Wednesday, January 23 Agenda:

1
Wednesday, January 23 Agenda

• Case discussion
• Chapter 2, reprise . . .
• Mission statements
• Team project introductory discussion
• Chapter 3

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Chapter 2 - Reprise . . .

• Strategists (strategy decision-makers) -
• work within a dense context of internal and
  external people, entities, and issues.
• have conceptual, administrative, interpersonal,
  and action roles.
• have individual attributes that affect
  organizations and their strategies.

3
Virtuoso management . . .

• involves information, people, and action.
• blends art, science, and craft.
• deftly and pragmatically plays the power game as
  necessary.
• keeps information channels and agendas open.
• works through opportunities in a stream of
  ongoing action and issues.

4
Mission Statement

• typically the starting point for strategic
  planning/thinking/decision making
• a relatively enduring yet basic description of an
  organizations domain
• ideally expresses the essence or unique
  personality of an organization in a compelling
  way
• includes 3 essential components product target
  market, differentiating feature

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Basic advice for creating useful mission
statements
1. The articulation of PRODUCT should be balanced
between broad and narrow. 2. TARGET MARKET should
be expressed as precisely as possible. 3.
DIFFERENTIATING FEATURE should be specific,
realistic, and truly differentiating. 4. CONCISE
versions (T-shirt size?) are valued more often
used and remembered.
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AVERA Mission

• Avera is a health ministry rooted in the
• Gospel. Our mission is to make a positive
• impact in the lives and health of persons
• and communities by providing quality
• services guided by Christian values.

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?????

• We aspire to distinctively serve customers
• those linked to the land
• Through a great business,
• a business as great as our products.
• To achieve this aspiration, our strategy is
• Exceptional operating performance,
• Disciplined SVA growth,
• Aligned high-performance teamwork.

8
Cetero Research Vision Statement

• Cetero Research will be the premier global
  provider
• of early clinical and bioanalytical research
  services
• to the biotechnology, generic, and pharma
• industries.
• We will achieve this with personal attention to
  detail,
• consistently applying leadership, management,
• scientific and ethical rigor to everything we
  do, and
• by creating a culture that fosters change such
  that
• we establish the benchmark for customer service,
• timeliness and quality in the CRO industry.

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American Family Insurance Traver Silbernagel
Agency

• To provide insurance and financial products to
  the people and businesses of North Dakota and
  Minnesota . . .through employee experience,
  knowledge, and impeccable service,
• providing both a professional and relaxed
  environment for our clients.
• We only offer quality products to meet the needs
  of our clients while strengthening the reputation
  and financial foundation of American Family
  Group, which stands for credibility and
  integrity
• in the insurance industry.

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Mission Statement for NDSU/CC/U Mary MBA Program

• Product not too narrow, not too broad
• Target market as specific as
• usefully possible
• Differentiating feature realistic,
• crisply descriptive
• Plus a compelling spin, overall capturing the
  enduring essence of the organization

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NDSUs College of Business aspires to own the
future of management education (undergraduate,
MBA, and complementary) and business assistance
in the region by getting there first and being
the best. Core values quality, innovation,
renown, flexibility, accessibility,
responsiveness, appreciation for diversity,
efficiency.
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Andrews (R3.1) The Concept of Corporate
Strategy

• father of strategic management?
• design of the classic Harvard approach to
  strategic management

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Concepts/tools of strategic management apparent
in Andrews article ?

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Corporate strategy (pg. 72)

• the pattern of decisions in a company that
• determines and reveals its
• objectives, purposes, or goals,
• produces the principal policies and plans
• for achieving those goals, and
• defines the range of business
• the company is to pursue.

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The strategic decision contributing to this
pattern . . .

• is . . . effective over long periods of time.
• affects a company in many different ways.
• commits a significant portion of resources.
• defines the central character of a company.
• defines the companys image.
• defines the market position.

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Assumptions of the Harvard approach to
strategy. .

• Formulation precedes implementation.
• Strategy drives structure.
• Strategy should be explicit.

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Strategy formulation Strategy implementation

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Strategy . . . (pg. 75)

• Formulation
• 1. Identification of opportunity and risk
• 2. Determining the companys resources
• 3. Considering organizational values
• 4. Acknowledging social responsibility

• Implementation
• 1. Organizational structure
• 2. Organizational processes and behavior
• 3. Top leadership

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Strategic Management Process (Harvard)
Mission ?
? 1.External analysis 2. Internal
analysis (identify opportunities (identify
strengths threats in the industry)
weaknesses of the org) key success factors
distinctive competence ?
? Strategy ? ? 4. Social
responsibility 3.Managerial
values ? Strategy Implementation
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Chapter 12 - Reprise . . .

