Strategic Management for the
Capstone Business Simulation® and
Comp-XM®:
Analysis and Assessment
Michael L. Pettus, Ph.D.
ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or
used in any form or by any means- graphic, electronic, or mechanical, including photocopying, recording,
taping, Web distribution, or information storage and retrieval systems without the written permission of the
author, Michael L. Pettus. [email protected]
Copyright 2012
® is a registered trademark of Management Simulations, Inc.
6th
Edition
2
“I like this new 6th edition”
Professor Renee English
Webster University
“This text is excellent as a strategic management text which uses the Capstone
simulation and cases to explain the linkages of strategic management concepts to
real world business problems.”
Joseph Mahoney, Ph.D.
Caterpillar Chair in Strategic Management
University of Illinois
Associate Editor, Strategic Management Journal
“If you use the Capstone simulation this strategic management text must be used.
No other strategic management text can drive the concepts of strategic management
into a real world based simulation.”
Peter Wright, Ph.D.
Free Enterprise Chair in Strategic Management
University of Memphis
3
Acknowledgments
I would like to thank many people for their hard work and dedication to the
construction of this book. First, I would like to thank Dan Smith, founder of the
Capstone Business Simulation, for giving me the opportunity to prepare the book.
Second, I would like to thank all the students who spent hundreds of hours
word processing this book: Karen Knight and Tim Wiggenbach deserve special
recognition. Amanda Walker was especially helpful in the construction of this
second edition. Denisa Smaldone was very helpful in the development of the third
edition. Victoria Dudleston was instrumental in the constructing of the fourth
edition. Kelsey Lee was very important, and made significant contributions, in the
construction of the 5
th
edition. Audra Davis was crucial in terms of assistance of the
updated 5
th
edition. Maddison Harner was outstanding in terms of assistance in
creating the 6th edition. Someday all of you will walk with industry giants.
Third, there are two people who were vital to the construction of this book:
May Zelner of Capstone Business Simulation and Hans Royal-Hedinger of Millikin
University. Without the hard work of these individuals, this book would never have
been accomplished. If I were to pick a number of individuals to start a business,
May and Hans would be among my ten top picks in the world! Someday both of
you will walk with captains of industry.
Fourth, I would like to thank Eddie Schwertz of Webster University for his
review of the 6th edition
4
Michael L. Pettus earned a PhD in strategic managemen.
This document provides a summary of a master's thesis titled "Cracking the Code of Strategy Execution". The thesis explores why there is often a gap between corporate strategy formulation and execution. It aims to understand the causes of this gap and provide a method for organizations to successfully bridge it.
The thesis is divided into three parts. Part one defines the gap, examines why strategy execution fails, and what strategy execution entails. Part two identifies five "strategy execution syndromes" that can inhibit execution, such as resistance, lack of motivation, and groupthink. Part three proposes a strategy execution model and provides guidance on translating, adapting, and implementing strategies while avoiding the syndromes.
The thesis uses an eclectic research
How can a teacher be encouraging and motivating to students durinAlleneMcclendon878
How can a teacher be encouraging and motivating to students during challenging times ie. (COVID)? The problem is not being able to keep children motivated long enough to complete and submit assignments
· Do not simply put summaries together one by one or put all of your Annotated Bibliographies together
· Include an introduction section
· Include a conclusion section
· Consider creating themes
· You will need subheadings
· You must use APA format
· You must have a reference page (use hanging indents...See APA format)
· Use the correct in-paper citations
· Include different types of literature/resources
· Try to avoid using first person "I" (use scholarly, unbiased writing
Sterman
I 1
ISBN : 007238915X
TITLE: BUSINESS DYNAMICS : SYSTEMS THINKING I 1
t
RIAL : 291000
CLASS: BUSINESS
EXHIB :
Business Dynamics
Systems Thinking and
Modeling for a Complex World
John D. Sterman
Massachusetts Institute of Technology
Sloan School of Management
Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San Francisco St. Louis
Bangkok Bogota Caracas Lisbon London Madrid
Mexico City Milan New Delhi Seoul Singapore Sydney Taipei Toronto
McGraw-Hill Higher Education
A Division of f i e McGraw-Hill Companies
BUSINESS DYNAMICS
SYSTEMS THINKING AND MOOELING FOR A COMPLEX WORLD
Copyright 0 2000 by The McGraw-Hill Companies, Inc. AU rights reserved. Printcd in the United '
States of America. Except as permitted under the United States Copyright Act of 1976, no part of
this publication may be reproduced or dismbuted in any form or by m y means, or stored in a
database or retrieval system, without the prior written permission of the publisher.
This book is printed on acid-free paper. .h
4 5 6 7 8 9 0 KGPiKGP 0 9 8 7 6 5 4 3 2
ISBN 0-07-231135-5
Publisher: Jeffrey J. Shelsfud
Senior sponsoring editor: Scott Isenberg
Marketing manager: Zina Cra3
Senior project manager: Gladys True
Senior production supervisor: Lori Koetters
Freelance design coordinator: A4av L. Christianson
Freelance cover designer: The Wsrrul
Cover image: 0 Sonia Delaumy/L & M Services, Amsterdaflute Gulleo, LondodArt Resource, NY
Compositor: GAChdianapolis
Typeface: 11/13 Ernes Roman
Printer: Quebecor Printing Book Group/Kingsport
Library of Congress Cataloging-in-Publication Data
Sterman, John.
Business dynamics : systems thinking and modeling for a complex world I John D. Sterman.
Includes hibliographical references and index.
ISBN 0-07-231135-5 (alk. paper)
1. Indusmal management. 2. System theory. 3. Management information systems. I.
p. cm.
Title.
HD30.2.S7835 2000
658.4'038'011Ldc21
99-056030
http://www.mhhe.com
For Cindy
ABOUT THE AUTHOR
John D. Sterman is J. Spencer Standish Professor of Management at the Sloan
School of Management of the Massachusetts Institute of Technology and Director
of MIT’s System Dynamics Group. His research centers on the development of
practical methods for systems t ...
I am very happy to present you my very first thesis! :)
Within this thesis, I aim to consolidate scenario planning process accross various discipline.
This proposed approach will allow to explore "How can scenario planning can be leveraged to enhance long-term Strategic & Financial Planning." The aim is to bring a fresh perspective to Scenario Planning as a cross-functional practice.
Please feel free to contact me at ybmetalo@gmail.com for any discussion around this subject or any other related ones.
Thanks and regards :)
D MGMT655 Team CharterTeam Members and contact information .docxalanrgibson41217
D MGMT655 Team Charter
Team Members and contact information:
Name
Preferred Email
Phone Number
Time Zone
Denise Brown
[email protected]
970-313-8763
Pacific (California)
Purpose Statement and Team Objectives:
Team Values:
List the values/behaviors you will use to effectively achieve your mission.
Values might include behaviors such as listening with an open mind, sharing knowledge, respectful communication, take responsibility/no blame, decisions based on reasoning, etc. Come up with your own list!
Team Expectations:
Collectively identify a list of expectations for team members.
Expectations might include behaviors such as keeping commitments, being proactive in staying current with your team, everyone contributes, process if someone does not keep commitments, etc.
Team Meetings and Communication:
Working as a virtual team can present some challenges in terms of communication. Identify when and how the team will meet/communicate with one another. Include how to communicate with those who can’t attend.
Team Assessment:
Identify the strengths and weaknesses of each team member.
For this course, identify who is most comfortable with the simulation and with Finance. Be sure to tap into these skills in your team process.
Functional Roles:
Based on skills and interests, indicate each individual’s role and their tasks for the team project. Define the responsibilities of each role.
COO/ Team Leader –
Organizes team meetings, facilitates team discussions,facilitates problem solving and collaboration, and strives for team consensus and win-win agreements. The COO collects and compiles the Product Manager slides for the Board of Directors presentations (Group Projects), adding a “state of the business” executive summary-type slide, a finance slide, and, ideally, a “lessons learned” slide. Typically, the COO makes the final Finance decisions just before simulation round close when financing needs for the company are available in the Pro Formas.
Product Managers (VPs)–
Each team member selects one sensor product to manage. There are five sensor products in each company. If there are only five team members, then the COO also will manage a product. The Product Managers (VPs) will make all functional decisions for their product – R&D, Marketing, and Production. No decisions will be made for another VP’s product without their agreement. Each VP will create at least four slides for the Board of Directors Presentation (Group Project), including a cover slide, and one slide for each functional area. Ample notes explaining and assessing decisions are included. The slides are submitted to the COO and Instructor.
Fill out the table below to confirm product management responsibilities. The sensor names begin with the same letter as the first letter of your company name. E.g., Cid is the high end sensor for the Chester company. You will find the sensors and associated primary market segment listed on pag.
Creating Winning Businesses Deming’S System Of Profound KnowledgeNat Evans
This document discusses Deming's system of profound knowledge and systems thinking. It begins by introducing Deming's work identifying common management practices that can destroy companies, such as incentives and pay-for-performance targets. It then discusses the importance of systems thinking and having a clear organizational aim. Examples of effective aims from well-known companies are provided. The document argues that committed individuals and a shared vision are needed to enact systems thinking. It also discusses forces that can destroy a system, such as extrinsic motivation and competition between groups. Finally, it advocates using flow diagrams rather than traditional organizational charts to help individuals understand how their work fits within and impacts the larger organizational system.
Google X - Think Tanks as a Source of Disruptive Innovation in Large Corporat...Thomas Klaffke
My seminar paper on Think Tanks as a Source of Disruptive Innovation in Large Corporations tries to propose a viable solution to the problem many large organizations nowadays have: robust, inflexible structures, processes and cultures in which the creation and development of disruptive innovations is almost impossible.
My solution: outsourced, creative, clandestine think tanks or labs that are focusing solely on disruptive innovation outside of the core business of the organization. How can this be a viable solution? Google X might be a popular and successful example.
Read my paper to know why!
Cheap Assignment Help, an online tutoring company, provides students with a wide range of online assignment help services for students studying in classes K-12, and College or university. The Expert team of professional online assignment help tutors at Cheap Assignment Help .COM provides a wide range of help with assignments through services such as college assignment help, university assignment help, homework assignment help, email assignment help and online assignment help. Our expert team consists of passionate and professional assignment help tutors, having masters and PhD degrees from the best universities of the world, from different countries like Australia, United Kingdom, United States, Canada, UAE and many more who give the best quality and plagiarism free answers of the assignment help questions submitted by students, on sharp deadline. Cheap Assignment Help .COM tutors are available 24x7 to provide assignment help in diverse fields - Math, Chemistry, Physics, Writing, Thesis, Essay, Accounting, Finance, Data Analysis, Case Studies, Term Papers, and Projects etc. We also provide assistance to the problems in programming languages such as C/C++, Java, Python, Matlab, .Net, Engineering assignment help and Finance assignment help. The expert team of certified online tutors in diverse fields at Cheap Assignment Help .COM available around the clock (24x7) to provide live help to students with their assignment and questions. We have also excelled in providing E-education with latest web technology. The Students can communicate with our online assignment tutors using voice, video and an interactive white board. We help students in solving their problems, assignments, tests and in study plans. You will feel like you are learning from a highly skilled online tutor in person just like in classroom teaching. You can see what the tutor is writing, and at the same time you can ask the questions which arise in your mind. You only need a PC with Internet connection or a Laptop with Wi-Fi Internet access. We provide live online tutoring which can be accessed at anytime and anywhere according to student’s convenience. We have tutors in every subject such as Math, Chemistry, Biology, Physics and English whatever be the school level. Our college and university level tutors provide engineering online tutoring in areas such as Computer Science, Electrical and Electronics engineering, Mechanical engineering and Chemical engineering.
