Strategic Management

Characteristics of Mission Statement

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  It should be feasible A mission should always aim high but it should not be an impossible statement. ...
  
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  It should be precise. ...
  
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  It should be clear. ...
  
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  It should be motivating. ...
  
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  It should be distinctive. ...
  
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  It should indicate major components of strategy.
  

27. 
    List eight benefits of having a clear mission statement.
    

1. Guide the Thinking and Actions of Employees

2. Help Determine and Inform Performance Standards

3. Help Attract Appropriate Talent

4. Provide Context and Reduce Friction During Organisational Restructures

5. Provide a Stable Framework that can Outlast Internal Changes

6. Inspire People to be Focused and Productive

7. Facilitate Collaboration with Teams, Customers, Suppliers and Partners

8. Help with Public Relations

27. 
    How often do you think a firms vision and mission statements should be changed?
    

Unless your business or organization changes its focus completely, you won't need to change the mission or vision statement. However, as the organization or business evolves, you might incorporate additional elements into your mission or vision statement.

27. 
    Describe the “process of performing an external audit” in an organization doing strategic planning for the first time.
    

An external audit is the process of identifying and evaluating trends and events beyond the control of a single firm, in areas such as social, cultural, demographic technology, economic, political, and competition; reveals key opportunities and threats confronting anorganization, so managers can better formulate strategies. The process of an external audit involves an entire staff of employees and senior officials. This involvement is due to the level of commitment and understanding that is involved in the strategic planning process. Must employees are honored to be involved in such a task to share their ideas and to have a better knowledge of the company as a whole. To perform an external audit, a company first must gather competitive intelligence and information about economic, social, cultural, demographic, environmental, political, governmental, legal, and technological trends.

27. 
    The global recession forced thousands of firms into bankruptcy. Does this fact alone confirm that “external factors are more important than internal factors” in strategic planning? Discuss.
    

Bankruptcy is when an individual is incapable to repay the outstanding debts. The debts are more and the availability of liquid of fixed cash is less. In this case, the creditors request the governing authority to sell the assets of the individual and repay the debts.
We cannot consider external factors without internal factors or vice versa. External factors set the stage for what a company must deal with, but internal factors largely determine the extent to which a company is able to perform well in a given circumstance.

27. 
    Do you feel the advantages of a low value of the dollar offset the disadvantages for (1) a firm that derives 60 percent of its revenues from foreign countries and (2) a firm that derives 10 percent of its revenues from foreign countries? Justify your opinion
    

As per the theory of finance, a low value of dollar can results in a tremendous increase in the exports to foreign nations. In such a case, imports get reduced and as a result, cost of competitors in foreign nations rises. This leads to a much more competitive environment with extremely high pressure for a US based company. Likewise, a firm that derives 60 percent of its revenue from foreign countries would be easily...

27. 
    Governments worldwide are turning to “protectionism” to cope with economic recession, imposing tariffs and subsidies on foreign goods and restrictions/incentives on their own firms to keep jobs at home. What are the strategic implications of this trend for international
    commerce?
    

Trade protectionism is re-emerging as a controversial tactic among policymakers and economists in enhancing a nation’s economic well-being. Trade protectionism has been used with the intent of helping a nation recover from an economic downturn. However, in many instances the opposite effect occurred in which not just one but many nations suffered economic setbacks such as a recession or even a depression. In order to understand trade protectionism, it is necessary to know why it is done and what the effects are on an economy.

27. 
    Distinguish between market commonality and resource similarity. Apply these concepts to two rival firms that you are familiar with
    

Market commonality is nothing but the number of market shared by the similar kind of company in particular domain. Greater market commonality indicates greater rivalry as they are sharing similar kind of resources in the same market. There is multi market competition where there is high competition amongst the product introduction or in the whole segment. Firms with greater multimarket contact are less likely to be aggressive but more likely to respond when attacked Resource Similarity It is the measure up to what extent company’s tangible and intangible resources are shared by the competitor in the industry.

