Strat Pol Midterm - David Kee

Chess is like _______ it is a ______ sport rooted in _____ & _______

strategy; competitive; art and science

As strategy relates to business, what is important:

strategy is everything; you must outthink your opponent

As strategy relates to business, how is science involved

It is measurable - all goals have numbers and are measurable

You can only manage that which you can measure

peter drucker

Business level strategy:

- An __________ and ________________ set of ________ ______ ______ a firm uses to gain a _______ _______ by exploiting _______ __________ in ____ ____ ___

integrated; coordinated; commitments and actions; competitive advantage; core competencies; specific product markets

Strategic Management - taking care of strategy

the _________ & __________ of ________, __________, __________cross-functional decisions that enable an organization to achieve its ______________________

art & science; formulating, implementing, evaluating; objectives

Why is strategic management best

Why strategic management is best?

- Covers both Strategic Planning and Strategic Policy

o Strategic Planning - part of strategy formulation

o Strategic Policy - strategy implementation

Strategic Planning

- part of strategy formulation

Strategic Policy

- strategy implementation

What does strategic management involve

- Tough management choices, among good alternatives, commitment to markets, policies, procedures and operations

Strategic Modeling: The stages of Strategic Management

1. Formulation

2. Implementation

3. Evaluation

Phase 1 - Strategy Formulation

-________ includes developing a ________ and _______ identifying an organization’s ________ ________ & _____________ determining ________ ______________ & ____________ establishing long term objectives, generating _________ ___________, and choosing _______ ____________ to pursue.

vision; mission; external opportunities and threats; internal strengths and weaknesses; alternative strategies, particular strategies

Strategy Formulation examples

What businesses enter/abandon, allocating resources, expanding or diversifying, merges and acquisitions, joint ventures, avoiding a hostile takeover, entering international markets

Phase 2 - Strategy Implementation

- Requires a firm to establish _________ _________, __________ ___________, ______ _________ and ___________ ____________ so that formulated strategies can be _________.

annual objectives, devise policies, motivate employees, allocate resources; executed

Often called "the action stage" where things happen

Strategy Implementation

No actions happen in the _______ stage

formulation

Phase 3 - Strategy Evaluation

Reviewing ____________ & _____________ _____________ that are the bases for current strategies, measuring ___________ and taking __________ ____________

- external and internal factors; performance; corrective actions.

There are 3 levels of strategy:

Corporate Strategy

Divisional Strategy

Business Unit Level Strategy

Corporate strategy is

economy oriented, Big picture, multi-level, hierarchical

Divisional strategy is

Market oriented

Business Unit Level Strategy

o Small Business level oriented

Strategic Management helps a firm function as a

competitive team

Competitive Advantage – Anything a firm does ________ well compared to____________ firms – not just other firms.

Especially; rival

Strategists

_____________ ____________ ________ for the success or failure of an organization. People focused on developing _____________.

individuals most responsible; strategies.

Examples of people who must be strategists

Small business owners must be, corporate executives, etc

circuit city

successful by selling TVs at a good time, then overspent and became outdated, focused on revenue over profit

cut a ton of employees-

The CFO had the ear of CEO

Cut 3500 sales people "most expensive" on the same day.

These managers were let go, and by 2008 (They did this March 28, 2007), they were filing for bankruptcy. Took 6-9 months to go out of business

Examples of poor decision makers

Blockbuster bypass Netflix

Kodak didn't go digital

David Kee's personal business trying to sell gelato

What does business failure show us

Lack of humility and professional will

Vision Statement:

Answers __________ "What do we _____ _____ _____ ",

question; want to become

Vision statement is often considered the

1st step of strategic planning

Vision statement looks to the ________, is ____________, and is how we ______ _________

future; internal; see ourselves

Mission statement

Enduring _______ _______ _________ ___________ one business from other _______ firms. Identifies the ________ of firm's ________ in ______ & ________ terms,

address basic ____________ faces all strategists -

_________ _________ ___________ ___________. (Seen as) - external how perceived.

statement of purpose; similar; scope; operations; product and market; questions; what is our business seen as - external how we perceived

Vision Statement:

an _________ statement describing the __________ of the company for the __________ of _________ & __________ __________ to the company

internal; future; purpose; inspiring & giving direction;

Mission statement

A ________ - ________ sentence which ________ to the ______ the __________, ___________, and __________ of the company

1-2; states; public; purpose, contribution, and distinction

What are important reasons for Mission and vision statements

- To make sure all employees/managers understand the firm's purpose or reason for being.

- To provide a basis for prioritization of key internal and external factors utilized to formulate feasible strategies.

