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Strategic Management Outline Vision Mission.

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Presentation on theme: "Strategic Management Outline Vision Mission."— Presentation transcript:

1 Strategic Management Outline Vision Mission

2 A Comprehensive Strategic-Management Model
Feedback External Assessment Chapter3 Develop Vision & Mission Statement Chapter 2 Establish Long- Term Objectives Chapter 5 Generate, Evaluation and Select Strategies Chapter 6 Implement Strategies- Management Issues Chapter 7 Implement Strategies--- Marketing, Finance, R&D Chapter 8 Measure & Evaluate Performance Chapter 9 Internal Assessment Chapter 4 Strategy Formulation Strategy Implementation Strategy Evaluation

3 Importance of a Vision Statement
-Vision statement answers the question: “What do we want to become?” A clear vision provides foundation for comprehensive mission statement Vision statement developed first Short – preferably one sentence Broad management involvement

4 Vision Statements---Examples
To Be The Best And Biggest World Brand In Apparel Retailing ---Giordano’s Vision . ---Vitasoy’s Vision To maintain the leadership in promoting superior quality of life through the production of high quality, great tasting nutritious products that satisfy customers in all markets

5 Mission Statements “What is our business?”
Recent Data indicates that 90% of all companies have used a mission statement sometime in the previous five years. Mission statement answers the question: “What is our business?”

6 Mission Statements Mission Statement is to reveal what an organization wants to be and whom it wants to serve Essential for effectively establishing objectives and formulating strategies

7 Mission Components Customers Products or services Markets Technology
Survival, growth, and profitability Philosophy Self-concept Concern for public image Concern for employees

8 PepsiCo Mission Statement
PepsiCo’s mission is to increase the value of our shareholders’ investment. We do this through sales growth, cost controls, and wise investment resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.

9 Vitasoy Mission Statement
At Vitasoy, promoting consumer well-being is our number one priority. This is achieved through the provision of a variety of high-quality nutritious foods and beverages. Vitasoy is an innovative company, a reliable employer, and a responsible corporate citizen dedicated to creating value for our shareholders. Giordano Mission Statement To make people “feel good” and “look great” Nike Mission Statement To bring inspiration and innovation to every athlete in the world

10 Chapter 3: External Assessment Outline
The Nature of an External Audit: Five Keys Factors Economic Forces Social,Cultural,Demographic & Environmental Forces Political, Governmental, and Legal Forces Technological Forces Competitive Forces

11 Chapter Outline (con’d)
Competitive Analysis: Porter’s Five-Forces Model Source of External Information The Global Challenge Industry Analysis: The External Factor Evaluation Matrix The Competitive Profile Matrix

12 External Strategic Management Audit
Also called: Environmental scanning Industry analysis Purpose: Opportunities to be explored Threats to be avoided

13 Special Interest Groups
Relationships Between Key External Forces and an Organization Competitors Suppliers Distributors Creditors Customers Employees Communities Managers Stockholders Labor Unions Special Interest Groups Products Services Key Forces -Economic forces -Social, cultural, demographic & environment forces -Political, legal forces government -Technological force -Competitive forces Opportunities & Threats

14 Key External Forces Economic forces
Five (5) Key Forces affecting the Opportunities and Threats: Economic forces Social, cultural, demographic, & environmental forces Political, governmental, and legal forces Technological factors Competitive forces

15 Economic Forces Monitor Key Economic Variables: Availability of credit
Level of disposable income Interest rates Inflation rates Federal government budget deficits Gross domestic product trend Consumption patterns Unemployment trends Worker productivity levels Value of the dollar in world markets Stock market trends Foreign countries’ economic conditions Import/export factors Demand shifts for goods/services Income differences by region/customer Price fluctuations Monetary policies Fiscal policies Tax rates OPEC policies

16 Social, Cultural, Demographic & Environmental Forces
Key variables – Number of special-interest groups Number of marriages Number of divorces Number of births Number of deaths Immigration & emigration rates Life expectancy rates Per capita income Attitudes toward business Average disposable income Buying habits Ethical concerns Attitudes toward saving Racial equality Average level of education Government regulation Attitudes toward customer service Attitudes toward product quality Energy conservation Social responsibility Value placed on leisure time Recycling Waste management Air & water pollution

17 Social, Cultural, Demographic & Environmental Forces
Major impact on: Products Services Markets customers

18 Political, Govt., & Legal Forces
Key Political, govt., & legal variables: Government regulation/deregulation Tax law changes Special tariffs Number of patents Changes in patent laws Import-export regulations Monetary policy Political conditions in other countries Government budgets World oil, currency & labor markets Location and severity of terrorist activities Environmental protection laws Equal employment legislation Level of government subsidies Antitrust legislation/enforcement Sino-American relationships

