...Introduction Strategic planning determines where an organization is going over the next year or more, how it's going to get there and how it'll know if it got there or not. The focus of a strategic plan is usually on the entire organization, while the focus of a business plan is usually on a particular product, service or program. There are a variety of perspectives, models and approaches used in strategic planning. The way that a strategic plan is developed depends on the nature of the organization's leadership, culture of the organization, complexity of the organization's environment, size of the organization, expertise of planners, etc. For example, there are a variety of strategic planning models, including goals-based, issues-based, organic, scenario (some would assert that scenario planning is more of a technique than model), etc. For-Profit Versus Nonprofit Strategic Planning Major differences in how organizations carry out the various steps and associated activities in the strategic planning process are more of a matter of the size of the organization -- than its for-profit/nonprofit status. Small nonprofits and small for-profits tend to conduct somewhat similar planning activities that are different from those conducted in large organizations. On the other hand, large nonprofits and large for-profits tend to conduct somewhat similar planning activities that are different from those conducted in small organizations. (The focus of the planning activities is often...
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...Managers in all types of businesses must address the central strategic question A. | Where are we now? | B. | Where do we want to go from here? | C. | How are we going to get there? | D. | When will we know we are there? | E. | All of these | | 2. | A company's strategy consists of A. | actions to develop a more appealing business model than rivals. | B. | plans involving alignment of organizational activities and strategic objectives. | C. | offensive and defensive moves to generate revenues and increase profit margins. | D. | competitive moves and approaches that managers have developed to grow the business, attract and please customers, conduct operations, and achieve targeted objectives. | E. | its strategic vision, its strategic objectives, and its strategic intent. | | 3. | The competitive moves and business approaches a company's management is using to grow the business, compete successfully, attract and please customers, conduct operations, respond to changing economic and market conditions, and achieve organizational objectives is referred to as its A. | strategy. | B. | mission statement. | C. | strategic intent. | D. | business model. | E. | strategic vision. | | 4. | A company's strategy is most accurately defined as A. | management's approaches to building revenues, controlling costs, and generating an attractive profit. | B. | management's game plan for growing the business, attracting...
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...Military University Abstract Porter’s Five Forces Model is a holistic approach towards competitive strategy. The model provides a framework for the strategic direction of management teams that are seeking an edge over their competitors and additional factors that may undermine profits. The model displays the dynamics between the competitive rivals, buyer’s bargaining power, suppliers, new entrant’s threat and substitutes. The implementation of Porter’s Five Forces Model is crucial on international business practice in order to establish a successful overseas operation and reduce cost of expansion. Global business expansion has become a common practice. Modern organizations are prone to take advantage of international attractive markets that are highly profitable and offer incentives for foreign companies. Implementation of the model increases the chances of success for firms that are considering branching out or simply starting a new company overseas. The Company’s management strategic vision also benefits from Porter’s Model because it points out the forces that affect the organization’s profitability. However, Porter’s modeling techniques have some limitations such as the absence of providing meaningful advice for preventive actions and profitability based solely on fighting competitors without taking in consideration opportunities of competitive strategic alliances. In conclusion, Porter’s Five Forces Model influences the profitability, product prices, costs...
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...Chapter 1- Introduction to Strategic Management Overview Strategy: set of related actions that managers take to increase their company’s performance -for most, if not all companies, achieving superior performance relative to rivals is the ultimate challenge -if a company’s strategies result in superior performance, it is said to have a competitive advantage -Ex: Dell’s strategies produced superior performance from mid-1990s until mid-2000s, as a result, Dell enjoyed competitive advantage over its rivals -How did they achieve competitive advantage? -due to successful pursuit of varying strategies: Direct selling, customization and efficient supply chain mgmt. -enabled company to lower cost structure, charge low prices, gain market share, and become more profitable than its rivals -Dell lost competitive advantage in later half of 2000s HP offered bundled products, needed to find ways to sell to intermediaries & Apple differentiation -first step toward achieving objective is to describe in more detail what superior performance/competitive adv mean and to explain pivotal role that managers play in leading strategy-making process Strategic Leadership: creating competitive adv through effective mgmt. of the strategy-making process -strat-making process is the process by which managers select/implement a set of strategies that ain to achieve a competitive adv Strategy Formulation: selecting strategies based on analysis of an org’s external/internal environment...
