BUSINESS STRATEGY CASE FORMAT
Two Strategy Case Formats
Format # 1
I. Executive Summary
A one- to three-page synopsis of the plan providing highlights of the current situation, objectives, strategies, principal actions programs, and financial expectations.
II. Company Mission
The mission of a company is the unique purpose that sets it apart from other companies of its type and identifies the scope of its operations. The mission describes the company’s product, market, and technological areas of emphasis in a way that reflects the values and priorities of the strategic decision makers.
A. Define the core business
1. Basic product or service
2. Primary market
3. Principal technology for production or delivery
III. Company Profile
The company profile depicts the quantity and quality of the company’s financial, human, and physical resources. It also assesses the strengths and weaknesses of the company’s management and organizational structure. Finally, it contrasts the company’s past successes and traditional concerns with the company’s current capabilities in an attempt to identify the company’s future capabilities.
A. SWOT Analysis - Company Situation Analysis - SWOT Analysis Checklist
1. Internal Strengths and Weaknesses
a. Marketing
b. Financial and Accounting
(1) Ratio analysis – Ratios & Comparative Ratios
(2) Sources and uses of funds
c. Production, Operations, Technical
d. Human Resources
e. Quality Management
f. Information Systems
g. Organization and General Management
2. External Opportunities
a. Serve additional customer groups or expand into new markets or segments
b. Expand product line
c. Transfer skills to new products or businesses
d. Integration
(1) Forward
(2) Backward
e. Foreign markets
f. Emerging new technologies
3. External Threats
a. Low barriers to entry
b. Availability of substitute products or services
c. Slower market growth
d. Costly regulatory requirements
e. Growing bargaining power of customers or supplies
f. Changing buyer needs and tastes
C. Current Competitive Position
a. Signs of Strengths and Weaknesses in a Company’s Competitive Position
b. Company Situation Analysis Competitive Strength Assessment
1. Comparison with past performance
2. Stage of industry evolution. New product introduction. Growth surge due to popularity of product. Industry is technologically declining.
3. Comparison with competition. Saturated competition due to low barriers. Categorizing the Objectives and Strategies of Competitors
4. Comparison with success factors in the industry. Many large IP's have become successful on the Internet. Few have failed. Types of Key Success Factors
IV. External Environment
A firm’s external environment consists of all the conditions and forces that affect its strategic options but are typically beyond its control.
A. Remote environment
1. Economic
2. Social/Cultural
3. Political/Regulatory
4. Technological
5. Ecological
B. Industry analysis
1. Industry attractiveness analysis - Industry Attractiveness Factors
a. Market factors:
(1) Size
(2) Growth
(3) Cyclicity
(4) Seasonality
b. Industry factors:
(1) Capacity
(2) New product entry prospects, new industries emerging
(3) Rivalry
(4) Power of suppliers
(5) Power of buyers
(6) Threat of substitutes
C. Operating environment
1. Driving forces
a. Changes in the long-term industry growth rate
b. Changes in who buys the product and how they use it
c. Product innovation
d. Technological change
e. Marketing innovation
f. Entry or exit of major firms
g. Diffusion of technical know-how
h. Increasing globalization of the industry
I. Changes in cost and efficiency
j. Emerging buyer preferences for differentiated products instead of a commodity product
k. Regulatory influences and government policy changes
l. Changing societal concerns, attitudes and lifestyles
m. Reductions in uncertainty and business risks
2. Strengths and Weaknesses of Competitors
3. Customer Profiles
4. Role of suppliers
V. Objectives
Setting objectives converts the strategic vision and directional course into target outcomes and performance milestones.
A. Long-term
B. Short-term
C. Financial
1. Faster revenue growth?
2. Faster earnings growth?
3. Higher dividends?
4. Wider profit margins?
5. Higher returns on invested capital?
6. Stronger bond and credit ratings?
7. Bigger cash flows?
8. A rising stock price?
9. Recognition as a “blue chip” company?
10. A more diversified revenue base?
11. Stable earnings during recessionary periods?
D. Strategic
1. A bigger market share?
2. A higher, more secure industry rank?
3. Higher product quality?
4. Lower costs relative to key competitors?
5. Broader or more attractive product line?
6. A stronger reputation with customers?
7. Superior customer service?
8. Recognition as a leader in technology and/or product innovation?
9. Increased ability to compete in international markets?
10. Expanded growth opportunities?
11. Total customer satisfaction?
VI. Grand (Organizational or Business) Strategy - Matching Strategy to the Situation
An articulation of the formal strategy based on the analysis preceding this step. The grand strategy identifies the overall goals of the organization.
