PowerPoint Presentation by Charlie Cook The Environment of Managing Gary Dessler Principles and Practices for Tomorrow’s Leaders Copyright © 2004 Prentice

Copyright © 2004 Prentice Hall, Inc. All rights reserved. Copyright © 2004 Prentice Hall, Inc. All rights reserved. PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie Cook

The Environment of ManagingThe Environment of Managing

Gary DesslerGary Dessler

Principles and Practices for Tomorrow’s LeadersPrinciples and Practices for Tomorrow’s Leaders

Strategic ManagementStrategic ManagementStrategic ManagementStrategic Management55CHAPTERCHAPTER

Copyright © 2004 Prentice Hall. All rights reserved. 5–2

Chapter ObjectivesAfter studying this chapter and the case exercises at the end, you should be able to:

1. Develop a workable strategic plan for an organization using SWOT analysis.

2. Identify a company’s current corporate strategies, and list its strategic options.

3. Develop a vision and mission statement.

4. Accurately identify a company’s “core competence.”

5. Explain each of the strategic planning tools you think the CEO should use, and why.


Checklist 5.1The Strategic Management Process

Define the business and its mission. Perform external and internal audits. Translate the mission into strategic

goals. Generate and select strategies to

reach strategic goals. Implement the strategy. Evaluate performance.


A Comprehensive Strategic-Management Model

FIGURE 5–1Source: Adapted from Fred David, Strategic Management (Upper Saddle River, NJ: Prentice-Hall, 2001), p. 77.


Examples of Mission Statements

FIGURE 5–2

APEX ELEVATORTo provide a high-reliability, error-free method for moving people and products up, down, and sideways within a building.

UNITED TELEPHONE CORPORATION OF DADETo provide information services in local-exchange and exchange-access markets within its franchised area, as well as cellular phone and paging services.

JOSEPHSON DRUG COMPANY, INC.To provide people with longer lives and higher-quality lives by applying research efforts to develop new or improved drugs and health-care products.

GRAY COMPUTER, INC.To transform how educators work by providing innovative and easy-to-use multimedia-based computer systems.

APEX ELEVATORTo provide a high-reliability, error-free method for moving people and products up, down, and sideways within a building.

UNITED TELEPHONE CORPORATION OF DADETo provide information services in local-exchange and exchange-access markets within its franchised area, as well as cellular phone and paging services.

JOSEPHSON DRUG COMPANY, INC.To provide people with longer lives and higher-quality lives by applying research efforts to develop new or improved drugs and health-care products.

GRAY COMPUTER, INC.To transform how educators work by providing innovative and easy-to-use multimedia-based computer systems.


FIGURE 5–3

Strategies in Brief

Source: Arit Gadiesh and James Gilbert, “Frontline Action,” Harvard Business Review, May 2001, p. 74.

COMPANY STRATEGIC PRINCIPLE

America Online Consumer connectivity first—anytime, anywhere

Dell Be direct

eBay Focus on trading communities

General Electric Be number one or number two in everyindustry in which we compete, or get out

Southwest Airlines Meet customers’ short-haul travel needs at fares competitive with the cost of automobile travel

Vanguard Unmatchable value for the investor-owner

Wal-Mart Low prices, every day

COMPANY STRATEGIC PRINCIPLE

America Online Consumer connectivity first—anytime, anywhere

Dell Be direct

eBay Focus on trading communities

General Electric Be number one or number two in everyindustry in which we compete, or get out

Southwest Airlines Meet customers’ short-haul travel needs at fares competitive with the cost of automobile travel

Vanguard Unmatchable value for the investor-owner

Wal-Mart Low prices, every day


Checklist 5.2How to Test the Quality of Your Strategy

Does your strategy fit with what’s going on in the environment?

Does your strategy exploit your key resources?

Will competitors have difficulty keeping up with you?

Are the elements of your strategy internally consistent?

Do you have enough resources to pursue this strategy?

Can your strategy be implemented?


FIGURE 5–4

Relationships Among Strategies inMultiple-Business Firms


FIGURE 5–5

Forces Driving Industry Competition

Source: Source: Reprinted with the permission of The Free Press, a division of Simon & Schuster from Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Copyright © 1980 by The Free Press.


FIGURE 5–6

How the Internet Influences Industry Structure

Source: Adapted from Michael Porter, “Strategy and the Internet,” Harvard Business Review, March 2001, p. 67.


FIGURE 7–7

Examples of a Company’s Strengths, Weaknesses, Opportunities, and Threats

Copyright © 2004 Prentice Hall. All rights reserved. 5–12 FIGURE 5–8

Worksheet for Environmental Scanning


Checklist 5.3How to Benchmark Focus on a specific problem and define it

carefully Use employees who will actually implement

changes to identify the best-practices companies and to conduct on-site studies.

Be willing to share information with others. Avoid sensitive issues such as pricing, and

don’t look for new product information. Keep information you receive confidential.


FIGURE 5–9

Cineplex Odeon TOWS Matrix

Source: Fred David, Strategic Management (Upper Saddle River, NJ: Prentice-Hall, 2001), p. 207.


FIGURE 5–10

BCG Matrix


Checklist 5.4Scenario Planning Principles

Scenarios inform decision makers and influence decision making.

Scenarios add value to decision making only when managers and others use them.

In developing scenarios, the emphasis is on improving managers’ mindsets and knowledge.


Checklist 5.4 (cont’d)Scenario Planning Principles

Alternative projections must challenge managers’ current mental models.

The consideration of alternative futures directly affects managers’ knowledge.

Scenarios must include indicators so that managers can track how the future is evolving.


Checklist 5.4Scenario Planning Principles Scenarios have value only to the extent that

they inform decision makers and influence decision making.

Scenarios add value to decision making only when managers and others use them to systematically shape questions about the present and the future, and to guide how to go about answering them.

In each step of developing scenarios, the emphasis must be on identifying, challenging, and refining the substance of managers’ mindsets and knowledge.


Checklist 5.4 (cont’d)Scenario Planning Principles Alternative projections about a given future

must challenge managers’ current mental models by creating tension among ideas, hypotheses, perspectives, and assumptions.

The dialogue and discussion spawned by the consideration of alternative futures should directly affect managers’ knowledge.

Scenarios should include enough indicators so that managers can track how the future is actually evolving so that the learning and adaptations stimulated by the scenarios are continuous.


FIGURE 5–11

Southwest Airlines’ Activity System

Source: Reprinted by permission of Harvard Business Review. From “What Is Strategy?” by Michael E. Porter, November–December 1996. Copyright © 1996 by the President and Fellows of Harvard College; all rights reserved.

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PowerPoint Presentation by Charlie Cook The Environment of Managing Gary Dessler Principles and Practices for Tomorrow’s Leaders Copyright © 2004 Prentice