(Mt) – MGT 490 SEU Principles of Management Worksheet

College of Administrative and Financial Sciences Critical Thinking 2 Course Name: Principles of management Student’s Name: Course Code: MGT 490 Student’s ID Number: Term: Summer CRN: Academic Year: 1440/1441 H For Instructor’s Use only Instructor’s Name: Students’ Grade: Marks Obtained/Out of 20 marks Level of Marks: High/Middle/Low Regulations: ✓ This assignment is an individual assignment. ✓ All students are encouraged to use their own words. ✓ Student must apply Saudi Electronic University academic writing standards and APA style guidelines. ✓ Support your submission with course material concepts, principles, and theories from the textbook along with at least two scholarly, peer-reviewed journal articles. ✓ A mark of zero will be given for any submission that includes copying from other resource without referencing it. ✓ Write at least 4-5 pages in length, excluding the title page, abstract and required reference page, which are never a part of the minimum content requirements. ✓ It is strongly encouraged that you submit your assignment into the safe assignment Originality Check prior to submitting it to your instructor for grading. An Overview about Assignment submission Time & grades: Type of Assignment Posting date Due date Marks Critical thinking Start of week 3 End of Week 4 20 Grace period* 3 days * Grace Period: with accepted excuse (accepted by instructor) with deduction of 10% for late submission Critical thinking: 2 Reference: MGT490-Book-Chapter No-05 (Planning) Part-1 This chapter has highlighted the role of mission statements as a starting point for organisational planning. In his book, Management: Tasks, Responsibilities and Practices, Peter Drucker said a mission statement should serve as the ‘foundation for priorities, strategies, plans and work assignments’ by providing a precise statement of the organisation’s core purpose. He suggested that in about three sentences a good mission statement would explain who it relates to, what they do, what they stand for and why they do it and that the information provided would communicate to separate, distinct stakeholder groups. Questions:1. Based on the criteria suggested by Peter Drucker, do business organisations produce mission statements that appear to provide a good starting point for organisational planning? Draw on actual examples to support your answer and critique these examples. 2. There is evidence that over the last decade businesses have modified their mission statements to include more reference to their ethical behaviour. Examine how the content of mission statements has changed and explain why this change has occurred. Note: Answer the questions thoroughly. Use at least 4 scholarly references to support your arguments. (Expected word count: 400-500 words). Part-2 As discussed in the chapter, management by objectives (MBO) is a long established and still widely practised management tool to motivate employees. MBO is informed by goal setting theory, which is a widely researched idea supported in multiple independent research studies conducted among different types of organisation and different types of employee in different countries. Questions:3. Is MBO an example of how management can become an evidence-based profession? What risks are associated with the use of MBO and how far do you think that guidance on good practice in setting work objectives for employees ensures that these risks can be controlled? Note: Use at least 3 scholarly references to support your arguments. (Expected word count: 300-400 words) Answers Planning The Foundation of Successful Management PPT3(A) Chapter Five © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Major Questions You Should Be Able to Answer 5.1 What are planning, strategy, and strategic management, and why are they important to me as a manager? 5.2 What are mission and vision statements and what are three types of planning and goals? 5.3 What are the three types of goals, and what are different kinds of plans? 5.4 What are SMART goals and MBO, and how can they be implemented? 5.5 How does the planning/control cycle help keep a manager’s plans headed in the right direction? © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-2 Planning: Coping with Uncertainty Planning coping with uncertainty by formulating future courses of action to achieved specified results setting goals and deciding how to achieve them © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-3 Planning: Coping with Uncertainty Business plan a document that outlines a proposed firm’s goals, the strategy for achieving them, and the standards for measuring success. Business model outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-4 Strategy Strategy a large-scale action plan that sets the direction for an organization represents an “educated guess” about what must be done in the long term for the survival or the prosperity of the organization or its principal parts. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-5 Strategic Management Strategic management a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-6 Planning & Strategic Management Figure 5.1 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-7 Why Planning & Strategic Management Are Important 1. Provide direction and momentum 2. Encourage new ideas 3. Develop a sustainable competitive advantage. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-8 Encouraging New Ideas Management scholar Gary Hamel says that companies such as Apple have been successful because they have been able to unleash the spirit of “strategy innovation.” Strategy innovation the ability to reinvent the basis of competition within existing industries—“bold new business models that put incumbents on the defensive.” © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9 Making Plans Figure 5.2 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-10 Mission & Vision Statements Mission statement expresses the purpose of the organization Vision statement expresses what the organization should become, where it wants to go strategically © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-11 Example: Amazon and Patagonia  Amazon – “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”  Patagonia – “We prefer the human scale to the corporate, vagabonding to tourism, and the quirky to the toned-down and flattened out.” © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-12 Three Types of Planning for Three Levels of Management Strategic planning Top managers determine what the organization’s long-term goals should be for the next 1-5 years with the resources they expect to have available Tactical planning Middle managers determine what contributions their departments or similar work units can make during the next 6-24 months © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-13 Three Types of Planning for Three Levels of Management Operational planning