Lecture 7 Strategy

Ch 2 -1

Copyright © 2009 Pearson Education, Inc.

Publishing as Prentice Hall

“What do we want to become?”

Vision

Ch 2 -2



General Motors’ vision is to be the world leader in transportation products and related services.

Vision Statement Examples

Ch 2 -3



PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today.


Ch 2 -4



Dell’s vision is to create a company culture where environmental excellence is second nature.


Ch 2 -5



Comprehensive

Mission Statement

Vision

Clear Business

Vision

Ch 2 -6



“What is our business?”

Mission Statements

Ch 2 -7



Mission Statements

•Creed statement

•Statement of purpose

•Statement of philosophy

•Statement of business principles

Also referred to as:

Ch 2 -8



We aspire to make PepsiCo the world’s premier consumer products company, focused on convenient foods and beverages. We seek to produce healthy financial rewards for investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrity.

Mission Statement Examples

Ch 2 -9



Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet consumer expectations of highest quality; leading technology; competitive pricing; individual and company accountability; best-in-class service and support; flexible customization capability; superior corporate citizenship; financial stability.


Ch 2 -10



Ch 2 -11



Mission

Components

Customers

Markets

Employees

Public

ImageSelf-Concept Philosophy

Survival,

Growth,

Profits

Products or

Services

Technology

Customers—Who are the firm’s customers? Products or services – What are the firm’s major products or services? Markets – Geographically, where does the firm compete? Technology– Is the firm technologically current? Concern for survival, growth, and profitability – is the firm committed

to growth and financial soundness? Philosophy – What are the basic beliefs, values, aspirations, and

ethical priorities of the firm? Self-concept– what is the firm’s distinctive competence or major

competitive advantage? Concern for public image – Is the firm responsive to social,

community, ad environmental concerns? Concern for employees – Are employees a valuable asset of the firm?

Ch 4-12Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ch 2 -13



Mission Statement Evaluation MatrixCOMPONENT COMPONENT COMPONENT COMPONENT COMPONENT

Organization CustomersProducts

or Services Markets

Concern for Survival, Growth,

Profitability Technology

Fleetwood Ent. Yes Yes No Yes Yes

Ben & Jerry's No Yes Yes No Yes

Royal Caribbean Yes No No No No

Dell Yes Yes Yes Yes Yes

Proctor & Gamble Yes No Yes No Yes

L’Oreal No No No No No

Ch 2 -14



Mission Statement Evaluation Matrix

COMPONENT COMPONENT COMPONENT COMPONENT

Organization PhilosophySelf-

ConceptConcern for Public Image

Concern for Employees

Fleetwood Ent. Yes Yes No Yes

PepsiCo Yes No Yes Yes

Royal Caribbean Yes Yes No Yes

Dell Yes Yes Yes No

Proctor & Gamble No Yes Yes Yes

L’Oreal No Yes Yes Yes

Ch 2 -15



Proctor & Gamble will provide branded products and services of superior quality and value that improve the lives of the world’s consumers. As a result, consumers will reward us with industry leadership in sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.


Ch 2 -16



Why Vision & Mission

??????


Internal strengths/weaknesses External opportunities/threats Clear statement of mission

Basis for Objectives & Strategies


“Great spirits have always encountered violent opposition from mediocre minds.” – Albert Einstein

“Weak leadership can wreck the soundest strategy.” – Sun Tzu

Strengths Vs Distinctive Competencies


Publishing as Prentice Hall Ch 4-19


Key Internal Forces

Distinctive Competencies:

Firm’s strengths that cannot be easily matched or imitated by competitors

Building competitive advantage involves taking advantage of distinctive competencies

From where do Strengths and

Weaknesses come

?Copyright © 2009 Pearson Education, Inc.

Publishing as Prentice Hall Ch 4-21


Internal Audit

•Information from:•Management

•Marketing

•Finance/accounting

•Production/operations

•Research & development

•Management information systems

Parallels process of external audit



Ch 6 -25

Match between organization’s internal resources & skills and

the opportunities & risks created by its external factors

Ch 6 -26

Stage 2: The Matching Stage

Strengths

Weaknesses

Opportunities

Threats

SWOT Matrix

Ch 6 -27

SWOT Matrix

Strengths-Opportunities (SO)

Weaknesses-Opportunities (WO)

Strengths-Threats (ST)

Weaknesses-Threats (WT)

Four Types of Strategies

Ch 6 -28

SO Strategies

Use a firm’s

internal strengths

to take advantage

of external

opportunities

SO

Strategies

Strengths

Weaknesses

Opportunities

Threats

SWOT

Ch 6 -29

WO Strategies

Improving internal

weaknesses by

taking advantage

of external

opportunities

WO

Strategies

Strengths

Weaknesses

Opportunities

Threats

SWOT

Ch 6 -30

ST Strategies

Use a firm’s

strengths

to avoid or

reduce the impact

of external

threats

ST

Strategies

Strengths

Weaknesses

Opportunities

Threats

SWOT

Ch 6 -31

WT Strategies

Defensive tactics

aimed at reducing

internal

weaknesses &

avoiding

environmental

threats

WT

Strategies

Strengths

Weaknesses

Opportunities

Threats

SWOT

Ch 6 -32

SWOT Matrix

Developing the SWOT

List firm’s key internal Strengths

List firm’s key internal Weaknesses

List firm’s key external Opportunities

List firm’s key external Threats

Ch 6 -33

Limitations with SWOT Matrix

Does not show how to achieve a competitive advantage

Provides a static assessment in time May lead the firm to overemphasize a single

internal or external factor in formulating strategies

Ch 8-34



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Lecture 7 Strategy