A. Concentration (increasing use of existing products in present markets)
B. Market development (existing products in new markets)
C. Product development (new products for present markets)
D. Innovation
E. Horizontal Integration
F. Vertical Integration
G. Concentric Diversification
H. Conglomerate Diversification
I. Turnaround
J. Divestiture
K. Liquidation
L. Joint Ventures
M. Strategic Alliances
VII. Functional Strategies
Although this may also be a part of the “Grand Strategy,” it is critical that the organization’s overall strategy be used a framework within which each division or business function sets its own strategic plan of action.
A. Production/Operations
1. Manufacturing
2. Materials
3. Capital
B. Marketing
1. Advertising
2. Selling
C. Finance and Accounting
1. Cash flow
2. Capital
D. Research and Development
E. Human Resource Management
VIII. Implementing the Strategy
Now that strategies have been defined for the organization as a whole and for the individual divisions or functions, a plan for implementing the strategy needs to be articulated.
A. Build a capable corporation
B. Policies and procedures to support the strategy
C. Support systems
D. Strategy-supporting reward systems
E. Strategy-supporting corporate culture
F. Strategic leadership
IX. Control and Evaluation
An implemented strategy must be monitored to determine the extent to which its objectives are achieved.
A. Strategic controls
1. Monitor assumptions and predictions
2. Monitor implementation
3. Strategic surveillance of internal and external environments
B. Operational controls
1. Budgets
a. Profit and loss
b. Cash flow - Calculating the Cash Budget Ratios
2. Schedules
3. Key success factors
a. Types of Key Success Factors
b. Competitive Strength Assessment
X. Bibliography
Format # 2
BUSINESS STRATEGY CASE FORMAT
Introductory Facts
ORGANIZATION'S BASIC MISSION/PURPOSE
KEY STRATEGIC ISSUES
EXTERNAL
KEY THREATS AND OPPORTUNITIES
INDUSTRY ANALYSIS
Industry dynamics
Industry life cycle
Industry trends
Principal industry drivers
DISCUSSION OF PORTER'S COMPETITION ANALYSIS
List key competitors
Competitor matrix
INTERNAL
INTERNAL STRENGTHS AND WEAKNESSES
PAST AND PRESENT STRATEGIC ANALYSIS
FUNCTIONAL ANALYSIS
MARKETING ANALYSIS
FINANCIAL ANALYSIS
MANAGEMENT TEAM/HUMAN RESOURCE ANALYSIS
PRODUCTION ANALYSIS
OTHER Functional Analysis
PROPOSED GENERIC OR MASTER STRATEGIC PLAN
BUILD A PLAN for 2009 - 2014
STRATEGIC CHOICE - DEVELOP A FULL STRATEGIC PLAN for 2009 - 2014
CONCLUSIONS
FINAL COMMENTARY - YOUR EVALUATION, SUMMARY CONCLUSIONS
BIBLIOGRAPHY - REFERENCES
BUSINESS STRATEGY CASE FORMAT
THE COMPANY NAME
Introductory Facts
IDEA 1 - Compose a very brief overview of the broadest descriptors which will introduce and profile this organization. First, Introduce the Company, (1) its name, (2) company history, (3) background, (4) location, or geographic description of offices and plants.
IDEA 2 - Describe your company's - Products/Services/Markets - List key products or groups of products/services.
IDEA 3 - Discuss the company's: (1) basic legal structure, (2) basic financial structure, as well as its' (3) most recent annual revenues.
IDEA 4 - Present any other introductory factors, variables, or descriptors which you deem important enough to discuss at the beginning of your work.
ORGANIZATION'S BASIC MISSION/PURPOSE, KEY CORPORATE GOALS/OBJECTIVES
IDEA 1 - Find or compose a mission/purpose statement for this firm.