First-line managers determine how to accomplish specific tasks with available resources within the next 1-52 weeks © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-14 Question Danny is participating with other managers in a discussion about what his organization’s goals should be for the next decade. He is participating in: A. Strategic planning B. Operational planning C. Tactical planning D. Controlling © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-15 Three Levels of Management, Three Types of Planning Figure 5.3 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-16 Three Types of Goals: Strategic, Tactical, & Operational Goals specific commitment to achieve a measurable result within a stated period of time also known as an objective strategic, tactical, operational © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-17 Three Types of Goals: Strategic, Tactical, & Operational Strategic goals set by and for top management and focus on objectives for the organization as a whole. Tactical goals set by and for middle managers and focus on the actions needed to achieve strategic goals. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-18 Three Types of Goals: Strategic, Tactical, & Operational Operational goals set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-19 The Action Plan & the Operating Plan Action plan defines the course of action needed to achieve the stated goal © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-20 The Action Plan & the Operating Plan Operating plan designed for a 1-year period defines how you conduct your business based on the action plan identifies clear targets such as revenue, cash flow, and market share © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-21 Types of Plans: Standing Plans & Single-Use Plans Table 5.1 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-22 Standing Plans: Policies, Procedures, & Rules Standing plans plans developed for activities that occur repeatedly over a period of time consist of policies, procedures, and rules. o Policy outlines the general response to a designated problem or situation © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-23 Standing Plans: Policies, Procedures, & Rules o Procedure outlines the response to a particular problem or circumstances o Rule designates specific required action © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-24 Single Use Plans: Programs & Projects Single-use plans plans developed for activities that are not likely to be repeated in the future o Program single-use plan encompassing a range of projects or activities o Project single-use plan of less scope and complexity than a program © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-25 SMART Goals Specific Measurable Attainable Results-oriented Target dates © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-26 Relationship Between Goal Difficulty and Performance Figure 5.4 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-27 Management by Objectives: The FourStep Process for Motivating Employees Management by objectives (MBO) a four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee’s performance, and (4) the manager makes a performance appraisal and rewards the employee according to results © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-28 Three Types of Objectives Used in MBO Table 5.2 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-29 Cascading Objectives: MBO from the Top Down 1. Top management must be committed 2. It must be applied organization-wide 3. Objectives must “cascade” © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-30 Cascading Objectives: MBO from the Top Down MBO works by cascading objectives down through the organization Objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-31 Question? Melissa wants her employee, Ralph, to turn in his monthly sales report by the 5th of every month. This meets the ____________ requirement of SMART goals. A. Specific B. Measurable C. Attainable D. Target dates © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any 5-32 manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. The Planning/Control Cycle 1. Make the plan 2. Carry out the plan 3. Control the direction by comparing results 4. with the plan Control the direction by taking corrective action in two ways a) Correcting deviations b) Improving future plans © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-33 The Planning/Control Cycle Figure 5.5 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-34 Question? Apple has fired employees who have leaked news about unannounced products. Which step of the Planning/Control is this? A. Make the plan B. Carry out the plan C. Take corrective action D. Document the plan © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 5-35 Strategic Management How Exceptional Managers Realize a Grand Design PPT3(B) Chapter Six © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Major Questions You Should Be Able to Answer 6.1 What is strategic positioning, and what are the three principles that underlie it? 6.2 What’s the five-step recipe for the strategic management process? 6.3 What are the characteristics of good mission and vision statements? © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-2 Major Questions You Should Be Able to Answer 6.4 How can three techniques—Porter’s four competitive strategies, diversification and synergy, and the BCG matrix—help me formulate strategy? 6.5 How does effective execution help managers during the strategic-management process? 6.6 How does effective execution help managers during the strategic-management process? © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-3 What Is an Effective Strategy? Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company “performing different activities from rivals, or performing similar activities in different ways” © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-4 Strategic Positioning & Its Principles 1. Strategy is the creation of a unique & 2. 