Regards
http://www.cheapassignmenthelp.com/
http://www.cheapassignmenthelp.co.uk/
This document provides a summary of a master's thesis titled "Cracking the Code of Strategy Execution". The thesis explores why there is often a gap between corporate strategy formulation and execution. It aims to understand the causes of this gap and provide a method for organizations to successfully bridge it.
The thesis is divided into three parts. Part one defines the gap, examines why strategy execution fails, and what strategy execution entails. Part two identifies five "strategy execution syndromes" that can inhibit execution, such as resistance, lack of motivation, and groupthink. Part three proposes a strategy execution model and provides guidance on translating, adapting, and implementing strategies while avoiding the syndromes.
The thesis uses an eclectic research
How can a teacher be encouraging and motivating to students durinAlleneMcclendon878
How can a teacher be encouraging and motivating to students during challenging times ie. (COVID)? The problem is not being able to keep children motivated long enough to complete and submit assignments
· Do not simply put summaries together one by one or put all of your Annotated Bibliographies together
· Include an introduction section
· Include a conclusion section
· Consider creating themes
· You will need subheadings
· You must use APA format
· You must have a reference page (use hanging indents...See APA format)
· Use the correct in-paper citations
· Include different types of literature/resources
· Try to avoid using first person "I" (use scholarly, unbiased writing
Sterman
I 1
ISBN : 007238915X
TITLE: BUSINESS DYNAMICS : SYSTEMS THINKING I 1
t
RIAL : 291000
CLASS: BUSINESS
EXHIB :
Business Dynamics
Systems Thinking and
Modeling for a Complex World
John D. Sterman
Massachusetts Institute of Technology
Sloan School of Management
Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San Francisco St. Louis
Bangkok Bogota Caracas Lisbon London Madrid
Mexico City Milan New Delhi Seoul Singapore Sydney Taipei Toronto
McGraw-Hill Higher Education
A Division of f i e McGraw-Hill Companies
BUSINESS DYNAMICS
SYSTEMS THINKING AND MOOELING FOR A COMPLEX WORLD
Copyright 0 2000 by The McGraw-Hill Companies, Inc. AU rights reserved. Printcd in the United '
States of America. Except as permitted under the United States Copyright Act of 1976, no part of
this publication may be reproduced or dismbuted in any form or by m y means, or stored in a
database or retrieval system, without the prior written permission of the publisher.
This book is printed on acid-free paper. .h
4 5 6 7 8 9 0 KGPiKGP 0 9 8 7 6 5 4 3 2
ISBN 0-07-231135-5
Publisher: Jeffrey J. Shelsfud
Senior sponsoring editor: Scott Isenberg
Marketing manager: Zina Cra3
Senior project manager: Gladys True
Senior production supervisor: Lori Koetters
Freelance design coordinator: A4av L. Christianson
Freelance cover designer: The Wsrrul
Cover image: 0 Sonia Delaumy/L & M Services, Amsterdaflute Gulleo, LondodArt Resource, NY
Compositor: GAChdianapolis
Typeface: 11/13 Ernes Roman
Printer: Quebecor Printing Book Group/Kingsport
Library of Congress Cataloging-in-Publication Data
Sterman, John.
Business dynamics : systems thinking and modeling for a complex world I John D. Sterman.
Includes hibliographical references and index.
ISBN 0-07-231135-5 (alk. paper)
1. Indusmal management. 2. System theory. 3. Management information systems. I.
p. cm.
Title.
HD30.2.S7835 2000
658.4'038'011Ldc21
99-056030
http://www.mhhe.com
For Cindy
ABOUT THE AUTHOR
John D. Sterman is J. Spencer Standish Professor of Management at the Sloan
School of Management of the Massachusetts Institute of Technology and Director
of MIT’s System Dynamics Group. His research centers on the development of
practical methods for systems t ...
I am very happy to present you my very first thesis! :)
Within this thesis, I aim to consolidate scenario planning process accross various discipline.
This proposed approach will allow to explore "How can scenario planning can be leveraged to enhance long-term Strategic & Financial Planning." The aim is to bring a fresh perspective to Scenario Planning as a cross-functional practice.
Please feel free to contact me at ybmetalo@gmail.com for any discussion around this subject or any other related ones.
Thanks and regards :)
D MGMT655 Team CharterTeam Members and contact information .docxalanrgibson41217
D MGMT655 Team Charter
Team Members and contact information:
Name
Preferred Email
Phone Number
Time Zone
Denise Brown
[email protected]
970-313-8763
Pacific (California)
Purpose Statement and Team Objectives:
Team Values:
List the values/behaviors you will use to effectively achieve your mission.
Values might include behaviors such as listening with an open mind, sharing knowledge, respectful communication, take responsibility/no blame, decisions based on reasoning, etc. Come up with your own list!
Team Expectations:
Collectively identify a list of expectations for team members.
Expectations might include behaviors such as keeping commitments, being proactive in staying current with your team, everyone contributes, process if someone does not keep commitments, etc.
Team Meetings and Communication:
Working as a virtual team can present some challenges in terms of communication. Identify when and how the team will meet/communicate with one another. Include how to communicate with those who can’t attend.
Team Assessment:
Identify the strengths and weaknesses of each team member.
For this course, identify who is most comfortable with the simulation and with Finance. Be sure to tap into these skills in your team process.
Functional Roles:
Based on skills and interests, indicate each individual’s role and their tasks for the team project. Define the responsibilities of each role.
COO/ Team Leader –
Organizes team meetings, facilitates team discussions,facilitates problem solving and collaboration, and strives for team consensus and win-win agreements. The COO collects and compiles the Product Manager slides for the Board of Directors presentations (Group Projects), adding a “state of the business” executive summary-type slide, a finance slide, and, ideally, a “lessons learned” slide. Typically, the COO makes the final Finance decisions just before simulation round close when financing needs for the company are available in the Pro Formas.
Product Managers (VPs)–
Each team member selects one sensor product to manage. There are five sensor products in each company. If there are only five team members, then the COO also will manage a product. The Product Managers (VPs) will make all functional decisions for their product – R&D, Marketing, and Production. No decisions will be made for another VP’s product without their agreement. Each VP will create at least four slides for the Board of Directors Presentation (Group Project), including a cover slide, and one slide for each functional area. Ample notes explaining and assessing decisions are included. The slides are submitted to the COO and Instructor.
Fill out the table below to confirm product management responsibilities. The sensor names begin with the same letter as the first letter of your company name. E.g., Cid is the high end sensor for the Chester company. You will find the sensors and associated primary market segment listed on pag.
Creating Winning Businesses Deming’S System Of Profound KnowledgeNat Evans
This document discusses Deming's system of profound knowledge and systems thinking. It begins by introducing Deming's work identifying common management practices that can destroy companies, such as incentives and pay-for-performance targets. It then discusses the importance of systems thinking and having a clear organizational aim. Examples of effective aims from well-known companies are provided. The document argues that committed individuals and a shared vision are needed to enact systems thinking. It also discusses forces that can destroy a system, such as extrinsic motivation and competition between groups. Finally, it advocates using flow diagrams rather than traditional organizational charts to help individuals understand how their work fits within and impacts the larger organizational system.
Google X - Think Tanks as a Source of Disruptive Innovation in Large Corporat...Thomas Klaffke
My seminar paper on Think Tanks as a Source of Disruptive Innovation in Large Corporations tries to propose a viable solution to the problem many large organizations nowadays have: robust, inflexible structures, processes and cultures in which the creation and development of disruptive innovations is almost impossible.
My solution: outsourced, creative, clandestine think tanks or labs that are focusing solely on disruptive innovation outside of the core business of the organization. How can this be a viable solution? Google X might be a popular and successful example.
Read my paper to know why!
Cheap Assignment Help, an online tutoring company, provides students with a wide range of online assignment help services for students studying in classes K-12, and College or university. The Expert team of professional online assignment help tutors at Cheap Assignment Help .COM provides a wide range of help with assignments through services such as college assignment help, university assignment help, homework assignment help, email assignment help and online assignment help. Our expert team consists of passionate and professional assignment help tutors, having masters and PhD degrees from the best universities of the world, from different countries like Australia, United Kingdom, United States, Canada, UAE and many more who give the best quality and plagiarism free answers of the assignment help questions submitted by students, on sharp deadline. Cheap Assignment Help .COM tutors are available 24x7 to provide assignment help in diverse fields - Math, Chemistry, Physics, Writing, Thesis, Essay, Accounting, Finance, Data Analysis, Case Studies, Term Papers, and Projects etc. We also provide assistance to the problems in programming languages such as C/C++, Java, Python, Matlab, .Net, Engineering assignment help and Finance assignment help. The expert team of certified online tutors in diverse fields at Cheap Assignment Help .COM available around the clock (24x7) to provide live help to students with their assignment and questions. We have also excelled in providing E-education with latest web technology. The Students can communicate with our online assignment tutors using voice, video and an interactive white board. We help students in solving their problems, assignments, tests and in study plans. You will feel like you are learning from a highly skilled online tutor in person just like in classroom teaching. You can see what the tutor is writing, and at the same time you can ask the questions which arise in your mind. You only need a PC with Internet connection or a Laptop with Wi-Fi Internet access. We provide live online tutoring which can be accessed at anytime and anywhere according to student’s convenience. We have tutors in every subject such as Math, Chemistry, Biology, Physics and English whatever be the school level. Our college and university level tutors provide engineering online tutoring in areas such as Computer Science, Electrical and Electronics engineering, Mechanical engineering and Chemical engineering.
Regards
http://www.cheapassignmenthelp.com/
http://www.cheapassignmenthelp.co.uk/
- Operations research (OR) evolved from its military origins during World War 2 when experts from different disciplines worked together to solve problems.
- OR uses quantitative models and techniques from various fields like mathematics, engineering and psychology to help managers make optimal decisions.
- Some key uses of OR models include helping to determine the optimal product mix in production, scheduling issues, financial decisions around capital structure, and efficient resource allocation and utilization.
the Summary of The End of Competitive AdvantageUswatun Hasanah
This document provides an overview of Rita McGrath's expertise and the types of talks she gives on strategy, innovation, complexity/uncertainty, and organizational leadership/change. Some of her most popular talks discuss the end of sustainable competitive advantage and the need for a new dynamic strategy playbook, lessons from companies that achieved consistent growth, and frameworks for effectively disengaging from declining businesses to free up resources. The document lists recent client engagements and publications and provides a detailed table of contents for her various speech topics.
This document provides a summary of Petra Söderling's learning diary from a study program in strategic innovations and entrepreneurship in Palo Alto, California from November 15-19, 2010. The diary summarizes lectures and discussions from professors on topics including strategic leadership of corporate innovation, building robust business clusters, dynamic capabilities, discovering business models, and lessons for CEOs. Key lessons included the importance of culture and mentality in strategy, the role of clusters and networks in innovation, using simple rules and rhythm in dynamic strategy, and the impact of leadership style on strategic decision making.
Integrated Enterprise Excellence White PaperJon Hansen
Is Six Sigma Still Relevant in A Dynamically Changing World?
“With the growing level of dissatisfaction with programs such as Six Sigma, the question that needs to be asked is quite simply this . . . what are the key elements of a successful process improvement initiative?