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...What Business Model Advantage Differs from Competitive Advantage: A Case Study of 7-Eleven Japan Yuwei Shi, Ph.D. Fisher Graduate School of International Business Monterey Institute of International Studies 460 Pierce Street Monterey, CA 93940 Phone: (831) 647 6682 E-mail: yuwei.shi@miis.edu Keywords: Business model, strategic management, competitive strategy 2 Abstract This paper introduces a business model framework based on a synthesis of a wide array of diverse business model definitions and related arguments. The intention is to make the theory discussions on business model more useful to the design, development and analysis of actual business models. The synthesis follows the mainstream strategic management theories of profit under competition. The business model framework includes four interrelated component models: the exchange model, the organizational model, the resource model, and the financial model, each with its own strategic logics. Together these component models and their strategic logics describe a comprehensive business model, which enables more meaningful strategic analysis. In order to demonstrate the use of this framework, particularly in comparison with the more traditional competitive analysis, this paper also applies the framework to analyzing the business model of 7-Eleven Japan. It states the additional insights drawn from the comparative analyses, and draws implications for the managerial task of business model design and...
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...Chapter 1: Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage I. Overview a. Strategy: set of related actions that managers take to increase their company’s performance b. Strategic Leadership: about how to most effectively manage a company’s strategy-making process to create competitive advantage c. Strategy Formulation: selecting strategies d. Strategy Implementation: putting strategies into action II. Strategic Leadership, Competitive Advantage, and Superior Performance e. Superior Performance i. Two reasons why maximizing shareholder value is the ultimate goal 1. Provide a company with risk capital a. Risk Capital: capital that can’t be recovered if a company fails 2. Shareholders are legal owners of a corporation ii. Shareholder Value: returns that shareholders earn from purchasing shares in a company 3. Comes from capital appreciation and dividend payments iii. Measuring Profitability 4. Return on Invested Capital (ROIC) b. ROIC= (profit/capital invested) iv. Measure Profit Growth by the increase in net profit overtime 5. Can grow profits if: c. Sell products in markets that are growing rapidly d. Gain market share from rivals e. Increase the amount sold to existing customers f. Expand overseas ...
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...answered 18 correctly with a final grade of 90% 18 correct (90%) 2 incorrect (10%) 0 unanswered (0%) 1. Review Key Points PowerPoint Presentations 2. Apply Assurance of Learning ... 3. Test Self-Graded Chapter Quiz Your Results: The correct answer for each question is indicated by a . 1 CORRECT Which of the following statements about a company's strategy is true? A) Crafting an excellent strategy is more important than executing it well. B) Managers at all companies face three central questions in thinking strategically about their company's present circumstances and prospects: Where are we now? Where do we want to go? How are we going to get there? C) A company's strategy deals with whether the revenue-cost-profit economics of its business model demonstrate the viability of the business enterprise as a whole. D) Masterful strategies come partly (maybe mostly) by doing things in much the same way as the industry leader but then being better than the leader in one particular area that counts heavily with buyers. E) Whether a company's strategy is ethical or not does not matter a lot because most customers and most suppliers are relatively unconcerned whether a company they do business with engages in sleazy practices or turns a blind eye to below-board behavior on the part of its employees. 2 CORRECT The competitive moves and business approaches a company's management are using grow the business, attract and please customers, compete successfully, conduct operations...
