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BACK TO 100 examples in Business, Operations and
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Strategic Management
Integration Strategies
Forward integration Ownership or increased control over distributors or retailers.
Backward integration Ownership or increased control over suppliers.
Horizontal integration Ownership or increased control over competitors.
Intensive Strategies
Market Penetration Increased share for present products by increased effort.
Market Development New or present products into new areas.
Product Development Improving or Modification of product for increased sales.
Diversification Strategies
Concentric Diversification Adding new but related products.
Horizontal Diversification Adding new Unrelated products for present customers. Firm knows customers.
Conglomerate Diversification Adding new unrelated products. Firm not familiar with customer base.
Defensive Strategies
Joint Venture Two or more firms get together for benefit.
Retrenchment Organization regroups by cost and asset reduction to reverse failing mkt.share and profits.
Divestiture Selling part of the company off, for raising capital and other reasoning.
Liquidation Selling all of the company assets.
Combination Many if not most use this method.
Summary
Mergers/Buyouts.
Mergers By similar sized companies.
Leveraged Buyouts Shareholders are bought out.
Generic Strategies
Cost Leadership strategies Striving to be the low cost provider. ~WalMart
Differentiation Strategies To stand out,~service,performance,useful life,ease of use.
Focus Strategies Concentration after certain customer or area attributes.
The Value Chain Making the finished product more valuable than the materials alone.
Competitive Advantage of Nations Benefits by natural resources, cheap labor, better education.
Mission
Purpose To state philosophy, beliefs, principles, defining the business.
Importance of So all will know, to allocate resources, for biz climate, a focal point, for objectives, work structures, company purpose.
Vision vs. Mission Mission is now, vision is later.
Process Select articles, show mgrs, get input, modify new statement.
Attitudes Mission is a declaration of attitude.
Divergent Views Expect and settle
Customer Orientation Good mission reflects the anticipation of the customers.
Social Policy Strategists considers what is owed to whom.
Components Since often most visible, have these in it.
Who are the customers
What are our services
Where does firm compete
Is technology a concern
Is firm committed to economic objectives.
Philosophies of firm.
Firms assets~ Self-concept
Public image concern
Employee concern
Writing and evaluation Study others.
Discussions
Modifications
Disbursement
External Audit
Key Forces Changes here affect all. Make advantages out of these. Some companies exist solely out of external changes.
Process Of Include as many people as possible, get competitive intelligence about environment, monitor, get reports.
Info.Technology Identifying and evaluating opportunities and threats. Chief Tech Off. =CTO
Economic Forces Direct impact on attractiveness of strategies, locations, Global , unequal effects.
Social Forces New trends are shaping new needs, ~ more houses have unrelated than related.
Cultural Forces Church membership down, fitness down, more educated, aging, environmental, minorities.
Demographic Forces People to south and west, Data at census bureau, leisure time.
Environmental Forces Life styles, sex roles, buying habits, ozone, disposable income, recycling, life styles, life expectancy, special interest groups.
Political Forces Can represent threats and opportunities, ~ trade sanctions, dump closing, Extinction, political unrest, policy actions.
Governmental Forces Above, product dumping, outside CO’s getting economics of scale 1ST ,
Legal Forces Special interest groups, EPA, FDA, OSHA, FCC, see texts.
Technological Forces Super conductivity, satellite networks, CAD,CAM, CNC,CIM, Obsolete?, new markets, new advantages, CO’s lack here. EDI.
Competitive Forces Collection of information here is vital for success, these are War Games.
Intelligence Programs Have understanding, find vulnerabilities, assess what-ifs, competitor’s logic and planning, commercial databases exist, ~Dialog.
Cooperation Among Used more now, Europe better at this, Suppliers for each other. Alliances here, US Asian Firms.
Sources Info. Unpublished ~ surveys, Mkt.research, speeches, TV, Stakeholders.
Indexes ~Applied Science & Technology Index=200 journals in fields, some updated weekly,
On-Line Data SEE directory of on-line databases, 2000 companies offer these, p 133,
Publications Forbes, business week, Dun-Bradstreet, Survey of manufactures.
