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1 Strategic Management Outline Vision Vision Mission Mission.

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1 1 Strategic Management Outline Vision Vision Mission Mission

2 2 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 External Assessment Chapter3 Feedback Strategy Evaluation Strategy ImplementationStrategy Formulation A Comprehensive Strategic-Management Model

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

4 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 5 Mission Statements Recent Data indicates that 90% of all companies have used a mission statement sometime in the previous five years. Recent Data indicates that 90% of all companies have used a mission statement sometime in the previous five years. Mission statement answers the question: Mission statement answers the question: “ What is our business? ” “ What is our business? ”

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

7 7 1. Customers 2. Products or services 3. Markets 4. Technology 5. Survival, growth, and profitability 6. Philosophy 7. Self-concept 8. Concern for public image 9. Concern for employees Mission Components

8 8 PepsiCo Mission Statement  PepsiCo’s mission is to. We do this through sales growth, cost controls, and wise investment resources. We believe our commercial success depends upon offering quality and value to and customers; providing 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.  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 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.  To make people “feel good” and “look great” Giordano Mission Statement Nike Mission Statement  To bring inspiration and innovation to every athlete in the world

10 10 Chapter 3: External Assessment Outline The Nature of an External Audit: Five Keys Factors 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 11 Chapter Outline (con ’ d) Competitive Analysis: Competitive Analysis:  Porter ’ s Five-Forces Model Source of External Information Source of External Information The Global Challenge The Global Challenge Industry Analysis: Industry Analysis:  The External Factor Evaluation Matrix The Competitive Profile Matrix The Competitive Profile Matrix

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

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

14 14 Five (5) Key Forces affecting the Opportunities and Threats: 1. Economic forces 2. Social, cultural, demographic, & environmental forces 3. Political, governmental, and legal forces 4. Technological factors 5. Competitive forces Key External Forces

15 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 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 17 Social, Cultural, Demographic & Environmental Forces Major impact on:  Products  Services  Markets  customers

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

19 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 20 Political, Govt., & Legal Forces Globalization of Industry Worldwide trend toward similar consumption patterns Worldwide trend toward similar consumption patterns Global buyers & sellers Global buyers & sellers E-commerce E-commerce Instant transmission of money & information across continents Instant transmission of money & information across continents

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

22 22 Technological Forces Revolutionary technological forces: Profound impact on organizations Internet Internet Semiconductors Semiconductors XML technologies 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。 HTML

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

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

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

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

27 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 28 Competitive Forces 7 Characteristics of most competitive U.S. firms: 1. Market share matters 2. Understand what business you are in 3. Broke or not, fix it 4. Innovate or evaporate 5. Acquisition is essential to growth 6. People make a difference 7. No substitute for quality

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

30 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 31 Industry Analysis (EFE) External Factor Evaluation Matrix Summarize & evaluate: CompetitivePoliticalCultural TechnologicalEnvironmentalSocial GovernmentalDemographic Economic

32 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 33 Industry Analysis (EFE) Five-step process: Sum the weighted scores for each 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, 1.0. Average = 2.5 Highest possible weighted score for the organization is 4.0; the lowest, 1.0. Average = 2.5

34 Clinton Administration Bad media exposure from FDA Smokeless market SE region U.S Production limits on tobacco Legislation against the tobacco industry Threats More social pressure to quit smoking TOTAL Pinkerton leader in discount market.051 Astronomical Internet growth Increased demand.151 Global markets untapped Weighted score RatingWeight UST—Key External Factors Opportunities

35 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 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. 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 37 Industry Analysis (EFE) Important Understanding of the factors used in the EFE Matrix is more important than the actual weights and ratings assigned. Understanding of the factors used in the EFE Matrix is more important than the actual weights and ratings assigned.

38 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 Identifies firm ’ s major competitors and their strengths & weaknesses in relation to a sample firm ’ s strategic position

39 39 (CPM) Procter Avon L’Oreal & Gamble Total Market Share Global Expansion Customer Loyalty Financial Position Management Price Competition Product Quality Advertising ScoreRatingScoreRatingScoreRatingWeight Critical Success Factor


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