IDEA 2 - Find or compose statements of key corporate goals and objectives.
DISCUSSION: A mission statement should describe the organization's major areas of interest, the scope of its intended actions, the basic market needs it intends to satisfy, and its primary values.
Strategic goals/objectives are broad statements of organizational purpose established in key results areas of the firm. They further define the mission. You will most likely find this mission/purpose in the annual report. If not compose one from your research - challenge your skills of logic.
KEY STRATEGIC ISSUES
IDEA 1 - List and describe, other key strategic issues, major assumptions, key problem areas, most significant strategic decisions, or other information of importance enough to appear at the beginning of your work.
EXTERNAL
KEY THREATS AND OPPORTUNITIES
IDEA 1 - List the five to ten most important: (1) Opportunities, (2) Trends, (3) Threats or (4) Risks.
These threats and opportunities derive from the following driving forces: Developments in Technology, Social/Cultural Trends, Economic: trends, changes or conditions, Legal/Political Developments (including regulation, insurance/benefits, taxes, etc.), Natural Resources, Ecological/Environmental, as well as International Events.
Key opportunities, threats, risks or trends may also derive from external organizations such as: Competitors, Customers/Clients, Suppliers, Organized Labor, Pressure Groups, Bankers/Creditors, Government Regulatory Agencies, Insurers, Stock Brokers/Analysts or any others which your creativity may generate.
Threats and opportunities can be discussed anywhere under the EXTERNAL heading. For example, threats and opportunities can be presented under the headings: "Industry Analysis", or "Competitor Analysis."
INDUSTRY ANALYSIS
IDEA 1 - BE SURE TO USE STANDARD AND POOR'S INDUSTRY SURVEYS, US INDUSTRIAL OUTLOOK, SEC FILINGS, AND OTHER CLOSE-BY INDUSTRY INFORMATION SOURCES.
IDEA 2 - Define and discuss the industry (for single business companies) or industries (for multiple business companies) in which your company competes. This should take the format: (1) name of major industry (2) industry product segments, or product groups, and (3) industry chain process. (manufacturer, wholesaler, or retailer)
EXAMPLE - Major industry: computers. Segment: software. Process: retailing.
Another EXAMPLE - Major industry: Entertainment. Segments: filmed entertainment, theme parks, consumer products. Process: service provider, wholesaler, retailer.
IDEA 3 - Describe the Industry structure and state the number of firms in the industry, discuss its degree of concentration. Is it oligopolistic, and heavily concentrated, or - competitive and with unlimited numbers of easy entry firms?
IDEA 4 - List and discuss the most important Industry Product/Market variables - such as key product lines, key markets and market structure, market share leaders, market size, market growth rate, number of companies in industry and industry segments, major positioning strategies, product position on life cycle, etc.
IDEA 4 - Discuss the industries' life cycle (fast growth, mature, declining.)
IDEA 5 - Discuss its history and background.
IDEA 6 - Characterize the environmental dynamics of the various industries or segments, as: dynamic, turbulent, hostile, dead, competitive, changing.
IDEA 7 - Discuss Scope of industry competitive rivalry (local, regional, national, or global).
IDEA 8 - Discuss the prevalence of backward and forward integration in the industry.
IDEA 9 - Discuss Industry Efficiency - scale economies, capacity utilization, industry profitability, experience curve effects.
VERY IMPORTANT INDUSTRY VARIABLES: Other Industry Trends and Changes, technological trends and changes, key barriers to entry and exit, industry capacity, diversification trends, global trends, consumer characteristics or segments, other economic characteristics.
Other Industry Variables - industry political structure, significant strategic successes and failures, most significant generic strategies used, most significant marketing and financial trends in the industry, significant industry restructuring (LBOs, takeovers, mergers, joint ventures, etc.), relevant ethical concerns, social responsibility trends in industry.
Definition of Industry - An industry can be defined as a group of firms offering products or services which are close substitutes of each other. Thus, the boundaries of the industry are the products that an individual trying to satisfy a certain need is willing to consider in his or her buying decision? The answer is: all products which, in the eyes of the individual, perform approximately the same function. From Hax and Majluf, THE STRATEGY CONCEPT AND PROCESS, Prentice Hall.)