Fore-Casting Tools ~Educated guesses, innovation, culture, new products, improved prod, stronger competitors, Gov.
Models Published sources sometimes best for variables, QUANTITATIVE, QUALITATIVE.
Quantitative methods Most appropriate when historic data exists, and relationships among key variables remain the same in future.
Three Quantitative methods Econometric models, Regression, Trend expolation. With computers these faster and cheaper than Qualitative methods. Error measure.
Econometric models What if’s with simulation, with computers, most common today for forecasting economic variables.
Linear Regression Past will be like today ~ never is. As relationships less stable ~ quantitative forecast less accurate.
Qualitative Methods Sales force estimate, Juries of execution, Anticipatory surveys or Mkt. Research, Scenario forecasts, delphi forecasts, Brain Storming.
Qualitative methods require more intuitive skill. Must study the underlying bases for published forecast. Forecasts are VITAL for CO.
Assumptions Must do these for strategic operations.
Competitive Analysis
Firm Rivalry Usually the most powerful, intensity increase as # of firms increase, equal in size, demand falls, price cutting occurs, can switch EZ.
New Competitors When market entered easily, intensity increases. Strategist’s job=identify new firms, their MO, counter attack, capitalize on strengths-weakness.
Substitute Products This put a ceiling on price before consumer would change, best measure is the Inroads being made by competitor.
Suppliers Power Can effect the intensity of competition, often in best interest of both parties to work together. Firms may purchase suppliers sometimes.
Consumer Power If customers are concentrated , buy in volume, large = major force in intensity of competition. Common product moreso,
Industry Analysis
EFE Matrix ~ External Allows Strategists to summarize and evaluate the Environment. Social to political …..
1. List success factors.2.Assign weight factors to each.3.Assign weight factor of firm’s response to this,4.Multiply out.5.Sum out.
CPM Matrix,Profiles Identifies major competitors strengths-weaknesses in relation to firm’s.The score =same meaning as EFE.CPM includes internal and ext.
Internal Assessment Includes biz,mgmt,mkt,accounting,prod-oper,research-dev,CIS.
Key Forces Ones that cannot be easily matched or imitated by competitors is called Distinctive Competencies. Strategist’s job is to change
weaknesses to Distinctive Competencies.
Process Closely parallels external audit, Provides chance for participants to understand their jobs, dept, and divisions. They get to see bigger picture.
Relationships Highly interactive process among all depts.
Integrating Culture/Strategy Organizational Culture is a phenomenon that permeates all depts.~ pattern of behavior. Subtle, elusive, unconscious forces. Can be strength or weakness.
Natural Environments Employee and consumer get resentful if firm takes more than gives. + government.
Management Planning, organizing, motivating, staffing, controlling.
Planning Cornerstone of strategy formulation. Involve all. Top=2-5 yrs, Middle mgmt=6mo-2yr,lower mgmt=1 week- 6 month.
Organizing Achieve coordinated effort by defining task and authority relationships. Optimize resources. Tasks to jobs, Jobs to departments, delegating authority.
Motivating Influencing people to accomplish objectives, listens to below needs, Group dynamics, communication,
Staffing Human resources, Laws, International firms more concerned here,
Controlling Actual operations conform to planned operations. Establishing standards, Measuring performance, Comparing with planned, taking corrective action.
Marketing Process of defining, anticipating, creating, fulfilling customer needs.
Customer Analysis Needs, desires, wants. Surveys, customer info, evaluating Mkt. Positioning, develop customer profiles, find optimal market segmentation strategies.
Buying Supplies Working w/Suppliers, evaluating alternatives, arranging payment terms, Buy the supplier???~ Backward integration.
Selling Includes Marketing activities as advertising, sales promotion, publicity, personal selling, sales force management, customer relations, dealer reactions.
Planning Test marketing, Product positioning, devising warranties, packaging, product options, product features, style, product quantity, deletion of ???.
Pricing Variables are: Consumers, governments, suppliers, distributors, competitors. Forward integration applied here at times. Look at short & long term view.
