MGMT 40000D Strategic Management<\/p>\n
Week 3<\/p>\n
By: Dr. Wael Ramadan, B.Eng., MBA, PhD, PMP, LSSBB, SPC, SDP, POPM, SA, SMC.<\/p>\n
2<\/p>\n
Agenda: \u2022 Perform The External Audit CH 3 \u2022 StartSim Live and Strategy Game Decision Points \u2022 Group Formations And Leaders \u2022 Summary<\/p>\n
Comprehensive Strategic Management Model:<\/p>\n
4<\/p>\n
Chapter Objectives<\/p>\n
1. Describe how to conduct an external strategic-management audit. 2. Discuss 10 major external forces that affect organizations: economic,<\/p>\n
social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive.<\/p>\n
3. Describe key sources of external information, including the Internet. 4. Discuss important forecasting tools used in strategic management. 5. Discuss the importance of monitoring external trends and events. 6. Explain how to develop an EFE Matrix. 7. Explain how to develop a Competitive Profile Matrix. 8. Discuss the importance of gathering competitive intelligence. 9. Describe the trend toward cooperation among competitors. 10. Discuss market commonality and resource similarity in relation to<\/p>\n
competitive analysis.<\/p>\n
5<\/p>\n
External Audit \u2022 focuses on identifying and evaluating trends and events beyond the<\/p>\n
control of a single firm<\/p>\n
\u2022 reveals key opportunities and threats confronting an organization so that managers can formulate strategies to take advantage of the opportunities and avoid or reduce the impact of threats<\/p>\n
\u2022 is aimed at identifying key variables that offer actionable responses<\/p>\n
\u2022 firms should be able to respond either offensively or defensively to the factors by formulating strategies that take advantage of external opportunities or that minimize the impact of potential threats.<\/p>\n
Key External Forces: Five Broad Categories<\/p>\n
economic forces<\/p>\n
6<\/p>\n
social, cultural, demographic, and natural<\/p>\n
environment (SCDE) Forces<\/p>\n
political, governmental, and legal forces<\/p>\n
technological forces<\/p>\n
competitive forces<\/p>\n
Relationships Between Key External Forces and an Organization<\/p>\n
8<\/p>\n
The Process of Performing an External Audit<\/p>\n
\u2022 First, gather competitive intelligence and information about economic, social, cultural, demographic, environmental, political, governmental, legal, and technological trends.<\/p>\n
\u2022 Information should be assimilated and evaluated<\/p>\n
\u2022 A final list of the most important key external factors should be communicated<\/p>\n
9<\/p>\n
The Process of Performing an External Audit (2)<\/p>\n
\u2022 Key external factors should be: 1. important to achieving long-term and annual objectives 2. measurable 3. applicable to all competing firms, and 4. hierarchical in the sense that some will pertain to the overall company and<\/p>\n
others will be more narrowly focused on functional or divisional areas<\/p>\n
\u2022 ACQD Test of external factors quality, when identifying & prioritizing key external factors, the following 4 factors are important: 1. Actionable 2. Quantitative 3. Comparative 4. Divisional<\/p>\n
The Industrial Organization (I\/O) View<\/p>\n
Firm performance is based more on industry properties<\/p>\n
Economies of scale<\/p>\n
Barriers to market entry<\/p>\n
Product differentiation<\/p>\n
The economy<\/p>\n
Level of competitiveness<\/p>\n
1 0<\/p>\n
\u2022 The Industrial Organization (I\/O) approach to competitive advantage advocates that external (industry) factors are more important than internal factors in a firm for achieving competitive advantage.<\/p>\n
Economic Forces \u2022 Shift to service economy \u2022 Availability of credit \u2022 Level of disposable income \u2022 Propensity of people to spend \u2022 Interest rates \u2022 Inflation rates \u2022 GDP trends \u2022 Consumption patterns \u2022 Unemployment trends \u2022 Value of the dollar \u2022 Import\/Export factors \u2022 Demand shifts for different<\/p>\n
goods and services<\/p>\n
\u2022 Income differences by region and consumer group<\/p>\n
\u2022 Price fluctuations \u2022 Foreign countries\u2019 economic<\/p>\n
conditions \u2022 Monetary and Fiscal policy \u2022 Stock market trends \u2022 Tax rate variation by country<\/p>\n