DISCUSSION: What Industry? - Single SBU companies find themselves in only one industry, whereas multiple SBU companies operate in several industries. Typically, one for each business. It is important that you identify your case subject as single or multiple business and then that you recognize all appropriate industries relevant to the strategic situation.
DISCUSSION: It is important in such companies to briefly define all major industries which are important to strategic analysis. Strategic planners must identify specific strategic opportunities within industries toward formulating a strategic plan. Some knowledge of key industry characteristics related to that strategic opportunity are of critical importance. Use your logical skills to decide which industries are strategically important as well as how much to research and analyze each industry.
DISCUSSION: Dominant Industry - Corporate "Goliaths" such as General Motors could be considered to be in the (1) automobile, (2) aeronautics, or (3) computer software/services industries, etc. - due to its subsidiaries. However, the majority of GM is considered to be in GMs dominant industry - the automobile manufacturing industry. Only when you are analyzing the strategic situation of GM subsidiaries such as: Electronic Data Systems, Teknowledge or Hughes Aircraft as strategic business units, would you consider the non-automotive industries. Again rely on your logic to develop the industry analysis.
MORE DISCUSSION - Here is another model from the Strategic Management literature which you might find useful in analyzing your industry. (Same stuff - another version.) (From Thompson and Strickland, STRATEGIC MANAGEMENT, McGraw-Hill-Irwin.)
Because industries differ so significantly in their basic character and structure, industry and competitive analysis begins with an overview of the industry's dominant economic traits. As a working definition, we use the word industry to mean a group of firms whose products have so many of the same attributes that they compete for the same buyers. The factors to consider in pinpointing the industry's primary economic features are fairly standard:
- Market size
- Scope of competitive rivalry (local, regional, national, or global).
- Market growth rate and where the industry is in the growth cycle (early development, rapid growth and takeoff, early maturity, late maturity and saturation, stagnant and aging, decline and decay).
- Number of rivals and their relative sizes - is the industry fragmented with many small companies or concentrated and dominated by a few large companies?
- The number of buyers and their relative sizes.
- The prevalence of backward and forward integration.
- Ease of entry and exit.
- The pace of technological change in both production process innovation and new product introductions.
- Whether the product(s)/service(s) of rival firms are highly differentiated, weakly differentiated, or essentially identical.
- The extent to which economies of scale are present in manufacturing, transportation, or mass marketing.
- Whether high rates of capacity utilization are crucial to achieving low-cost production efficiency.
- Whether the industry has a strong learning and experience curve such that average unit cost declines as cumulative output (and thus the experience of "learning by doing") builds up.
- Capital requirements.
- Whether industry profitability is above/below par. (Thompson and Strickland, p. 59)
IDEA 10 – Discuss Principal Industry Drivers
Principal Industry Drivers
• Changes in the long-term industry growth rate
• Changes in who buys the product and how they use it
• Product innovation
• Technological change
• Marketing innovation
• Entry or exit of major firms
• Diffusion of technical know-how
• Increasing globalization of the industry
• Changes in cost and efficiency
• Emerging buyer preferences for differentiated products instead of a commodity product
• Regulatory influences and government policy changes
• Changing societal concerns, attitudes, and lifestyles
• Reductions in uncertainty and business risk
COMPETITOR ANALYSIS
IDEA 1 - REALIZE THAT THIS IS A VERY IMPORTANT PART - DO NOT LEAVE IT OUT!
IDEA 2 - List all competitors for each of your company’s industry/industries. Research and report the market share of each major competitor.
IDEA 3 - Use M. E. Porter's "five forces model" discussed in detail below for this section of your case report. This section should adhere to the following format:
DISCUSSION OF PORTER'S COMPETITION ANALYSIS
I. THE RIVALRY AMONG COMPETING SELLERS IN THE INDUSTRY.
1. Rivalry tends to intensify as the number of competitors increases and as they become more equal in size and capability. 2. Rivalry is usually stronger when demand for the product is growing slowly. 3. Rivalry is more intense when industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit volume. 4. Rivalry is stronger when the costs incurred by customers in switching from one brand to another are low. 5. Rivalry is stronger when one or more competitors are dissatisfied with their market position and initiate moves to bolster their standing at the expense of rivals. 6. Rivalry increases in proportion to the size of the payoff from a successful strategic move. 7. Rivalry tends to be more vigorous when it costs more to get out of a business than to stay in and compete. 8. Rivalry becomes more volatile and unpredictable the more diverse competitors are in terms of their strategies, personalities, corporate priorities, resources, and countries of origin. 9. Rivalry increases when strong companies outside the industry acquire competitors into major market contenders.
