Would it pay to narrow a mission statement down?

    Your task

  • For the company of your choice, formulate a mission statement in your own words based on your current knowledge about the company.

  • Identify the mission statement based on your research.


Corporate vision

Corporate vision

McDonalds:

“… be the world's best quick service restaurant experience. Being

the best means providing outstanding quality, service, cleanliness, and value, so that

we make every customer in every restaurant smile.“

Toyota:

"To become the most successful and respected lift truck company in the U.S.”

Avery Dennison :

"To be recognized as the world's best coating and converting company by providing

innovative decorating, information transfer and bonding solutions that enable our

customers' success.“

- Manufacturing pressure sensitive labeling materials, retail apparel ticketing, graphics imaging media , office products, specialty tapes


Corporate vision1

Corporate vision

Your task

  • Identify the corporate vision for your company

  • Can be found directly in the vision statement or derived from a mix of information provided by top management.

  • Will be subject to re-evaluation / reconsideration after SWOT analysis based on EFAS, IFAS, and SFAS are performed


Progress check

Progress check

External analysis

  • Socio-economic (societal) environment – PEST(LE) analysis

    - analyzing general forces that do NOT directly affect business

    activities in the short-run BUT they DO influence long-term

    decisions

    - i.e. forces that regulate the exchange of materials, energy, money,

    and information

  • Task environment –> industry analysis (Porter’s 5 forces)


External analysis macro environment pest le

External analysis – Macro-environment -> PEST(LE)

How do economic factors affect our business in the “world of tomorrow, NOT today”?

  • GDP trends

  • Interest rates

  • Currency exchange rates

  • Inflation rates

  • Money supply

  • Level of unemployment

  • Wage/price control

  • Energy availability and costs

  • Disposable and discretionary income

  • Devaluation/revaluation


External analysis macro environment pest le1

External analysis – Macro-environment -> PEST(LE)

How do economic factors affect our business in the “world of tomorrow, NOT today”?

  • Higher GDP => higher consumer expenditures => alleviating competitive pressures w/in industry => potential for expansion => => higher profits => OPPORTUNITY

  • Fall in GDP => lower profits => price wars due to market saturation

  • Higher interest rates => borrowing becomes more expensive => FMCGs go unaffected (nearly) => THREAT

    => drop in demand for housing

    => fall in demand for cars, home appliances, capital equipment

    => higher cost of company’s capital => less able to raise funds to

    invest in new assets


External analysis macro environment pest le2

External analysis – Macro-environment -> PEST(LE)

How do economic factors affect our business in the “world of tomorrow, NOT today”?

  • Exchange rates

    - e.g. Czech company with majority of sales & revenues derived

    from trade with customers in Euro-zone

    - cheaper Euro => lower revenues after conversion to CZK holding

    sales constant => THREAT

    - cheaper USD against Japanese Yen => 240 Yen/USD down to

    85 Yen/USD => increase in price of imported goods from Japan

    (e.g. cars) => protection against competition from abroad =>

    => OPPORTUNITY


External analysis macro environment pest le3

External analysis – Macro-environment -> PEST(LE)

How do economic factors affect our business in the “world of tomorrow, NOT today”?

  • Price inflation => destabilization of economy => economic growth slowing down => e.g. unstable currency => difficult/hazardous to engage in investment planning => THREAT

    -> real value of future returns becoming uncertain – long-term

    projects

  • Price deflation => real price of fixed payments goes up => harms companies w/regular fixed repayments of debt => THREAT

    => lower discretionary income


External analysis macro environment pest le4

External analysis – Macro-environment -> PEST(LE)

How do economic factors affect our business in the “world of tomorrow, NOT today”?

  • “Boeing” sample problem

  • “Exchange rates” example

  • “Prices of inputs” example

  • “Industrial production level” example


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