This white paper focuses on the possible reasons behind the alarming number of failed or struggling programs, as well as providing insight into why Deming’s System of Profound Knowledge establishes a meaningful foundation upon which Forrest Breyfogle’s Integrated Enterprise Excellence methodology consistently delivers superior results.”
Integrated Enterprise Excellence - Jon W. HansenRonald Taylor
Integrated Enterprise Excellence - Whitepaper
What are the key elements of a successful IT initiative? I believe this paper on Integrated Enterprise Excellence represents the first step toward answering that question.
Integrated Enterprise Excellence White Paperguesta025e8
Is Six Sigma Still Relevant in a Dynamically Changing World?
With the growing level of dissatisfaction with programs such as Six Sigma, the question that needs to be asked is quite simply this . . . what are the key elements of a successful process improvement initiative?
This white paper, authored by critically acclaimed business writer Jon Hansen, focuses on the possible reasons behind the alarming number of failed or struggling programs, as well as providing insight into why Deming’s System of Profound Knowledge establishes a meaningful foundation upon which Forrest Breyfogle’s Integrated Enterprise Excellence methodology consistently delivers superior results.
This chapter provides an overview of sheet-fed offset presses and strategic operation management. It discusses the typical units of a sheet-fed offset press including the feeding, printing, inking, dampening and delivery units. The chapter also covers factors that are important for successful press operation like paper quality and flow. It explores the lithographic process and the interaction between water, ink and substrate. The chapter emphasizes the importance of quality, productivity, efficiency and profitability in production. It highlights the role of skilled personnel and quality materials in sheet-fed offset printing.
Pin On Sop For MBA Sample. Online assignment writing service.Tiffany Carpenter
The document outlines a project proposal for improving City Year by addressing issues corps members face. It notes that corps members work 50+ hours per week but the compensation does not equal the effort required. As a former corps member, the author found it difficult to live on the stipend. The proposal suggests increasing stipends to match living expenses and provide more support for corps members' well-being and development. It also recommends learning from similar organizations like Teach for America that offer higher compensation.
1. The consultancy report analyzes the bankruptcy of Japan Airline Ltd and provides recommendations for reorganization.
2. Root cause analysis using tools like fishbone diagrams and 5 whys identified high fixed costs, inefficient management, and lack of visionary leadership as contributing factors.
3. Literature on organizational distress phases and turnaround management informed the analysis. A matrix structure was recommended to improve adaptability compared to JAL's mechanistic structure.
This document summarizes 74 position papers submitted for an IBM conference on service science, management, and engineering education. It groups the papers into four categories: existing service-related courses and curricula, planned service-related courses and curricula, current service-related research, and planned service-related research. Under existing courses and curricula, it briefly describes programs at 22 universities. It then similarly outlines plans and proposals from 20 universities for new courses and curricula.
This document discusses scenario planning as a strategic tool for businesses to prepare for an uncertain future. Scenario planning involves identifying key driving forces that could impact a business, such as political, economic, social and technological factors. Managers then develop plausible scenarios or stories about how these factors could interact and influence the future environment. This allows businesses to assess different strategic options and make robust decisions that will work under a variety of potential futures. The document provides examples of companies that have successfully used scenario planning, such as Royal Dutch Shell. It also outlines the steps involved in scenario planning, from identifying uncertainties to developing four plausible scenarios to guide strategic decision making.
The book "On the Profession of Management" by Peter Drucker compiles over 30 years of his work published in the Harvard Business Review, organized into sections on a manager's responsibilities and an executive's world. Drucker discusses key challenges modern managers face from dynamic shifts in business realities and theories, and how to make effective decisions, focusing on knowledge-based organizations and the emergence of information technology. The book provides valuable insights for managers on their role and responsibilities in continuously evolving business environments.
This document provides an overview of strategic planning. It discusses how strategic planning aims to gain control over decisions and reduce uncertainty, but this obsession with control can lead organizations to engage in strategic planning more for public relations purposes rather than strategic value. Strategic planning works best in stable conditions but deals less well with unpredictable situations. The document also discusses how strategic planning has become an important process in both the public and private sectors to help organizations measure performance, improve over time, and work towards achieving their missions and goals. However, strategic planning must be approached differently in the public sector compared to the private sector due to differences in objectives and accountability.
2014 q3 McKinsey quarterly - Management, the next 50 yearsAhmed Al Bilal
This article discusses how the collision of three major trends - rapid technological disruption, growth in emerging markets, and widespread population aging - is upending traditional management assumptions and intuition. These trends include the rise of artificial intelligence, the shift of economic activity to emerging markets and cities within those markets, and the demographic changes resulting from population aging. The article argues that the acceleration and interaction of these large shifts will profoundly impact business and require new approaches to strategy, decision-making, and management. Leaders must overhaul how they set strategy, engage with technology, manage workforces, and combat organizational inertia to succeed in the new environment.
Anatomy Of An Organization S Top Management TeamDon Dooley
The document discusses leadership styles and strategic decision making within corporate top management teams. It defines leadership and contrasts transactional vs transformational leadership styles. The top management team is responsible for strategic decisions that impact the organization's future. Decision making is influenced by both objective facts and the mental models and personalities of individual top managers. The document then examines different leadership styles potentially found within top management teams, including visionary, managerial, and strategic styles, and how these styles influence strategic decision making processes and organizational outcomes.
This chapter introduces descriptive statistics and key concepts. It distinguishes between qualitative and quantitative data, and discusses different scales of measurement including nominal, ordinal, interval, and ratio scales. It also defines populations and samples, noting that samples are subsets selected from populations. Descriptive statistics are used to summarize and describe data through measures of central tendency and variability.
This document provides an overview of strategic communications planning. It discusses key components of an effective communications plan including context, environmental scan, stakeholder analysis, objectives, strategy, audiences, announcements, messages, tactics, issues, budget, and evaluation. The document is intended to serve as a comprehensive guide for developing strategic corporate communications plans.
Steps Begin your board with an explanation of your topic and th.docxrjoseph5
Steps: Begin your board with an explanation of your topic and the information you've already found. You can then place citations for your articles (so you don't get repeat suggestions). Then, ask the following questions.
1) In what way have you experienced or have been impacted by my topic? (Directly or indirectly)
2) What do already know about its history and/or current problems? (Readers should reply with a list of 3-4 things)
3) What other nations relate to my topic? (Readers, if you don't know, do a quick search!)
4) Aside from the disciplines I'm currently researching, what other fields do you think would be interested in my topic and why?
.
Steps for Effective Case Analysis Adapted from Harvard .docxrjoseph5
Steps for Effective Case Analysis
Adapted from Harvard Business Publishing
It's useful to think of a case analysis as digging deeper and deeper into the layers of a case.
You should make sure to follow these general steps in addition to answering the questions
from the case.
1. You start at the surface, Getting Oriented and examining the overall case
landscape.
2. Then you begin to dig, Identifying Problems, as well as possible alternative
solutions.
3. This is the section where you will spend most of your time.
Digging deeper, Performing Analyses you identify information that exposes the issues,
gather data, perform calculations that might provide insight. "Analysis" describes the
varied and crucial things you do with information in the case, to shed light on the problems
and issues you've identified. That might mean calculating and comparing cumulative
growth rates for different periods from the year-by-year financials in a case's exhibits. Or it
might mean pulling together seemingly unrelated facts from two different sections of the
case, and combining them logically to arrive at an important conclusion or conjecture.
Analysis usually doesn't provide definitive answers. But as you do more of it, a clearer
picture often starts to emerge, or the preponderance of evidence begins to point to one
interpretation rather than others. Don't expect a case analysis to yield a "final answer." If
you're accustomed to doing analysis that ends with a right answer, coming up with a
possible solution that simply reflects your best judgment might frustrate you. But
remember that cases, much like real-world business experiences, rarely reveal an
absolutely correct answer, no matter how deeply you analyze them. Typically, you'll do
qualitative analysis based on your reading and interpretation of the case. Ask yourself:
What is fact and what is opinion? Which facts are contributing to the problem? Which are
the causes?
Qualitative factors should be prioritized and fully developed to support your argument.
Make notes about your evolving interpretations, always being careful to list the evidence or
reasons that support them. Qualitative information in a case can be a mix of objective and
subjective information. For example, you may need to assess the validity of quotations from
company executives, each of whom has a subjective opinion. Reports from external
industry analysts or descriptions of what other companies in the industry have done might
seem more objective; no one in the case has a vested interest in this information. A
company's internal PowerPoint presentation should be considered separately and
differently from a newspaper article about the company. Cases mix firsthand quotations
and opinions with third-person narratives, so you need to consider the reliability of
sources. As in real life, you shouldn't take all case information at face value.
Quantitative data—such as amounts of.
Steps of Assignment• Choose TWO of the social health determi.docxrjoseph5
Steps of Assignment
• Choose
TWO
of the social health determinants important to you. – Start your report with a brief description of why you chose these two• Determine your electoral riding, and which political parties are running candidates in your riding– Report in the your introduction • Examine the platforms of each of the political parties represented in your riding for promises that will influence your chosen health determinants• Report these promises in a chart– Do NOT tell me which party you prefer. Just describe the relevant promises.• Describe the process by which you would register your vote in the provincial election (where, when, what documentation required)– This may be different than usual, given the pandemic safety requirements–
www.elections.sk.ca
.
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Steps: Begin your board with an explanation of your topic and the information you've already found. You can then place citations for your articles (so you don't get repeat suggestions). Then, ask the following questions.
1) In what way have you experienced or have been impacted by my topic? (Directly or indirectly)
2) What do already know about its history and/or current problems? (Readers should reply with a list of 3-4 things)
3) What other nations relate to my topic? (Readers, if you don't know, do a quick search!)
4) Aside from the disciplines I'm currently researching, what other fields do you think would be interested in my topic and why?
.
Steps for Effective Case Analysis Adapted from Harvard .docxrjoseph5
Steps for Effective Case Analysis
Adapted from Harvard Business Publishing
It's useful to think of a case analysis as digging deeper and deeper into the layers of a case.
You should make sure to follow these general steps in addition to answering the questions
from the case.
1. You start at the surface, Getting Oriented and examining the overall case
landscape.
2. Then you begin to dig, Identifying Problems, as well as possible alternative
solutions.
3. This is the section where you will spend most of your time.
Digging deeper, Performing Analyses you identify information that exposes the issues,
gather data, perform calculations that might provide insight. "Analysis" describes the
varied and crucial things you do with information in the case, to shed light on the problems
and issues you've identified. That might mean calculating and comparing cumulative
growth rates for different periods from the year-by-year financials in a case's exhibits. Or it
might mean pulling together seemingly unrelated facts from two different sections of the
case, and combining them logically to arrive at an important conclusion or conjecture.
Analysis usually doesn't provide definitive answers. But as you do more of it, a clearer
picture often starts to emerge, or the preponderance of evidence begins to point to one
interpretation rather than others. Don't expect a case analysis to yield a "final answer." If
you're accustomed to doing analysis that ends with a right answer, coming up with a
possible solution that simply reflects your best judgment might frustrate you. But
remember that cases, much like real-world business experiences, rarely reveal an
absolutely correct answer, no matter how deeply you analyze them. Typically, you'll do
qualitative analysis based on your reading and interpretation of the case. Ask yourself:
What is fact and what is opinion? Which facts are contributing to the problem? Which are
the causes?
Qualitative factors should be prioritized and fully developed to support your argument.
