L O-The Strat. Mgt. Process

1
L O-The Strat. Mgt. Process

• Define Strategic Management State similarities
  among strat. mgt. models
• Reconstruct class strat. mgt. model
• Define parts of model
• Define fit
• Provide example of fit
• Define synergy
• Provide example of synergy
• Define feedback
• Provide examples of feedback
• Know parts of a SWOT anal. and how to perform
• Know purpose of SWOT analysis

2
STRATEGIC MANAGEMENT

• Definition The process of forming and
  implementing a mission, strategies, and
  objectives to enhance organizational performance.

3
STRATEGIC MANAGEMENT MODEL
Mission
D E S I R E D
POSS IBLE
Internal Environment
External Environment
Strategy Objectives
Feedback
Implementation
4
Parts of the Model

• Mission- Broad outline of orgs. activity and
  business make up. Includes product scope, market
  scope, technology.
• External Environment -Conditions outside of the
  firm.
• Internal Environment- Conditions within the firm.
• Strategy- How an organization attempts to achieve
  its objectives.
• Objectives- Desired results- What SPECIFICALLY
  the organization wants to achieve (goals).
• Implementation- All activities associated with
  putting the strategy in place.

5
Define Fit

• 1 part of model is logically connected to other
  parts

6
Provide Example of Fit

• Mention and give example of part of model for a
  specific company (e.g. Strategy).
• Mention/give example for another part for company
  (e.g. Implementation)
• Explain why the two examples support each other.

7
Define synergy

• Sum of parts of system produce greater total when
  working together than when working alone.
• 113

8
Provide Example Synergy

• Use real business example
• Not ridiculous
• Identify distinct parts
• How much independently
• How much together
• Why more together

9
Define Feedback Give Example

• Define
• Collection of post implementation results to
  enhance future decision making.
• Example
• State
• strategy or objective
• result
• how affect future decisions

10
Parts and Performance of a SWOT Analysis

• Identify mission (goals)
• Isolate Opportunities and Threats
• External Conditions
• Isolate Strengths and Weaknesses
• Internal Conditions
• Choose strategies to avoid (or minimize) WT and
  utilize (or maximize) S O.
• Explain how strategy accomplishes above.

11
Purpose of SWOT Analysis

• Identifying a strategy to achieve your mission
  (goals) which utilizes your strengths and
  opportunities and avoids your weaknesses and
  threats.

12
Revising Comp.Strategy

• 1) Identify Mission
• 2) Analyze External Environment
• 3)Analyze Internal Environment
• 4)List current LT strategy and LT objectives
• 5)  Evaluate Current Strategy
• 6) Consider new strategies Type of strategy
• 7) Evaluate new strategies
• 8)  Re-evaluate long-term objective.
• 9)  Implement new strategy
• a.Consider remaining draw backs strategy
• 10) Feedback

13
Paper 1.  Pick 4 of the items from the list
below (One of the items must be item 1 and
another item 2). For the each of the items
chosen you must find an article from the
Internet, newspapers, or magazines about a
current business situation. The article must be
less than 8 months old. Specifically, the
articles (4 in all) should discuss companies or
industries that illustrate the items. Write one
or two paragraphs that clearly explain how the
article illustrates the item. Although the paper
should be understandable even if someone has not
read the article, you still must include the
article with your paper. Attach all the articles
at the very end of your paper. You must type your
paper and make sure it clearly indicates which
item you are answering. Discuss each of the four
items independently. Be sure to indicate which of
the questions you are answering!  I will grade
you on writing style and content. Your write-up
should clearly show that you understand the
concepts you are using, clearly explain how the
article illustrates the concept, and clearly be
closely tied to points made in the relevant
course pack reading or lecture on that
concept. Mandatory itemsItem 1. From the
lecture on five forces or the reading on "How
competitive forces shape strategy" explain how
one of the underlying factor's we discussed is
strengthening a force and how the company has
adjusted its strategy to cope with the underlying
factor.Item 2. Provide an example of a company's
international strategy. Is the strategy
multicountry or global? Why? Using points in the
course pack (read pages 109, 110, 112, 113), as
well as details in the current event business
article explain whether it makes more sense to
pursue a multi-country strategy or a global
strategy in the particular case mentioned in the
business article. Pick any two of the items
belowItem 3. Explain how a firm is effectively
aligning it strategy to avoid threats or
weaknesses.Item 4. Explain how a lower or
mid-level employee clearly influenced the overall
strategic direction of the entire firm.Item 5.
On page 6 of the course pack, the second
paragraph under long-term objectives, lists how
to increase the value of objectives. Find an
example of an objective and explain whether or
not it meets at least three of criteria in the
article (The list of criteria is, motivating,
measurable, achievable, and consistent with the
other objectives of the firm). Item 6. On
page 14 through 22 the reading mentions "tight"
fit, "early" fit and the "fragility" of fit. Find
an article that illustrates any of these three
concepts. Item 7. Explain how a firm has
modified its strategy to better fit one of the
elements in the remote environment. Item 8.
According the reading starting on page 96,
explain how a firm is using a strategy that is
consistent with its industry environment (i.e.,
emerging industries, high velocity markets,
maturing industries, declining industries, or
fragmented industries). Be sure your paragraph
clearly shows which of the industry environments
the company is in, as well as, explaining how the
strategy the firm is using is consistent with
that environment.
14
L O-Mission