- To provide a basis for the allocation of resources.

- To provide a basis for organizing work, departments, activities, and segments around a common purpose

Objectives

__________ results that an organization ________ ________ ________ in _________ its ____________ ____ for the ________ term

Specific; seeks to achieve; pursuing; basic mission; long

Objectives should be _______, ___________, _________, _________, and __________

challenging, measurable, consistent, reasonable, clear

SMART GOALS:

Specific, Measurable, Achievable, Relevant, Time-Bound

Strategies

the ___________ by which ________ term ___________ will be achieved

moves; long; objectives

Policies

the _____________ by which ___________ objectives will be achieved

means; annual

5 P'S of Coke

1. Profit

2. People

3. Portfolio

4. Partners

5. Planet

Industry Organizational Approach to competitive advantage

believes that ___________ factors are _______ important than _________ factors in a firm for __________ & __________ _______ _____________. An important part of an ________ ________ is __________ ___ ___________ __________

external (industry); more; internal factors ; gaining and sustaining competitive advantage.

external audit is identifying a rival firm

Core Competency

multiple ________ & _________ that _________ a firm in the _________ and therefore are the ________ of a company's ____________

resources and skills; distinguish; marketplace; foundation; competitiveness

Resource Based View

Approach _________ that ________ _________ are ____________ important for a ____________ than __________ factors in ________ & __________ _________ _____.

contends; internal resources; firm; external; achieving and sustaining competitive advantage

What is a GE Matrix

Compares (Y-Axis) Industry Attractiveness to Business Unit Strength (X axis)

goes toward the left on X-Axis

Ansoff Matrix

analytical tool devise various product and market growth strategies:

Market Present vs. Market Future & Product Present vs. Product Future

Does businesses want to market new or existing products in either new or existing markets.

In Ansoff Matrix

Market Penetration

Market Development

Product Development

Diversification

1. Market Penetration - Lowest risk - selling same products to the same types of customers (market/product present)

2. Product Devlopment - Medium Risk selling new products to Existing Customers (market present product future)

3. Market Development - Medium Risk - selling same products to new customers (Market Future/Product Present)

4. Diversification - highest risk - selling new products to new customers (Market Future/Product Future)

Difference Between Reengineering and Restructuring

Restructuring: tweaking what's already there, move things around, changing pieces not overall design. restructuring cost reduction; fire and hire new people; a defensive strategy; easier for people to handle this strategy.

Reengineering: Changing the design and structure from scratch by coming up with a whole new system. Gutting things. Face more resistance. The most complex form; questioning every process and function to determine if it is effective for the purpose of the business; involves starting over with new ideas; requires good motivational strategies

Difference between implementation and formulation

Formulation is EFFECTIVENESS - the positioning of forces before action, intellectual process, that requires intuitive and analytical skills. Takes more time.

Implementation is EFFICIENCY - the management of forces during action, operational processes, special motivation and leadership skills. Less time (deadlines).

The Balanced Scorecard

How did you do vs. your objectives and goals?

Is the firm continually improving and creating (innovation, technological leadership, product quality, operational process efficiencies)

Is the firm sustaining and even improving on its core competencies and competitive advantages?

How satisfied are the firm's customers?

Four areas of the balanced scorecard

1. Finances

2. Innovation and Growth

3. Processes

4. Relationships

The goal of the balanced scorecard is

alignment

Blue Ocean Strategy is also known as the

Lazy Dreamer Strategy

What is the Blue Ocean Strategy

1. thinking of something new

2. Have a product that works

Don't want competition, innovative, create a new market where no one is.

Creating Demand.

downfall - impossible to stay in blue ocean because of competition, short lived, and competitors often make money

What is the Red Ocean

Evolutionary Strategy of Darwin "survival of the fittest." Market Goal = survival or last one standing. Treading water. Current Market = cut throat competition, filled w/ blood making it red (Alice in Wonderland Looking Glass). Ex: Airline Industry

Red Queen effect

a phenomenon seen in coevolving populations- to maintain relative fitness, each population must constantly adapt to the other

Delta Model

Hippie Strategy - Love not War - Relationship oriented: we want people to love us so much they don't even think about choosing anyone else, and they don't know why.