Make notes about your evolving interpretations, always being careful to list the evidence or
reasons that support them. Qualitative information in a case can be a mix of objective and
subjective information. For example, you may need to assess the validity of quotations from
company executives, each of whom has a subjective opinion. Reports from external
industry analysts or descriptions of what other companies in the industry have done might
seem more objective; no one in the case has a vested interest in this information. A
company's internal PowerPoint presentation should be considered separately and
differently from a newspaper article about the company. Cases mix firsthand quotations
and opinions with third-person narratives, so you need to consider the reliability of
sources. As in real life, you shouldn't take all case information at face value.
Quantitative data—such as amounts of.
Steps of Assignment• Choose TWO of the social health determi.docxrjoseph5
Steps of Assignment
• Choose
TWO
of the social health determinants important to you. – Start your report with a brief description of why you chose these two• Determine your electoral riding, and which political parties are running candidates in your riding– Report in the your introduction • Examine the platforms of each of the political parties represented in your riding for promises that will influence your chosen health determinants• Report these promises in a chart– Do NOT tell me which party you prefer. Just describe the relevant promises.• Describe the process by which you would register your vote in the provincial election (where, when, what documentation required)– This may be different than usual, given the pandemic safety requirements–
www.elections.sk.ca
.
Step 2 in your textbook outlines a few specific ways to seek out pot.docxrjoseph5
Step 2 in your textbook outlines a few specific ways to seek out potential funding, including email inquiry, telephone call, brief letter, or invitation to funder to attend an event at your organization. Which method would you be most comfortable with? Which method you would be least comfortable with? Which method do you think would be the most effective? Explain your responses to each.
.
STEPPING INTO MANAGEMENT.Questions 1 to 20 Select the bes.docxrjoseph5
STEPPING INTO MANAGEMENT
.
Questions 1 to 20:
Select the best answer to each question. Note that a question and its answers may be split across a page
break, so be sure that you have seen the
entire
question and
all
the answers before choosing an answer.
1.
_______ management theory suggests we should encourage team building and listen to new ideas.
A.
Organizational development
B.
Contingency
C.
Management as discipline
D.
Entrepreneurial
2.
_______ theory works to increase the health of work processes, communication, and shared goals.
A.
Management as discipline
B.
Entrepreneurial
C.
Systems
D.
Organizational development
3.
_______ supported simplification and decentralization, with emphasis on quality improvement.
A.
Taylor
B.
Weber
C.
Fayol
D.
Drucker
4.
_______ consists of determining whether plans are being carried out and progress is being made toward
objectives.
A.
Planning
B.
Influencing
C.
Controlling
D.
Organizing
5.
Resource allocator is one of the _______ roles.
A.
informational
B.
decisional
C.
negotiational
D.
interpersonal
6.
All other things being equal, the difference between a good supervisor and a poor supervisor is better
A.
organizational rules.
B.
education.
C.
staff.
D.
managerial skills.
7.
Which of the following is
not
one of a manager's four areas of responsibility?
A.
Maintaining good relationships with other managers
B.
Speaking one's mind always
C.
Being a competent subordinate
D.
Being a good boss
8.
When a manager serves as a liaison between different departments, he or she is acting in a/an _______
role.
A.
interpersonal
B.
decisional
C.
informational
D.
relational
9.
Positional authority is based on
A.
qualities of the manager.
B.
authority of superior over subordinate.
C.
laws and procedures.
D.
the ability to direct complex processes.
10.
A manager can delegate most duties
except
A.
writing policies.
B.
evaluating employees.
C.
planning.
D.
organizing.
11.
The acceptance theory holds that managerial authority depends on four conditions. Which of the
following is
not
one of the conditions?
A.
Employees must think the manager's directives are fair.
B.
Employees must think the directive is in keeping with organizational objectives.
C.
Employees must understand what the manager wants.
D.
Employees must be able to comply with the directives.
12.
_______ is/are vested in the organizational position and not the individual manager.
A.
Authority
B.
Delegation
C.
Managerial functions
D.
Responsibility
13.
Which of the following is
not
one of the Katz skills?
A.
Human relations skills
B.
Technical skills
C.
Budgeting skills
D.
Conceptual skills
14.
_______ first developed systems theory.
A.
Peters
B.
Thom
C.
Bertalanffy
D.
Mintzberg
15.
The supervisor's job is to do which of the following?
A.
Control employees' work to improve efficiency.
B.
Help employees f.
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Stephen and Meredith have a 4-yr old son named Will. They are expecting a second child. In what ways might the second child change the dynamics of the family's communication? Will the gender of the child make a difference in this change? Why or why not? Use on of the theories discussed in chapter 12 to support your answers.
Write a page to address these questions. Give examples where necessary.
.
Step 1 Write five sentences with spelling errors.Make sure t.docxrjoseph5
Step 1
Write five sentences with spelling errors.
Make sure the sentences are at a moderate length (anywhere from 10 - 25 words in each).
Once you've written them, post them on the discussion board.
Do not include answers or say which words are misspelled; your classmates can figure that out for themselves.
.
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Stephen Pevar, “Chapter 8: Criminal Jurisdiction in Indian Country” (from textbook)
Stephen Pevar, “Chapter 9: Civil Jurisdiction in Indian Country” (from textbook)
1
The Religious Environment: Worldview,
Ritual, and Communal Status
Islam and Conversion
The process of conversion to Islam remains on the whole poorly studied
in either its social and historical, or affective and personal/psychologi-
cal, aspects. Despite the relatively recent and signal contributions of
Nehemiah Levtzion I and Richard Bulliet 2 who have advanced inno-
va tive classificatory, methodological, and analytical strategies in the
framework of comparative and more localized approaches toward
Islamization, the complex of problems associated with conversion to
Islam still has not drawn sufficient attention from specialists on all
"fronts" of Islamization to allow a synthetic treatment of conversion to
Islam from either a theoretical or historical perspective. 3 If old notions
of forced conversion and the choice of "Islam or the sword" have been
abandoned, at least in scholarly literature, little serious analytical work
I. See above all the volume Conversion to Islam, ed. Nehemia Levtzion (New YorklLondon:
Holmes & Meier Publishers, 1979), and Levtzion's contributions therein, "Toward a Com-
parative Study of Islamization" (pp. 1-23) and "Patterns of Islamization in West Africa" (pp.
207-216), as well as his bibliography (pp. 247-265), in which Central and Inner Asia are pre-
dictably poorly represented; cf. also his "Conversion under Muslim Domination: A Comparative
Study," in Religious Change and Cultural Domination, ed. D. N. Lorenzen (Mexico City: El
Colegio de Mexico, 1981), pp. 19-38.
2. See his seminal work, Conversion to Islam in the Medieval Period: An Essay in Quantitative
History (Cambridge: Harvard University Press, 1979), and more recently his "Process and Status
in Conversion and Continuity," introducing Conversion and Continuity: Indigenous Christian
Communities in Islamic Lands Eighth to Eighteenth Centuries, ed. Michael Gervers and Ramzi
Jibran Bikhazi (Toronto: Pontifical Institute of Mediaeval Studies, 1990), pp. 1-12, and his
"Conversion Stories in Early Islam" in the same volume (pp. 123-133).
3. For important theoretical considerations on conversion to Islam in historical surveys see,
for example, Marshall Hodgson's The Venture of Islam, vol. 2 (The Expansion of Islam in the
18 Islamization and Native Religion
has been done as a means of replacing older models and assumptions of
how Islam was adopted and appropriated in specific contexts; nor, in
general, have primary sources been tapped or reevaluated with an eye to
the particular issue of Islamization.
In the case of Inner Asia we are remarkably ill-served with regard to
studies of conversion to Islam; specialists on Islam in sub-Saharan Africa
and on South Asian Islam4 for instance, have recognized the importance
of conv.
Stephanie WroteA lean organization understands customer value a.docxrjoseph5
Stephanie Wrote:
A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.
To accomplish this, lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.
Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate.
A popular misconception is that lean is suited only for manufacturing. Not true. Lean applies in every business and every process. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organization.
The term "lean" was coined to describe Toyota's business during the late 1980s by a research team headed by Jim Womack, Ph.D., at MIT's International Motor Vehicle Program.
Mary Wrote:
· What is the lean concept and why is it important to study?
With fewer resources lean creates more value for customers. The idea of maximizing customer value while minimizing waste. Lean is important to study because there are so many benefits such as through lean there is a cost benefit. we can increase quality and reliability. Reduce operating costs, boost staff productivity and reduce the length of production cycles.
· How can lean be applied to manufacturing and service processes?
TOYOTA is the best example of a company that use lean processes and implement them. Toyota is the first major company to use lean ideology in their manufacturing processes. They have eliminated wasted and using techniques to get rid of faulty products that do not interest the customers. They use two processes, one is Jidoka and the other one is JIT or just in time. Jidoka is used to check the quality of the product and can stop the machines themselves down when there is an error. JIT/ just in time leads to the next step once the previous step is finished.
https://www.lean.org/whatslean/
https://refinedimpact.com/4-good-examples-of-companies-that-use-lean-manufacturing/
Project Management
Processes, Methodologies, and Economics
Third Edition
Avraham Shtub
Faculty of Industrial Engineering and Management
The Technion–Israel Institute of Technology
Moshe Rosenwein
Department of Industrial Engineering and Operations Research
Columbia University
Boston Columbus San Francisco New York Hoboken
Indianapolis London Tor.
Step 1 Do some research on the Affordable Care Act. You can start.docxrjoseph5
Step 1
Do some research on the Affordable Care Act. You can start with the government sponsored website,
Health and Human Services Website (Links to an external site.)
, but find an additional resource as well.
Step 2
After reading about payment sources in this week's lesson, and conducting your research, address the following:
Where does the Affordable Care Act fit into the overall U.S. health care payment system?
How has it affected private insurance and Medicaid?
Did it go far enough in providing access to health care for all U.S. citizens? Too far? Explain your position.
.
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Step 3: Construct Ethical Arguments
Determine which of the ethical principles/standards apply to this case (moral development; egoism; virtue; deontology; teleology; justice)
Identify the accounting principles (i.e., ethics codes of conduct and GAAP) that can be invoked to support a conclusion as to what ought to be done ethically in this case or similar cases?
Determine whether the different ethical standards/accounting principles yield converging or diverging judgments about what ought to be done?
Step 4: Evaluate the Arguments for each Option
Weigh the ethical reasons and arguments for each option in terms of their relative importance.
Determine whether there are any unwarranted factual assumptions that need to be examined in each argument.
Determine whether there are any unresolved conceptual issues in each argument.
.
