STRATEGIC MANAGEMENT
SEMINARS
October 13, 2011
Week 1
Our goal? Practice all steps of strategic
planning process
• Choose a company for which to formulate a strategic business plan
• Identify / formulate:
- mission statement – framework w/in which strategy
shall be crafted
- corporate vision – where do we want to be in # years
- business aims -> specific objectives
• Scan the environment – carry out external, internal & industry
analysis -> situational analysis
-> Internal analysis - core business & competencies, resources
available, corp. structure, required inputs,
corp. culture
=> IFAS (Internal Factor Analysis Summary)
Our goal? Practice all steps of strategic
planning process
• Environment scanning cont’d:
-> External analysis - PEST(LE) => EFAS (External Factor Analysis
Summary)
- Industry Analysis (task environment):
-> Porter’s Five (Six) forces => Industry Matrix
- Situational Analysis – finding a strategic fit b/w external opportunities & internal strengths
- mitigating harmful effects of external threats
due to internal weaknesses
=> SFAS (Strategic Factor Analysis Summary) => SWOT analysis
Strategic Management Model
Existing
Existing business model
Mission, vision, goals, objectives, corp.
values
External
analysis ->
opportunities,
threats
SWOT =>
Strategic
choice
Functional-level strategies
Business-level strategies
Corporate-level strategies
Strategy implementation
Internal
analysis ->
strengths,
weaknesses
Strategic Management Cycle
Which sector? What company? … your
choice
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http://www.top500.de/g0037200.htm
http://www.europages.co.uk/
http://www.hbi.cz/index.php?Lang=en
http://www.hoovers.com/
http://www.marketresearch.com/
http://www.business.com/
http://www.expats.cz/directory/#482
http://www.rusmarket.com/
http://www.thomasnet.com/
http://no1construction.com/
http://dir.yahoo.com/business_and_economy/directories/companies/
Which companies do these mission statements
represent?
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"To experience the joy of advancing and applying technology for the
benefit of the public“
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"To build a place where people can come to find and discover anything
they might want to buy online."
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"To produce high-quality, low cost, easy to use products that incorporate
high technology for the individual. We are proving that high technology
does not have to be intimidating for non-computer experts.
Mission statement
Kodak vs. Polaroid
KODAK:
“We will build a world-class, results-oriented culture based on our six key
values:
- respect for the individual, uncompromising integrity, trust, credibility,
- continuous improvement and personal renewal
- recognition and celebration of achievement
through which we will grow more rapidly than our competitors by providing
customers and consumers with solutions they need to capture, store, process,
output and communicate images to people and machines anywhere,
anytime.”
POLAROID:
“… to put the latest cutting edge technology in the peoples’ hands and give
them the power to use it comfortably, affordably… and in an
instant.”
Mission statements
Take a wild guess
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BMW vs. Mercedes
McDonalds vs. KFC
IBM vs. Apple
Acer vs. Dell
Google vs. Yahoo
Mission statement samples
BMW:
"The BMW Group is the world's leading provider of premium products and
premium services for individual mobility.“
Mercedes:
“We invented the automobile - now we are passionately shaping its future. As
a pioneer of automotive engineering, we feel inspired and obliged to continue
this proud tradition with groundbreaking technologies and high-quality
products.”
Mission statement samples
McDonalds:
“to provide the fast food customer food prepared in the same high-quality manner
world-wide that is tasty, reasonably-priced & delivered consistently in a low-key décor
and friendly atmosphere."
KFC:
“to sell food in a fast, friendly environment that appeals to pride conscious, health
minded consumers.”
Mission statement samples
IBM:
"At IBM, we strive to lead in the invention, development and manufacture of the
industry's most advanced information technologies, including computer systems,
software, storage systems and microelectronics.
We translate these advanced technologies into value for our customers through
our professional solutions, services and consulting businesses worldwide."
Apple:
"To produce high-quality, low cost, easy to use products that incorporate high
technology for the individual. We are proving that high technology does not have to
be intimidating for noncomputer experts."