Distribution Warehousing, Distribution, Coverage of, Retail location, Sales territories, Inventory levels and location. Evaluate different methods.
Mkt Research Systematic gathering, recording, analyzing data related to marketing of goods. Can find strengths and weaknesses. Numerous tools are used.
Pepsi will borrow from smaller, update, improve and out execute them.
Opportunity Analysis Assess costs, benefits, risks with decisions. Analysis is performed here.
Social Responsibility Safe, reasonably priced, must have economical advantages. Can be strength or weakness.
Finance/Accounting Often called best measure of firms competitive position. Must find strengths and Weaknesses here.
Functions Investment decision, Finance decision, Dividend decision. Financial Ratio analysis most widely used for determining strengths and weaknesses.
Investment decision ~ Capital Budgeting ~ Allocation of resources. Strategies first, budgeting next.
Finance Decision Best capital structure, Find various ways for capital, consider short-long term needs. Ratios = Debt to equity , debt to total assets.
Dividends decision Percentage paid to stock holders and the retained amount. No set formula. Dividends are customary, some investors accept only this, shareholders want.
Ratios From balance sheet and income statement.
Liquidity Firms ability to meet short term obligations. Current ratio, quick or acid-test ratio.
Leverage Extent company is financed by debt. Debt to Assets, Debt to Equity, Long term debt to Equity, Times interest earned. ~ coverage ratio.
Activity How effectively Firm is using Resources. Inventory turn-over, total asset turnover, fixed asset turnover, average collection period.
Profitability Returns generated by sales and investments. Gross profit margin, Oper profit margin, Net profit margin, Return on assets, Return on Equity, EPS.
Growth Firm’s ability to maintain economic position in Marketplace. Sales, net income, earning per share, dividends per share, price earning ratio.
Productions/Operations All activities that transforms inputs into goods. Transformations,
Function Process, Capacity, Inventory, Work-force, Quality.
Research/Development 5th item examined also for strengths and weaknesses.
Internal / External Most firms have little choice but to develop. Internal R&D, Contact R&D. Maybe a joint venture. Common= 1. Finance as many projects as possible,
2. using a percentage of sales method,3. Budget same as competitors, 4. Deciding need (1 product or 10) and work backwards.
Computer Information Systems Collects, Codes, Stores, Synthesizes, Presents information. Improves decisions making.
Computer SoftWare To improve participation, integration, uniformity, analysis, economy.
Internal audit checklists Including MGMT, MKT, Finance, Production, R&D, CIS. To determine strengths and weaknesses.
IFE Matrix Internal Factor Evaluation, List critical success factors, Assign (important) weight .1-1.0, assign (weakness-strength) 1-4, multiply out, sum out.
Summary Vital to operations. Opportunity for all to help set future for firm.
Strategy Analysis Involves making subjective decisions based on objective information. Need to generate feasible alternatives. Culture here to. Long term objectives.
Process Selection Select the most attractive. Should involve many mgr’s. Trade-off’s, costs,benefits. Each department should be there and the Audit data at their side.
That along with the mission statement helps crystalize in their own minds the paths best fit for the firm. Choices should be discussed, rank in order of ..
Long Term Objectives 2-5 yrs, must be give,take. Finals will settle as strategies are formulated and selected.
Nature of LTO. LTO should be Quantitative, measurable, realistic, understandable, hierarchical, obtainable, similar among biz units. + Time Line.
Management OF Strategists should avoid "ain’t broke", ("wait 4 crisis(this is reaction")), "do own thing best u can", "use HOPE as method.
Formulation framework Important formulation techniques can be put into 3 stage process. Applicable to all size firms and help strategists find, evaluate, select choices.
Stage 1 ~ Input Stage = EFE matrix, IFE matrix, CPM , This is basic needs for formulating Strategics.
Stage 2 ~ Matching Stage ~ focuses on generating feasible alternative strategies by aligning key external - internal factors. TOWS, SPACE,BCG,IE,GSM.
