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Title: Strategic Management Concepts & Cases Eighth Edition Fred R. David Author: anthony chelte Last modified by: User Created Date: 3/19/2000 12:55:30 PM – PowerPoint PPT presentation

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Title: Strategic%20Management

Strategic Management
  • Vision
  • Mission

A Comprehensive Strategic-Management Model
External Assessment Chapter3
Develop Vision Mission Statement Chapter 2
Establish Long- Term Objectives Chapter 5
Generate, Evaluation and Select
Strategies Chapter 6
Implement Strategies- Management Issues Chapter 7
Implement Strategies--- Marketing, Finance, RD
Chapter 8
Measure Evaluate Performance Chapter 9
Internal Assessment Chapter 4
Strategy Evaluation
Strategy Implementation
Strategy Formulation
Importance of a Vision Statement
  • -Vision statement answers the question
  • What do we want to become?
  • A clear vision provides foundation for
  • comprehensive mission statement
  • Vision statement developed first
  • Short preferably one sentence
  • Broad management involvement

Vision Statements---Examples
  • To Be The Best And Biggest World Brand In Apparel
    Retailing ---Giordanos Vision
  • .---Vitasoys VisionTo maintain the leadership
    in promoting superior quality of life through the
    production of high quality, great tasting
    nutritious products that satisfy customers in all

Mission Statements
  • Recent Data indicates that 90 of all companies
    have used a mission statement sometime in the
    previous five years.
  • Mission statement answers the question
  • What is our business?

Mission Statements
  • Mission Statement is to reveal what an
    organization wants to be and whom it wants to
  • Essential for effectively establishing objectives
    and formulating strategies

Mission Components
  1. Customers
  2. Products or services
  3. Markets
  4. Technology
  5. Survival, growth, and profitability
  6. Philosophy
  7. Self-concept
  8. Concern for public image
  9. Concern for employees

PepsiCo Mission Statement
  • PepsiCos mission is to increase the value of our
    shareholders investment. We do this through
    sales growth, cost controls, and wise investment
    resources. We believe our commercial success
    depends upon offering quality and value to our
    consumers and customers providing products that
    are safe, wholesome, economically efficient and
    environmentally sound and providing a fair
    return to our investors while adhering to the
    highest standards of integrity.

Vitasoy Mission Statement
  • At Vitasoy, promoting consumer well-being is our
    number one priority. This is achieved through the
    provision of a variety of high-quality nutritious
    foods and beverages. Vitasoy is an innovative
    company, a reliable employer, and a responsible
    corporate citizen dedicated to creating value for
    our shareholders.

Giordano Mission Statement
  • To make people feel good and look great

Nike Mission Statement
  • To bring inspiration and innovation to every
    athlete in the world

Chapter 3 External AssessmentOutline
  • The Nature of an External Audit Five Keys
  • Economic Forces
  • Social,Cultural,Demographic Environmental
  • Political, Governmental, and Legal Forces
  • Technological Forces
  • Competitive Forces

Chapter Outline (cond)
  • Competitive Analysis
  • Porters Five-Forces Model
  • Source of External Information
  • The Global Challenge
  • Industry Analysis
  • The External Factor Evaluation Matrix
  • The Competitive Profile Matrix

External Strategic Management Audit
  • Also called
  • Environmental scanning
  • Industry analysis
  • Purpose
  • Opportunities to be explored
  • Threats to be avoided

Relationships Between Key External Forces and an
Competitors Suppliers Distributors Creditors Custo
mers Employees Communities Managers Stockholders L
abor Unions Special Interest Groups Products Servi
Key Forces -Economic forces -Social, cultural,
demographic environment forces -Political,
legal forces government -Technological
force -Competitive forces
Opportunities Threats
Key External Forces
  • Five (5) Key Forces affecting the Opportunities
    and Threats
  • Economic forces
  • Social, cultural, demographic, environmental
  • Political, governmental, and legal forces
  • Technological factors
  • Competitive forces

Economic Forces
  • Monitor Key Economic Variables
  • Availability of credit
  • Level of disposable income
  • Interest rates
  • Inflation rates
  • Federal government budget deficits
  • Gross domestic product trend
  • Consumption patterns
  • Unemployment trends
  • Worker productivity levels
  • Value of the dollar in world markets
  • Stock market trends
  • Foreign countries economic conditions
  • Import/export factors
  • Demand shifts for goods/services
  • Income differences by region/customer
  • Price fluctuations
  • Monetary policies
  • Fiscal policies
  • Tax rates
  • OPEC policies

Social, Cultural, Demographic Environmental
  • Key variables
  • Number of special-interest groups
  • Number of marriages
  • Number of divorces
  • Number of births
  • Number of deaths
  • Immigration emigration rates
  • Life expectancy rates
  • Per capita income
  • Attitudes toward business
  • Average disposable income
  • Buying habits
  • Ethical concerns
  • Attitudes toward saving
  • Racial equality
  • Average level of education
  • Government regulation
  • Attitudes toward customer service
  • Attitudes toward product quality
  • Energy conservation
  • Social responsibility
  • Value placed on leisure time
  • Recycling
  • Waste management
  • Air water pollution