• Define a mission.
• Know what a mission includes.
• Compare and contrast a mission statement and a
  mission.
• Know why a mission is needed.
• Know what to keep in mind when designing a
  mission.
• Evaluate a mission.
• Define stakeholder.
• Know how to reconcile the conflicting needs of
  stakeholders.

15
What is Mission, What Includes

• What is it.
• Purpose
• Unique
• Values of decision makers
• Includes
• Product scope-Needs satisfied
• Market
• Technology
• Stakeholders
• Importance
• Claims

16
Compare Contrast Mission and Mission Statement

• Mission Statement
• Helpful
• Written or Oral communication
• One potential form of support
• Many organizations have.
• Content same

• Mission
• Needed
• Communicated in multiple ways
• What is being supported.
• Few organizations have.
• Content same

17
Why Needed

• Purpose
• Screening
• Guide
• Resource allocation
• Strategy
• Tone

18
Keep in Mind whenDesigning a Mission

• Duration
• Unique
• Motivating
• Permeate Organization
• Realistic
• Mean it.

19
Evaluate a Mission

• Make sure to
• Include needed parts.
• Meet needs.
• Keep everything in mind.

20
Define Stakeholder

• Any group that has a justifiable reason for
  expecting a firm will satisfy their claims in a
  responsible manner.

21
Reconciling the Needs of Stakeholders

• Decide importance.
• Understand specific claims.
• Have mission reflect importance and claims.
• Be willing to reassess.
• Try not to antagonize any stakeholder.

22
LO The External Environment

• Define and distinguish among three levels of
  environment.
• Understand the need to assess the external
  environment.
• List the five elements within the remote
  environment.
• Define key success factors.
• Know errors regarding KSFs.
• Define give example of industry specific
  ratios.
• List five forces and know the difference among
  the forces.
• Define underlying factors.
• Know how underlying factors affect the strength
  of a force.
• Know how to use information from five force
  analysis to form strategy.
• Perform a five force analysis
• Know the three types of conclusions derived from
  a five force analysis.
• Know major point about operating environments.

23
Define and Distinguish among the 3 Levels of
Environment.
Remote Environment
- Economic - Social - Ecological
- Political - Technological
Industry Environment
Key Success Factors Industry Specific Ratios Five
Force Model Driving Forces
Operating Environment
Strategic Group Labor Creditor Customers Supplier
s
The Firm
24
Define Levels of Environment Know Differences

• Define
• Remote Environment Originates beyond,
  irrespective of a firms operation. Difficult
  for 1 firm to influence.
• Industry Environment Collection of firms
  offering similar products or services, the
  entities directly related to those firms
  (Includes five forces.)
• Operating Environment Those entities that the
  specific firms deals with.
• Distinguish
• As one moves from remote to operating
  environment
• More control
• More immediate surroundings
• There are fewer participants
• Lines between is blurred.

25
Remote Environment Five Elements

• Elements
• Economic Disposable income, inflation, interest
  rates, etc.
• Social Collective beliefs, values, attitudes,
  opinions lifestyles reflected by society.
• Political Taxes, laws, gov. as customer and
  competitor.
• Technological Computers, faxes etc.
• Ecological Pollution, fewer resources.

