Essay About Themstrategic Management And Firms Environment

3 Basic Parts of Strategy: Analysis, Formulation, and Implementation
3 Basic Parts of Strategy: Analysis, Formulation, and Implementation
MGT 409 – Exam 1 Review3 basic parts of strategy: Analysis, formulation, and implementationStrategy: anything you can do to gain advantage over competition Romantic view of leadership: CEO is responsible for success/failure (Steve Jobs)External control leadership: Co’s are controlled by mkt forces, best CEO can do is anticipate and prepare for themStrategic management: analyses, decisions, and actions taken to create/sustain a competitive advantageBiggest problem is sustaining competitive advantage. Things care copied/imitated and eventually all ground breaking tech is industry standand.Ambidextrous behaviors: balance between getting most out of current product/services and developing new ones → doing current tasks and looking for new opportunities simultaneouslyStrategic Planning → from VISION to TASKKey to effective management is to MANAGE – requires managers who are able to think, plan, analyze, and decideEfficiency vs. effectiveness: interest of management and owners aren’t always the same; the more closely you supervise management team, the more it costs and less efficient they will be.Strategic direction: (Hierarchy of Goals – Top down)Vision: inspiring, overarching, long-term, passion driven, statement of co’s values, aspirations, and goals.’Mission: more specific than vision, purpose of co., basis of competition and competitive advantages, focuses on means by which firm will competeStrategic Objectives: most specific, operationalize mission statement, guidance on how org will move to higher goals (mission/vision), cover more defined time frameNEED TO BE SMART: Specific, Measurable, Appropriate, Realistic, TimelyCorporate Governance: relationship between Stockholders: OwnersManagement: headed by CEOBoard of directors: elected by shareholders (representatives of owners)ensure interest/motives of mgt are aligned with the ownersStakeholders: anyone who will be affected by the success, failure, or continued operation of the firmNot just management, owners, employees → suppliers, custo’s, competitors, neighbors, community, politicians etc. → crowdsourcing can effect even more people (kickstarter)Views of stakeholder management:Zero sum: stakeholders compete for attention and resources of org./ gain of one is loss to anotherSymbiosis: stakeholders dependent on one another (mutually beneficial)Chapter 2:Forecasting → 3 Functions:External Scanning: predicting changes in firms environment, changes already underway, then working out possible responsesExternal Monitoring: tracking trends, sequences of related activities, and organized programsCompetitive Intelligence: tracking/understand industry, monitoring competition, identify emerging threats/opportunitiesCollected through public industry sources. Alerts management of threatsNot always successful: managers can be overwhelmed with amount of info/miss something criticalGeneral Environment:DemographicsSociocultural measuresLegal/political issuesTechnologicalEconomicInternationalModels for analyzing eternal environment:SWOT Analysis: sum up general environment, industry conditions, and firm resources/needsStrengths: what are we good atWeaknesses: where do we need helpOpportunities: where can we expandThreats: where are we vunerablePorters 5 Forces: Michael Porter, Harvard. Zero-sum conditionThreat of new entrantsThreat of substitutesPower of suppliersPower of buyersRivalry amongst existing firmsStrategic Groups: Cluster of firms that share similar strategies and activitiesNo 2 firms exactly alike/completely differentIn industry firms will utilize similar strategies → results in same actions (direct competition) Ex. Mercedes, Audi, BMW  or  Meijer, WalMart, Super TargetForward Integration: Firm buys something closer to customer (Hammer manufacturer buys hardware store that sells hammers)Backward Integration: Firm buys something closer to supplier (Hammer manufacturer buys steel mill that supplies steel)Chapter 3:Internal Analysis:Value Chain: All add value or reduce costs → all work collaboratively to do so → 2 activities, 9 categoryPrimary activities:Inbound Logistics, operations, outbound logistics, marketing & sales, ServiceSupport activities:General admin, HR management, technology development (R&D), procurement (purchasing/supply chain relations/vendor relations)Resource Based View (RBV):Tangible Asset: all physical and financial assets used to create value for custo (includes patent)Intangible Assets: routines, practices, knowledge, experience, reputation, and HR accumulated over time → employee skills/abilities, reputations, brand name etc.Organizational Capabilities: skills the firm can use to provide superior product/service value (customer service)Firm resources:Valuable: does the resource add value?Rare: does everybody have?Difficult to imitate: unique or hard to make?Difficult to substitute: is there an equivalent?4 Balanced Scorecard Analysis:Customer perspective: quality, service, performanceInternal business perspective: capabilities, skills, issuesInnovation and learning perspective: increasing efficiency, adding value, etcFinancial perspective:  profitability, growth, asset turnoverLimitations: lack of clear strategy, limited executive sponsorship, too much emphasis on financial measures, poor data on actual performance, inconsistent terminologyChapter 4:Knowledge economy:Knowledge based labor makes 50% of GDP in industrialized countries3 Intellectual Assets:Human Capital: individual knowledge/capabilities, experience of employeesSocial Captial: network of relationships that people have throughout firmKnowledge: Tactic: can’t be recorded or spread (shared only with consent and participation of the individual) / Explicit: write down, record, and transmit to someone else (reusable, replicated, widely distributed)3 major aspects of human capital: Attracting, developing, retaining -→ all required for successAttracting HC: hire for attitude, train for skill – scan pools for candidates, referralsDeveloping HC: train and develop on all levels, encourage widespread involvement, monitor progress/development, *employee buy-in is critical – 360 degree relationshipRetaining HC: avoid transfer of valuable/sensitive info outside of firm (promote firms values, loyalty strategies. Challenging/stimulating work environment, financial/non-financial rewardsDiversity: enhances human capital. Adds viewpoints, different opinions and expertise to firmSocial Capital: Benefit: Workers often more loyal to colleagues and profession than employer. can help attract and retain talent, help connect firm to social networksDownside: people in groups/cliques tend to go with opinions of groups. Cost of financial resources (time employees spend networking). Management has to be committed too social networking tooLeveraging Human Capital with TechnologySharing info allows us to: conserve resources, develop new products/services, new opportunitiesWe can use tech to record & share info: email etc.Improves speed, efficiency, connections with customers and suppliers