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MGMT 300 Integrated Core: Management

What is Strategic Planning and Strategic Management?

Strategy Defined

Strategy: broad and general plan developed to reach long-term objectives

What is Strategic Planning?

• Strategy: broad and general plan developed to reach long-term objectives

• Strategic planning: long-range planning that focuses on the org as a whole

How Long Into the Future Should Managers Focus? • Long-term strategic planning = 3-5 years into the future

• Commitment principle: managers should commit funds for planning only if they can anticipate a return on planning expenses as a result of long-term analysis

Strategic Management

• Strategic management: process of ensuring that the org possesses and benefits from the use of an appropriate strategy

5 steps involved in strategic management…

Strategic Management Process Environmental

Analysis

Establishing organizational

direction

Strategy Formulation

Strategy implementation

Strategic control

Strategic Management Process Environmental

Analysis

Establishing organizational

direction

Strategy Formulation

Strategy implementation

Strategic control

MGMT 300 Integrated Core: Management

Environmental Analysis: The General Environment

Environmental Analysis

Environmental analysis: the study of the organizational environment to pinpoint factors that can influence org operations

General Environment

Industry Environment

Internal Environment

Environmental Analysis

Environmental analysis: the study of the organizational environment to pinpoint factors that can influence org operations

General Environment

Industry Environment

Internal Environment

Environmental Analysis

General environment: an organization’s external environment that has long-term implications for managing the organization

Environmental Analysis

What aspects of the general environment might influence organizational strategy?

General Environment

Environmental Analysis

Presenter
Presentation Notes
International component: all factors related to org operations. Other countries’ laws, cultures, economics, and politics

General Environment

Social Component

Environmental Analysis

Presenter
Presentation Notes
International component: all factors related to org operations. Other countries’ laws, cultures, economics, and politics

General Environment

Social Component

Environmental Analysis

Presenter
Presentation Notes
International component: all factors related to org operations. Other countries’ laws, cultures, economics, and politics

General Environment

Social Component

Environmental Analysis

Presenter
Presentation Notes
International component: all factors related to org operations. Other countries’ laws, cultures, economics, and politics

General Environment

Social Component

Technology Component

Environmental Analysis

Presenter
Presentation Notes
International component: all factors related to org operations. Other countries’ laws, cultures, economics, and politics

General Environment

Social Component

Technology Component

Environmental Analysis

Presenter
Presentation Notes
International component: all factors related to org operations. Other countries’ laws, cultures, economics, and politics

MGMT 300 Integrated Core: Management

Environmental Analysis: The Industry Environment

Environmental Analysis

Environmental analysis: the study of the organizational environment to pinpoint factors that can influence org operations

General Environment

Industry Environment

Internal Environment

Environmental Analysis

• Industry Environment: level that contains components normally having specific and immediate implications for managing the org

• Porter’s Five Forces Model

Environmental Analysis

Bargaining power of new entrants

Industry Competitors

New Entrants

Presenter
Presentation Notes
Starbucks example: threat of new entrants is moderate. Moderate cost of doing business in the industry. High cost of developing a brand. New entrants may be able to enter the market but may also find it difficult to compete against the strength of the Starbucks brand. Threat of buyers/customers: strong. Customers can easily shift from Starbucks to other brands. Many alternatives. Strong effect on the business. Threat of substitutes: many substitutes. Restaurants, grocery stores, etc. cost of substitutes is low. Many of the substitutes cost less than Starbucks products. Threat of Subsitutes is a strong concern. Suppliers: low threat because there is a high variety of suppliers, large overall supply. Industry competitors: large amount of competiors, McDonalds, Dunkin

Environmental Analysis

Bargaining power of suppliers

Bargaining power of new entrants

Industry Competitors

New Entrants

Suppliers

Presenter
Presentation Notes
Starbucks example: threat of new entrants is moderate. Moderate cost of doing business in the industry. High cost of developing a brand. New entrants may be able to enter the market but may also find it difficult to compete against the strength of the Starbucks brand. Threat of buyers/customers: strong. Customers can easily shift from Starbucks to other brands. Many alternatives. Strong effect on the business. Threat of substitutes: many substitutes. Restaurants, grocery stores, etc. cost of substitutes is low. Many of the substitutes cost less than Starbucks products. Threat of Subsitutes is a strong concern. Suppliers: low threat because there is a high variety of suppliers, large overall supply. Industry competitors: large amount of competiors, McDonalds, Dunkin