and state \u2022 European Economic<\/p>\n
Community (EEC) policies \u2022 Organization of Petroleum<\/p>\n
Exporting Countries (OPEC) policies<\/p>\n
11<\/p>\n
Advantages of a Strong Canadian Dollar<\/p>\n
10<\/p>\n
1. Leads to lower exports 2. Leads to higher imports 3. Makes Canadian goods expensive for foreign consumers 4. Helps keep inflation low 5. Allows Canadian firms to purchase raw materials cheaply<\/p>\n
from other countries 6. Allows Canada to service its debt better 7. Spurs foreign investment 8. Encourages Canadians to travel abroad 9. Encourages Canadians to spend money because they can<\/p>\n
buy more for their money<\/p>\n
13<\/p>\n
Social, Cultural, Demographic, and Natural Environmental Forces<\/p>\n
\u2022 Facts \u2013 World population 7 billion \u2013 World population = 8 billion by 2028 \u2013 World population = 9 billion by 2054<\/p>\n
Key Social, Cultural, Demographic, and Natural Environmental Variables<\/p>\n
\u2022 Population changes by race, age, and geographic area<\/p>\n
\u2022 Regional changes in tastes and preferences<\/p>\n
\u2022 Number of marriages \u2022 Number of divorces \u2022 Number of births \u2022 Number of deaths \u2022 Immigration and emigration<\/p>\n
rates \u2022 Social Security programs \u2022 Life expectancy rates \u2022 Per capita income \u2022 Social media pervasiveness<\/p>\n
\u2022 Attitudes toward retirement \u2022 Energy conservation \u2022 Attitudes toward product<\/p>\n
quality \u2022 Attitudes toward customer<\/p>\n
service \u2022 Pollution control \u2022 Attitudes toward foreign<\/p>\n
peoples \u2022 Energy conservation \u2022 Social programs \u2022 Number of churches \u2022 Number of church members \u2022 Social responsibility issues<\/p>\n
3-14<\/p>\n
Political, Government, & Legal Variables<\/p>\n
\u2022 Environmental regulations<\/p>\n
\u2022 Number of patents \u2022 Changes in patent laws \u2022 Equal employment laws \u2022 Level of defense<\/p>\n
expenditures \u2022 Unionization trends \u2022 Antitrust legislation<\/p>\n
\u2022 Canada vs. other country relationships<\/p>\n
\u2022 Political conditions in foreign countries<\/p>\n
\u2022 Global price of oil changes<\/p>\n
\u2022 Local, state, and federal laws<\/p>\n
\u2022 Import\u2013export regulations \u2022 Tariffs \u2022 Local, and national<\/p>\n
elections<\/p>\n
15<\/p>\n
16<\/p>\n
Technological Forces (1) The Internet has changed the very nature of opportunities and threats by:<\/p>\n
\u2013altering the life cycles of products, \u2013increasing the speed of distribution, \u2013creating new products and services, \u2013erasing limitations of traditional geographic markets, \u2013changing the historical trade-off between standardization & flexibility.<\/p>\n
\u2022The Internet is altering economies of scale, changing entry barriers, and redefining the relationship between industries and various suppliers, creditors, customers, and competitors<\/p>\n
\u2022Many firms now have a Chief Information Officer (CIO) and a Chief Technology Officer (CTO) who work together to ensure that information needed to formulate, implement, and evaluate strategies is available where and when it is needed<\/p>\n
17<\/p>\n
Technological Forces (2)<\/p>\n
Technological advancements can:<\/p>\n
\u2022 Create new markets, \u2022 Result in a proliferation of new & improved products \u2022 Change the relative competitive cost positions in an<\/p>\n
industry \u2022 Render existing products and services obsolete.<\/p>\n
New technologies such as: \u2022 the Internet of Things \u2022 3D printing \u2022 the cloud \u2022 mobile devices \u2022 biotech \u2022 analytics \u2022 autotech \u2022 robotics and \u2022 artificial intelligence are fueling innovation in many industries, and impacting strategic-planning decisions.<\/p>\n
3-18<\/p>\n
Technological Forces (3)<\/p>\n
Results of Technological Advances<\/p>\n
1. Major opportunities and threats that must be considered in formulating strategies.<\/p>\n
2. Can affect organizations\u2019 products, services, markets, suppliers, distributors, competitors, customers, manufacturing processes, marketing practices, and competitive position.<\/p>\n
