Parts of a Company Situation Analysis Exhibit 5 –5 1. Assessment of the present strategy based on performance. 2. Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis. 3. Assessment of competitive strength and identification of competitive advantage. 4. Conclusions concerning competitive position. 5. Determination of the strategic issues and problems that need to be addressed through the strategic planning process.
SWOT Analysis for Starbucks Coffee Exhibit 5 –6
Competitive Strength Assessment for Starbucks Coffee Exhibit 5 –7
A functional capability (strength) that the firm does well and one that creates a competitive advantage for the firm.
The process of comparing an organization’s products or services and processes with those of other companies.
Scanning the Environment
Searching the external environment for opportunities and threats.
State what is to be accomplished in singular, specific, and measurable terms with a target date.
Are general targets to be accomplished that are translated into actionable objectives.
Writing Effective Objectives
Max E. Douglas’s model for writing effective objectives:
(1) the word to , followed by
(2) an action verb,
(3) a statement of the single, specific, and measurable result to be achieved, and
(4) a target date.
To achieve a 6% overall return on fourth quarter sales.
Criteria That Objectives Should Meet Exhibit 5 –8
Management by Objectives (MBO)
Management by Objectives
Step 1. Set individual objectives and plans.
Step 2. Give feedback and evaluate performance.
Step 3. Reward according to performance.
Sources of MBO Failures
Lack of top management commitment and follow-through on MBO.
Employees’ negative beliefs about management’s sincerity in its efforts to include them in the decision-making process.
Turnaround and retrenchment
Backward and forward integration
Related and unrelated diversification
Corporate Grand and Growth Strategies Exhibit 5 –9
Responsible for financing the business activities by raising money through the sale of stock or bonds or through loans, deciding on the debt-to-equity ratio, paying off the debt and dividends to shareholders, keeping records of transactions, developing budgets, and reporting financial results.
Other Functional-Level Strategies
Research and development (R&D) is important to remaining competitive.
Types of Plans
Policies, procedures, and rules developed for handling repetitive situations.
General guidelines to be followed when making decisions.
A sequence of actions to be followed in order to achieve an objective.
A statement of exactly what should or should not be done.
Types of Plans (cont’d)
Programs and budgets developed for handling nonrepetitive situations.
A set of activities designed to accomplish an objective over a specified period of time.
Set project objectives.
Break the project down into a sequence of steps.
Assign responsibility for each step.
Establish starting and ending times.
Determine the resources needed for each step.
Types of Plans (cont’d)
Single-Use Plans (cont’d)
Represents the funds allocated to operate a unit for a fixed period of time.
Is a planning tool initially and becomes a control tool after implementation of the plan.
Standing Plans versus Single-Use Plans Exhibit 5 –14
Types of Plans (cont’d)
Alternative plans to be implemented if uncontrollable events occur.
Developing a contingency plan
What might go wrong?
How can I prevent it from happening?
If it does occur, what can I do to minimize its effect?
Implementing and Controlling Strategies
Top and middle managers plan, whereas lower-level functional managers and employees implement strategies.
Successful implementation requires effective and efficient support systems.
The process of establishing and implementing mechanisms to ensure that objectives are achieved.
Measuring progress toward achievement of objectives and taking corrective action when needed.
Staying within the budget when appropriate or changing it when necessary to meet changes in the environment.
Time Management Appendix
Explain the use of a time log.
List and briefly describe the three steps in the time management system.
Define the following key terms:
After studying this appendix, you should be able to: time management time management system
Analyzing Time Use
The Time Log
A daily diary that tracks your activities and enables you to determine how you spend your time each day.
Analyzing Time Logs
Determine how much time you are spending on your high-priority (HP) and low-priority (LP) responsibilities.
Identify areas where you spend too much time (TT).
Identify areas where you do not spend enough time (NT).
Identify major interruptions (I) that keep you from doing what you want to get done.
Identify tasks that could be delegated to someone else (D).
How much time does your boss control (B)? How much time do your employees control (E)? How much time do others outside outside your department control (O)? How much time do you actually control (M)?
Look for crisis situations (C).
Look for habits, patterns, and tendencies.
Daily Time Log Exhibit A5 –1
A Time Management System
Key components of a time management system:
The Time Management Process
Step 1. Plan each week .
Step 2. Schedule each week .
Step 3. Schedule each day .
Weekly Planner Exhibit A5 –2
Weekly Schedule Exhibit A5 –3
Daily Schedule Exhibit A5 –4
A Time Management System (cont’d)
Don’t be too optimistic; schedule enough time to do each task.
Once tasks are prioritized and scheduled, focus on only one at a time.
Schedule high-priority items during your “prime time,” when you perform at your best.
Try to set aside a regular time-slot for activities or events that you cannot anticipate.
Do not perform an unscheduled task before determining its priority.