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Step 2 Grading Rubric EconomyTask descriptionComponents of .docxrjoseph5
Step 2 Grading Rubric: Economy
Task description
Components of the task
Total points
Major economic features
Current demographic and economic features:
What is the population of your country, its age and gender composition? (2 points)
What are the major natural resources and the major features of the economy? Is the economy driven by the export of minerals and raw materials, agriculture, significant industries, or a mixture of these? What are the main exports and imports? (5 points)
Which countries are its largest trading partners? Is the country a member of regional or continental African trading blocs? (3 points)
What are major livelihood strategies, formal and informal, in both rural and urban settings? In other words, how do people in your country make a living? (5 points)
15
Economic policies
How did colonial policies impact your country’s current economic conditions? (5 points)
How has domestic economic policy since independence shaped the country? (5 points)
How have international economic forces shaped your country’s economy? For example, has your country been impacted by World Bank or International Monetary Fund programs? Do international trade agreements impact your country? (5 points)
15
Basic economic conditions
What is the current Gross Domestic Product (GDP) and Gross National Product (GNP)? What is the significance of these numbers for the economy of this country? (3 points)
What is the unemployment rate? (I point)
What is the poverty rate? (I point)
What is the foreign debt? (I point)
What do all these different economic indicators show about the state of the economy in your country? (3 points)
9
Technology
To what extent are the Internet and mobile phones, including the mobile banking system, used in your country? Do these affect economic potential and how so? (4 points)
4
Conclusion
Using all the data and analysis you have done pertaining to the above questions, write a conclusion addressing the economic health of your country and analyze the main factors contributing to its current strengths and challenges. (3 points)
3
Other requirements
Referencing:Evidential Proof of sources used: Papershould be supported by evidence and quotations from sources. At least three sources with APA citation at the bottom of the report, Variation in selection of sources necessary (2 points). Full points for accurate use of APA in-text and reference list)
Organization of text: Well organized, detailed and logical/cohesive arguments addressing relevant issues.(2 points)
4
CASE 6
From Nothing to Something: Defining Governance and Infrastructure in a Small Medical Practice
Dea Robinson
Midtown Neurology was started by a single physician who had been practicing in the community for nearly 20 years. As the practice grew, it evolved from a “mom-n-pop” operation to a more complex model. The founding physician recruited four new neurologists to join and continue to help build the practice. Subseq.
Step 2 Attend Meeting with ACME· Read the ACME meeting documen.docxrjoseph5
Step 2: Attend Meeting with ACME
· Read the ACME meeting document to know what was discussed.
Step 3: Review Marketing Information on Consumer Buying Behavior
· Read all attached step 3 documents to answer questions in step 4.
· As you read through the following materials, begin to think about how this information will apply to the report you will prepare for Erik and Tarek. To successfully complete the report, you'll need an understanding of marketing. You’ll also benefit from a keen understanding of digital marketing, consumer buying behavior, and evaluating business attractiveness.
· As you conduct your analysis of ACME's consumer environment, remember that there are two types of market research: primary and secondary research. Both types of research are required in real-life, and each of them has its pros and cons. However, for this Project, only secondary research is required.
· Finally, to fully understand ACME's position, read about offerings—what a company provides its customers, be it a product, a service, or a mix of both. Also consider the differences between a product and a service. You know that a product can be more than just a physical good, it can be a service attached to a physical product, a "pure" service, an idea, a place, an organization, or even a person.
· After you have read these materials, proceed to the next step, where you will begin your analysis of the specified consumer markets
Step 4: Conduct a Consumer Buying Behavior Study
As previously mentioned, I would like you to conduct an analysis of the consumers in our main markets. Your analysis should consider both current and potential product users and should address the following questions:
· What needs are being met by the product purchase? What are the benefits to the consumers? Make sure that you differentiate between features and benefits; go beyond manifest motives and consider latent motives.
· Who is involved in the purchase process? Who are the influencers? Who are the buyers? Who are the end users?
· Where are the products sold, and what are the distribution channels?
· How often are the products purchased? Is there seasonality to sales?
I need you to produce a six-page preliminary consumer buying behavior report (excluding cover page, reference list, tables, graphs, and exhibits) explaining your findings on consumer needs, wants, and preferences in these markets. Make sure that your report is specific to consumers of ACME’s potential product and not to consumers in general.
Step 5: Complete Your Value Proposition
· I wanted to clarify that a customer-focused value proposition explains the reason why a customer purchases a product or uses a service (i.e., the value that a company delivers to its customers).
· Deliverable: (complete this part separate from step 2-4) Based on your research of consumer needs in our main markets, describe your value proposition, or the benefits that ACME and its potential new product would provide to customers. Remember.
Step 1 Put the following steps in the order of a routine patient .docxrjoseph5
Step 1:
Put the following steps in the order of a routine patient care flow, from the beginning through to the end of the patient encounter flow.
New patient paperwork is signed and returned to front desk with insurance information for verification of benefits
Patient pays standard co-pay if applicable
Hard copy record is pulled, or made if new patient
Patient called to back office
Height, weight, and blood pressure taken by CNA or CMA
CMS 1500 form is coded and sent to insurance for reimbursement
Signs in at reception desk
Patient released from exam room
Call in to schedule appointment
Doctor, NP, or Physician’s Assistant examines patient
Shown to patient care room
Reason for visit reviewed with patient by CNA, CMA, or NP
Any refunds due to patient or insurance sent out
Collections efforts initiated if patient's charges not paid, and any insurance appeals are processed
Patient checks out and pays any deductible verified
Explanation of benefits returns with breakdown of payments
Height, weight, and blood pressure taken by CNA or CMA
Practice manager applies payments, writes off amounts required by contract with insurance companies, adjusts patient’s account records, and initiates billing to patient that indicates insurance has processed charges
Step 2:
Write an essay of 1–2 pages explaining how a new office would be set up or organized. Some of the elements included could be:
The physical appearance of the office
The types of personnel that would be needed
The types of activities, policies, or procedures that would be put into place to mentor employees and promote teamwork
Create and describe the demographics of the patients that would receive care at this facility.
Remember that demographics include any and all of the following: type of population (rural, suburban, urban); male or female; adult or child; type of insurance, public assistance, or no insurance; emergency care needed or preventative care; and many others.
Describe the specialized training that you, the office manager, need to help this particular facility accomplish its mission of efficient integrated medical care to its patient population.
Please submit your assignment.
.
Step 1 To annotate a source, first cite the source in correct .docxrjoseph5
Step 1:
To annotate a source,
first cite the source in correct MLA format
.
For example:
Gould, Joseph.
Citizen United and the Breakdown of Democracy.
New York: University of New York Press, 2012.
Step 2:
Break down the source into the
four sentence pattern
:
Sentence 1 (Credentials and Thesis
): Joseph Gould, a noted journalist covering issues of public policy and elections for the
Washington Post
, argues that the
Citizens United
decision has irrevocably undermined the democratic process of our electoral system.
Sentence 2 (Medium / Genre and Evaluation
): Gould constructs a thesis-driven, book-length, academic argument in the field of political science.
Sentence 3 (Audience
): Gould’s audience consists of academics in the field of political science and public policy as well as public officials.
Sentence 4 (How You Can Use This Source):
This source provides information about the effects of
Citizens United
that I can use to support my thesis, and because it is written by a noted expert it lends credibility to my argument.
Annotations should be written as paragraphs
and should follow the four sentence pattern above. Do not include labels, bold text, or spaces between sentences. These are provided here so that you can more easily identify the parts of the annotation. Yours will look more like this:
Gould, Joseph.
Citizen United and the Breakdown of Democracy.
New York: University of New York Press, 2012.
Joseph Gould, a noted journalist covering issues of public policy and elections for the
Washington Post
, argues that the
Citizens United
decision has irrevocably undermined the democratic process of our electoral system. Gould constructs a thesis-driven, book-length, academic argument in the field of political science. Gould’s audience consists of academics in the field of political science and public policy as well as public officials. This source provides information about the effects of
Citizens United
that I can use to support my thesis, and because it is written by a noted expert it lends credibility to my argument.
Your annotated bibliography
must include at least six sources
. At least three sources should be peer-reviewed academic sources or otherwise approved by me before submitting this assignment's deadline. Sources should be listed in alphabetical order by the first word of the works cited entry (usually, this will be the author's last name).
Annotations should be specific and include details; however, they
should not include
any
quotes.
All of the writing should be
your original writing.
Due Date and Submissions
Submit your annotated bibliography in the Turnitin window below as a Word document by 11:59pm Friday, 6/12.
.
Step 1Read the first two sections of Wordsworths Tintern.docxrjoseph5
Step 1
Read the first two sections of
Wordsworth's "Tintern Abbey". (Links to an external site.)
Step 2
In a separate Word document, complete the following points:
Explain what the ideas, memories, and presence of the natural world give to Wordsworth.
Copy and paste a section of the poem that supports your claim, and explain how it supports your claim.
Must be no fewer than 300 words, not including the quote.
.
Step 1The first step in performing an IT audit that is tied to b.docxrjoseph5
Step 1
The first step in performing an IT audit that is tied to business strategy is understanding the short-term and long-term goals and objectives of the business. While we expect IT strategies to be aligned to an organization's business strategies, in practice, this is not easy to achieve. The organization typically has made large investments in legacy systems that have been supporting the current business. The organization must balance the maintenance of current business requirements with the need to support longer term strategies, using emerging technologies to improve the competitiveness of the organization.
Completing this business audit will ensure that you learn a lot about the business of the organization.
To prepare for the audit, read Audits, Internal and Core Competencies. The templates provided for Step 1 will give you a framework for collecting this information. Be sure to ask the following questions:
· What are the strategic goals of the organization?
· What are the business operational goals?
· How do you see your organization in one year, in five years, and beyond?
Download and open the Templates_for_Project2_with_Instructions.xlsx file. You will be using this file throughout this project. For optional feedback in Steps 1 and 3, use the following naming protocols:
· Step 1 -> Lastname_first name_Project 2_Appx_A1_A2_B_C
· Steps 2 and 3 -> Lastname_first name_Project 2_Appx_A1_A2_B_C_D_E_F
For the final submission in this project, please use the following naming protocol:
· Step 5 -> Lastname_first name_Project 2_Appx_A1_A2_B_C_D_E_F_G_H_I
The templates for business objectives in Appendices A1 and A2 will guide your discovery. You should list a minimum of three business objectives that exist for your organization, which will likely vary from these templates. Existing entries in templates A1 and A2 are for illustration purposes only. You should fill in and submit to the assignment folder two tables: Appendix A1 is for short-term goals (one year) and Appendix A2 is for longer term goals (five or more years). See Goal Setting for more information.
After you understand your organization's business objectives, you will need to evaluate how well your organization is meeting those objectives. The template in Appendix B will guide you through a quick analysis of overall organizational effectiveness. You may want to ask those in leadership positions how well the organization is performing, but you can also get this information by examining how well the organization is performing according to current operational objectives. Choose a minimum of three organizational effectiveness criteria. Provide a one-sentence description of each measure, along with an overall score on a five-point scale and an explanation of the score you provided. See Effectiveness and Efficiency.
Now that you've looked at how well the overall organization is performing, you should evaluate the organization at a lower level. Using the Appendix C template to guide yo.
Step 1Select ONE of the following fugal agents for your assignme.docxrjoseph5
Step 1
Select ONE of the following fugal agents for your assignment.
Aspergillus, Tinea pedis, Candida albicans, Coccidioides, Pneumocystis jirovecii, Blastomyces, Cryptococcus neoformans, Histoplasma, Tinea corporis
Step 2
Research the chosen fungal agent to examine the anatomical structures and diseases associated with it.
Step 3
Using the template below answer the following questions:
Where the organism is normally found and how is it spread?
What are the virulence factors of the organism?
What are the symptoms and incubation period of the infection caused by the organism?
How would you diagnose an infection caused by the organism?
Describe how the organism infects different organs and how the immune system responds to infection.
What is the current treatment plan for the infections caused by the organism and the treatment success rate?
What populations are most at risk for infection?
What environments and sources are associated with the organism?
What are some public health implications of the infection caused by the agent?
What precautions can the public take to prevent infections?
.
