1. Making strategic decisions

2. Syllabus aims the significance of information management
the value of different approaches to decision making
assessing influences on corporate decision-making.
Influences on corporate decision-making include ethical position (real or perceived),
Resources available and relative power of stakeholders.
The range of management approaches to decision making from scientific to intuition.

3. Strategic Decisions Strategy = a plan for meeting your objectives
Strategic is far more than this!
Strategic thinking
Strategic decisions

4. Strategic v Tactical Strategic decisions Long term view
Visualising what you want to achieve
SWOT analysis
Carried out on a range of senior & junior staff
Tactical decisions
Short term issues,
Concerns day to day issues taken by a manager.

5. Your go Strategic decision Tactical decision Whiteboard
Write on one side
Strategic decision
On the other
Tactical decision

6. To seize the opportunity to open the first chain of luxury ice cream outlets in China
Strategic:
Part of a long-term goal, difficult to reverse and requiring substantial resources

7. This is a short-term fix to what may or may not be a long-term problem
To tackle sales weakness in the North with a major sales promotion based on Buy One Get One Free.
Tactical:
This is a short-term fix to what may or may not be a long-term problem

8. though not necessarily sensible!
To address a potential sales threat from an Italian firm by launching a complete range of Italian products.
Tactical
launch until the Italian firm gives up, then perhaps withdraw your own product from the market
Strategic
though not necessarily sensible!

9. To cut back on our training budget during this recession
Tactical
no reason to suppose that it’s part of a long-term plan to reduce training spending

10. To focus the energies and resources of the business upon its strengths (not correcting weaknesses).
Strategic:
would affect the long-term plans of all managers working for the business

11. Different approaches to strategic decisions

13. If you were to put £1000 on a horse
Scientific method
Hunch/ Intuition
num
What is the difference?

14. If you were to put £1000 on a horse would you study the form or go for one you liked the sound of?
Scientific method
Look at the horse’s form
Check the ‘going’ – ground, weather
Check the jockey’s form
Watch the horse in training a few days before!
Hunch/ Intuition
Colour
Name
Number
num

15. Real business example
Of intuition!

16. Richard Branson & Northern Rock
In 2007 with the collapse of Northern Rock
Branson put himself forward as a saviour
Based on a hunch!

17. Do you know the business story here?
Of business tactics
Do you know the business story here?

18. “Well, we were wrong... the storm in a D cup is over!”

19. The central issues
M&S have introduced a policy of price discrimination in the lingerie department; they charge an extra £2 for bras sized over a DD cup.
a pressure group ‘Busts 4 Justice’ has been set up on Facebook and now has over 16,000 members who were campaigning for this surcharge to be removed.
The group’s founder, Beckie Williams, has bought a £3.40 share in the company to allow her to confront chairman Sir Stuart Rose at the next annual meeting in July.
On Friday, M&S apologised & Saturday started a promotional campaign!

20. On Friday M&S backed down, saying "we boobed".
Miss Williams, 26, met chairman Sir Stuart Rose, who revealed the company's response of cutting the charge has cost £3million.

22. M&S comment…
"We've heard what our customers are telling us - that they are unhappy with the pricing on our DD-plus bras and that basically we've boobed.
So from Saturday May 9 no matter what size you buy, the price is going to be the same. We're not going to cut the quality though - they'll still be made to the same high standards so you get the best support on the high street.
From Saturday, the chain is also offering 25% off the price of any bra in any size. The promotion will last until May 25.”

23. Discuss the alternative strategies that M&S might adopt to protect itself from sharply worsening economic circumstance in the future.

24. Scientific decision making
Logical & rational

25. Scientific methods SWOT – PEST-G CPA Investment appraisal
Ratio analysis
Break even analysis
Boston Matrix
ANSOFF Matrix
Porters Matrix
Scientific decision making
Marketing research
IT analysis

26. Influences on corporate decision-making
Ethical position (real or perceived)
How will the decision be viewed by key stakeholders
Will moving production abroad match the business’ ethical standards?
Where are materials sourced from?
Resources available
Financial constraints
Workforce
Scarcity of materials
Relative power of stakeholders
How might pressure groups respond?
Will TUs become involved?

27. Which method did they use?

28. Wanted to expand into Europe
Looked at a range of possible mergers….
How did they raise the money £30m?

30. Issues with joint ownership…
Positive
Negatives
Ethics
Environmental
Different culture
Target market

31. Article on Innocent…

32. We’ll look at these in more detail next lesson
Decision-making
There are many techniques to aid decision-making
SWOT
Cost Benefit Analysis
Six Thinking Hats – look at
decisions from different angles
Pareto Analysis – what is
the most important problem
to solve?
Starbursting - analysing
decisions by asking questions
We’ll look at these in more detail next lesson 32

33. Complete innocent exam style q’s Due in next week (Monday)
Homework
Complete innocent exam style q’s
Due in next week (Monday)