Bus 411
DAY 10
Agenda

Assignment #3 not corrected




Assignment #4 assigned this class
Templates available in WebCT
Discussion on Mid-term will be after Spring Break




Still waiting for submissions
Chapters 1-9
Take home
Intense
Finish Discussion on Strategy Analysis and choice
Strategy-Formulation Analytical
Framework
SWOT Matrix
SPACE Matrix
Stage 2:
The Matching Stage
BCG Matrix
IE Matrix
Grand Strategy Matrix
IE Matrix



The IE Matrix positions an organization’s various
divisions in a nine-cell display illustrated in Figure 610.
The IE Matrix is similar to the BCG Matrix in that
both tools involve plotting organization divisions in a
schematic diagram; this is why they are called
portfolio matrices.
Differences between the IE Matrix and the BCG
Matrix



Axis are different.
IE Matrix requires more information about divisions than
BCG.
Strategic implications of each matrix are different.
IE Matrix
IFE Scores
Average
2-2.99
Strong
3-4
EFE
Scores
High
3-4
Medium
2-2.99
Low
1-1.99
Weak
1-1.99
I
II
III
IV
V
VI
VII
VIII
IX
Strategy-Formulation Analytical
Framework
SWOT Matrix
SPACE Matrix
Stage 2:
The Matching Stage
BCG Matrix
IE Matrix
Grand Strategy Matrix
Grand Strategy Matrix
Tool for formulating alternative strategies
Based on two dimensions
Competitive position
Market growth
RAPID MARKET GROWTH
1.
2.
3.
4.
5.
6.
WEAK
COMPETITIVE
POSITION
1.
2.
3.
4.
5.
Quadrant II
Market development
Market penetration
Product development
Horizontal integration
Divestiture
Liquidation
1.
2.
3.
4.
5.
6.
7.
Quadrant III
Retrenchment
1.
Concentric diversification
2.
Horizontal diversification
3.
Conglomerate
diversification
4.
Liquidation
SLOW MARKET
Quadrant I
Market development
Market penetration
Product development
Forward integration
Backward integration
Horizontal integration
Concentric diversification
Quadrant IV
Concentric diversification
Horizontal diversification
Conglomerate
diversification
Joint ventures
STRONG
COMPETITIVE
POSITION
GROWTH
Ch 6 -8
Grand Strategy Matrix
Quadrant I
Excellent strategic position
Concentration on current markets/products
Take risks aggressively when necessary
Grand Strategy Matrix
Quadrant II
Evaluate present approach
How to improve competitiveness
Rapid market growth requires intensive
strategy
Grand Strategy Matrix
Quadrant III
Compete in slow-growth industries
Weak competitive position
Drastic changes quickly
Cost & asset reduction (retrenchment)
Grand Strategy Matrix
Quadrant IV
Strong competitive position
Slow-growth industry
Diversification to more promising growth areas
Strategy-Formulation Analytical
Framework
Stage 3:
The Decision Stage
Quantitative Strategic
Planning Matrix
(QSPM)
QSPM
Quantitative Strategic Planning Matrix
Technique designed to determine the relative
attractiveness of feasible alternative actions
Six steps to developing a QSPM:
1.
2.
Make a list of the firm’s key external opportunities/threats and
internal strengths/weaknesses in the left column of the QSPM.
Assign weights to each key external and internal factor.
1. Weights for each category should add up to one
3.
Examine the Stage 2 matrices and identify alternative
strategies that the organization should consider implementing.
4. Determine the Attractiveness Scores (AS).
5. Compute the total AS.
1. Weight * AS
6. Compute the sum Total AS.
Strategic Alternatives
QSPM
Key External Factors
Economy
Political/Legal/Governmental
Social/Cultural/Demographic/
Environmental
Technological
Competitive
Weight
Strategy 1
Strategy 2
Strategy 3
Key Internal Factors
Management
Marketing
Finance/Accounting
Production/Operations
Research and Development
Computer Information
Systems
Ch 6 -16
QSPM
Limitations
Requires intuitive judgments & educated
assumptions
Only as good as the prerequisite inputs
QSPM
Advantages
Sets of strategies considered simultaneously or
sequentially
Integration of pertinent external & internal factors in
the decision making process
Cultural Aspects of Strategy
Choice
Organization Culture
Successful strategies depend on the degree of
consistency with the firm’s culture
Politics of Strategy Choice
Politics in Organizations
Management hierarchy
Career aspirations
Allocation of scarce resources
Successful Strategists :

Were found to let weakly supported ideas
and proposals die through inaction and to
establish additional hurdles or tests for
strongly supported ideas considered
unacceptable but not openly opposed.
Politics of Strategy Choice
Political tactics for strategists
Equifinality
Same outcomes by different means
Satisfying
Good results with acceptable strategy is better than excellent results with an
unpopular strategy
Generalization
Less detail
Higher-order issues
Take cars of the big stuff first
Political access on important issues
Agency and political avenues for redress
Governance Issues
Board of Directors Roles & Responsibilities
Control & oversight over management
Adherence to legal prescriptions
Consideration of stakeholder interests
 Advancement of stockholder rights
Corporate Governance Issues
Business Week’s “principles of good governance”
1. No more than 2 directors current or former company executives
2. No directors do business with the company
3. Audit, compensation, and nominating committees made up
of outside directors
4. Each director attends at lest 75% of all meetings
5. Audit committee meets at least four times a year
6. CEO is not also the Chairperson of the Board
7. Shareholders have considerable power and information to
choose & replace directors
8. Stock options are considered a corporate expense
9. No interlocking directorships
Chapter 7
Implementing Strategies: Management &
Operations Issues
Strategic Management:
Concepts & Cases
10th Edition
Fred David
PowerPoint Slides by
Anthony F. Chelte
Western New England College
Chapter Outline
The Nature of Strategy Implementation
Annual Objectives
Policies
Chapter Outline (cont’d)
Resource Allocation
Managing Conflict
Matching Structure with Strategy
Chapter Outline (cont’d)
Restructuring, Reengineering & E-Engineering
Linking Performance & Pay to Strategies
Managing Resistance to Change
Chapter Outline (cont’d)
Managing the Natural Environment
Creating a Strategy-Supportive Culture
Production/Operations Concerns When
Implementing Strategies
Chapter Outline (cont’d)
Human Resource Concerns When
Implementing Strategies
Implementing Strategies
Pretend that every single person you meet
has a sign around his or her neck that says,
“Make me feel important” –
Mary Kay Ash, CEO of Mary Kay, Inc.
The Nature of Strategy
Implementation
-- Successful strategy formulation does not
guarantee successful strategy implementation
Nature of Strategy
Implementation
Formulation vs. Implementation

Formulation positions forces before the action

Implementation manages forces during the
action
Nature of Strategy
Implementation
Formulation vs. Implementation

Formulation focuses on effectiveness

Implementation focuses on efficiency
Nature of Strategy
Implementation
Formulation vs. Implementation

Formulation primarily an intellectual process

Implementation primarily an operational
process
Nature of Strategy
Implementation
Formulation vs. Implementation

Formulation requires good intuitive & analytical
skills

Implementation requires special motivational &
leadership skills
Nature of Strategy
Implementation
Formulation vs. Implementation

Formulation requires coordination among a
few individuals

Implementation requires coordination among
many individuals
Nature of Strategy
Implementation
Strategy Implementation

Varies among different types & sizes of
organizations
Assignment Four


Use templates provided in assignment and in
WebCT
Due Before Spring Break


In my possession prior to 3:30PM Friday,
February 25
20 points off for each day late and I will not be
checking during break so if I get it after break, it
will be a zero.