3. Can create new markets, result in new and improved products, change the relative competitive cost positions, and render existing products and services obsolete.<\/p>\n
4. Can reduce or eliminate cost barriers between businesses, create shorter production runs, create shortages in technical skills, and result in changing values and expectations of employees, managers, and customers.<\/p>\n
5. Can create new competitive advantages that are more powerful than existing advantages.<\/p>\n
3-19<\/p>\n
20<\/p>\n
Competitive Forces<\/p>\n
\u2022 An important part of an external audit is identifying rival firms and determining their strengths, weaknesses, capabilities, opportunities, threats, objectives, and strategies<\/p>\n
21<\/p>\n
Characteristics Of The Most Competitive Companies:<\/p>\n
1.Market share matters 2.Understand & remember precisely what business you are in 3.Whether it\u2019s broke or not, fix it\u2013make it better 4.Innovate or evaporate 5.Acquisition is essential to growth 6.People make a difference 7.There is no substitute for quality<\/p>\n
Key Questions About Competitors 1. What are the strengths of our major competitors? 2. What are the weaknesses of our major competitors? 3. What are the objectives and strategies of our major competitors? 4. How will our major competitors most likely respond to current economic, social,<\/p>\n
cultural, demographic, environmental, political, governmental, legal, technological, and competitive trends affecting our industry?<\/p>\n
5. How vulnerable are the major competitors to our alternative company strategies? 6. How vulnerable are our alternative strategies to successful counterattack by our<\/p>\n
major competitors? 7. How are our products or services positioned relative to major competitors? 8. To what extent are new firms entering and old firms leaving this industry? 9. What key factors have resulted in our present competitive position in this industry? 10.How have the sales and profit rankings of our major competitors in the industry<\/p>\n
changed over recent years? Why have these rankings changed that way? 11.What is the nature of supplier and distributor relationships in this industry? 12.To what extent could substitute products or services be a threat to our competitors?<\/p>\n
22<\/p>\n
23<\/p>\n
Competitive Intelligence Programs Competitive intelligence (CI)<\/p>\n
\u2013 a systematic and ethical process for gathering and analyzing information about the competition\u2019s activities and general business trends to further a business\u2019s own goals<\/p>\n
The three basic objectives of a CI program are: 1. to provide a general understanding of an industry and its<\/p>\n
competitors 2. to identify areas in which competitors are vulnerable and to<\/p>\n
assess the impact strategic actions would have on competitors 3. to identify potential moves that a competitor might make that<\/p>\n
would endanger a firm\u2019s position in the market<\/p>\n
Legal & Ethical Ways To Obtain Competitive Intelligence:<\/p>\n
1. Reverse-engineer rival firms\u2019 products. 2. Use surveys and interviews of customers, suppliers, and<\/p>\n
distributors of rival firms. 3. Analyze rival firm\u2019s Form 10-K (public report of financials). 4. Conduct fly-over and drive-by visits to rival firm operations. 5. Search online databases. 6. Contact government agencies for public information about<\/p>\n
rival firms. 7. Monitor relevant trade publications, magazines, and<\/p>\n
newspapers. 8. Purchase social-media data about customers of all firms in<\/p>\n
the industry. 9. Hire top executives from rival firms.<\/p>\n
Market Commonality & Resource Similarity<\/p>\n
Market commonality<\/p>\n
Resource similarity<\/p>\n
the number and significance of<\/p>\n
markets that a firm competes in with<\/p>\n
rivals<\/p>\n
the extent to which the type and amount<\/p>\n
of a firm\u2019s internal resources are<\/p>\n
comparable to a rival<\/p>\n
20<\/p>\n
The Five-Forces Model of Competition<\/p>\n
\u2022 Rivalry among competing firms \u2013 Most powerful of the five forces \u2013 Focus on competitive advantage of strategies over other firms<\/p>\n
26<\/p>\n
27<\/p>\n
Common \u201cWeapons\u201d for Competing with Rivals<\/p>\n
Competitive Weapons Primary Effects<\/p>\n