26
Industry Environment Key Success Factors

• Definition
• Skills, resources, activities.
• Especially important to survival of almost all
  participants in a specific industry.
• Does not assure success.
• Relationship to Performance
• Missing KSF--- Firm Failure
• Threshold Level of KSF -- Possible Survival
• High level -- Survival to superior performance.
• Sometimes need something more than KSFs for
  superior performance

27
Manager Errors Key Success Factors

• Believe having a threshold level on all KSFs is
  enough for high performance.
• Below a threshold level on 1 or more.
• Investing (time, effort, , etc.) in a KSF
  beyond point of meaningful return.

28
Define/Give Example of Industry Specific Ratio

• A ratio especially important to a specific
  industry.
• Helps determine profitability.
• Often captures utilization of scarce resource.

29
Finding A Prom Date
Movies Redwings
Students at School
Tuxes, Dresses
Dates
Nearby University
30
Industry Environment Five Forces

• Competitive Rivalry (Sellers)- Other firms within
  the industry.
• Potential Entrants - Companies formerly not in
  the industry.
• Substitutes - Firms from other industries that
  offer products or services fulfilling similar
  needs.
• Suppliers - Those companies who supply the
  industry with products or services.
• Buyers - Those companies or individuals who
  purchase the industrys product or service.

31
Define Underlying Factors

• Underlying factors Conditions that increase the
  power of a given force.
• Each force has its own unique set of conditions
  or underlying factors.

32
UNDERLYING FACTORS THAT MAKE FORCES STRONGER
Competitive rivalry (jockeying for position) is
a powerful force given the following underlying
factors   1. Many competitors (Compared to
other industries) 2. Competitors equal in size
and/or very large 3. Slow growth in demand 4.
High fixed costs 5. Undifferentiated products 6.
High exit barriers   Potential entrants are a
powerful force given the following underlying
factors (NOTE If potential entrants are
powerful, it is easier for outsiders to enter the
industry. This is favorable to those not in the
industry, but makes the industry less desirable
to those participating in it.)   1. The industry
has few economies of scales 2. Easy access to
technology and know-how 3. Little product
differentiation (no loyalty) 4. Low capital
requirements 5. Few cost disadvantages
independent of size 6. Easy access to
distribution channels 7. Few government rules
that deter entry   Substitute products are a
powerful force given the following underlying
factors   1. The price of substitutes is low
compared to your industry 2. The benefits are
high compared to your industry 3. There are low
switching costs when purchasing
substitutes   Buyers are a powerful force given
the following underlying factors   1. They
purchase in large volume or there are few
buyers 2. Your products are undifferentiated 3.
Your products represent a significant percentage
of a buyer's total costs 4. The buyer is not very
profitable 5. Quality of your product is not
important to buyer 6. Your product does not save
buyer money 7. The buyer can integrate
backward   Suppliers are a powerful force given
the following underlying factors   1. There are
few suppliers -they are more concentrated than
your industry 2. The suppliers' product is
differentiated 3. Supplier product has few
substitutes 4. The supplier can integrate forward
33
Using information from five force analysis to
form strategy

1. Identify industry (Where in the distribution
   chain does it fall). Who are the suppliers and
   buyers?
2. Identify a strong force (Porters 5 Force Model)
   relative to the industry
3. Clearly identify underlying factor that makes the
   force strong (If doing as part of paper 1,
   question 1, provide specific support from the
   article)
4. Mention the specific firm within the industry
   (center box, competitive rivalry)
5. State what is being done to contend with the
   underlying factor. (If doing as part of paper 1,
   question 1, provide specific support from the
   article)

34
Performing A Five Force Analysis

• 1. Specify industry
• 2. List all five forces
• 3. For each force, indicate important underlying
  factors
• 4. Summarize the strength of each force based
  upon the number and importance of underlying
  factors.

35
Performing A 5 Force Analysis
36
3 Types of Conclusion Derived from 5 Force
Analysis

• 1. Determine the strongest forces
• e.g., Competitive Rivalry New
• Entrants
• 2. Determine which underlying factors are most
  important by determining the ones that have
  greatest influence on the strongest forces.
• e.g., High fixed costs,
• Undifferentiated products.
• 3. Determine industry attractiveness comp. riv.
  based upon strength of forces combined
• e.g., Industry not attractive.
• Rivalry intense.