• Institutional values
• shared values and beliefs
• forms orgl culture
• fosters orgl commitment
• tied to core competence

• Social responsibility
• beyond economic role
• beyond legal requirements
• ethical considerations
• considers a broad range of stakeholders, not just
  stockholders
• impact on society

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Hamel and Prahalad (R3.3)Strategic Intent
Strategic intent ?? Implications of strategic
intent ?? Use of strategic intent to improve
organizational performance ??
22
Development of economic strategy . . . (pp. 73,
79). . .

• involves matching industry opportunity
• with organizational capability
• at an acceptable level of risk

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Goals of strategic management

• External strategic fit formulation to match
  capabilities of the firm with opportunities in
  the industry strategy effectively adapts to
  external trends
• Internal strategic fit implementation manage
  internal resources of the firm to facilitate
  effective execution of strategy
• Sustainable competitive advantage and
  above-average returns

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Strategic Management Process (Harvard)
Mission ?
? 1.External analysis 2. Internal
analysis (identify opportunities (identify
strengths threats in the industry)
weaknesses of the org) key success factors
distinctive competence ? external
strategic fit ? Strategy ? internal
strategic fit ? 4. Social responsibility
3.Managerial values ? Strategy Implementation
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SWOT analysis -brings together two primary
levels of analysis used in strategic decision
making

• Strengths and weaknesses are specific to the
  individual organization
• Opportunities and threats are present in the
  external environment
• create unique strategies that draw on internal
  strengths to pursue external opportunities,
  buffer external threats, and minimize effects of
  internal weaknesses

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Strategic Management Tools

• External Analysis
• general environment analysis (R3.1)
• basic industry facts
• 5 forces analysis (R4.1)
• competitive intelligence (R4.4)
• key success factors

• Internal Analysis
• identification of resources and capabilities
  (R3.1)
• value chain analysis (R4.5)
• core competencies and sustainable competitive
  advantage (R4.2, R4.3)

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Sometimes confused terms . . .

• Key success factor
• externally focused factors
• pre-requisites for success
• specific skills or attributes that ALL serious
  players must have to be contenders

• Distinctive competencies
• also known as core competencies
• specific skills or attributes that set an
  organization apart from others
• sources of competitive advantage

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Use of internal analysis

• Identify important resources and capabilities of
  the organization
• Understand the organizations specific strengths
  and weaknesses
• Utilize unique strengths to develop strategies
  that provide sustainable competitive advantage
• Improve weak areas that are vulnerabilities

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The general environment analysis
(macro-environment analysis) -

• a critical tool for external analysis
• identify relevant trends in each segment of the
  general (macro-) environment demographic,
  economic, socio-cultural, political-legal,
  technological, global
• interpret potential implications of the trends
  (opportunity? threat?)
• identify emerging (forward-looking) opportunities
  and threats in the industry

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General Environment Analysis - Thinking Probes

• Demographic Trends
• population size
• age structure
• geographic distribution
• ethnic mix
• income distribution
• household composition
• . . . .

• Sociocultural Trends
• women in workforce
• workforce diversity
• habits, values, attitudes, beliefs
• life goals/motives
• hobbies, activities
• lifestyle trends
• consumer behavior

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General Environment Analysis - Thinking Probes

• Economic Trends
• inflation rates
• interest rates
• unemployment rates
• budget or trade deficits or surpluses
• exchange rates
• savings rate
• GNP GDP

• Political-Legal Trends
• anti-trust laws
• taxation
• labor laws
• regulatory issues
• impending legislation

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General Environment Analysis - Thinking Probes

• Technological Trends
• product innovation
• communication advances
• process innovation
• cost and speed
• diffusion
• focus of public and private expenditures

• Global Trends
• key political events
• critical global markets
• newly industrialized countries
• varying cultural and national attributes
• political instability
• trade barriers

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Use of General Environment Analysis

• Understand broad factors likely to impact your
  industry now and in the future.
• Realize that the individual firm has little if
  any control over these broad trends
• Thus, firms must ADAPT to important general
  environment trends.
• Consider resulting opportunities and threats.
• Look for intersecting/parallel trends that can be
  subtle yet ultimately profound.
• Anticipate! Place your bets for the future!

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Hitting a home run in strategic management
1. What MIGHT we do? - considering the
external environment 2. What CAN we do?
- considering the internal environment 3. What
DO WE WANT to do? considering managerial
values 4. What SHOULD we do?- considering
social responsibility