Business Strategies or How to Analyze a Case. Dr. K. Kwong MGMT 497. How to Analyze a Case. Mission/Vision & Objectives Industry Analysis S.W.O.T. Analysis Current Strategy Recommendations. MISSION Defined. Answers the question: “ What business are we in? ” or “ Why do we exist? ”
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Dr. K. Kwong
Answers the question:
“What business are we in?” or
“Why do we exist?”
--Customer Needs: What is being satisfied?
--Customer Groups: Who is being satisfied?
“To continually provide our members with quality goods and services at the lowest possible prices”
= a desired future state that a company attempts to realize.
- precise & measurable
- addressing important issues
- challenging but realistic
- set for a specific time period
- consistent with each other
B1. Generic Analysis
Purpose: understand why some industries have higher profit margins & what factors can change long-run industry profitability.
= products from OTHER industries that serve consumers’ needs in a way that is similar to those being served by your industry.
Example: coffee vs. tea vs. soft drinks
NOTE: Substitutes are very difficult to monitor, because they can involve technological changes in industries that did not pose any threat in the past.
A. Identify the Key Elements of the Corporate Culture
(within specific areas of operations):
Research and Development (R&D)
Human Resource Management (HRM)
C. Financial Ratio Analysis:
Liquidity Ratios, Activity/Efficiency Ratios, Leverage Ratios, and Profitability Ratios
= Collection of beliefs, expectations, and values learned and shared by members and transmitted from one generation of employees to another.
= Collective mental programming.
Resource strengths and competitivecapabilities arecompetitive assets!
Resource weaknesses and deficienciesarecompetitive liabilities!
(define the overall
scope & direction
of the company)
advantage for each
Business Unit #1
Business Unit #2
Business Unit #3
Marketing & Sales,
Marketing & Sales,
Marketing & Sales,
(secure effective &
in each area)
This guides decisions on which business to expand, maintain or exit:
Forward or Backward
Related or Unrelated
Global or Multi-domestic
Examples: Merck, Walgreen, Cisco, Starbucks, UPS
Examples: Oracle, Unitedhealth
Examples:Exxon Mobil, General Motors
Examples: Johnson & Johnson, Pepsico, JP Morgan
Examples: General Electric, 3M, Honeywell, United Technologies, Samsung
These alternative options vary in their degree of speed, control, and risk, as well as the required level of investment and market knowledge.
Pressures for Local Responsiveness
Examples: Coca-Cola, MacDonald’s, Sony, Panasonic, Boeing
Examples: KFC, Otis Elevator
Examples: Toyota, Philips Electronics, Procter & Gamble
Positioning the company based on strategic strength and strategic scope:
Examples: Apple Inc., Harley-Davidson, Walt Disney
Examples: Porsche AG (focused differentiation)
Credit unions and community banks (focused cost)
Decide on product choices, pricing, distribution, promotion, and customer service
Deal with capital acquisition, capital allocation, dividend policy, investment, and cash flow management
Address choices about where and how product will be manufactured, technology to be used, management of resources, purchasing, quality control, inventory control, and relations with suppliers
Process development and product development
Deal with office automation, decision support, and operational support
Deal with work flow control, pay and incentives, recruiting, orientation, training, staffing, and labor relations
A “good” strategy must address “what to do”about each and every strategic issue!
Shift from Analysis--->Synthesis