Price discounting, clearance sales, \u201cblowout\u201d sales<\/p>\n
Lowers price (P), acts to boost total sales volume and market share, lowers profit margins per unit sold when price cuts are big and\/or increases in sales volume are relatively small<\/p>\n
Couponing, advertising items on sale Acts to increase unit sales volume and total revenues, lowers price (P), increases unit costs (C), may lower profit margins per unit sold (P \u2013 C)<\/p>\n
Advertising product or service characteristics, using ads to enhance a company\u2019s image or reputation<\/p>\n
Boosts buyer demand, increases product differentiation and perceived value (V), acts to increase total sales volume and market share, may increase unit costs (C) and\/or lower profit margins per unit sold<\/p>\n
Innovating to improve product performance and quality<\/p>\n
Acts to increase product differentiation and value (V), boosts buyer demand, acts to boost total sales volume, likely to increase unit costs (C)<\/p>\n
Introducing new or improved features, increasing the number of styles or models to provide greater product selection<\/p>\n
Acts to increase product differentiation and value (V), strengthens buyer demand, acts to boost total sales volume and market share, likely to increase unit costs (C)<\/p>\n
Increasing customization of product or service<\/p>\n
Acts to increase product differentiation and value (V), increases switching costs, acts to boost total sales volume, often increases unit costs (C)<\/p>\n
Building a bigger, better dealer network Broadens access to buyers, acts to boost total sales volume and market share, may increase unit costs (C)<\/p>\n
Improving warranties, offering low- interest financing<\/p>\n
Acts to increase product differentiation and value (V), increases unit costs (C), increases buyer costs to switch brands, acts to boost total sales volume and market share<\/p>\n
28<\/p>\n
Sources of External Information \u2022 Unpublished sources include customer surveys, market research,<\/p>\n
speeches at professional and shareholders\u2019meetings, television programs, interviews, and conversations with stakeholders.<\/p>\n
\u2022 Published sources of strategic information include periodicals, journals, reports, government documents, abstracts, books, directories, newspapers, and manuals.<\/p>\n
\u2022 Internet \u2013 marketwatch.multexinvestor.com \u2013 moneycentral.msn.com \u2013 finance.yahoo.com \u2013 www.clearstation.com \u2013 us.etrade.com\/e\/t\/invest\/markets \u2013 www.hoovers.com \u2013 globaledge.msu.edu\/industries\/<\/p>\n
http:\/\/www.clearstation.com\/
\nhttp:\/\/www.hoovers.com\/
\n29<\/p>\n
Industry Analysis: The External Factor Assessment (EFE) Matrix<\/p>\n
\u2022 Economic \u2022 Social \u2022 Cultural \u2022 Demographic \u2022 Environmental \u2022 Political \u2022 Governmental \u2022 Technological \u2022 Competitive \u2022 Legal<\/p>\n
\u2022 Steps 1. List key external factors 2. W eight from 0 to 1 3. Rate effectiveness of<\/p>\n
current strategies 4. Multiply weight * rating 5. Sum weighted scores<\/p>\n
EFE Matrix for a Local Ten-Theater Cinema Complex<\/p>\n
Weight 0 not impt, 1 very impt, industry based. Rating, firm based, 1=poor response, 4=superior response from firm strategies to the fac2t6or.<\/p>\n
EFE Total Weighted Score Interpretation:<\/p>\n
\u2022 \u201cA Total Weighted Score of 4.0 indicates that an organization is responding in an outstanding way to existing opportunities and threats in its industry.<\/p>\n
\u2022 In other words, the firm\u2019s strategies effectively take advantage of existing opportunities and minimize the potential of adverse effects of external threats.<\/p>\n
\u2022 A Total weighted Score of 1.0 indicates that the firm\u2019s strategies are not capitalizing on opportunities or avoiding external threats.\u201d<\/p>\n
\u2022 (See Textbook, p. 80-81)<\/p>\n
An Example Competitive Profile Matrix Identifies firm\u2019s major competitors & their strengths & weaknesses in relation to a firm\u2019s strategic positions. Critical success factors include internal & external issues. Ratings are company based and weights are industry based.<\/p>\n
27<\/p>\n
MGMT 40000D Strategic Management
\nAgenda:
\nComprehensive Strategic Management Model:
\nChapter Objectives
\nExternal Audit
\nKey External Forces: Five Broad Categories
\nRelationships Between Key External Forces and an Organization
\nThe Process of Performing an External Audit
\nThe Process of Performing an External Audit (2)
\nThe Industrial Organization (I\/O) View
\nEconomic Forces
\nAdvantages of a Strong Canadian Dollar
\nSocial, Cultural, Demographic, and Natural Environmental Forces
\nKey Social, Cultural, Demographic, and Natural Environmental Variables
\nPolitical, Government, & Legal Variables
\nTechnological Forces (1)
\nTechnological Forces (2)
\nSlide Number 18
\nResults of Technological Advances
\nCompetitive Forces
\nCharacteristics Of The Most Competitive Companies:
\nKey Questions About Competitors
\nCompetitive Intelligence Programs
\nLegal & Ethical Ways To Obtain Competitive Intelligence:
\nMarket Commonality & Resource Similarity
\nThe Five-Forces Model of Competition
\nCommon \u201cWeapons\u201d for Competing with Rivals
\nSources of External Information
\nIndustry Analysis: The External Factor Assessment (EFE) Matrix
\nEFE Matrix for a Local Ten-Theater Cinema Complex
\nEFE Total Weighted Score Interpretation:
\nSlide Number 32<\/p>\n
—–<\/p>\n
Strategic Management (MGMT 40000D)<\/p>\n
Week three<\/p>\n
Dr. Wael Ramadan has a B.Eng., MBA, PhD, PMP, LSSBB, SPC, SDP, POPM, SA, and SMC.<\/p>\n
2<\/p>\n
\u2022 Perform the external audit CH 3 \u2022 StartSim Live and Strategy Game Decision Points \u2022 Group Formations and Leaders \u2022 Summary<\/p>\n
Model of Comprehensive Strategic Management:<\/p>\n
4<\/p>\n
Objectives of the Chapter<\/p>\n
1. Explain how to carry out an external strategic-management audit. 2. Discuss the ten key external forces that influence organizations: economic, political, and social.<\/p>\n
Social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive considerations<\/p>\n
3. Describe major external information sources, such as the Internet. 4. Go over key forecasting tools used in strategic management. 5. Discuss the significance of keeping an eye on external trends and events. 6. Describe how to create an EFE Matrix. 7. Describe how to create a Competitive Profile Matrix. 8. Go over the<\/p>\n","protected":false},"excerpt":{"rendered":"
MGMT 40000D Strategic Management Week 3 By: Dr. Wael Ramadan, B.Eng., MBA, PhD, PMP, LSSBB, SPC, SDP, POPM, SA, SMC. 2 Agenda: \u2022 Perform The\u2026<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8783,8777,7650,8780,8779,8778,8781,8782],"tags":[704,702,687,211,699,215,706,68,208,686,210,705,701,703,697,157,33,698,209,700,685],"class_list":["post-92355","post","type-post","status-publish","format-standard","hentry","category-assignment-help-uk-no-1-writing-services-company","category-assignment-uk-assignment-writing-service-assignment-help","category-assignment-writing-help","category-assignment-writing-help-in-london","category-best-assignment-writing-service-uk","category-best-essay-writing-services-in-uk-online-essay-help","category-uk-assignment-writing","category-uk-assignment-help-services-from-best-writing-experts","tag-apn-nursing-help","tag-assignment-help-online-free-help-with-assignment-online","tag-assignment-help-website","tag-best-website-for-nursing-assignment","tag-dnp-nursing-help","tag-do-my-nursing-homework","tag-get-help-with-assignments","tag-healthcare-homework-help","tag-help-with-nursing-assignment","tag-help-writing-online-assignment-homework","tag-homework-help-for-nursing-school","tag-medical-assignment-help","tag-msn-nursing-help","tag-need-help-with-assignment","tag-nursing-capstone-help","tag-nursing-dissertation-help","tag-nursing-essay-help","tag-nursing-help-websites","tag-nursing-homework-website","tag-nursing-school-help-sites","tag-online-writing-assignments-for-pay"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/92355","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=92355"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/92355\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=92355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=92355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=92355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}