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
हिंदी वर्णमाला पीपीटी, hindi alphabet PPT presentation, hindi varnamala PPT, Hindi Varnamala pdf, हिंदी स्वर, हिंदी व्यंजन, sikhiye hindi varnmala, dr. mulla adam ali, hindi language and literature, hindi alphabet with drawing, hindi alphabet pdf, hindi varnamala for childrens, hindi language, hindi varnamala practice for kids, https://www.drmullaadamali.com
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
Leveraging Generative AI to Drive Nonprofit InnovationTechSoup
In this webinar, participants learned how to utilize Generative AI to streamline operations and elevate member engagement. Amazon Web Service experts provided a customer specific use cases and dived into low/no-code tools that are quick and easy to deploy through Amazon Web Service (AWS.)
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
How to Make a Field Mandatory in Odoo 17Celine George
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
Reimagining Your Library Space: How to Increase the Vibes in Your Library No ...Diana Rendina
Librarians are leading the way in creating future-ready citizens – now we need to update our spaces to match. In this session, attendees will get inspiration for transforming their library spaces. You’ll learn how to survey students and patrons, create a focus group, and use design thinking to brainstorm ideas for your space. We’ll discuss budget friendly ways to change your space as well as how to find funding. No matter where you’re at, you’ll find ideas for reimagining your space in this session.
How to Fix the Import Error in the Odoo 17Celine George
An import error occurs when a program fails to import a module or library, disrupting its execution. In languages like Python, this issue arises when the specified module cannot be found or accessed, hindering the program's functionality. Resolving import errors is crucial for maintaining smooth software operation and uninterrupted development processes.
Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
"Learn about all the ways Walmart supports nonprofit organizations.
You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
The webinar may also give some examples on how nonprofits can best leverage Walmart Business+.
The event will cover the following::
Walmart Business + (https://business.walmart.com/plus) is a new shopping experience for nonprofits, schools, and local business customers that connects an exclusive online shopping experience to stores. Benefits include free delivery and shipping, a 'Spend Analytics” feature, special discounts, deals and tax-exempt shopping.
Special TechSoup offer for a free 180 days membership, and up to $150 in discounts on eligible orders.
Spark Good (walmart.com/sparkgood) is a charitable platform that enables nonprofits to receive donations directly from customers and associates.
Answers about how you can do more with Walmart!"
1. Strategic Management for the
Capstone Business Simulation® and
Comp-XM®:
Analysis and Assessment
Michael L. Pettus, Ph.D.
ALL RIGHTS RESERVED. No part of this work covered by the
copyright hereon may be reproduced or
used in any form or by any means- graphic, electronic, or
mechanical, including photocopying, recording,
taping, Web distribution, or information storage and retrieval
systems without the written permission of the
author, Michael L. Pettus. [email protected]
Copyright 2012
® is a registered trademark of Management Simulations, Inc.
2. 6th
Edition
2
“I like this new 6th edition”
Professor Renee English
Webster University
“This text is excellent as a strategic management text which
uses the Capstone
simulation and cases to explain the linkages of strategic
management concepts to
real world business problems.”
Joseph Mahoney, Ph.D.
Caterpillar Chair in Strategic Management
University of Illinois
Associate Editor, Strategic Management Journal
3. “If you use the Capstone simulation this strategic management
text must be used.
No other strategic management text can drive the concepts of
strategic management
into a real world based simulation.”
Peter Wright, Ph.D.
Free Enterprise Chair in Strategic Management
University of Memphis
4. 3
Acknowledgments
I would like to thank many people for their hard work and
dedication to the
construction of this book. First, I would like to thank Dan
Smith, founder of the
Capstone Business Simulation, for giving me the opportunity to
prepare the book.
Second, I would like to thank all the students who spent
hundreds of hours
word processing this book: Karen Knight and Tim Wiggenbach
deserve special
recognition. Amanda Walker was especially helpful in the
construction of this
second edition. Denisa Smaldone was very helpful in the
development of the third
edition. Victoria Dudleston was instrumental in the constructing
of the fourth
edition. Kelsey Lee was very important, and made significant
contributions, in the
construction of the 5
5. th
edition. Audra Davis was crucial in terms of assistance of the
updated 5
th
edition. Maddison Harner was outstanding in terms of
assistance in
creating the 6th edition. Someday all of you will walk with
industry giants.
Third, there are two people who were vital to the construction
of this book:
May Zelner of Capstone Business Simulation and Hans Royal-
Hedinger of Millikin
University. Without the hard work of these individuals, this
book would never have
been accomplished. If I were to pick a number of individuals to
start a business,
May and Hans would be among my ten top picks in the world!
Someday both of
you will walk with captains of industry.
Fourth, I would like to thank Eddie Schwertz of Webster
University for his
review of the 6th edition
6. 4
Michael L. Pettus earned a PhD in strategic management from
the University of
Illinois in 1997 and has more than 30 years of global experience
in airline, airfreight
and trucking industries. He is published in the Academy of
Management Journal, the
Strategic Management Journal, and many leading practitioner
journals. He is the
author of Growth from Chaos (2003: Praeger) which explores
corporate growth in
deregulated transportation industries. This book, Strategic
Management for the
Capstone Business Simulation and Comp - XM, which is now in
its 6th edition,
explains how the content of strategic management is integrated
into business
simulations.
12. .....................................................................................16
U.S. Economic Collapse
.................................................................................... ...........
....18
U.S. Government Stimulus Plan
.....................................................................................20
U.S. Auto Industry
...............................................................................................
............20
International Recession
...............................................................................................
....21
The "Secret" Global Bailout
......................................................................................... ..23
Economic Status as of 3
rd
Quarter 2011
........................................................................25
Economic Conditions During 1
st
Quarter 2012 .............................................................26
Discussion Questions
...............................................................................................
........31
References
...............................................................................................
..........................32
Harvard Business Cases for Chapter 1
..........................................................................36
Professor Case for Chapter 1
13. ..........................................................................................36
Chapter 2
...............................................................................................
...... 37
Industry Analysis and Industry Evolution for the 21
st
Century ............ 37
Learning and Assessment Goals
.....................................................................................38
The Competitive Environment in the 21
st
Century ......................................................39
Industry Structure
........................................................................................ .......
............40
Industry Classification
...............................................................................................
.....40
Porter’s Five Forces
...............................................................................................
..........42
Potential Entrants (Threat of New Entrants)
............................................................. 42
Bargaining Power of Suppliers
................................................................................. 43
Bargaining Power of Buyers
..................................................................................... 43
14. Threat of Substitutes
...............................................................................................
.. 43
Degree of Rivalry
...............................................................................................
....... 44
Industry Analysis Using Porter’s Five Forces Model
...................................................45
Industry Evolution
...............................................................................................
............46
Introduction Stage
...............................................................................................
...... 47
Growth Stage
...............................................................................................
............. 47
Maturity Stage
...............................................................................................
............ 47
Decline Stage
...............................................................................................
............. 48
Industry Forces During Introduction
Stage............................................................... 50
Industry Forces During Growth Stage
...................................................................... 50
Industry Forces During Maturity Stage
.................................................................... 51
Industry Forces During Decline Stage
...................................................................... 51
The Upside of Declining Industries
.......................................................................... 52
15. Discussion Questions
...............................................................................................
........53
References
...............................................................................................
..........................54
Intel Mini Case
...............................................................................................
..................55
Harvard Business Cases for Chapter 2
..........................................................................57
8
Professor Case for Chapter 2
..........................................................................................5 7
Chapter 3
...............................................................................................
...... 59
Utilizing Internal Analysis to Build Competitive
Advantage Over Rivals
............................................................................... 59
Learning and Assessment Goals
.....................................................................................60
The Resource-Based View
......................................................................................... ......
61
Criteria for Competitive Advantage
.......................................................................... 61
16. Value Chain Analysis and Capstone Simulation
..........................................................68
Technology Development
......................................................................................... 68
Human Resource Management
................................................................................. 69
Firm Infrastructure
...............................................................................................
..... 69
Procurement
...............................................................................................
............... 69
Inbound and Outbound Logistics
.............................................................................. 70
Operations
...............................................................................................
.................. 70
Marketing and Sales
...............................................................................................
... 70
Service....................................................................................
................................... 71
Global Outsourcing
...............................................................................................
..........71
Discussion Questions
...............................................................................................
........74
References
...............................................................................................
..........................75
Ryder Mini Case
...............................................................................................
...............77
17. Harvard Business Cases for Chapter 3
..........................................................................78
Professor Case for Chapter 3
..........................................................................................78
Chapter 4
...............................................................................................
...... 79
Business Level Strategy
.............................................................................. 79
Learning and Assessment Goals
.....................................................................................80
Key Success Factors
...............................................................................................
..........81
Determining Key Success Factors
............................................................................ 8 1
Utilizing Key Success Factors over Time
................................................................. 82
Generic Business Level Strategies
..................................................................................82
Cost leadership
...............................................................................................
........... 83
Focused low cost
...............................................................................................
........ 83
Differentiation
...............................................................................................
............ 83
Focused differentiation
19. Dell Mini Case
...............................................................................................
...................95
Harvard Business Cases for Chapter 4
..........................................................................96
9
Professor Case for Chapter 4
..........................................................................................96
Chapter 5
...............................................................................................
...... 97
Analysis of Markets and
Positioning......................................................... 97
Learning and Assessment Goals
.....................................................................................98
Market Segmentation
...............................................................................................
.......99
Market Segmentation of the Airline
Industry…………………….………………99
Product
Positioning……………………………………………………………
……101
Sales Forecasting
...............................................................................................
.............103
20. Sales Forecasting Methods
..................................................................................... 103
Sales Forecasting and Capstone Simulation
................................................................104
Marketing Mix Variables
..............................................................................................
110
Product Variable
...............................................................................................
...... 110
Price
Variable..................................................................................
........................ 111
Promotion Variable
...............................................................................................
.. 111
Distribution Variable
..............................................................................................
113
Discussion Questions
...............................................................................................
......115
References
...............................................................................................
........................116
Proctor and Gamble (P&G) Mini Case
.......................................................................117
Harvard Business Cases for Chapter 5
........................................................................119
Professor Case for Chapter 5
........................................................................................119
21. Chapter 6
...............................................................................................
.... 121
Growth by Internal Development
........................................................... 121
Learning and Assessment Goals
...................................................................................122
Internal Development Strategies
..................................................................................123
Market Penetration
...............................................................................................
... 123
Market Development
..............................................................................................
125
Product
Development...........................................................................
................... 127
Diversification........................................................................
................................. 129
Competition
...............................................................................................
.....................129
Internal Development and Capstone Simulation
........................................................130
Growth by Market
Penetration..............................................................................
.. 130
Growth by Market Development
............................................................................ 131
Growth by Product Development
22. ........................................................................... 133
Growth by Diversification
...................................................................................... 135
Discussion Questions
.......................................................................................... .....
......136
References
...............................................................................................
........................137
Starbucks Mini Case
..................................................................................... ..........
.......139
Harvard Business Cases for Chapter 6
........................................................................140
Professor Case for Chapter 6
........................................................................................140
10
Chapter 7
...............................................................................................
.... 141
Corporate Level Strategies and Restructuring
...................................... 141
23. Learning and Assessment Goals
...................................................................................142
Diversification
...............................................................................................
.................143
Diversification and Performance
............................................................................ 143
Diversification and Value Chain Analysis
.............................................................. 145
Same Industry Diversification
......................................................................................146
Related Industry Diversification
..................................................................................147
Unrelated Industry Diversification
..............................................................................148
Diversification and Risk
.........................................................................................
148
Business Strengths and Industry Attractiveness
........................................................149
Industry Attractiveness
...........................................................................................
150
Business Strength
...............................................................................................
..... 151
Restructuring
...............................................................................................
..................152
Downsizing
...............................................................................................
