BUSN 489: STRATEGIC MANAGEMENT

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BUSN 489 STRATEGIC MANAGEMENT

• WELCOME!!
• Dr. Karen Froelich

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TODAYS AGENDA

• INTRODUCTIONS
• - Class participants
• - Strategic management Chapter 1
• SYLLABUS, expectations . . .
• QUESTIONS? ANSWERS?

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Term Project Topics

• 1. Coach
• 2. Gilead Sciences
• 3. Allegheny
• Technologies
• 5. Questar
• 7. Colgate-Palmolive
• 9. Abercrombie Fitch
• 10.Memc Electronic Materials
• 12.C.H. Robinson Worldwide
• 14.United Health Group

• 17.Robert Half
• International
• 18.Avon Products
• 19.Cognizant
• Technology Solutions
• 24.Rockwell Collins
• 25.Nucor
• 27.ATT
• 30.Bed, Bath Beyond
• 40.Sherwin-Williams
• 43.Titanium Metals
• 47.TJX
• 50.ExxonMobil

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What key factors influence the success of a
business?

• Jot down FIVE (5) factors
• that you feel have strong influence
• in the ultimate success of a
• (business) organization.

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2 models (theories) of how to best achieve
above-average returns
1. Industrial-organization model 2.
Resource-based model
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WHAT IS STRATEGIC MANAGEMENT?

• DISTINGUISHING FEATURES . . . .

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WHAT IS STRATEGIC MANAGEMENT?

• MAJOR TOPICS/DECISIONS . . . .

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Which of the following clearly represents a
strategic decision?
1. Ingersoll-Rands sale of Bobcat to Korean
firm 2. Hornbachers canvas shopping bags 3.
Bison athletics fall promotion campaign 4. NDSU
downtown campus 5. Targets sale of Marshall
Fields globalization? 6. New compensation and
benefit plans
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WHAT IS STRATEGIC MANAGEMENT?

• THE STRATEGIC DECISION-MAKERS . . . .

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Strategic Management Process
Involves the full set of
Actions
Commitments
Decisions

formulation
implementation
which are required for firms to achieve
Sustained Competitive Advantage
Above-Average Returns
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Without strategic management the organization is
like a ship without a rudder. Ross and Kami,
strategy consultantsUnless we change our
direction we are likely to end up where we are
headed. Ancient Chinese proverb

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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 version continued
parts version of the firms ? new
planned parts of the strategy new
emergent parts firms ?
strategy adaptive reactions
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Increasing pace of organizational adaptation due
to
HYPERCOMPETITION (the new competitive
landscape, according to our text)
? ? ______________ _____________
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Due to hypercompetition,

• competitive advantages are less sustainable over
  time
• an organization must become
• POISED FOR CHANGE, while still
• formulating and implementing
• planned strategies

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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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• 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, in a compelling
  and memorable way

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Mission Statements

• Three essential components
• 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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Target market (BUSN 360 review!)
Ways to delineate various market segments?
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Phoenix International

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

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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
• the organizational compass directional guide
• ? an underutilized strategic tool ?

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strong culture firms?

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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 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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NDSU CoB values?

• Interpersonal accessible
• Non-hierarchical respectful
• Conscientious
• Resourceful
• Frugal
• Participative governance
• For the good of the whole

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

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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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Mission Statements

• SO WHAT?
• WHO CARES?
• WHY?

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Vision and Mission ? ? 1.External
analysis 2.Internal analysis ?
? Opportunities threats Strengths
weaknesses Key success factors
Distinctive competence ?
? Strategy 4.Social ? ?
?3.Managerial responsibility values Implementat
ion ? Sustainable competitive advantage Above
average returns
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Role of social responsibility

• To anticipate and meet social expectations.
• To look out for the long-term interests of
  society, ABOVE AND BEYOND legal requirements
• To conduct business in a manner consistent with
  good corporate citizenship
• To balance the needs and expectations of a
  variety of stakeholders

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Stakeholders
stakeholder analysis identifying and
prioritizing key stakeholder groups anticipating
their opinions modifying strategic
decisions/actions as appropriate.
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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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A Stakeholder (SH) Analysis Tool
SH (priority) agree neutral disagree 1Customer
s X ____________________
____________________ 2Shareholders
X ________________________________________ 3Emplo
yees X
________________________________________ 4Inter
est
X Groups
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A Stakeholder Analysis Tool
high SH priority

low
high

SH interest
customers
Stockholders, employees
interest groups
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Issues involved with social responsibility . .
.

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Social Responsibility
So what? Who cares? Why bother? /-?
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Societal considerations An increasingly BIG DEAL
. . .

• Green to Gold, by D. Esty A. Winston
• how smart companies use environmental strategy
  to innovate, create value, and build competitive
  advantage
• The Triple Bottom Line, by A. Savitz K. Weber
  how todays best run companies are achieving
  economic, social and environmental success
• Kaplan Nortons Balanced Scorecard approach
  to organizational control (Chapter 12)

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Hit a home run? Cover 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?)