Domino's Pizza

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Chapter 1 Strategic Management and Strategic
Competitiveness major concepts

• strategic management
• strategic management process
• strategic decision makers
• external strategic fit
• internal strategic fit
• sustainable competitive advantage
• above-average returns
• hypercompetition

• industrial-organizational (I/O) model of above-
  average returns
• resource-based model of above-average returns
• vision/mission statements
• organizational values
• stakeholders
• social responsibility

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Unless we change our direction we are likely to
end up where we are headed. Ancient Chinese
proverbIf we can know where we are and
something about how we got there, we might see
where we are trending and if the outcomes which
lie naturally in our course are unacceptable, to
make timely change. Abraham LincolnIf you
dont know where you are going, any road will
take you there. The KoranWithout strategic
management the organization is like a ship
without a rudder. Ross and Kami, strategy
consultants

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Strategic Management Process
Involves the full set of
Actions
Commitments
Decisions
which are required for firms to achieve
Strategic Competitiveness
Sustained Competitive Advantage
Above-Average Returns
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Chapter 2
The Strategic Management Process
External
Environment
Strategic Intent
Strategic Mission
Chapter 3
Internal
Environment
Strategy Formulation
Strategy Implementation
Chapter 4
Chapter 5
Chapter 6
Chapter 10
Chapter 11
Business-Level
Competitive
Corporate-Level
Corporate
Structure
Strategy
Dynamics
Strategy
Governance
Control
Actions
Strategic
Chapter 8
Chapter 7
Chapter 9
Chapter 12
Chapter 13
International
Entrepreneurship Innovation
Cooperative
Acquisitions
Strategic
Strategy
Strategies
Restructuring
Leadership
Strategic
Competitiveness
Above Average
Feedback
Returns
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• Vision and Mission
• ? ?
• External analysis Internal analysis
• ? ?
• Opportunities threats Strengths
  Weaknesses
• Key success factors Distinctive competence
• ? ?
• Strategy
• Social ? ? ? Managerial
• responsibility values
• Implementation
• ?
• Sustainable competitive advantage
• Above average returns

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Strategic Management Process -not always so
neatly planned . . .

• The process of developing superior
• strategies is part planning, part trial and
• error, until you hit upon something that
• works. Professor Costas Markides,
• London Business School

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Strategic Management Process both proactive and
reactive components, planned and emergent
components -

• abandoned parts
• ?
  latest
• prior versio n continued parts version
• of the firms ? new planned parts
  of the
• strategy new emergent parts firms
• ? strategy
• adaptive reactions

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Strategic Management shooting at a moving
target of co-alignment (Thompson, 1967)

• External Strategic Fit
• Strategy formulation to
• -match internal capabilities
• with specific attractive
• external opportunities
• -create strategies
• that effectively adapt to
• external (industry and
• competitive) trends.

• Internal Strategic Fit
• Strategy implementation to
• -match the skills and
• resources of the firm to
• requirements for successful
• strategy execution
• -ensure that actions and
• resources facilitate strategy
• accomplishment.

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Hypercompetition fleeting competitive
advantage due to aggressive/relentless challengers
Globalization impacts
Impacts of technology change
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Two Models of Superior Returns Two different
perspectives on how to best achieve
above-average returns
Industrial Organization Model
Resource-Based Model
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I/O Model of Superior Returns
The Industrial Organization Model suggests that
above-average returns for any firm are largely
determined by characteristics ________ the firm.
The I/O model largely focuses on industry
structure or attractiveness of the external
environment rather than internal characteristics
of the firm.
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I/O Model of Superior Returns
Action required
External Environment
Study the external environment, especially the
industry environment.
General Environment
Industry Environment
Competitive Environment
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I/O Model of Superior Returns
Action required
Locate an industry with high potential for
above-average returns.
An Attractive Industry
An industry whose structural characteristics
suggest above-average returns are possible
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I/O Model of Superior Returns
Action required
Identify strategy called for by the industry to
earn above-average returns.
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I/O Model of Superior Returns
Action required
Develop or acquire assets and skills needed to
implement the strategy.
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I/O Model of Superior Returns
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I/O Model of Superior Returns
Action required
Maintain selected strategy in order to outperform
industry rivals.
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Resource-Based Model of Superior Returns
The Resource-Based Model suggests that
above-average returns for any firm are largely
determined by characteristics ________ the firm.
The Resource-Based view focuses on developing or
obtaining valuable resources and capabilities
which are difficult or impossible for rivals to
imitate.
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Resource-Based Model of Superior Returns
Action required
Identify firm resources. Study strengths and
weak- nesses relative to rivals.
Resources
Inputs to a firms production process.
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Resource-Based Model of Superior Returns
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Resource-Based Model of Superior Returns
Action required
Determine how firms resources and capabilities
may create competitive advantage.
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Resource-Based Model of Superior Returns
Action required
Locate an attractive industry.
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Resource-Based Model of Superior Returns
Action required
Select strategy that best exploits resources and
capabilities relative to opportunities in
environs.
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Resource-Based Model of Superior Returns
Action required
Maintain selected strategy in order to outperform
industry rivals.
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• Vision and Mission
• ? ?
• External analysis Internal analysis
• ? ?
• Opportunities threats Strengths
  Weaknesses
• Key success factors Distinctive competence
• ? ?
• Strategy
• Social ? ? ? Managerial
• responsibility values
• Implementation
• ?
• Sustainable competitive advantage
• Above average returns

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Mission Statements

• typically the starting point for strategic
  planning
• provide a relatively enduring yet basic
  description of an organizations domain
• ideally express the essence or unique
  personality of an organization
• should clearly include three core elements
• 1.
• 2.
• 3.