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...Business Policy and Strategy – Study Guide: Unit 1 Material from McGraw Hill website – Chapters 1 & 2 Chapter 1 What Is Strategy and Why Is It Important? Learning Objectives - After studying this chapter, you should be able to: LO 1. | Understand why every company needs a sound strategy to compete successfully, manage the conduct of its business, and strengthen its prospects for long-term success. | LO 2. | Develop an awareness of the four most dependable strategic approaches for setting a company apart from rivals and winning a sustainable competitive advantage. | LO 3. | Understand that a company's strategy tends to evolve over time because of changing circumstances and ongoing management efforts to improve the company's strategy. | LO 4. | Learn why it is important for a company to have a viable business model that outlines the company's customer value proposition and its profit formula. | LO 5. | Learn the three tests of a winning strategy. | Key Points: The tasks of crafting and executing company strategies are the heart and soul of managing a business enterprise and winning in the marketplace. The key points to take away from this chapter include the following: 1. A company's strategy is the game plan management is using to stake out a market position, conduct its operations, attract and please customers, compete successfully, and achieve the desired performance targets. 2. The central thrust of a company's strategy is undertaking moves...
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...Chapter 1 Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage Opening Case Wal-Mart Wal-Mart is one of the most extraordinary success stories in business history. Started in 1962 by Sam Walton, Wal-Mart has grown to become the world’s largest corporation. In the financial year ending January 31, 2004, the discount retailer whose mantra is “every day low prices” had sales of nearly $256 billion, five thousand stores in ten countries (almost three thousand are in the United States), and 1.3 million employees. Some 8 percent of all retail sales in the United States are made at a Wal-Mart store. Wal-Mart is not only large but also very profitable. In 2003, the company earned a return on invested capital of 14.7 percent, significantly better than rivals Costco and Target, which earned 9.4 percent and 10 percent, respectively (another major rival, Kmart, emerged from bankruptcy protection in 2004). As shown in the accompanying figure, Wal-Mart has been consistently more profitable than its rivals for years. Wal-Mart’s superior profitability reflects a competitive advantage that is based on the successful implementation of a number of strategies. In 1962 Wal-Mart was one of the first companies to apply the self-service supermarket business model developed by grocery chains to general merchandise (two of its rivals, Kmart and Target, were established in the same year). Unlike its rivals, who focused on urban and suburban locations, Sam Walton’s Wal-Mart...
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...1. What is competitive advantage, and how does it relate to a company’s business model? - Competitive advantage is a result of business models that a company has by achieving higher profitability than average of its’ industry competitors. In order for a company to achieve a higher profitability, the company has to create a strategy to attract more customers, and/or sell more products to beat other competitors in the market with a sustainable profit gain, and a business model is the definition of the companies’ strategies to achieve this profitability. 2. Describe the strategic planning model, and who is involved in the strategy-making process - Strategic planning model is the process of formulating and implementing company strategies. Corporate...
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...Ch3 1. What are the key components of the Strategic Profit Model? How can it be used to examine the effect of logistics decisions? The strategic profit model provides the framework for conducting return on assets (ROA) analysis by incorporating revenues and expenses to generate net profit margin, as well as an inclusion of assets to measure asset turnover. The strategic profit model employs two key components: net profit margin and asset turnover. Net profit margin is net profit divided by sales, and looking at net profit and sales as reported on the income statement suggests multiple ways in which net profit margin can be influenced by managerial decision. The logistics managers should consider sale, costs of goods sold, and total expenses. Net profit Margin Higher profit margins result in higher return on equity. Asset Turnover is computed by dividing total sales by total assets and provides information of the efficiency capital employed to support the business. If asset turnover decrease, the return on equity decreases. In addition, logistics decisions can influence the speed at which invoices are paid, as reflected in accounts receivable on the balance sheet. 2. How does logistics strategy connect to overall corporate strategy? Is it a one-way or two-way connection? It’s a two-way connection. The logistics strategy refers to long-term, overall planning and strategy for the pursuit of sustainable development of the logistics and according to logistics development...
