D02 group1-gale2

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D02 group1-gale2

  1. 1. Running head: GROUP ASSURANCE OF LEARNING EXERCISE 2 1 Group Assurance of Learning Exercise 2 Melanie Allerdings, Amy Cashion, Tiffany Clay, Candida Dean, and Tammy Gobert Liberty University Group 1 - BUSI 400-D02 201240 Dr. A. Blossom
  2. 2. GROUP ASSURANCE OF LEARNING EXERCISE 2 2 Issues for Review and Discussion – Chapter 3 (p. 84)3.17 - Explain how to conduct an external strategic-management audit. The purpose of an external audit is to develop a list of the opportunities that can benefit afirm and a list of the threats that the firm should avoid. The audit should involve as manymanagers and employees as possible, and should begin with a company gathering competitiveintelligence and information about economic, social, cultural, demographic, environmental,political, governmental, legal, and technological trends. After the information has been gathered,a team should be assembled to evaluate and organize the opportunities and threats into lists.Management should then be assigned the task of prioritizing the lists from most importantopportunity/threat to least important opportunity/threat. Once the finalized list has been agreedupon, the material should be communicated and spread throughout the organization as a helpfulresource (David, 2011).3.18 - Identify a recent economic, social, political, or technological trend that significantlyaffects the local Pizza Hut. With the current state of our economy, many people are choosing to not eat out as much.This trend has hurt all restaurants and has significantly affected the profit margin of localeateries. With families having to budget their income more tightly than usual, eating out is one ofthe first things to go. Some people are eliminating dining out and opting for preparing meals athome. This economic trend has affected all restaurants, including the local Pizza Hut. A social trend that would affect Pizza Hut specifically is society’s consciousness ofeating healthy. Many people are choosing healthier restaurants to dine at that will not hurt theirdiet. Pizza Hut along with many other less healthy eateries have been affected by this health-conscious trend.
  3. 3. GROUP ASSURANCE OF LEARNING EXERCISE 2 3 A technological trend that is benefitting Pizza Hut is society’s dependence on technology.Pizza Hut has developed a website that allows customers to order their pizza online and reducethe amount of wait time it usually takes. This new service which caters to the technologicallysavvy has greatly benefited Pizza Hut and allowed them to service this new market.3.22 - What major forecasting techniques would you use to identify (1) economicopportunities and threats and (2) demographic opportunities and threats? Why are thesetechniques most appropriate? Economic opportunities and threats can best be forecasted using quantitative technique.Since there is historical data present that can be gathered and used when forecasting, it is easiestto utilize the quantitative method. However, demographic opportunities and threats do not haveas many numerical values and historical data to help with predictions, so it is easier to use thequalitative technique. Quantitative methods place greatest reliance on representing developmentsnumerically; whereas, qualitative methods are, of course, often employed where the key trends ordevelopments are hard to capture using simplified indicators, or where such data are notavailable (JRC European Commission, 2005).3.27 - Give some advantages and disadvantages of cooperative versus competitivestrategies. The advantages of the cooperative strategy are that it promotes teamwork and allows forjoint ventures. It allows two firms to work together, pull their resources, and share in bothtriumphs and failures. The disadvantage would be that profits and success would also be divided.The advantages of competitive strategies are that a firm can learn about its competitors and useits resources to gain a competitive edge against rival firms. It promotes a sense of dedication tocreating better products or services for their own company as a way to become more popular
  4. 4. GROUP ASSURANCE OF LEARNING EXERCISE 2 4than competing brands. Competitive analysis allows a firm to do research on the strengths,weaknesses, threats, and opportunities of their industry and organize their firm in a way thatpromotes their strengths, downplays their weakness, avoids their threats, and takes advantage oftheir opportunities. The disadvantages to the competitive strategy are the rivalry of other firms,the shared customer base, and the bargaining power of suppliers.3.31 - Let’s say your boss develops an EFE Matrix that includes 62 factors. How would yousuggest reducing the number of factors to 20? An EFE matrix should include between 15 to 20 factors. If my boss develops amatrix with 62 factors, chances are many of those factors are very similar. First, you couldreduce many of the factors by combining all the ones that are similar into one factor group.Second, you can pick the most important 20 factors that are left in the already reduced list andincorporate those into your final EFE matrix. Assurance of Learning Exercises 3A, Step 1 (p. 86)Table 3A.1EFE Matrix for McDonald’s Corporation WeightedKey External Factors Weight Rating ScoreOpportunitesReimaging of 900 stores in 2012 0.03 4 0.12Need exists to increase staffing during peak hours 0.08 1 0.08Increase restaurants operating 24/7 schedule 0.08 2 0.16Increase of liabilities by $967 million from 2007 to 2008 0.05 4 0.20Leadership turnover 0.12 2 0.24Enhance food image 0.06 4 0.24Optimize current menu options 0.07 3 0.21ThreatsDirect relationship between diet & health 0.09 3 0.27New competitor: Starbucks 0.06 2 0.12Competition from Yum! Brands 0.04 1 0.04Foreign currency translation losses 0.04 2 0.08Antiglobalization Activism Protests 0.06 1 0.06Increased Supply Costs 0.08 3 0.24Proposed IRS tax adjustments 0.06 4 0.24Proposed Government Regulations Regarding Fast Food 0.08 1 0.08Total 1.00 2.38
  5. 5. GROUP ASSURANCE OF LEARNING EXERCISE 2 5 Assurance of Learning Exercise 3D, Step 1-3 (p. 87)Table 3D.2Competitive Profile Matrix McDonalds YUM! Brands Burger KingCritical Success Factors Weight Rating Score Rating Score Rating Score Global Presence 0.13 4 0.52 3 0.39 2 0.26 Market Share 0.07 4 0.28 3 0.21 3 0.14 Product Quality 0.09 3 0.27 2 0.18 4 0.36 Customer Satisfaction 0.08 2 0.16 3 0.24 4 0.32 Financial Stability 0.14 4 0.56 2 0.28 3 0.42 Technology 0.08 4 0.32 3 0.24 3 0.16 Product Development 0.05 4 0.20 3 0.15 2 0.10 Brand Awareness 0.16 4 0.64 3 0.48 3 0.32 Price Competitiveness 0.13 4 0.52 3 0.39 3 0.26 Diversification 0.07 3 0.21 4 0.28 3 0.14 TOTALS: 1.00 3.68 2.84 2.48Source: Dale Wiersema. 2009. McDonald’s Corporation Strategic Management Plan.
  6. 6. GROUP ASSURANCE OF LEARNING EXERCISE 2 6 References(2005). Quantitative Versus Qualitative Methods. JRC European Commission. Retrieved from http://forlearn.jrc.ec.europa.eu/guide/4_methodology/meth_quanti-quali.htmDavid, F. R. (2011). Strategic Management: Concepts and Cases (13th Ed.). Upper Saddle River, NJ: Prentice Hall.

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