3. valuable position Strategy requires trade-offs in competing Strategy involves creating a “fit” among activities © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-5 The Strategic-Management Process © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-6 Assess the Current Reality Current reality assessment to look at where the organization stands and see what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organization’s mission Also called organizational assessment © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-7 Formulate the Grand Strategy Grand strategy explains how the organization’s mission is to be accomplished. Strategy formulation process of choosing among different strategies and altering them to best fit the organization’s needs Strategy implementation putting strategic plans into effect © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-8 The Strategic Management Process Strategic control consists of monitoring the execution of strategy and making adjustments, if necessary © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-9 Mission Statements and Vision Statements Table 6.1 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-10 Competitive Intelligence Competitive intelligence means gaining information about one’s competitors’ activities so that you can anticipate their moves and react appropriately public prints and advertising, investor information, informal sources © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-11 SWOT Analysis Environmental scanning careful monitoring of an organization’s internal and external environments to detect early signs of opportunities and threats that may influence the firm’s plans © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-12 SWOT Analysis Figure 6.2 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-13 SWOT Analysis Organizational strengths skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission Organizational weaknesses drawbacks that hinder an organization in executing strategies in pursuit of its mission © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-14 Question? When analyzing the “W” in SWOT analysis, Roberta, the manager might be assessing: A. Possible challenges in the market B. Competitors’ actions C. High turnover of employees D. Good financial resources of the firm © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-15 SWOT Analysis Organizational opportunities environmental factors that the organization may exploit for competitive advantage Organizational threats environmental factors that hinder an organization’s achieving a competitive © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-16 Example: How Would You Analyze Toyota? Internal strengths attention to detail and a frugality that shuns waste of every kind Internal weaknesses parts were supplied by outside companies rather than trusted traditional suppliers External opportunities stressed commitment to customers still ranks high in quality © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-17 Forecasting: Predicting the Future Trend analysis hypothetical extension of a past series of events into the future Contingency planning creation of alternative hypothetical but equally likely future conditions also called scenario planning and scenario analysis © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-18 Benchmarking: Comparing with the Best Benchmarking a process by which a company compares its performance with that of high-performing organizations © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-19 Porter’s Five Competitive Forces 1. Threat of new entrants 2. Bargaining power of suppliers 3. Bargaining power of buyers 4. Threat of substitute products or services 5. Rivalry among competitors © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-20 Common Grand Strategies Growth strategy involves expansion – as in sales revenues, market share, number of employees, or number of customers Stability involves little or no significant change Defensive involves reduction in the organization’s efforts retrenchment © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-21 How Companies Can Implement Grand Strategies? Table 6.3 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-22 Porter’s Four Competitive Strategies Figure 6.3 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-23 Porter’s Four Competitive Strategies Cost-leadership strategy keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-24 Question The company’s CEO puts pressure on the firm’s R&D managers to develop products that can be created cheaply. The firm would be following a ________ strategy: A. Cost leadership B. Differentiation C. Cost focus D. Retrenchment © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-25 Porter’s Four Competitive Strategies Differentiation strategy offer products that are of unique and superior value compared to those of competitors but to target a wide market © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-26 Porter’s Four Competitive Strategies Cost-focus strategy keep the costs of a product below those of competitors and to target a narrow market Focused-differentiation offer products that are of unique and superior value compared to those of competitors and to target a narrow market © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-27 The Single-Product Strategy: Focused but Vulnerable Single-product strategy company makes and sells only one product within its market Benefit-focus Risk-vulnerability © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-28 The Diversification Strategy Diversification operating several businesses in order to spread the risk related, unrelated © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-29 Advantages of Related Diversification Reduced risk because more than one product Management efficiencies administration spread over several businesses © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-30 Advantages of Related Diversification Synergy the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-31 The BCG Matrix BCG matrix a means of evaluating strategic business units on the basis of (1) their business growth rates and (2) their share of the market. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-32 The BCG Matrix Figure 6.4 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-33 Maintaining Strategic Control Engage people Keep moving Keep it simple Stay focused © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-34 Execution: Getting Things Done Execution consists of using questioning, analysis, and followthrough in order to mesh strategy with reality, align people with goals, and achieve results promised central part of any company’s strategy © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-35 Question John owns a piano sales and tuning store. He wants to be the biggest retailer in the Midlands. Adding salespeople would be part of his strategic __________. A. Locution B. Execution C. Efficacy D. Efficiency © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-36 The Three Core Processes of Business People Consider who will benefit you in the future Strategy Consider how success will be accomplished Operations Consider what path will be followed © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-37 What Questions Should a Strong Strategic Plan Address? Table 6.4 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-38 Building a Foundation of Execution Know your people & your business Insist on realism Set clear goals & priorities Follow through Reward the doers Expand the capabilities Know yourself © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 6-39

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• Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
• From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.

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