37
Major Point about Operating Environments

• General conditions in an industry (e.g., power of
  a force or underlying factors) may differ from
  the conditions within a specific operating
  environment within the industry.

38
Strategic Group Map Shoe Industry
High
Quality
Low
Low
High
Marketing Expenditure
39
Why Conduct Strategic Analysis?

• Simplifies analysis.
• Ident. competitors
• Finds uncovered spaces.
• Isolates factors that might hurt/help some groups
  more than others.

40
L O-Internal Environment

• Know parts of value chain and how to conduct a
  value chain analysis.
• Know the definition of a core competence.
• The attributes of a core competence.
• Know what makes a strength or weakness relevant.

41
Parts of Value ChainConducting Analysis

• Parts (In book)
• Primary activities parallels flow of goods.
• Support activities affect each of primary
  activities
• Effectiveness/efficiency in activities affects
  profit margin.
• Conducting Analysis
• Mention one part of value chain
• Describe activity as it relates to company (For
  support activity, describe how affects several
  primary activities).
• Specify whether activity differs from others in
  industry
• Indicate likely affect on profit margin

42
Core CompetenceDef. Attributes

• Core competence A companys skills, capabilities
  or resources that serve as a basis for building a
  sustainable competitive advantage.
• Attributes
• Valuable
• Rare
• Imperfectly imitable

43
LO Competitive Advantage (CA) Generic
Strategies (GSs)

• Define competitive advantage (CA)
• Know the relationship between CA and core
  competencies.
• Define Porters generic strategies (GSs)
• Know Porters recommendation regarding the GSs.
• Know the relationship between Porters GSs and
  CA.
• Define best cost provider
• Know the proposed relationship between a best
  cost provider and CA.
• Decide whether you think Porters recommendations
  should be followed.

44
Define Competitive Advantage (CA) Relate to
Core Competence

• CA A fairly SUSTAINABLE advantage over
  competitors resulting in above average
  performance
• Relationship

Strategy Selection
Competitive Advantage
Core Competence
45
Define Porters GSs

• Differentiation The product or service is
  unique. Appeals to a broad segment of the market
  because of superior features or attributes. May
  cost more to produce but company can charge more.
• Low cost provider The product or service is
  basic. Appeals to a broad section of the market.
  The company has a lower cost structure than all
  rivals.
• Focus Focuses on a narrow customer group and
  differentiates its offering based upon the unique
  needs of that group or is able to develop a lower
  cost structure due to unique attributes of that
  group.

46
Porters Recommendations Regarding GSs

• Use just 1 GS
• All efforts towards 1 GS.
• Zero tradeoffs
• Avoid stuck in middle.
• Occasionally can find win win advance in more
  than one strategic direction

47
The Relationship between GSs and CA

• Passionately pursuing 1 GS ---gt CA.
• Superior profits
• Differentiation -- Higher price compensates for
  higher cost.
• Low cost - Same price as competitor but bigger
  profit margin or lower price same margin per unit
  but more volume so greater profits.
• Focus -- Either of the above but characteristics
  of segment allows.
• Different skills core competencies
• Differentiation
• Low cost
• Focus
• Relationship

Different GSs
Competitive Advantage
Different Core Competence
48
10 Auction

• Playing for real money!!!! If you are not
  willing to possibly lose money do not become
  involved!!!!!!
• Absolutely no talking once bidding begins. Use
  hands to indicate bids.
• Bidding starts at 50 cents and increases in
  increments of 50 cents.
• You cant bid twice in a row.
• The highest bidder will get the 10 but must also
  give me their bid.
• The second highest bidder must pay me what they
  bid.

49
The Relationship between GSs and CA

• In part, to gain CA
• Signal
• Retaliate
• Resources in one direction
• Be only one seriously competing in that way.
• Develop unassailable position.

50
Best Cost ProviderDef Relationship to CA

• Def Product or service is not unique and is not
  basic. Represents a better value than competitive
  products. Lower price for similar benefits or
  same price for more benefits. Company must have
  cost advantage over CLOSE compets. This strategy
  was not mentioned by Porter in his original work.
• Book says can lead to CA. Greater market share,
  possible more profits per unit.
• What would Porter say? Why?

