Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 1 Assignment for Session 4  Dell articles. Link will be posted on web site.  Preparation questions/tasks How have Dell’s strategies changed? Consider all 3 levels of strategy. How has Dell’s Organizational Effectiveness changed on each Approach to O/E? Evaluate Dell’s environment using Fig. 3-1, Table 3-1, and Figure 3-3. Then, identify the “high priority” issues for Dell in Fig. 3-3 Characterize Dell’s business strategies in Fig Identify a Dell business that fits in each of the cells in either Fig. 6-2 or Fig. 6-3.

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 2 Session 4: Today’s agenda  Development of Opportunities and Threats Environmental analysis  Areas of concern  Issues and priorities  O & T Industry analysis (Porter model)  Areas of concern  O & T  Development of Strengths & Weaknesses Resource-based analysis  S & W Value chain analysis  S & W  Business strategies

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 3 Session 4: Environmental scanning, corporate and business strategy.  Evaluate Dell’s environment using Fig. 3-1 & Table 3-1. Identify the “high priority” issues in Fig Categorize the issues as Opportunities or Threats  Characterize Dell’s business strategies in Fig  Identify a Dell business that fits in each of the cells in either Fig. 6-2 or Fig. 6-3.

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 4 Environmental scanning  What is it?  What is its scope?  Why do it?  What work output should an environmental scan produce?

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 5 Environmental Scan Sociocultural Forces Political - Legal Forces Technological Forces Economic Forces Task Environment Shareholders Communities Governments Special Interest Groups Customers Creditors Trade Association Competitors Employees/ Labor Unions Suppliers Internal Environment Structures Culture Resources Which elements are most relevant? What are the implications for management?

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 6 Environmental & industry analysis  Fig. 3-1 Environment Note distinction between inside and outside External focus is on Opportunities and Threats  Table 3.1 Environmental variables Identify important variables.  Fig. 3.2 Scanning external environment Note the process. Which factors are key Fig 3.3 Issues priority matrix What opportunities and threats does this lead to?

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 7 Porter’s industry analysis model  Buyers—what are sources  Suppliers—what gives this power  Potential entrants—and barriers to entry  Other stakeholders—who? see Fig. 3-1  Substitutes—alternative ways to satisfy need  Rivalry among existing firms—factors influencing competition

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 8 STRENGTHS – SWEAKNESSES - W OPPORTUNITIES – O SO STRATEGIES WO STRATEGIES THREATS - T ST STRATEGIESWT STRATEGIES Internal External SWOT analysis & Alternative Strategies

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 9 Industry Competitors Rivalry Among Existing Firms Potential Entrants Suppliers Other Stakeholders Buyers Substitutes Threat of Substitute Products or Services Bargaining Power Of Buyers Threat of New Entrants Relative Power of Unions, Government, Etc. Bargaining Power Of Suppliers Industry Analysis (Porter)

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 10 Risks of High- Growth Markets Competitive Risk Overcrowding Superior competitive entry Market Changes Changing CSFs New technology Disappointing growth Price instability Firm Limitations Resource constraints Distribution unavailable

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 11 Generic business strategies  Focuses on how the firm will compete  Competitive strategies (Porter) Address scope (broad or narrow) and advantage (cost or differentiation) 4 options Cost leadership Differen- tiation Cost Focus Focused differenti- ation Competitive Advantage Competitive Scope

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 12 Assignment for Session 5  H&W Ch 4; Ch 5, Sections 5.1, 5.2, 5.3  Value chain item in Reading Packet !  Preparation questions/tasks 1. Describe the resource-based view of the firm? 1. What is its purpose? 2. What is the process for doing a resource-based analysis? 2. What are Dell’s core competencies? 3. What are Dell’s distinctive competencies? Are they sustainable? 4. Analyze the cells in the internal value chain (see next slide). Identify strengths and weaknesses.

Strategic ManagementEnvironmental Scanning, Corporate & Business Strategy 13 Margin The internal value chain Primary Activities Support Activities Procurement Serv- ice Technology Development Human resource management Firm infrastructure Inbound Logistics Opera- tions Out- bound Logistics Market- ing and sales Which cells are strong? Which are weak? Which offer competitive opportunities? Which cells are strong? Which are weak? Which offer competitive opportunities? What strengths and weaknesses are revealed by this analysis?