Social, Cultural, Demographic Environmental
  • Major impact on
  • Products
  • Services
  • Markets
  • customers

Political, Govt., Legal Forces
  • Key Political, govt., legal variables
  • Government regulation/deregulation
  • Tax law changes
  • Special tariffs
  • Number of patents
  • Changes in patent laws
  • Import-export regulations
  • Monetary policy
  • Political conditions in other countries
  • Government budgets
  • World oil, currency labor markets
  • Location and severity of terrorist activities
  • Environmental protection laws
  • Equal employment legislation
  • Level of government subsidies
  • Antitrust legislation/enforcement
  • Sino-American relationships

Political, Govt., Legal Forces
  • Government Regulation
  • Key opportunities key threats
  • Antitrust legislation (Microsoft)
  • Tax rates
  • Patent laws
  • Increasing Global Interdependence
  • Impact of political variables
  • Formulation of Strategies
  • Implementation of Strategies

Political, Govt., Legal Forces
  • Globalization of Industry
  • Worldwide trend toward similar consumption
  • Global buyers sellers
  • E-commerce
  • Instant transmission of money information
    across continents

Political, Govt., Legal Forces
  • Increasing Global Interdependence
  • Strategists in a global economy
  • Forecast political climates
  • Legalistic skills
  • Diverse world cultures

Technological Forces
  • Revolutionary technological forces
  • Profound impact on organizations
  • Internet
  • Semiconductors
  • XML technologies
  • ????????(eXtensible Markup Language)
    ??????????????????????? XML ????????? -- Standard
    Generalized Markup Language (SGML) --
    International Organization for Standardization
    (ISO) ISO 88791986 ??????. XML ????? HTML,
    ??????????? ????????. ????????????,?? XML ?? ???
    (serializing) ????

Technological Forces
  • Internet changes the nature of opportunities and
    threats --
  • Alters life cycle of products
  • Increases speed of distribution
  • Creates new products and services
  • Eases limitations of geographic markets
  • Alters economies of scale
  • Changes entry barriers

Technological Forces
  • Capitalizing on Information Technology (IT)
  • Chief Information Officer (CIO)
  • Chief Technology Officer (CTO)

Competitive Forces
  • Collection and evaluation of information on
    competitors is essential for successful strategy
  • Identifying rival firms
  • Strengths
  • Weaknesses
  • Capabilities
  • Opportunities
  • Threats
  • Objectives
  • Strategies

Competitive Forces
  • Key Questions About Competitors
  • Their strengths
  • Their weaknesses
  • Their objectives and strategies
  • Their responses to all external variables (e.g.
    social, political, demographic, etc.)
  • Their vulnerability to our alternative strategies

Competitive Forces
  • Key Questions About Ourselves
  • Our vulnerability to successful strategic
  • Our product and service positioning relative to
  • Entry and exit of firms in the industry
  • Key factors for our current position in industry
  • Sales and profit rankings of competitors over
  • Nature of supplier and distributor relationships
  • The threat of substitute products or services

Competitive Forces
  • 7 Characteristics of most competitive U.S. firms
  • Market share matters
  • Understand what business you are in
  • Broke or not, fix it
  • Innovate or evaporate
  • Acquisition is essential to growth
  • People make a difference
  • No substitute for quality

Competitive Analysis Porters Five-Forces Model
Potential development of substitute products
Rivalry among competing firms
Bargaining power of suppliers
Bargaining power of consumers
Potential entry of new competitors
Global Challenge
  • International Challenge faced by U.S. firms
  • How to gain and maintain exports to other nations
  • How to defend domestic markets against imported

Industry Analysis (EFE)
  • External Factor Evaluation Matrix
  • Summarize evaluate

Industry Analysis (EFE)
  • Five-Step process
  • List key external factors (10-20)
  • Opportunities threats
  • Assign weight to each (0 to 1.0)
  • Sum of all weights 1.0
  • Assign 1-4 rating to each factor
  • Firms current strategies response to the factor
  • Multiply each factors weight by its rating
  • Produces a weighted score

Industry Analysis (EFE)
  • Five-step process
  • Sum the weighted scores for each
  • Determines the total weighted score for the
  • Highest possible weighted score for the
    organization is 4.0 the lowest, 1.0. Average

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Industry Analysis (EFE)
  • Total weighted score of 4.0
  • Organization response is outstanding to threats
  • Total weighted score of 1.0
  • Firms strategies not capitalizing on
    opportunities or avoiding threats

Industry Analysis (EFE)
  • UST (in the previous example), has a total
    weighted score of 2.10 indicating that the firm
    is below average in its effort to pursue
    strategies that capitalize on external
    opportunities and avoid threats.

Industry Analysis (EFE)
  • Important
  • Understanding of the factors used in the EFE
    Matrix is more important than the actual weights
    and ratings assigned.

Industry Analysis (CPM)
  • Competitive Profile Matrix
  • Identifies firms major competitors and their
    strengths weaknesses in relation to a sample
    firms strategic position

(CPM) Procter
Avon LOreal Gamble