19 Political, Govt., & Legal Forces
Government Regulation Key opportunities & key threats Antitrust legislation (Microsoft) Tax rates Patent laws Increasing Global Interdependence Impact of political variables Formulation of Strategies Implementation of Strategies

20 Political, Govt., & Legal Forces
Globalization of Industry Worldwide trend toward similar consumption patterns Global buyers & sellers E-commerce Instant transmission of money & information across continents

21 Political, Govt., & Legal Forces
Increasing Global Interdependence Strategists in a global economy Forecast political climates Legalistic skills Diverse world cultures

22 Technological Forces Revolutionary technological forces:
Profound impact on organizations Internet Semiconductors XML technologies 可擴展標示語言」(eXtensible Markup Language) 是用於標示具有結構性資訊的電子文件的標示語言。 XML 是根據一個國際標準 -- Standard Generalized Markup Language (SGML) -- International Organization for Standardization (ISO) ISO 8879:1986 所製定而成的. XML 的格式類似 HTML, 但是您可以使用自行定義 的標籤及文件結構. 也可以由資料庫中取得資料,再用 XML 進行 串列化 (serializing) 的工作。

23 Technological Forces Alters life cycle of products
Internet changes the nature of opportunities and threats -- Alters life cycle of products Increases speed of distribution Creates new products and services Eases limitations of geographic markets Alters economies of scale Changes entry barriers

24 Capitalizing on Information Technology (IT)
Technological Forces Capitalizing on Information Technology (IT) Chief Information Officer (CIO) Chief Technology Officer (CTO)

25 Competitive Forces Collection and evaluation of information on competitors is essential for successful strategy formulation Identifying rival firms Strengths Weaknesses Capabilities Opportunities Threats Objectives Strategies

26 Competitive Forces Key Questions About Competitors: Their strengths
Their weaknesses Their objectives and strategies Their responses to all external variables (e.g. social, political, demographic, etc.) Their vulnerability to our alternative strategies

27 Competitive Forces Key Questions About Ourselves:
Our vulnerability to successful strategic counterattack Our product and service positioning relative to competitors Entry and exit of firms in the industry Key factors for our current position in industry Sales and profit rankings of competitors over time Nature of supplier and distributor relationships The threat of substitute products or services

28 Competitive Forces 7 Characteristics of most competitive U.S. firms:
Market share matters Understand what business you are in Broke or not, fix it Innovate or evaporate Acquisition is essential to growth People make a difference No substitute for quality

29 Competitive Analysis: Porter’s Five-Forces Model
Potential development of substitute products Rivalry among competing firms Bargaining power of suppliers Bargaining power of consumers Potential entry of new competitors

30 Global Challenge International Challenge faced by U.S. firms:
How to gain and maintain exports to other nations How to defend domestic markets against imported goods

31 Industry Analysis (EFE)
External Factor Evaluation Matrix Summarize & evaluate: Competitive Political Cultural Technological Environmental Social Governmental Demographic Economic

32 Industry Analysis (EFE)
Five-Step process: List key external factors (10-20) Opportunities & threats Assign weight to each (0 to 1.0) Sum of all weights = 1.0 Assign 1-4 rating to each factor Firm’s current strategies response to the factor Multiply each factor’s weight by its rating Produces a weighted score

33 Industry Analysis (EFE)
Five-step process: Sum the weighted scores for each Determines the total weighted score for the organization. Highest possible weighted score for the organization is 4.0; the lowest, Average = 2.5

34 UST—Key External Factors
.20 1 Clinton Administration 2 .10 Bad media exposure from FDA .05 Smokeless market SE region U.S. .15 3 Production limits on tobacco Legislation against the tobacco industry Threats .30 More social pressure to quit smoking 2.10 1.00 TOTAL .60 4 Pinkerton leader in discount market Astronomical Internet growth Increased demand Global markets untapped Weighted score Rating Weight UST—Key External Factors Opportunities

35 Industry Analysis (EFE)
Total weighted score of 4.0 = Organization response is outstanding to threats & weaknesses Total weighted score of 1.0 = Firm’s strategies not capitalizing on opportunities or avoiding threats

36 Industry Analysis (EFE)
UST (in the previous example), has a total weighted score of 2.10 indicating that the firm is below average in its effort to pursue strategies that capitalize on external opportunities and avoid threats.

37 Industry Analysis (EFE)
Important Understanding of the factors used in the EFE Matrix is more important than the actual weights and ratings assigned.

38 Industry Analysis (CPM)
Competitive Profile Matrix Identifies firm’s major competitors and their strengths & weaknesses in relation to a sample firm’s strategic position

39 (CPM) Procter Avon L’Oreal & Gamble 2.80 3.25 3.15 1.00 Total 0.15 3 0.20 4 0.05 1 Market Share 0.40 2 0.80 Global Expansion 0.10 Customer Loyalty 0.45 0.60 Financial Position 0.30 Management Price Competition Product Quality Advertising Score Rating Weight Critical Success Factor

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