Stage 3 ~Decision Stage~ single method= Quantitative Strategic Planning Matrix.. QSPM uses input from #1 for evaluation on stage #2.Shows attractiveness.
Be sure not to let numbers cover up people communication. Analytic tools can diminish effectiveness and does not foster organization learning.
TOWS Matrix Threats, Opportunities, Weaknesses, Strengths. Develops 4 types of strategies, SO, WO, ST, WT. These forces are most difficult.
Tows eight steps 1.
SPACE Matrix The Strategic Position and Action Evaluation. "matching tool". Whether aggressive, conservative, defensive, competitive strategies are most important.
SPACE Quadrants + + = aggressive, - + = conservative, + - = competitive, - - = defensive.
BCG Matrix Boston Consulting Group. Profit centers make up a business portfolio. BCG graphically portrays differences among divisions in Mkt share& growth.
Internal/External Matrix Positions Co’s divisions in a 9 cell matrix. Like above a Portfolio Matrix.
Grand Strategy Matrix Formulating alternative strategies. Quadrant again.
Decision Stage Above give basis for Strategy-Formulation decisions. Above reveal feasible alternative solutions.
QSPM Matrix Quantitative Strategic Planning Matrix, objectively selects best choice.
QSPM steps (6) 1. List Ext/Int threats-opportunities.2.Assign weights.3.Look at alternatives.4.Determine attractiveness score. 5.Compute total. 6.Compute sum total.
Pro QSPM Sets of strategics can be examined sequentially or simultaneously. NO limit
Con QSPM
Cultural Aspects
Politics of a Strategic Choice
Directors, Board
Summary
Implementation Mgmt.
Positioning
Managing
Effectiveness
Efficiency
Mgmt.Perspectives
Annual Objectives
Allocation
Evaluation
Monitoring
Priorities
Summarization
Policies
WorkShops
Training
Recruitment
Promotions
Compensation
Benefits
Negotiations
Delegations
OverTime
Safety Stocks
Suppliers
Purchasing Equipt.
High/Low QC
Set Standards
1/2/3 Shifts
Inside Ethics Opr.
Resource Allocation
Managing Conflicts
Structure & Strategy
Functional Structure
Divisional Structure
By Area
By Product
By Process
By Customer
Strategic Biz Unit, SBU
Matrix Structure
Pay Strategies
Profit Share
Gain Share
Communication OfIt
Resistance
Environment
Co.Culture
Prod.Operation Concern
Human Resources
Summaries
Implementation Issues
Marketing
Channels
Advertising
Single Customer
Warranties
Pricing
Sales Commissions
Market Segmentation
Product Positioning
Finance Issues
Acquiring Capital
Pro-Forma Statements
Finance Budgets
Evaluating Worth
Going Public
Research / Dev. Issues
CIS Issues
Summaries
Strategy Evaluation
FeedBacking
Reviewing Bases
Measuring Performance
Corrective Actions
Acquiring Information
Characteristics of Evaluation
Contingency Planning
Environmental Audit
Computer Usage
Guidelines
Summaries
International Mgmt.
Nature Of Points.
Advantages/Disadvantages of.
Cultures
American vs. XXXXX
Global Challenge
Impact of Policies
Globalization
Economic Reforms
Political Reforms
New Opportunities
Money Politics
Joint Ventures
Guidelines
Other Mgmt.Styles
Operation Guidelines
Summaries
Case Analysis
Practicality
Justification
Realism
Specificity
Originality
Contribute
Preparing the Analysis
Executive Summary
Written Analysis
Existing Mission
Develop Statement
Opportunities/Threats
Do CPM Matrix
Do EFE Matrix
Internal Strengths/Weaknesses
Do IFE Matrix
Other Matrix’s
Recommendations
Specify Strategies
Specify How
Annual Objectives
Review Procedures
Oral Presentations
Organizing
Controlling
Managing
Speaking
Visual Aids
Answer Questions
|
BACK TO 100 examples in Business, Operations and
Engineering. |
|
Do it once, do it right, and do it now. |
|
Back to Lawson Computing Homepage |
Apply as needed,
when needed. |