Mission statement samples
Dell:
"To be the most successful computer company in the world at delivering the best
customer experience in markets we serve.“
Acer:
"Measuring and tracking the effects of climate change demands accurate reporting.
ACER believes in a grassroots approach - utilizing citizen scientists to conduct such
measurement in a scientifically sound manner.”
Mission statement samples
Google:
“Google’s mission is to organize the world‘s information and make it universally
accessible and useful.”
Yahoo:
1. “To connect people to their passions, communities, and the world’s knowledge.”
2. "Yahoo's mission is to be the most essential global Internet service for consumers
and businesses."
Mission statements – conclusion?
Questions to consider
• Why are some mission statements similar?
• Why do they look so broad or general?
• Would it pay to narrow a mission statement down?
Your task
• For the company of your choice, formulate a mission
statement in your own words based on your current
knowledge about the company.
• Identify the mission statement based on your research.
Corporate vision
McDonalds:
“… be the world's best quick service restaurant experience. Being
the best means providing outstanding quality, service, cleanliness, and value, so that
we make every customer in every restaurant smile.“
Toyota:
"To become the most successful and respected lift truck company in the U.S.”
Avery Dennison :
"To be recognized as the world's best coating and converting company by providing
innovative decorating, information transfer and bonding solutions that enable our
customers' success.“
- Manufacturing pressure sensitive labeling materials, retail apparel ticketing, graphics
imaging media , office products, specialty tapes
Corporate vision
Your task
• Identify the corporate vision for your company
• Can be found directly in the vision statement or derived from a mix
of information provided by top management.
• Will be subject to re-evaluation / reconsideration after SWOT
analysis based on EFAS, IFAS, and SFAS are performed
Progress check
External analysis
• Socio-economic (societal) environment – PEST(LE) analysis
- analyzing general forces that do NOT directly affect business
activities in the short-run BUT they DO influence long-term
decisions
- i.e. forces that regulate the exchange of materials, energy, money,
and information
• Task environment –> industry analysis (Porter’s 5 forces)
External analysis – Macro-environment ->
PEST(LE)
How do economic factors affect our business in the
“world of tomorrow, NOT today”?
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GDP trends
Interest rates
Currency exchange rates
Inflation rates
Money supply
Level of unemployment
Wage/price control
Energy availability and costs
Disposable and discretionary income
Devaluation/revaluation
External analysis – Macro-environment ->
PEST(LE)
How do economic factors affect our business in the
“world of tomorrow, NOT today”?
• Higher GDP => higher consumer expenditures => alleviating
competitive pressures w/in industry => potential for expansion =>
=> higher profits => OPPORTUNITY
• Fall in GDP => lower profits => price wars due to market saturation
• Higher interest rates => borrowing becomes more expensive =>
FMCGs go unaffected (nearly) => THREAT
=> drop in demand for housing
=> fall in demand for cars, home appliances, capital equipment
=> higher cost of company’s capital => less able to raise funds to
invest in new assets
External analysis – Macro-environment ->
PEST(LE)
How do economic factors affect our business in the
“world of tomorrow, NOT today”?
• Exchange rates
- e.g. Czech company with majority of sales & revenues derived
from trade with customers in Euro-zone
- cheaper Euro => lower revenues after conversion to CZK holding
sales constant => THREAT
- cheaper USD against Japanese Yen => 240 Yen/USD down to
85 Yen/USD => increase in price of imported goods from Japan
(e.g. cars) => protection against competition from abroad =>
=> OPPORTUNITY
External analysis – Macro-environment ->
PEST(LE)
How do economic factors affect our business in the
“world of tomorrow, NOT today”?
• Price inflation => destabilization of economy => economic growth
slowing down => e.g. unstable currency => difficult/hazardous to
engage in investment planning => THREAT
-> real value of future returns becoming uncertain – long-term
projects
• Price deflation => real price of fixed payments goes up => harms
companies w/regular fixed repayments of debt => THREAT
=> lower discretionary income
External analysis – Macro-environment ->
PEST(LE)
How do economic factors affect our business in the
“world of tomorrow, NOT today”?
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“Boeing” sample problem
“Exchange rates” example
“Prices of inputs” example
“Industrial production level” example