51
LO ODI

• Know advantages and disadvantages of first
  moving.
• Know factors that make innovations harder and
  easier to adopt.
• Be able to do a break-even analysis based upon
  fixed cost, variable costs, and price.
• Be able to calculate amount of customer
  benefits in ODI case

52
ODI

• 1. What factors about the product and market
  would make it easier to convince farmers to adopt
  the lenses. (Think in terms of the nature of the
  product, generalizations about farmers, etc.)
• 2. What factors would make it harder to convince
  farmers to adopt the lenses? (Objections one may
  have to overcome, nature of the product,
  generalizations about farmers, etc)
• 3. Why might it be easier or harder for the
  market to accept this product than it would be
  for market, in general, to accept new products,
  in general?
• 4. What are the benefits of being THE FIRST to go
  ahead with the contact lenses. Why would one want
  to beat the competition?
• 5. What are the drawbacks of being THE FIRST? Why
  would one choose to wait to introduce the
  product?
• 6. Given the assumptions of the case, how many
  lenses would ODI have to sell in year 1 to break
  even?
• 7. What specific dollar amount does the
  farmer gain per chicken per year if they adopt
  the lenses?
• 8. Which generic strategy would you follow in
  year 1? WHY? What specific strategy would you
  follow? Sell to whom, where, how big a market?
  WHY?

53
Test 1 About 30 to 35 multiple choice questions
60 of test(About 10 to 15 of which
will be on readings)4 essay questions
40 of test Learning objectives from READINGS
for the first exam. (To avoid thinking about the
wrong article when asked a question on the test,
it might be helpful to be familiar with the names
of the articles) The articles on mission
statements make some recommendations regarding
who should be involved in developing a mission
statement --- make sure that you are familiar
with their recommendations. From page 93 and
94, understand the three ways in which a five
force analysis might influence the formulation of
strategy. Make sure you have an in-depth
understanding of each way. What are the four
things that lead to sustainability (pages 64-68)?
Make sure you understand each.  Within each
primary and support activity there are three
activity types that play a different roll in
competitive advantage. (Page 81-82). Be familiar
with each. On pages 85 and 86 understand what
the article means by vertical linkages. From
page 121, know the common required skills and
resources and common and the common
organizational requirements for each generic
strategy. On pages 123 and 124 know the risks
associated with each generic strategy. On page
128-129 know the conditions that lead to pure
strategies and the conditions that lead to mixed
strategies. From pages 97 to 107, be able to
describe the characteristics associated with each
of the competitive environments (emerging, high
velocity, maturing, stagnating, and fragmented
industries) and strategies for competing in each.
 Be able to distinguish between multicountry
and global strategies (pages 109 and 110). 
54
 Multiple choice questions relating to lectures
for the first exam. Multiple choice questions
will relate to the learning objectives. Essay
Topics For Exam 1 Rules for essays requiring
that you come up with a business example 1) The
example should not be something used in class or
book2) The example should be unique. Essay
question 1 Use a SWOT analysis to determine a
strategy to reach a personal goal that is
important to you. If you have done this in
advance it can be turned in with the test.
Follow the same format used on the sheet
describing Magnum's strategy. Only include 1
opportunity, 1 threat, 1 strength, 1
weakness. Essay question 2 Essay question 2
will be about 1 of the items below. (You will
learn which at the time of the exam). For all of
the items below, use an actual company or
industry in your example. Also to receive full
credit, your example should come from a
newspaper, magazine or Internet article which is
less then 2 months old. Although the article does
not need to use the same terminology that the
class used, it should illustrate the general
concept. Feel free to be creative. You will also
need to include the article with your test. DO
NOT WRITE (OR TYPE) ON THE ARTICLES prior to the
test. Since you do not know which of the above
items will be on the test, to be fully prepared,
you need to bring in articles for each of the
items below.  Provide an example of
fit.Provide an example of feedback.Provide
examples of key success factors.Provide an
example of an industry specific ratio.Provide an
example of synergy. Essay question 3 You will
be asked to do a break-even analysis. Essay
question 4 will reflect one of the four items
below. Relate the value chain to an actual
company. Be able to identify and explain each
part of the value chain.Reconstruct the
strategic management model developed in class
Including being able to give an example of each
part.Use an example to illustrate the
relationship between core competence (Know traits
of core competence according to lecture),
strategy and competitive advantage.Conduct a
five force analysis for an actual industry. Be
able to mention two underlying factors for each
force and explain how they affect the force. 
55
Take Home Exam Question.  Conduct a SWOT
analysis to determine a strategy to reach
whatever personal goal is important to you. You
may not, however, choose for your goal, landing a
job, getting a promotion, losing weight, getting
in better shape, or graduating. Only list one
opportunity, one threat, one strength, and one
weakness. You will be graded on writing style
(which includes how clearly you label your
answer) as well as content. The example below
includes the format you should use to answer the
question. Example How might Magnum use a SWOT
analysis to form a strategy to achieve a personal
goal. Assume Magnum is caught on a dessert island
with a 12 foot tall villain who wants to kill
him. Step 1 List the goal and indicate a
strength, weakness, opportunity and
threat. Goal To continue to live. Strength
A very good swimmerWeakness Magnum's small
sizeOpportunity Mainland is 1/4 mile
away.Threat Villain with a club Step 2
Choose a strategy Magnum should swim to
shore. Step 3 Defend your choice by showing
how your strategy utilizes or maximizes the
importance of the strength and opportunity and
avoids or minimizes the importance of the
weakness and threat. Swimming to shore utilizes
Magnum's superior ability to swim thereby
maximizing his strength.Swimming to shore allows
Magnum to reach the mainland, thereby maximizing
the opportunity that it is only 1/4 mile
away.Swimming to shore minimizes the importance
of Magnum's weakness because being large does not
make one a better swimmer. Swimming to shore
minimizes the importance of the villain's club
because he will not able to hold on to it while
swimming after Magnum.
56
LO Strategic Treatment of Conclusions from 5
Force Analysis