II. THE COMPETITIVE FORCE OF POTENTIAL ENTRY
- Economies of scale -- Inability to gain access to technology and specialized know-how -- The existence of learning and experience curve effects -- Brand preferences and customer loyalty -- Capital requirements -- Cost disadvantages of independent of size -- Access to distribution channels -- Regulatory policies -- Tariffs and international trade restrictions -
III. THE COMPETITIVE FORCE OF SUBSTITUTE PRODUCTS.
I. THE POWER OF SUPPLIERS.
V. THE POWER OF BUYERS.
"The Strategic Implication of the Five Competitive Forces", from Strategic Management by Thompson and Strickland.:
INTERNAL
INTERNAL STRENGTHS AND WEAKNESSES
IDEA 1 - List several key strengths and several key weaknesses of your company. You will discover upon analysis - that strengths and weaknesses generally can be categorized under the major functional components of the business: (1) management/human resources, (2) production/operations (3) financial (4) marketing
DISCUSSION - Every person alive has strengths and weaknesses. Therefore, every aggregate set of individuals or organization has strengths and weaknesses. It is more positive and pleasant to discuss the strengths.
DISCUSSION - Key Strengths have also been called: competitive competencies, business advantages, key success factors, competitive advantage, or competitive edges, etc . . Examples of key strengths might include: excellent management team or key entrepreneurial skill, excellent financial position, strong resource base, borrowing potential, strong equity position, excessive cash, etc.
DISCUSSION - It is just as important to assess key weaknesses - such as: excessive debt, limited talent of management, outdated production systems and equipment. Poor debt management or bookkeeping practices; small size competing with large market dominant firms; lack of marketing skill or distribution channels to carry a potentially successful product national or international, and so on. It will be your challenge to research and make an exhaustive list of the strengths and weaknesses which are important in the strategic decision at hand.
PAST AND PRESENT STRATEGIC ANALYSIS
IDEA 1 - DISCUSS AND DRAW A SCHEMATIC MODEL OF THE COMPANY'S TOP LEVEL GROWTH AND COMPETITIVE STRATEGY:
(1) GROWTH - EXPANSION - INTEGRATION/MERGER/ACQUISITION - CONSOLIDATION - RETRENCHMENT - DIVERSIFICATION - CORPORATE VENTURE - STRATEGIC ALLIANCE
(2) COMPETITIVE STRATEGY - COST - DIFFERENTIATION - FOCUS
DISCUSSION: We are seeking to identify our case subjects - Grand, Generic, or Corporate Strategy - the master plan - the big picture. Obviously, this CEO level strategy has been called many names. It is best for us to pursue the general characteristics of this CEO level master plan.
DISCUSSION: In a multiple business company, the CEO strategy is usually multiple business in scope. It concentrates on management of the portfolio of component businesses which make up the organization. It relates more to the generic process of growth, retrenchment, or stabilization. Such strategies as corporate takeovers, selling off whole autonomous businesses or groups of assets, financial or human resource restructuring - are all corporate strategic decisions/actions.
DISCUSSION: Corporate generic strategy determines what business or businesses the firm is in or should be in and how the business or businesses fundamentally should be conducted.
DISCUSSION: Corporate strategy answers these questions: A. Is there some business in which the organization has a strategic advantage or an innate interest? B. Does the company want to compete or find a niche? C. Does the company want or need to grow, stabilize, reduce its investment, turn company fortunes around, or defend itself against a takeover?