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...Although the various textbooks on management accounting make no attempt to develop an integrated theory, there is a high degree of consistency and standardization in methodology of presentation. In this chapter, the concepts and assumptions which form the basis of management accounting will be formulated in a comprehensive management accounting decision model. The formulation of theory in terms of conceptual models is a common practice. Virtually all textbooks in business administration use some type of conceptual framework or model to integrate the fundamentals being presented. In economic theory, there are conceptual models of the firm, markets, and the economy. In management courses, there are models of organizational structure and managerial functions. In marketing, there are models of marketing decision‑making and channels of distribution. Even in financial accounting, models of financial statements are used as a framework for teaching the fundamentals of basic financial accounting. The model, A = L + C, is very effective in conveying an understanding of accounting. Management accounting texts are based on a very specific model of the business enterprise. For example, all texts assume that the business which is likely to use management accounting is a manufacturing business. Also, there is unanimity in assuming that the behavior of variable costs within a relevant range tends to be linear. The consequence of assuming that variable costs vary directly with volume is a classification...
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...1. What are the components of the Strategic Profit Model? How can it be used to examine the effects of logistics decisions? The strategic profit model provides the framework for conduction return on assets analysis by incorporation revenues and expense to generate net profit margin, as well as an inclusion of assets to measure asset turnover. The strategic profit model employs three key components: profit margin, asset turnover and leverage. Profit Margin Net Profit Margin Sales Net Profit Gross Margin Total Expenses Sales Cost of Goods Sold Net Profit Margin Sales Net Profit Gross Margin Total Expenses Sales Cost of Goods Sold It reflects the profits generated from each dollar of sales. The model of profit margin like figure1.1 Figure1.1 For example, say your company achieved $100 million in sales last year. The total cost is $85 million. It is include cost of goods and other expense. So the net profit is equal $15 million. Dividing the figure by $100 million leaves you with a profit margin of 15 percent. Higher profit margins result in higher return on equity. Asset Turnover Asset Turnover Total Assets Sales Current Assets Fixed Assets Inventory Accounts Receivable Other Current Assets Asset Turnover Total Assets Sales Current Assets Fixed Assets Inventory Accounts Receivable Other Current Assets It assesses the productivity of a firm’s investment in its assets. The model of profit margin like figure1.2 Figur1.2 For example...
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...The Management of Strategy: Concepts and Cases 9e Part I: Strategic Management Inputs Chapter 1: Strategic Management and Strategic Competitiveness ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1: Strategic Management and Strategic Competitiveness • Overview: Eight content areas – – – – – – – – Nature of Competition The Competitive Landscape I/O Model of Above-Average Returns (AAR) Resource-Based Model of AAR Vision and Mission Stakeholders Strategic Leaders The Strategic Management Process ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Nature of Competition: McDonald’s • McDonald’s creates value for customers through: – Business-level strategies • Product Innovation • Upgrading existing restaurants • Listened to customers – value menu, healthier items, more convenience • Purchasing European property for future expansion – Corporate-level strategies • Disposed of its interests in other restaurants ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Nature of Competition: Basic concepts • Strategic Competitiveness – Achieved when a firm formulate & implements a valuecreating strategy • Strategy – Integrated and coordinated set of...
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...CHAPTER 1 WHAT IS STRATEGY AND WHY IS IT IMPORTANT? 1. Understand why every company needs a sound strategy to compete successfully, manage the conduct of its business, and strengthen its prospects for long-term success. 2. Develop an awareness of the four most dependable strategic approaches for setting a company apart from rivals and winning a sustainable competitive advantage. 3. Understand that a company’s strategy tends to evolve over time because of changing circumstances and ongoing management efforts to improve the company’s strategy. 4. Learn why it is important for a company to have a viable business model that outlines the company’s customer value proposition and its profit formula. 5. Learn the three tests of a winning strategy. Copyright ®2012 The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin 1–2 WHAT DO WE MEAN BY STRATEGY ? ♦ What is our present situation? ● ● WHAT IS STRATEGY ABOUT? ♦ Strategy is all about How: ● ● ● ● Business environment and industry conditions Firm’s financial and competitive capabilities Creating a vision for the firm’s future direction How to outcompete rivals. How to respond to economic and market conditions and growth opportunities. How to manage functional pieces of the business. How to improve the firm’s financial and market performance. ♦ Where do we want to go from here? ● ♦ How are we going to get there? ● Crafting an action plan that will get us there 1–3 1–4 WHY DO STRATEGY ? ♦ A firm does...
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