• Know why one does a 5 force analysis
• Know 3 strategies firms can select to contend
  with low industry profitabilty
• Know 3 strategies firms can select to contend
  with strong forces
• Know 3 strategies firms can select to contend
  with important underlying factors

57
Strategic Treatment of Conclusions from 5 Force
Analysis

• Conclusion Potentially low industry
  profitability
• Strategic Treatment
• Avoid industry
• Diversify
• Locate profitable operating environment
• Conclusion A strong force is ...
• Strategic Treatment
• Emphasize in planning
• Locate operating environment where force is
  weaker
• Develop strength to contend with force
• Conclusion The most imporant underlying factor
  is...
• Strategic Treatment
• Change underlying factor
• Develop relevant strength to contend with
  underlying factor
• Locate operating environment where underlying
  factor is less important

58
LO The Grand Strategies

• Know the difference between generic strategies
  and grand strategies.
• Know which of the grand strategies are corporate
  level and which are business level.
• Know how to define and identify (distinguish
  between) each of the grand strategies.
• Know some of the advantages and disadvantages of
  each of the grand strategies.

59
Difference between Generic and Grand Strategies

• Grand strategy more specific.
• Generic strategy guides choice of grand strategy

60
Grand Strategies Distinctions, Level, Adv.
Disadv.

• Apple develops first micro-computer
• 3M develops the post -it note pad
• Coke acquires bottling facilities (or builds own)
• A major oil company moves into retail gas
  stations
• Stu Leonard Dairy Market opens salad bar and
  starts selling ribs
• Pepsi splits from restaurants operations.
• Agilent and Hewlett Packard
• KFC advertises When did you last have KFC? Have
  some today.
• Skin so soft sells their skin softener as a bug
  repellent
• GM and Toyota get together to produce the Geo
• Kmart and Yahoo launch internet site
• Iacocca takes over Chrysler stops producing
  larger cars
• A cigarette company, Philip Morris buys Miller
  beer.
• A Maine ski resort buys a company that repairs
  air-conditioners in Florida
• Diamler Benz buys Chrysler
• Eastern Airlines-Sells shuttle to Trump, routes
  to Delta and Continental and planes to other
  companies. Eventually they close their doors.

61
LO CITA

• What general factors lead to the formation of a
  new venture?
• What critical success factors are important to
  new ventures
• How did the remote environment influence CITA
• What were the differences and difficulties of
  dealing with diverse cultures.
• How can several concept be used to help CITA
  choose a product line.