DISCUSSION: - GENERIC STRATEGIES INCLUDE: 1. Competing or finding a niche. 2. Concentration on single product or diversification to multiple products. 3. Growth or expansion: a. Intensive, integrative, or diversified growth, b. Sales growth or expansion by innovation or imitation. c. Regional, national, or international market expansion, d. Internal asset expansion, external expansion by acquisition, by merger, or by joint venture. e. Gradual or rapid expansion. 4. Stabilization. 5. Investment reduction by: a. Retrenchment. b. Divestment or spin-off of business unit (for multiple-SBU firms only). c. Selected asset reduction. d. Cost cutting. e. Liquidation. f. Selling out. g. Profit extraction. 6. Turnaround 7. Takeover defense. 8. Combination.
DISCUSSION: Michael Porter, (1980) has researched and proposed three generic strategies for COMPETITIVE ADVANTAGE: (1) cost leadership, (2) differentiation, and (3) focus.
FUNCTIONAL ANALYSIS
As I will state in class, marketing and financial analysis will be one of the most significant components of your case analysis.
MARKETING ANALYSIS
IDEA 1 - Overview the strategic marketing activity of this firm. You might include specific marketing strengths and weaknesses, successes or failures.
IDEA 2 - Briefly discuss the most important or key marketing variables. These might include: differentiation due to: market share leadership, product strengths, reputation (eg. Nordstrom's), talented sales staff, distribution network, cheaper suppliers, creative advertising, etc. .
IDEA 3 - Look for examples of specific (1) product strategies (2) promotional strategies (3) pricing strategies (4) distribution strategies (5) positioning strategies.
DISCUSSION: Thompson and Strickland ( p. 99) provide examples of marketing strengths: "Important distinctive competences - strong market share (or leading market share), a pacesetting or distinctive strategy, growing customer base and customer loyalty, above-average market visibility, in a favorably strategic situation, concentrating on fastest-growing market segments, strongly differentiated products, cost advantages, above-average marketing skills, a creative, entrepreneurially alert management, in position to capitalize on opportunities."
FINANCIAL ANALYSIS
IDEA 1 - INCLUDE ONE COMPREHENSIVE FINANCIAL TABLE IN THE TEXT.
These should include basic financial data - at minimum: revenues, profits, and selected key ratios for at least the three to five most current years. Again (to emphasize importance!) - Include in your report at least one financial table (in the text, not appendix) which provides at least minimum basic financial information for the three to five most current years.
IDEA 2 - Then provide three to five points which analyze and interpret this company's financial position. Expand upon your discussion of basic financial strengths and weaknesses.
IDEA 3 - Select the three or four most significant financial ratios for your company. Analyze and interpret these RATIOS. Do not just present the numbers in your table without interpretation.
DISCUSSION: It is very important for you to interpret trends. If revenues are up and profits are down - interpret, or look further for more information. Ratios are useless without your interpretation. Do not consider your task done if you have only listed them in tabular form.
Google Inc.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
| | | | | | | | | | |
| | |Year Ended December 31, |
| | |2005 | |2006 | |2007 |
|Revenues | |$|6,138,560 | |$|10,604,917 | |$|16,593,986 |
|Cost of revenues (including stock-based compensation expense of $5,579, $17,629, $22,335) | | |2,577,088 | | |4,225,027 | | |6,649,085 |
|Sales and marketing (including stock-based compensation expense of $28,411, $59,389, $131,638) | | |468,152 | | |849,518 | | |1,461,266 |
|Contribution to Google Foundation | | |90,000 | | |— | | |— |
|Total costs and expenses | | |4,121,282 | | |7,054,921 | | |11,509,586 |
| | | | | | | | | | |
|Income from operations | | |2,017,278 | | |3,549,996 | | |5,084,400 |
| | | | | | | | | | |
|Income before income taxes | | |2,141,677 | | |4,011,040 | | |5,673,980 |
| | | | | | | | | | |
|Net income | |$|1,465,397 | |$|3,077,446 | |$|4,203,720 |
|Net income per share of Class A and Class B common stock: | | | | | | | | | |
|Basic | |$|5.31 | |$|10.21 | |$|13.53 |
|Diluted | |$|5.02 | |$|9.94 | |$|13.29 |
| | | | | | | | | | |
Source: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549. FORM 10-K For the fiscal year ended December 31, 2006 number: 000-50726 Google Inc. Retrieved 3/26/2007
FUNCTIONAL ANALYSIS - Also consider the other following functional areas for analysis, including strengths and weaknesses:
MANAGEMENT TEAM/HUMAN RESOURCE ANALYSIS
PRODUCTION ANALYSIS
OTHER Functional Analysis
PROPOSED GENERIC OR MASTER STRATEGIC PLAN
BUILD A PLAN
THIS SHOULD BE ONE FOURTH OF YOUR PAPER - IT IS A VERY IMPORTANT PART!!