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Rape and Abuse Crisis Center provides crisis
intervention, advocacy, and counseling services
free of charge to all persons in the region
who have been victims of domestic violence or
sexual assault.
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To create meaningful and strategically useful
mission statements . . .

• PRODUCT description should be carefully balanced
  - not too broad, not too narrow
• TARGET MARKET should be expressed as specifically
  as possible
• DIFFERENTIATING FEATURE should be meaningful and
  realistic

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Phoenix International

• . . . designs and manufactures electronics
• for harsh environments for the worldwide
• original equipment manufacturer market.

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Mission Statement for NDSUs College of Business?

• Be sure to clearly and appropriately include
• Product(s)
• Target market(s)
• Differentiating feature(s)

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Why is it so difficult to develop a concise,
compelling, and agreed-upon mission statement?

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Difficulties encountered developing NDSUs
mission statement

• How distinctive can you be in 25 words?
• breadth of organizational activities
• many constituents
• competing priorities
• loaded words
• overly general bland
• overly specific too long

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Peter Drucker . . .
Establishing a mission should never be made on
plausibility alone, should never be made fast,
and should never be made painlessly. The
mission decision is far too important to be made
by acclamation.
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Useful additional statements to accompany the
mission statement

• vision statement - future orientation
• values statement - underlying important
  philosophical motives and standards
• goals statement - specific objectives for
  numerous activity areas

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NDSU

• With energy and momentum,
• North Dakota State University addresses the needs
  and aspirations
• of people in a changing world
• by building on our land-grant foundation.

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NDSU Vision Statement

• We envision
• a vibrant university
• that will be globally identified
• as a contemporary
• metropolitan land-grant university.

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NDSU Goals

• go to the next level
• 1. student enrollment -
• 12,000 15 graduate students
• 2. PhD programs (15) and graduates (50)
• 3. ? research expenditures ( 100M!)
• 4. research extensive classification
• 5. technology transfer and
• economic development
• 6. ? salaries to midpoint of peers

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NDSU Core Values

• Land-grant
• People
• Scholarship
• Teaching and learning
• Ethics
• Culture
• Accountability

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Mission Statements So what?Who cares?Why
bother?

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ELDERHOSTELs mission statement

• We are the nations first and the worlds
• largest education and travel organization for
• adults 55 and over, dedicated to providing
• exceptional learning opportunities at
• remarkable value.
• We value stimulating, expert information
• adventure and the spirit of camaraderie.

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Organizational Values

• values and beliefs that are widely shared and
  endorsed by organizational participants
• part of the organizational culture
• can lead to an ingrained way of thinking and
  acting within the organization
• often linked to competitive advantage

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Yahoos Mission and Values

• Our mission is to be the most essential
• global Internet service for
• consumers and businesses.
• Core values
• Excellence, innovation, customer fixation,
  teamwork, community, and fun.
• Yahoo doesnt value bureaucracy, losing,
  arrogance, being good enough, the status quo,
  quick fixes, passing the buck, missing the boat,
  following, punching the clock . . .

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• Mission
• ? ?
• External analysis Internal analysis
• ? ?
• Opportunities threats Strengths
  Weaknesses
• Key success factors Distinctive competence
• ? ?
• Strategy
• Social ? ? ? Managerial
• responsibility values
• Implementation
• ?
• Sustainable competitive advantage
• Above average returns

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(? stockholders)
Stakeholders
The firm must maintain performance at an adequate
level in order to maintain the participation of
key stakeholders
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Groups who are affected by a firms performance
and who have claims on its performance
Stakeholders
The firm must maintain performance at an adequate
level in order to maintain the participation of
key stakeholders
Capital Market
Firm
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Groups who are affected by a firms performance
and who have claims on its performance
Stakeholders
The firm must maintain performance at an adequate
level in order to maintain the participation of
key stakeholders
Capital Market
Firm
Product Market
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Groups who are affected by a firms performance
and who have claims on its performance
Stakeholders
The firm must maintain performance at an adequate
level in order to maintain the participation of
key stakeholders
Capital Market
Firm
Product Market
Organizational
Employees Managers Non-Managers
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Stakeholder Analysis

• Identifying and prioritizing specific key
  stakeholder groups
• Anticipating reactions of key stakeholder groups
• Modifying strategic decisions in light of key
  stakeholder groups

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Social Responsibility

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Social Responsibility

• Prominent issues today?
• How to address?

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Social Responsibility

• So what?
• Who cares?
• Why bother?

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Hit a home run? Touch all the bases?

• 1. Consider external environment
• (What MIGHT we do?)
• 2. Consider internal environment
• (What CAN we do?)
• 3. Consider organizational values
• (What do we WANT to do?)
• 4. Consider social responsibility
• (What SHOULD we do?)