62
LO Wendys

• What were key environmental considerations in the
  fast-food industry at the time Wendy's entered
  the market?
• What was Wendy's early strategy/objectives/mission
  ?
• Which of Porter's generic strategies was Wendy's
  following, early in the case?
• Evaluate Wendy's early strategy.
• What were Wendy's functional strategies?
• How did Wendy's functional strategies relate to
  their strategy?
• How did functional strategies support each other?
• Why did Wendy's change from it's initial
  strategies?

63
Implementation Overview

• Functional strategies
• Support Strategy
• Support Each Other
• 7 S
• Strategy
• Staff
• Structure
• Skills
• Systems
• Shared values
• Style
• Institutionalizing the Strategy
• Controls

64
Paper 2. Due on the last day of class.  Find
business articles, less than 8 months old, about
companies that illustrate the grand strategies.
You need to use one article per strategy. The
article does not need to use the same terminology
as the class. Highlight or underline the two
sentences in the article that most clearly
reflects the strategy chosen. Although the paper
should be understandable even if someone has not
read the article, you still must include the
article with your paper. You will be graded on
writing style, as well as, content. The
assignment must be typed. You may NOT help each
other finding articles. 1) Write one or two
paragraphs that clearly explains why you think
the article illustrates the strategy you have
chosen. Be very specific. 2) As per our class
discussion, clearly indicate one of the major
advantages (i.e., an advantage mentioned on the
overhead) and one of the major disadvantages
(i.e., a disadvantage mentioned on the overhead)
typical of that strategy. 3) Explain how the
advantage and disadvantage apply to your example.
Be very specific. Normal Assignment If you
turn in 11 of the grand strategies, you may earn
up to a maximum of 40/40 pointReduced
Assignment If you turn in 7 of the grand
strategies, you may earn up to a maximum of 30/40
points.  Do not count combination strategies
as one of the grand strategies!
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TEST 2KNOW LEARNING OBJECTIVES FROM CLASS
LECTURES SINCE THE MID-TERM. About 30 multiple
choice questions 60 of test (90 pts)(About 8
will be from readings, 19 on lecture material
since the last exam and 3 questions from pages
97 to 107 (Be able todescribe the
characteristics associated with each of the
competitive environments (emerging, high
velocity, maturing,stagnating, and fragmented
industries)and strategies for competing in
each).4 essay questions 40 of
test (60pts) Essay Question 1 There will be
one essay question on one of the topics
below.A) Apply the three tests of a
diversification move. Use a real company in your
example (although, the company does not actually
have to be diversifying). Your example should be
unique. What outcome is needed for the test to
suggest that the move will enhance shareholder
value. Your answer should clearly indicate that
you understand what each of the tests of
diversification is. Your answer should be at
most 7 seven sentences. B) Give two examples
from the Wendys case illustrating how functional
strategies supported business level strategies
and two examples of how strategies from different
functional areas supported each other. C) Using
concepts from the lecture build a case that CITA
should pursue the glazed mosaics. Find at least
one reason why you would not blindly follow the
analysis! Essay Question 2 The instructor
mentioned several policies that might lead him to
achieving his goal of having members of his
entrepreneurship class who are not members of a
specific group provide feedback to other groups
in the class on that group's project. A) What
ONE change could lead the instructor to achieve
this goal. Justify your answer and make sure
your answer relates to the seven "S" model. This
answer should be no more than two sentences
max.B) I will ask how you might adjust or
change an S to help achieve the instructor's
goal. I will specify which S during the exam.
Make sure your answer clearly indicates that you
understand the definition of the S. Your answer
to part B does necessarily imply that this is the
only change that you would make.  
66
TEST 2 ContinuedEssay Question 3 To
successfully implement a strategy, all aspects of
the company and the company's environment should
"fit" together. Collectively, the Rothchilde
article and the Deshpande article suggest that
BCG quadrants (e.g., dog, cash cow, question mark
or star), type of leaders, cultures, strategies,
and industry lifecycle stages should all fit
together (see attached sheet). For the exam be
ready to justify the articles choices of how
specific types of leaders, cultures, strategies,
industry lifecycle stages and quadrants fit
together -- I will specify which quadrant at the
time of the exam. This question MAY be open
note. Your answer should be no more than 7
sentences max. Essay Question 4 This question
will require that you use the "Competitive
Advantage to Corporate Strategy" and the
"Corporate Strategy Quest for Parenting
Advantage" articles to analyze BD's
diversification strategies. The specific
question(s) will be a subsection of the questions
asked on the handout on BD (See next page). Also
see the handout for more specific grading
criteria. This question(s) MAY be open note. You
will have a total of one half hour to answer
essay questions 3 and 4. Multiple Choice
Questions from Readings Be able to define each
of the concepts of corporate strategy and know in
general how effective the article thinks each of
the strategies usually is. (page 157 to page
166). Know what managers' biggest mistakes are
when diversifying according to page 179. Know
the questions one should ask when assessing a
business strategy (page 182). Know entire
reading on Designing Organizational Structure
(Beginning on page 532)  Other multiple choice
questions from the readings will relate to issues
studied in preparation for the essay questions.
67
Essay Question 4 Further details. Certain
question(s) on the final will be identical or
very similar to the ones below (and will account
for a significant amount of points on the
final). You may only discuss these questions
with students currently enrolled in Prof. Simon's
MGT 435 class. While you may take notes on what
your class members say, you may not copy or get
any written or typed material from your
classmates. You may ask the instructor to
clarify any of the questions below. A MAJOR part
of the grading of the essays will reflect how
well students used concepts within the
Competitive Advantage to Corporate Strategy and
the Corporate Strategy Quest for Parenting
Advantage articles to analyze BD's
diversification strategies. 1) Was Black and
Decker's acquisitions of GE's houseware division
a good idea? To answer this question you should
discuss whether you think the acquisition meets
the three tests of adding value (As discussed in
today's lecture and the article "Competitive
Advantage to Corporate Strategy"). Why or why
not? (While all three tests should be discussed,
pay special attention to the better-off test).
Also justify your answer by discussing which one
of the four corporate strategies (As discussed in
the lecture and the article Competitive Advantage
to Corporate Strategy) the GE acquisition
represents? Why? You may also argue that the
diversification efforts reflected more than just
one strategy. Finally, use may be asked to use
the concepts in the "Corporate Strategy Quest
for Parenting Advantage" article to determine
where on the parenting-fit matrix the
acquisitions would be placed to justify your
answer.  2) Was the Emhart Corporation
acquisition a good idea? Make sure your answer
to this question addresses the issues mentioned
above. In the case of Emhart, you may want to
argue that some of the specific units acquired
were a good idea and others were not (If you wish
to make this point just discuss two of the units
in detail). Do make sure to draw an overall
conclusion, however.  Criteria I will use in
grading the answers for the exam A. Correct
and appropriate use of concepts.B. Superior
answers will utilize detailed ideas and tools in
the articles that underlie the main concepts
(e.g., if asked about the three tests, students
should apply some of the ideas in the article
that help determine if an acquisition passes a
given test).C. While you may discuss some post
hoc results to support you points, this should
not be the major thrust of your answer.
Primarily use information that was available at
the time of the acquisitions. You may also make
REASONABLE assumptions but make sure you clearly
state them.
68
LO Seven Ss