1. Best Product Positioning

2. Total Customer Solutions

3. System Lock in

Disruptive Innovation

an innovation that leverages new technologies to attack existing markets from the bottom up - bring creative destruction to the market

Kotter's Leading Change (CBFEEGSI)

8 Stages - as the leader goes, so does the company. Risk of Leadership/Management Fallacy

create, build, form, enable, enlist, generate, sustain, institute

What is the BCG Matrix

a means of evaluating strategic business units on the basis of (1) their market growth rates and (2) their relative market share

1. Star

2. Cash Cow

3. Question Mark

4. Dog

In BCG Matrix

1. Star = High, stably growing earnings: CF = Neutral ... Invest for Growth

2. Cash Cow = High, stable earnings and cash flow... Milk it

3. Question mark = Low, Unstable or Growing Earnings, negative CF, Analyze. Becomes Star or Dog

4. Dog = Earnings unstable, low, negative or neutral CF ... divest

Minceberg's 5 P's

1) Plan - develop a strategy in advance with a purpose

2) Ploy - one of the ways to outsmart the competition such as buying patents to competitors cannot launch a rival product

3) Pattern - successful aspects of the past can lead to success in the future

4) Position - the way organization relates to its competitive environment and what it can do to make it a unique product in the marketplace

5) Perspective - influence of organizational culture and collective thinking on the strategic decision making within the company

Porter's 5 Forces Model

analyzes the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry

CENTER: Rivalry Among existing competitors

LEFT - Power of Suppliers

RIGHT - Power of BUyers

Top - Potential New Entrants

Bottom - Threat of Substitute Products or Services

Dr. T came to class - What did he talk about

The importance of Listening

2. Processing what you heard

3. Formulate Mission, vision, values

4. Establish 6 Strategic Objectives

5. Developing department goals and action steps

MOST IMPORTANT: Promote it

6. Assessing programs: 3-5 years normal timeline, we have open time frame

Dr. Kee said one reason there was not a set timeline on Harding's strategic planning is because

They were still predominatly in the Formulation stage, not the implementation stage

Harding Uses a system called ________________________

progress indicators: Green, Yellow, Red - like the balanced scorecard

Some challenges for harding has been

1. Deciding who should develop goals (how to break it up by department)

2. What previous strategic plan goals to keep

3. Aligning with accreditation process

4. Aligning budget and timeline with strategic initiatives

David Kee's questions to Dr. T

Competitive Advantages are 1. Academics 2. Genuine Christian Worldview 3. Community .... Culture changing = how do we function in today's political environment. Highly regards openness and collaboration

Peter Drucker said "Culture eats __________ for Breakfast"

strategy

Dr. T Talked about the "Window, Door, Table" appraoch

1. Window - outside can barely see cannot hear

2. Door - eavesdropping just outside the door, not heard

3. Table - inviting to share thoughts and be apart of the process

Volkswagen Acquires Audi

Horizontal Integration

Starbucks purchases Seattles Best Coffee

Horizontal Integration

GE Spins off (UNLOAD)

Divestiture

Royal farms opens store in baltimore

Forward Integration

Coke Bought Columbia Pictures

Unrelated Diversification

Microsoft embraced Open Source Software

Product Development

Forward Integration

gaining ownership or increased control over distributors or retailers

Backward Integration

Strategy of seeking ownership or increased control over suppliers

Horizontal Integration

Strategy of seeking ownership or increased control over key competitors

Market Penetration

Increase market share for present products or services in present markets through greater marketing efforts

Market Development

Introducing products or services into new geographic areas

Product Development

Increase sales by improving or modifying present products or services

Related Diversification

value chains possess competitively valuable cross business strategic fits

Unrelated Diversification

value chains are so dissimilar that no competitively valuable cross-business relationship exist

Retrenchment

regroups through cost and asset reduction to reverse declining sales and profits

Divestiture

selling a division or part of an organization often to raise capital for further strategic acquisitions or investments

Liquidation

selling all of a company's assets, in parts, for their tangible worth

Amazon began rapid delivery services in US cities

forward integration

Starbucks purchased a coffee farm

Backward Integration of suppliers

BBT Acquired Susquehana Bancshares

Horizontal integration of competitors

Under Armour signed tennis champion Andy Murray to a 4 year 23M dollar marketing deal

Market Penetration

GAP opened 5 stores in China

Market Development

Amazon began offering its own line of baby diapers and wipes

product development

Social MEdia firm Facebook acquired Whatsapp messaging for 19 Billion dollars

related diversification

Kroger and Whole Foods Market are becoming restaurants by cooking meals in the store

unrelated diversification

Staples closed 250 stores, reducing 50% of other stores

retrenchment

Sears divested its Land's end division to shareholders

divestiture

The Trump Taj Mahal in Atlantic City faces bankruptcy and liquidation

Liquidation

Who said that chess is "art, science, and sport," and what were his accomplishments:

Anthony Karpov; 12 year chess world champion 1970