24. .............. 152
Downscoping
...............................................................................................
........... 153
Realignment
...............................................................................................
............. 154
Restructuring and the Capstone Simulation
...............................................................154
Discussion Questions
...............................................................................................
......160
References
...............................................................................................
........................161
General Electric (G.E.) Mini Case
...............................................................................165
Harvard Business Cases for Chapter 7
........................................................................166
Professor Case for Chapter 7
........................................................................................166
Chapter 8
...............................................................................................
.... 167
Growth Via Strategic Alliances
............................................................... 167
Learning and Assessment Goals
...................................................................................168
Trust
...............................................................................................
.................................170
25. Scale of Coverage
...............................................................................................
............171
Relationship-Specific Assets
.........................................................................................171
Complementary Capabilities
........................................................................................171
Interfirm Knowledge Sharing
......................................................................................171
Scale Alliances
...................................................................................... .........
.................172
Link Alliances
...............................................................................................
..................174
Joint Ventures
............................................................................. ..................
.................176
The Downside of Strategic Alliances and Joint Ventures
..........................................177
Strategic Alliances and the Recession
..........................................................................1 77
The Future of Strategic Alliances
.................................................................................178
Strategic Alliances and Capstone Simulation
.............................................................179
Discussion Questions
...............................................................................................
......183
References
...............................................................................................
........................184
Oneworld Airline Strategic Alliance Mini Case
.........................................................188
Harvard Business Cases for Chapter 8
26. ........................................................................189
11
Professor Case for Chapter 8
........................................................................................189
Chapter 9
...............................................................................................
.... 191
Acquisition Strategies
............................................................................... 191
Learning and Assessment Goals
...................................................................................192
Impact of the Global Recession on Mergers and Acquisitions
.................................193
Attributes of Successful Acquisitions
...........................................................................197
Access to International
Markets..............................................................................
197
Synergies Resulting from Economies of Scale
....................................................... 198
Synergies Resulting from Economies of Scope
...................................................... 198
Reduce Costs of New Product Development
.......................................................... 198
Entry into More Attractive Industries
27. ..................................................................... 199
Problems with Acquisitions
..........................................................................................19
9
Paying Too Much
...............................................................................................
..... 199
Inability to Achieve Synergies
................................................................................ 199
Failure to Retain Key Personnel
............................................................................. 200
Too Much Debt
...............................................................................................
........ 200
Invest in Mature Industries
..................................................................................... 201
Process for Achieving Successful Acquisitions
............................................................202
Due Diligence
...............................................................................................
.......... 202
Engage in Friendly Acquisitions
............................................................................. 202
Maximize Resource Utilization
.............................................................................. 202
Diversify Into Firms That Have Strong Brand Names
........................................... 203
Acquire High Growth Firms
................................................................................... 204
Hostile Acquisitions
...............................................................................................
........204
Are Acquisitions Beneficial?
28. .........................................................................................205
Acquisitions as a Source of Innovation
........................................................................206
Discussion Questions
...............................................................................................
......208
References
...............................................................................................
........................209
Pfizer Mini Case
...............................................................................................
..............212
Harvard Business Cases for Chapter 9
........................................................................213
Professor Case for Chapter 9
........................................................................................213
Chapter 10
...............................................................................................
.. 215
International Strategies
............................................................................ 215
Learning and Assessment Goals
...................................................................................216
Factors Encouraging International Expansion
...........................................................217
Innovation in Domestic Market
....................................................................................220
Determining International Country Attractiveness
...................................................220
Role of Government
...............................................................................................
........221
29. Determination of International Industry Attractiveness
...........................................223
Determination of Firms’ Business Strengths
..............................................................226
Adaptation Versus Standardization
.............................................................................228
Determination of International Modes of Entry
.........................................................228
12
Exporting................................................................................
................................. 228
Licensing/Franchising
.............................................................................................
230
Strategic Alliances
...............................................................................................
... 231
Acquisitions
...............................................................................................
............. 231
Foreign Direct Investment
...................................................................................... 232
Competition within International Markets Intensifies
..............................................233
Relocate to Low Cost Markets
......................................................................................233
New Innovation in Home Markets
...............................................................................233
Discussion Questions
...............................................................................................
......235
30. References
...............................................................................................
........................236
IKEA Mini Case
...............................................................................................
..............239
L’Oreal Mini Case
...............................................................................................
..........241
Harvard Business Cases for Chapter 10
......................................................................243
Professor Case for Chapter 10
......................................................................................243
Chapter 11
...............................................................................................
.. 245
Strategic Leadership Decision Making
................................................... 245
Learning and Assessment Goals
...................................................................................246
Strategic Leadership
...............................................................................................
.......247
Customers
...............................................................................................
........................249
Employees
...............................................................................................
........................250
Collective Bargaining Organizations
...........................................................................251
Shareholders
31. ...............................................................................................
....................252
Board of Directors
...............................................................................................
..........252
Investment Community
...............................................................................................
..253
Senior Managers and Ethical Decision Making
..........................................................253
Strategic Leadership and Growth
………………………………………………......255
Scandals and Strategic Leadership
..............................................................................257
Industry Evolution and Strategic Leadership
.............................................................258
Introduction
...............................................................................................
.............. 258
Growth
...............................................................................................
..................... 259
Maturity..................................................................................
................................. 259
Decline
...............................................................................................
..................... 260
Discussion Questions
...............................................................................................
......261
References
...............................................................................................
32. ........................262
Hershey Mini Case
...............................................................................................
..........264
Harvard Business Cases for Chapter 11
......................................................................265
Professor Case for Chapter 11
......................................................................................265
13
Chapter 12
...............................................................................................
.. 267
Wealth Creation
........................................................................................ 267
Learning and Assessment Goals
...................................................................................268
Balanced Scorecard and Wealth Creation
..................................................................269
Customer Wealth
...............................................................................................
37. 16
Learning and Assessment Goals
1. Understand why we are in a recession within the U.S.
2. Understand why a global recession has occurred.
3. Understand the role the U.S. Government is playing to
improve economic
conditions with its economic stimulus plan.
4. Understand the economic state of affairs as of 2011.
5. Understand, at the firm level, what has to happen to be able
to grow in turbulent
economic environments.
6. Understand how firms can maintain competitive positions in
times of economic
turbulence.
17
We live in a chaotic, changing world. The economic
ramifications of 2007-2010
38. have had a negative economic impact on most emerging and
fully developed countries
throughout the world. The United States has been very
significantly impacted by this
economic downturn. Some economists believe that the 2007-
2010 time period
represented a depression rather than a recession.
Are the 1930’s depression conditions upon us during 2007-
2010? The Great
Depression of the 1930’s may have a more modern version.
However, the solutions to
this current economic crisis need 2011 solutions. This chapter
will address ways of
dealing with current economic conditions. If firms are to be
successful in current
economic times, a number of decisions will need to be made
which address conditions
specific to modern times. The first question that needs to be
raised is, “Are we in a
depression or a recession?” In the United States, the Business
Cycle Dating Committee
of the National Bureau of Economic Research (NBER) is
generally seen as the authority
39. for dating U.S. recessions. The NBER defines an economic
recession as: “a significant
decline in [the] economic activity spread across the country,
lasting more than a few
months, normally visible in a reduction in real GDP growth,
real personal income,
employment (non-farm payrolls), industrial production, and
wholesale-retail sales
1
.”
Academics, economists, policy makers, and businesses defer to
the determination
measurement by the NBER for the precise dating of a
recession’s onset and end
2
. A
depression is a severe economic downturn that results in a
decline in real GDP exceeding
10% and is a recession lasting three or more years
3
. Table 1.1 identifies the conditions in
the Great Depression of the 1930’s and current (2007-2010)
economic condition.
Table 1.1
Comparison of the Great Depression (1930s) to the Current
40. (2007-2010) Economic Conditions
Factor 2007-2010 1930’s
GDP Less than 5% Down 30%
Unemployment 5-10% 25-30%
Consumer prices Fairly stable Down 20-30%
During the 1930’s depression gross domestic product fell by
over 30 %
4
. Since
2007 gross domestic product has fallen by less than 5 %. While
in 2007-2010
unemployment hovered about 5-10 %, unemployment during the
1930’s depression was
approximately 25-30 %. In the 2007-2010 time period,
consumer prices have held fairly
stable; however, during the Great Depression there was between
a 20-30 % reduction in
consumer prices. Fortunately, this economic downturn does
indeed appear to be a
recession as opposed to a depression. However, the U.S.
economy is currently
experiencing its worst crisis since the Great Depression
41. 5
. The U.S. Government has
played a very significant role (e.g. Chrysler and G.M.)
throughout this period of
recession.
In essence, the government has been regulating economic
conditions (e.g.
economic stimulus package). As the government reduces its
regulatory role, firms will
18
need to learn how to adjust to the new economic environment.
These new economic
conditions (2007-2010) have had a significant impact upon
industries and firms. Let us
begin with what caused the current (2007-2009) economic
crisis.
U.S. Economic Collapse
What happened was caused by a combination of two factors.
The first factor was
people losing their jobs causing them not to be able to pay their
mortgages. In the U.S.,
significant job losses have been going on since December 2007
42. and have accelerated in
September 2008. In 2008, 2.6 million jobs were lost. From
January through April of
2009, 2.6 million jobs were also lost.
The rise of advanced economies in Russia, Brazil, India, and
China increased the
total global labor pool dramatically. Recent improvements in
communication and
education in these countries has allowed workers to compete
more effectively with
workers in traditionally strong economies, such as the United
States. This surge in labor
supply has provided downward pressure on wages and
contributed to unemployment.
The second factor that has contributed to the challenging
economic conditions is
falling housing prices in the U.S. Historically, the U.S. housing
market has been very
strong. From the mid-1990 to 2005, housing prices grew.
During the same period of
time, the U.S. gross domestic product (GDP) per capita was
rising.
Housing prices stopped increasing in 2006, started to decrease
in 2007, decreased
43. in 2008 and have fallen about 25% from the peak in 2005
6
. During 2007-2010, the
decline in prices meant that homeowners had more difficulty
refinancing their mortgage
rates. This action caused delinquencies and defaults of
mortgages to increase sharply,
especially among subprime borrowers. Sub-prime loans were
made to customers who
had spotty credit histories. In 2006, it was estimated that over
half of the loans were sub-
prime. Banks who had financed these mortgages tried to sell
the loans to other banking
institutions. In order to sell the loans, these institutions had to
lower the price. These
actions made the initial bank and the bank who acquired the
loans worse off. In general,
this is what led to the demise of Bear Stearns and Lehman
Brothers. Many other firms
were also dramatically affected. From Table 1.2, the top U.S.
bankruptcy filings of all
times included six firms in 2008 and 2009.
44. 19
Table 1.2
Top 10 U.S. Bankruptcy Filings of all Time
Company
Bankruptcy
Date Assets ($ billions)
1. Lehman Brothers 6/15/2009 691
2. Washington Mutual 9/26/2008 328
3. Worldcom Inc. 7/21/2002 104
45. 4. General Motors 6/1/2009 91
5. Enron 12/2/2001 66
6. Conseco Inc. 12/17/2002 61
7. Chrysler 4/30/2009 39
8. Thornburg Mortgage 5/1/2009 36
9. Pacific Gas and Electric 4/6/2009 35
10. Texaco Inc. 4/12/1987 34
Although the economic crisis started in the home mortgage
market, it spread to
commercial real estate, corporate junk bonds, and other forms
of debt. Total losses to
U.S. banks reached as high as one-third of the total bank
capital. The crisis has led to a
sharp reduction in bank lending, which in turn caused a severe
recession in the U.S.
economy
7
. How mortgages were affected needs to be discussed.