Environmental Analysis

Bargaining power of suppliers

Bargaining power of buyers

Bargaining power of new entrants

Industry Competitors

New Entrants

Suppliers Buyers

Presenter
Presentation Notes
Starbucks example: threat of new entrants is moderate. Moderate cost of doing business in the industry. High cost of developing a brand. New entrants may be able to enter the market but may also find it difficult to compete against the strength of the Starbucks brand. Threat of buyers/customers: strong. Customers can easily shift from Starbucks to other brands. Many alternatives. Strong effect on the business. Threat of substitutes: many substitutes. Restaurants, grocery stores, etc. cost of substitutes is low. Many of the substitutes cost less than Starbucks products. Threat of Subsitutes is a strong concern. Suppliers: low threat because there is a high variety of suppliers, large overall supply. Industry competitors: large amount of competiors, McDonalds, Dunkin

Environmental Analysis

Bargaining power of suppliers

Bargaining power of buyers

Threat of substitutes

Bargaining power of new entrants

Industry Competitors

New Entrants

Suppliers

Substitutes

Buyers

Presenter
Presentation Notes
Starbucks example: threat of new entrants is moderate. Moderate cost of doing business in the industry. High cost of developing a brand. New entrants may be able to enter the market but may also find it difficult to compete against the strength of the Starbucks brand. Threat of buyers/customers: strong. Customers can easily shift from Starbucks to other brands. Many alternatives. Strong effect on the business. Threat of substitutes: many substitutes. Restaurants, grocery stores, etc. cost of substitutes is low. Many of the substitutes cost less than Starbucks products. Threat of Subsitutes is a strong concern. Suppliers: low threat because there is a high variety of suppliers, large overall supply. Industry competitors: large amount of competiors, McDonalds, Dunkin

Environmental Analysis

Bargaining power of suppliers

Bargaining power of buyers

Threat of substitutes

Bargaining power of new entrants

Industry Competitors

New Entrants

Suppliers

Substitutes

Buyers

Presenter
Presentation Notes
Starbucks example: threat of new entrants is moderate. Moderate cost of doing business in the industry. High cost of developing a brand. New entrants may be able to enter the market but may also find it difficult to compete against the strength of the Starbucks brand. Threat of buyers/customers: strong. Customers can easily shift from Starbucks to other brands. Many alternatives. Strong effect on the business. Threat of substitutes: many substitutes. Restaurants, grocery stores, etc. cost of substitutes is low. Many of the substitutes cost less than Starbucks products. Threat of Subsitutes is a strong concern. Suppliers: low threat because there is a high variety of suppliers, large overall supply. Industry competitors: large amount of competiors, McDonalds, Dunkin

MGMT 300 Integrated Core: Management

Internal Environment, Establishing Organizational Direction, and Strategy Formulation

Environmental Analysis

Environmental analysis: the study of the organizational environment to pinpoint factors that can influence org operations

General Environment

Industry Environment

Internal Environment

Environmental Analysis

• Internal environment: environment that exists inside the org and has immediate and specific implications for managing the org

• Includes marketing, finance, and accounting

Strategic Management Process Environmental

Analysis

Establishing organizational

direction

Strategy Formulation

Strategy implementation

Strategic control

Establishing Org Direction

Organizational Mission: purpose for which an organization exists

Establishing Org Direction Organizational Mission: purpose for which an org exists

Included in mission: • What types of products or services it produces • Who its customers tend to be • What important value it holds

Mission statement: written document with org mission to provide easy access and understanding of mission

Establishing Org Direction

Importance of Org Mission:

Helps management direct human

effort

Provides guidance on

how resources should be allocated

Helps management define critical jobs that must

be accomplished

Org objectives flow from mission

Strategic Management Process Environmental

Analysis

Establishing organizational

direction

Strategy Formulation

Strategy implementation

Strategic control

Strategy Formulation: Tools

Strategy Formulation: process of determining appropriate courses of action for achieving org objectives and thereby accomplishing the org purpose

• Critical question analysis • SWOT analysis • Business portfolio

analysis

3 tools:

Critical Question Analysis

Thinking about and answering the following :

• What are the purposes and objectives of the org? • Where is the org presently going? • What is the current org environment? • What can be done better to achieve org objectives in

the future?

