Transcript Management 3e - Gary Dessler

Principles and Practices for Tomorrow’s Leaders
Gary Dessler
CHAPTER
5
Strategic Management
The Environment of Managing
PowerPoint Presentation by Charlie Cook
Copyright © 2004 Prentice Hall, Inc. All rights reserved.
Chapter Objectives
After 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.
Copyright © 2004 Prentice Hall. All rights reserved.
5–2
Checklist 5.1
The 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.
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5–3
A Comprehensive Strategic-Management Model
Source: Adapted from Fred David, Strategic Management (Upper Saddle River, NJ: Prentice-Hall, 2001), p. 77.
Copyright © 2004 Prentice Hall. All rights reserved.
FIGURE 5–1
5–4
Examples of Mission Statements
APEX ELEVATOR
To provide a high-reliability, error-free method for moving people and
products up, down, and sideways within a building.
UNITED TELEPHONE CORPORATION OF DADE
To 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 5–2
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5–5
Strategies in Brief
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 every
industry 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
Source: Arit Gadiesh and James Gilbert, “Frontline Action,” Harvard Business Review, May 2001, p. 74.
Copyright © 2004 Prentice Hall. All rights reserved.
FIGURE 5–3
5–6
Checklist 5.2
How 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?
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5–7
Relationships Among Strategies in
Multiple-Business Firms
FIGURE 5–4
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5–8
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.
Copyright © 2004 Prentice Hall. All rights reserved.
FIGURE 5–5
5–9
How the Internet
Influences
Industry Structure
Source: Adapted from Michael Porter, “Strategy and the
Internet,” Harvard Business Review, March 2001, p. 67.
Copyright © 2004 Prentice Hall. All rights reserved.
FIGURE 5–6
5–10
Examples of a Company’s Strengths, Weaknesses,
Opportunities, and Threats
FIGURE 7–7
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5–11
Worksheet for
Environmental
Scanning
FIGURE 5–8
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5–12
Checklist 5.3
How 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.
Copyright © 2004 Prentice Hall. All rights reserved.
5–13
Cineplex
Odeon
TOWS
Matrix
FIGURE 5–9
Source: Fred David, Strategic Management (Upper
Saddle River, NJ: Prentice-Hall, 2001), p. 207.
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5–14
BCG Matrix
FIGURE 5–10
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5–15
Checklist 5.4
Scenario 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.
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5–16
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.
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5–17
Checklist 5.4
Scenario 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.
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5–18
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.
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5–19
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.
Copyright © 2004 Prentice Hall. All rights reserved.
FIGURE 5–11
5–20