27. 
    Explain why it is appropriate for Ratings in an EFE Matrix to be 1, 2, 3, or 4 for any opportunity or threat.
    

External factor evaluation, EFE, is a concept of management which is used in order to measure and assess the condition of the business currently. It helps in identifying the threats and opportunities of the business. The ratings of EFE have to be between 1 and 4, in which 4 is the most better and superior response hence the understanding is that the company or the business is at a better position.

27. 
    In developing an EFE Matrix, would it be advantageous to arrange your opportunities according to the highest weight, and do likewise for your threats? Explain.
    

EFE (External Factor Evaluation) Matrix is often regarded a powerful strategic management tool for assessment of present business conditions. The tool helps identify and prioritize the various threats and opportunities for the business. In developing an EFE Matrix, it is better to and advantageous to arrange both the opportunities and threats according to the highest weight.

27. 
    Explain how to conduct an external strategic-management audit
    

Examine the external environment with current market. Compare the information collected when researching the external environment to the target market survey. Look for shifts in the external environment that will have an effect on the target market which could provide opportunities or be potential threats.

27. 
    Identify a recent economic, social, political, or technological trend that significantly affects the local Pizza Hut
    

The trend to move to healthier foods and give up junk food in the process would reduce the consumption of products at Pizza Hut Political Trend: Application of excessive taxes on the products of Pizza Hut will increase the price and hence a loss in the price sensitive demand.

27. 
    Discuss the following statement: Major opportunities and threats usually result from an interaction among key environmental trends rather than from a single external event or factor
    

The opportunities that result from a single external event or factor are easy to see and are capitalized on quickly by people with money and large organizations. The opportunities that result from several interaction are more difficult to see and the size of the opportunity more difficult to judge. That makes them better opportunities for smaller, more nimble, and yes, less well-capitalized individuals and companies.

27. 
    Identify two industries experiencing rapid technological changes and three industries that are experiencing little technological change. How does the need for technological forecasting differ in these industries? Why?
    

This is an era of intense competition and market pressure where firms across almost all the industry sectors and verticals are constantly competing with each other. With this in consideration, two main industries that are experiencing rapid technological changes include IT industry and the communications industry. And three of those industries that are experiencing very little technological change include the shipping industry, milk products & dairy industry as well as the forest industry. The basic reason that has resulted in the need for differences in the technological forecasting across these industries

27. 
    What major forecasting techniques would you use to identify (1) economic opportunities and threats and (2) demographic opportunities and threats? Why are these techniques most appropriate?
    

Economic opportunities and threats: Quantitative as well as qualitative forecasting techniques are used to forecast of economic opportunities and threats. Quantitative forecasting is frequently considered as objective analysis on the other hand qualitative forecasting is treated to be managerial or judgmental analysis.
Demographic opportunities might include an aging population, which signals a need for more geriatric products, or gentrification in central cities that signals a need for upscale restaurants and boutique shops.

27. 
    How does the external audit affect other components of the strategic-management process?
    

An external audit provides information on the threats and opportunities in the business environment that could impact your strategic decisions on issues such as new product development, market entry or exit, mergers and acquisitions, and resource allocation.

27. 
    As the owner of a small business, explain how you would organize a strategic-information
    scanning system. How would you organize such a system in a large organization?
    

We subscribed to relevant trade journals, blogs and newsletters, and regularly scanned competitor’s and vendor’s websites. We reviewed competitive losses on a regular basis, and paid fees to several research organizations to receive ‘intelligence’ on trends, and to be able to ask questions of their analysts. We had a standing item to discuss ideas and issues monthly at management meetings, and with the help of an outside facilitator, reviewed our strategic plan annually. At that time we updated our progress, our ‘official’ SWOT analysis, and our portfolio of strategic initiatives. From time to time we experimented with different techniques; scenario planning and client interviews were probably the most useful.