SWOT Analysis • Tool that matches internal org strengths and

weaknesses with external opportunities and threats

• Strengths • Weaknesses • Opportunities • Threats

Strengths Business strengths are its resources

and capabilities that can be used as a basis for developing competitive

advantage

Weaknesses Internal limitations that may interfere with a company’s ability to achieve

objectives

Opportunities The external environment analysis

may reveal certain new opportunities for profit and growth

Threats The changes in the external

environment that may present threats to the firm

Presenter
Presentation Notes
Overall – want to take advantage of the company’s strengths and minimize weaknesses to grasp opportunities and avoid threats. In groups of 4-5 and I will assign you each a company. Write down on your index card strengths, weaknesses, opps, and threats to the company. Disney Google Starbucks

SWOT Analysis • Tool that matches internal org strengths and

weaknesses with external opportunities and threats

• Strengths • Weaknesses • Opportunities • Threats

Internal

External

Presenter
Presentation Notes
Strengths and weaknesses are in the manager’s firm and opportunities and threats are in the firm’s external environment. Once these things are reviewed, strategy for success will become evident

MGMT 300 Integrated Core: Management

BCG Growth-Share Matrix

Business Portfolio Analysis

• Based on the philosophy that orgs should develop strategy as much as they handle investment portfolios

• Two business portfolio tools:  BCG Growth-Share Matrix  GE Multifactor Portfolio Matrix

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Business Portfolio Analysis

• Based on the philosophy that orgs should develop strategy as much as they handle investment portfolios

• Two business portfolio tools:  BCG Growth-Share Matrix  GE Multifactor Portfolio Matrix

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

BCG Growth-Share Matrix

• BCG = Boston Consulting Group

• 1st step: Identify the strategic business units

• Strategic business units: significant org segments that are analyzed to develop org strategy aimed at generating future business or revenue

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

BCG Growth-Share Matrix

Strategic business

units:

• Single business or collection of related businesses

• Has its own competitors

• Has a manager who is accountable for its operation

• Is an area that can be independently planned for within the org

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

High Low

Relative Market Share

High

Low

Market Growth Rate

BCG Growth-Share Matrix

Presenter
Presentation Notes
Dogs barely support themselves and may actually drain off cash resources generated from other SBUs. Ex: SBUs that produce typewriters or cash registers

Stars

High Low

Relative Market Share

High

Low

Market Growth Rate

Stars: Large share of a high- growth market and typically needs large amounts of cash to support rapid and significant growth

BCG Growth-Share Matrix

Presenter
Presentation Notes
Dogs barely support themselves and may actually drain off cash resources generated from other SBUs. Ex: SBUs that produce typewriters or cash registers

Stars

Cash Cows

High Low

Relative Market Share

High

Low

Market Growth Rate

Cash cows: large share of a market that is growing only slightly

BCG Growth-Share Matrix

Presenter
Presentation Notes
Dogs barely support themselves and may actually drain off cash resources generated from other SBUs. Ex: SBUs that produce typewriters or cash registers

Stars Question Marks

Cash Cows

High Low

Relative Market Share

High

Low

Market Growth Rate

Question Marks: small share of a high-growth market

BCG Growth-Share Matrix

Presenter
Presentation Notes
Dogs barely support themselves and may actually drain off cash resources generated from other SBUs. Ex: SBUs that produce typewriters or cash registers

Stars Question Marks

Cash Cows Dogs

Dogs: relatively small share of a low-growth market

High Low

Relative Market Share

High

Low

Market Growth Rate

BCG Growth-Share Matrix

Presenter
Presentation Notes
Dogs barely support themselves and may actually drain off cash resources generated from other SBUs. Ex: SBUs that produce typewriters or cash registers

Strategy Formulation: Sample Org Strategies Based on the categorization of the unit in the BCG Matrix  can help decide on which strategy.