• Be able to define each S
• Be able to give an example of each S
• Understand Major Points of 7 S Model

69
Define Example of 7 S

• Strategy-The plan to achieve objectives, mission
  --- How?
• Staff - People
• Hard --Pay Scales, Formal training, Selection,
  Etc
• Soft--Morale, Attitudes
• Structure-- How to divide and coordinate tasks
• Skills--What firm does best
• Systems--Formal and informal procedures that make
  org go
• Shared values-Culture-Beliefs, Traditions, and
  Operating style.
• Style-Top level- Leadership.

70
LO Staff, Structure Skills

• What are elements of staff
• Relate staff to a companys strategy
• What are elements of structure
• Know the three rules of structure
• Relate structure to a companys strategy
• Relate skills to concepts in prior parts of
  course.
• Relate skills to a companys strategy

71
LO Systems, Shared Values, Style

• Types of systems
• Types of reward systems major message
• Relate systems to a companys strategy
• Know the importance of shared values (Culture)
• How to identify shared values
• How to manage culture
• Relate shared values to a companys strategy
• Why listen?
• Relate style to a companys strategy

72
Shared Values

• Importance
• very --- esp to implim.
• How identified
• Shared stories
• Org winners
• How to manage culture
• Set example
• Get dominant core
• Relate culture to strategy