27. 
    Make an appointment with a librarian at your university to learn how to use online databases. Report your findings in class.
    

Schedule a one-on-one online research consultation with a librarian for assistance with your research, to learn advanced skills or to identify sources in a specific subject area.
Appointment requests must be made at least 24 hours in advance.

27. 
    Give some advantages and disadvantages of cooperative versus competitive strategies.
    

When individuals or parties enter into a negotiation process to resolve conflict, they will bring a certain orientation to the table in their effort to settle the conflict. The two most basic orientations people adhere to when entering into negotiations are cooperative or competitive. A cooperative approach aligns with the process of interest-based or integrative bargaining, which leads parties to seek win-win solutions. Disputants that work cooperatively to negotiate a solution are more likely to develop a relationship of trust and come up with mutually beneficial options for settlement. The mutual gains approach is considered a constructive resolution process.
Options for a negotiated settlement are limited in some cases by a fixed pie (a set amount of rewards) that must be divided one way or the other. Such situations leave no alternative for mutual gains and therefore parties must utilize competitive negotiation tactics to pursue their goal(s). Competitive approaches align with the process of disruptive bargaining, which results in win-lose outcomes. 

27. 
    What is your forecast for interest rates and the stock market in the next several months?
    

When the Federal Open Market Committee (FOMC) changes the interest rate, it impacts both the economy and the stock markets because borrowing becomes either more or less expensive for individuals and businesses.
Any impact on the stock market to a change in the interest rate changes is generally experienced immediately, while, for the rest of the economy, it may take about a year to see any widespread impact.
Higher interest rates tend to negatively affect earnings and stock prices (with the exception of the financial sector).

27. 
    Explain how information technology affects strategies of the organization where you worked most recently.
    

Information technology (IT) is significantly changing the business scene. In spite of the fact that association societies and business techniques shape the utilization of IT in associations, all the more frequently the impact is more grounded the other path round. IT altogether influences key choices and makes opportunities and issues that directors need to address in numerous parts of their business."Huge numbers of the effects of Information Technology are clear. In any case, they are not as a matter of course self-evident, nor are they unimportant"information technology (IT) is significantly changing the business. Despite the fact that association societies and business systems shape the utilization of IT in associations, all the more frequently the impact is more grounded the other path round. IT altogether influences key alternatives and makes opportunities and issues that directors need to address in numerous parts of their business.

27. 
    Discuss the ethics of gathering competitive intelligence.
    

So, based on the law, competitive intelligence is completely legal. ... Gathering information by not disclosing who you are to a competitor or by lying would be considered unethical, but it's not illegal. The best competitive intelligence professionals don't conduct their practice through illegal or unethical means.

51 Discuss the ethics of cooperating with rival firms
Answer The norms of personal ethics serve as a foundation for business ethics and provide a basis for cooperating with rival firms. Engaging in unethical practices, even with rival fimis, will jeopardize a firmlis credibility and respect in the industry.
52 List three firms you are familiar with and give a distinctive competence for each firm.
Answer: Answers will vary for each student. Examples of firms with distinctive competencies include Maytag, which is known for excellent product quality; Procter & Gamble, known for superb marketing; and 3M, known for innovative research & development
53 Give some key reasons why prioritizing strengths and weaknesses is essential.
It is crucial to prioritize strengths and weaknesses because this helps a company determine areas that they need to improve on as well as areas that they are performing well in.
54 If you and a partner were going to visit a foreign country where you have never been before, how much planning would you do ahead of time? What benefit would you expect that planning to provide?
Answer: I would do extensive planning, so that we could use our time wisely in the country, seeing and doing all that we could while there. Potential benefits from planning for the trip mayinclude anticipating and preparing for potential issues related to weather and travel, establishingobjectives on what to do and see, devising strategies to make the trip cost effective, developing policies and guidelines on behavior and activities, and setting goals (priorities) that are important to the student. Some students may indicate that extensive planning is not necessary and may curb spontaneity.