Growth – increase amount of

business of unit

Stability – maintain or slightly improve amount of

business

Retrenchment – strengthen or protect amount of business

Divestiture – eliminate a business

unit that is not generating satisfactory

business

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Stars Question Marks

Cash Cows Dogs

High Low

Relative Market Share

High

Low

Market Growth Rate

BCG Growth-Share Matrix

Which boxes would you match with the below strategies? • Growth • Stability • Retrenchment • Divestiture

MGMT 300 Integrated Core: Management

Common Organizational Strategies

Strategy Formulation

Three generic types of strategies that companies might use to increase competitiveness of their organization:

Differentiation

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Differentiation Strategy

Ex: different design or brand image, technology, features, customer service, or price

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Strategy Formulation

Three generic types of strategies that companies might use to increase competitiveness of their organization:

Differentiation

Cost Leadership

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Cost Leadership Strategy

https://www.businesswire.com/news/home/20210415005210/en/Dollar-Tree-Inc.-Introduces-Chesapeake-Media- Group-Its-Retail-Media-Network-Connecting-Brands-with-Shoppers-in-Real-Time

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Strategy Formulation

Three generic types of strategies that companies might use to increase competitiveness of their organization:

Differentiation

Cost Leadership

Focus

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Focus Strategy

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

MGMT 300 Integrated Core: Management

Strategy Implementation and Control

Strategic Management Process Environmental

Analysis

Establishing organizational

direction

Strategy Formulation

Strategy implementation

Strategic control

Strategy Implementation

Strategy implementation: putting formulated strategies into action

What skills are needed for successful strategy implementation?

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Strategy Implementation

ability to manage peopleInteracting skills:

ability to provide the org resources necessaryAllocating skills:

ability to use information to determine whether a problem has arisen that is blocking implementationMonitoring skills:

ability to build a network of people who can help solve problemsOrganizing skills:

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix

Strategic Management Process Environmental

Analysis

Establishing organizational

direction

Strategy Formulation

Strategy implementation

Strategic control

Strategic Control

Strategic control: monitoring and evaluating the strategic management process as a whole to ensure it is operating properly

Presenter
Presentation Notes
Portfolio tools provide graphic frameworks for analyzing the relationship among businesses of an org and provides useful strategy recommendations We’re only going to focus on BCG Growth-Share Matrix
  • MGMT 300�Integrated Core: Management
  • Strategy Defined
  • What is Strategic Planning?
  • How Long Into the Future Should Managers Focus?
  • Strategic Management
  • Strategic Management Process
  • Strategic Management Process
  • MGMT 300�Integrated Core: Management
  • Environmental Analysis
  • Environmental Analysis
  • Environmental Analysis
  • Environmental Analysis
  • Slide Number 13
  • Slide Number 14
  • Slide Number 15
  • Slide Number 16
  • Slide Number 17
  • Slide Number 18
  • MGMT 300�Integrated Core: Management
  • Environmental Analysis
  • Environmental Analysis
  • Environmental Analysis
  • Environmental Analysis
  • Environmental Analysis
  • Environmental Analysis
  • Environmental Analysis
  • MGMT 300�Integrated Core: Management
  • Environmental Analysis
  • Environmental Analysis
  • Strategic Management Process
  • Establishing Org Direction
  • Establishing Org Direction
  • Establishing Org Direction
  • Strategic Management Process
  • Strategy Formulation: Tools
  • Critical Question Analysis
  • SWOT Analysis
  • Slide Number 38
  • SWOT Analysis
  • MGMT 300�Integrated Core: Management
  • Business Portfolio Analysis
  • Business Portfolio Analysis
  • BCG Growth-Share Matrix
  • BCG Growth-Share Matrix
  • BCG Growth-Share Matrix
  • BCG Growth-Share Matrix
  • BCG Growth-Share Matrix
  • BCG Growth-Share Matrix
  • BCG Growth-Share Matrix
  • Strategy Formulation: �Sample Org Strategies
  • BCG Growth-Share Matrix
  • MGMT 300�Integrated Core: Management
  • Strategy Formulation
  • Differentiation Strategy
  • Strategy Formulation
  • Cost Leadership Strategy
  • Strategy Formulation
  • Focus Strategy
  • MGMT 300�Integrated Core: Management
  • Strategic Management Process
  • Strategy Implementation
  • Strategy Implementation
  • Strategic Management Process
  • Strategic Control