IDEA 1 - GENERATE SOME STRATEGIC ALTERNATIVES FOR DECISION
a. First, generate several - at least two or more - broad strategic alternative plans.
b. Combine key strengths with key opportunities - One of the most effective ways to begin is to combine key company strengths with the most promising external opportunities.
Example: Key Opportunity - Cabbage Patch Dolls are going to be a hot item for at least 18 months. Key Strengths - We have several similar dolls in production with our Hong Kong contracted manufacturer. Also, we have excellent doll distribution equivalent to the originator of Cabbage Patch dolls. Strategic alternative - we introduce a doll similar to Cabbage Patch for market.
c. Take care to analyze weaknesses with opportunities. Your objective should be to eliminate the weakness to take advantage of the opportunity.
Example: Weakness - we are dependent on only two suppliers. Opportunity - High sudden demand for our product. Strategic solution - eliminate dependency by finding and developing new suppliers.
IDEA 2 - Weigh and analyze the merits and demerits of the alternatives. Next, make a strategic decision on which alternative plan is best, given the situation variables from your research.
STRATEGIC CHOICE - DEVELOP A FULL STRATEGIC PLAN
IDEA 1 - After you have selected the best alternative strategy. Fill in the detail. Your broad and general plan will most likely be corporate or multiple SBU in nature.
IDEA 2 - In this segment you develop full business unit plans, functional level plans and operational level plans for each of the businesses addressed in your analysis.
To summarize: a full and detailed strategic plan for (1) the corporation as a whole (multiple business in nature), as well as (2) a plan for each single business or business unit that is important to your analysis.
DISCUSSION: How detailed depends on logic. Operationally you may need to change the brand of paper towels in the washroom. However, logic dictates that this detail is not germane to the success of the strategic plan. A few details about a new type of advertising campaign, however, may be very important.
DISCUSSION: Your strategic plan should be deductive - that is - beginning with the general or broad (corporate or multiple business - generic plan) - then developed toward the specific (specific business unit plans, functional and operational plans for each business unit plan, etc.) In other words, begin with a broad statement of the corporate or master generic plan, then expand the plan for each business or product/market segment with specific functional and operational strategies or tactics. Full financial analysis are most important to any plan.
Example: We propose a master plan to develop the markets for products A, B, and C in the following international markets: Hong Kong, Singapore, Bangkok and Kuala Lumpur.
First, operational plan for Hong Kong. Open an office in Hong Kong to receive product and store, transport, sell or warehouse in the market area. Need specific plan to open office, specific plan to rent warehouse space, transportation plan for merchandise, human resource plan to recruit needed people in Hong Kong, training plan, manpower plan, and so on. .
CONCLUSIONS
FINAL COMMENTARY - YOUR EVALUATION, SUMMARY CONCLUSIONS
IDEA 1 - Include in your final commentary your final evaluation remarks. Why the strategy will or will not work. Changes that must be made before the strategy will work. Competitive advantage critical to success or failure, etc. Other final comments.
BIBLIOGRAPHY - REFERENCES
IDEA 1 - REALIZE THAT FOOTNOTES/ENDNOTES ARE VERY IMPORTANT
IDEA 2 - Please include in your paper a Bibliography. Please use proper footnoting or endnoting. If you are not sure consult one of the several footnote format sources listed in the syllabus.
It is also most important that you connect footnotes or endnotes with specific paragraphs in the body of the document. That is, at the end of a paragraph which you have taken from a specific source, make sure that you cite that source properly using an endnote or footnote.
The Bibliography section of your paper is always carefully checked. Please feel free to ask specific questions about proper referencing and footnoting if you are still unsure after checking with syllabus sources.
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