Borrowers were given low mortgage rates from banks for the
first two to three
years (these initial low rates were called “teaser rates”)
8
46. . The strategy was that by the
time the teaser rates expired and the rates were to be adjusted
upward, the value of their
homes would have increased enough so that a new mortgage
could be taken out and the
old mortgage paid off. However, this strategy worked only as
long as housing prices
were increasing.
When housing prices stopped increasing in 2006, this strategy
no longer worked
9
.
Old mortgages could no longer be refinanced, so the borrowers
were stuck with higher
mortgage rates that they could not afford, and the default rates
started to increase. From
the first quarter of 2006 to the third quarter of 2008, the
percentage of mortgages in
foreclosure more than doubled from 4.5 % to 10 %
10
. This foreclosure rate was the
highest since the Great Depression.
11
47. According to data from Bankruptcy Data.com, a division of
New Generation
Research, Inc., bankruptcy filings among publicly traded
companies surged 74 % in
2008
12
. There were 136 bank bankruptcy filings in 2008, compared
with 78 in 2007.
While the year-over-year growth in bankruptcies rose quickly,
the value of the firms
seeking protection grew much faster. The 136 banks seeking
bankruptcy protection in
2008 had about $1.16 trillion in assets, compared with just
$70.5 billion in assets for
banks filing for bankruptcy protection in 2007
13
.
20
U.S. Government Stimulus Plan
The U. S. government has tried to stabilize this economic
48. crisis. President
Obama’s economic stimulus package, $787 billion, has been an
attempt to get the
economy back on track. On February 10, 2009, the Senate
voted 61-37 to approve
President Obama’s economic stimulus bill. The first piece of
the plan would create one
or more banks that would rely on taxpayer and private money to
purchase and hold the
banks’ bad assets
14
. In the credit markets, the administration and the Fed are
proposing
to expand a lending program that would spend as much as $1
trillion to make up for the
$1.2 trillion decline created between 2006 and 2009 by issuing
securities backed
primarily by consumer loans
15
.
The second major component of the plan would give banks
capital with which to
lend. Banks that receive new government assistance will have
to cut the salaries and
49. perks of their executives and sharply limit dividends and some
corporate acquisitions
16
.
The third piece of the plan would use the last $350 billion that
the Treasury has
allocated for the bailout to rely on the Federal Reserve’s ability
to create money. The
Fed’s money will enable the government to become involved in
the management of
markets and banks
17
.
By comparing the first six months of 2006 with the first six
months of 2009,
results have not been promising. Retail sales have decreased
from $360 billion in 2006 to
$340 billion in 2009
18
. Construction of new homes has declined from approximately
2
million in 2006 to less than 500,000 in 2009
19
50. . The purchasing managers’ index shows
the manufacturing sector activity has declined significantly
since 2006
20
. Orders for
nondefense capital goods have decreased from over $60 billion
in 2006 to less than $50
billion in 2009
21
. Jobless claims have increased from 300,000 to over 600,000
22
. In
2009, the number of people who are receiving jobless benefits
rose to 670,000 million
individuals. This is the highest total since 1967
23
. The impact of the recession upon the
U.S. auto industry has been especially severe.
U.S. Auto Industry
G.M. and Chrysler have received billions of dollars in
government funds to try to
return to profitability. As of mid 2009, nothing positive has
happened. Chrysler has
51. emerged from Chapter 11 bankruptcy (7
th
largest filing of all time: Table 1) and G.M. has
had to receive several billion dollars in additional government
aid. G.M. is in a
particularly difficult position. On March 30, 2009, Rick
Wagoner, the CEO of G.M. was
forced to resign. This was one of the first times that a U.S.
government has forced out a
CEO of a publically held company
24
. This would appear to have been a necessary move.
G.M. has not turned a profit since 2004. Between 2004-2008,
G.M. has lost 82
billion dollars
25
. G.M.’s stock was trading at $70/share in June 2000. On
March 30,
2009 the stock was trading at $3.62. In May 2009, the stock
was trading at $0.75
26
.
Because of these conditions, G.M. has had to borrow money
52. from the
government. As part of President Obama’s bailout plan, G.M.
borrowed $15.4 billion
27
.
In addition, G.M. was forced to borrow an additional $4 billion
during the first quarter of
2009 to stay in business
28
. In addition, G.M. eliminated its Pontiac division and cut
21,000 employees
29
. On May 16, 2009, G.M. began to close 1100 of its dealerships
30
.
On June 1, 2009, GM went into Chapter 11 bankruptcy
protection (4
th
largest filing of all
time: Table 1.2).
Several other businesses of G.M. were affected. The Saturn
brand was
discontinued in 2009. In 2010, the Hummer brand was
53. discontinued. G.M. has exited
21
Chapter 11 Bankruptcy Protection and has been increasing
revenues, earnings and
earnings per share in 2010 and 2011.
Chrysler has taken a somewhat different approach. Chrysler
has obtained $9
billion in bailout funds and exited Chapter 11 bankruptcy
protection after 45 days on June
12, 2009. Chrysler has looked to Fiat for assistance. The U.S.
Government has put in
place goals for Fiat if it desires to increase its ownership of
Chrysler. Fiat will be
allowed to expand its ownership of Chrysler up to a majority
stake if the Italian auto
maker meets certain goals
31
.
Fiat will get an initial 20% stake in Chrysler and can increase
its holdings in
increments of five percentage points, up to 35%, if it achieves
three milestones by
54. January 1, 2013. Fiat will get the first increase once it starts
producing Fiat engines in
the U.S. To receive the second increase, Fiat must develop a
vehicle in the U.S. that can
go 40 miles on a gallon of gasoline.
32
Fiat can get a third increase if Chrysler is able to generate
more than $1.5 billion
in sales outside of North America, according to a “Master
Transaction Agreement” that
was filed on May 9, 2009 in the U.S. Bankruptcy Court in
Manhattan.
33
The agreement
also gives Fiat the option to purchase an additional 16% of
Chrysler. If Fiat meets all
three goals and exercises its options, it could eventually end up
with a 51% stake in
Chrysler.
34
Fiat won’t be able to take full control of Chrysler until it pays
off the loans
55. Chrysler has received from the U.S. government. Prior to that
point, Fiat’s ownership
will be capped at 49.9%. Until the loans are repaid, any Fiat
stake above 35% will be
held in a trust controlled by the U.S. treasury.
35
As of May 2011, Chrysler has some success with repayment of
its loans. Chrysler
used a $1.3 billion investment from Fiat to repay its loans.
Fiat, which has had
management control over Chrysler since it emerged from
bankruptcy protection in 2009,
paid that amount to increase its stake in Chrysler to 46 percent.
The refinancing will
allow it to retire a $5.9 billion balance on the U.S. loans and
$1.6 billion to the
governments of Canada and Ontario
36
. As of 2011, Fiat has an agreement to buy the U.S.
Treasury’s remaining 6% stake in Chrysler Group LLC, a move
that would bring an end
to the U.S. government’s involvement in Chrysler
37
56. . The Canadian and U.S.
governments had taken stakes in Chrysler after providing the
automaker $7.6 billion in
bankruptcy loans. Chrysler formally repaid those loans in 2011
38
. This agreement could
allow Fiat to skip a Chrysler IPO and move forward with its
ambitions to combine
Chrysler and Fiat into a single automaker with global footprints.
In 2011, the combination sold 1.4 million vehicles, a 26%
increase from the prior
year.
For 2011, Fiat/Chrysler generated sales of 59.55 billion Euros
and profit of 1.07
billion Euros.
Chrysler is optimistic about its future. Sergio Marchionne, who
is CEO of Fiat
and Chrysler, said profit for 2012 should increase to $1.5
billion and revenue rise 18%
over 2011 to $65 billion. As of 2012, the two largest stake
holders are Fiat and UAW. As
of 2012, Chrysler is owned by Fiat and the UAW. Fiat has a
57. 53.5 percent share and the
UAW has a 14.5 percent share.
International Recession
This recession (2007-2010) has not been experienced solely in
the U.S.; it is
having negative impacts in several international markets.
During 2006 and 2007 global
investors with significant amounts of cash were looking for
ways to invest their funds.
As discussed earlier, Wall Street investment firms began to
consolidate investments with
22
both prime and sub-prime loans. As housing prices declined
many large and well
established investment and commercial banks in Europe
suffered huge losses. This was
the beginning of the global recession. This recession has
resulted in a sharp drop in
international trade, rising unemployment and a reduction in
commodity prices. This
impacted not only the U.S. investors but international investors
as well.
58. Wall Street hedge funds held by large institutional investors and
foreign banks
who had bought some of the consolidated loans had difficulty
selling the loans
39
. Banks
stopped lending in an effort to conserve cash. The worldwide
recession became worse
because investors who had funds were not investing. This
action caused stock markets
worldwide to plummet. As stock prices fell, firms cut expenses
to try to keep up with the
declining stock prices. This caused a significant increase in
unemployment and
individuals stopped making purchases except for necessities.
The collapse of the housing market in the U.S. had a direct
impact not only on the
nation’s mortgage banks but also upon U.S. and international
home builders, real estate,
and home supply retail outlets. The continuing development of
this crisis led to a global
economic collapse
40
59. . Beginning with failures caused by misapplication of risk
controls
for bad debts, collateralization of debt insurance and fraud,
large financial institutions in
the United States and Europe faced a credit crisis and a
slowdown in economic activity.
The crisis rapidly developed and spread into a global economic
shock, resulting in a
number of European bank failures, declines in various stock
indexes, and large reductions
in the market value of equities and commodities.
Other impacts were felt in international markets. In 2009,
currency values, oil
prices and other commodity prices increased significantly while
housing prices in the
European Union continued to decline. Steep declines in the
economies of three of the
U.S.’s biggest trading partners – Mexico, Japan and Germany –
underscored the severity
of the global recession and put pressure on major industrialized
nations to revive global
trade talks
41
. Mexico has been affected significantly.
60. Mexico’s gross domestic product fell at an annualized rate of
21.5% in the first
quarter of 2009. This was the worst performance since the 1995
peso crisis which led to
an International Monetary Fund and U.S. Treasury financial
rescue. Mexico, during the
past 15 years, has depended on demand for goods from the U.S.
to stabilize its economy.
About a fifth of Mexico’s economy depends on manufacturing
exports to the U.S., and
this dramatic drop in demand has hit Mexico hard
42
. During the first quarter of 2009,
Mexican auto production slid 41% compared to the same period
the year before.
Mexico’s decline was followed by Japan’s as its economy
contracted in the first quarter
of 2009 by 15.2%, its worst performance since 1955
43
. Germany’s first quarter of 2009
showed a decline in GDP by 14.5%, which was the worst since
1970. All of these
countries depend heavily on exports to the U.S. This is no
61. longer happening because
U.S. consumers have cut back purchases from these countries.
Many industrialized countries went into recession in 2008.
The following
countries went into recession in the third quarter of 2008:
Japan, Sweden, Hong Kong,
Singapore, Italy, Turkey and Germany
44
. In addition, the fifteen nations in the European
Union that use the euro went into recession in the third quarter
of 2008. The following
countries went into recession in the fourth quarter of 2008:
United Kingdom, Spain,
Taiwan, Estonia, Latvia, Ireland, New Zealand, Russia,
Netherlands, and Iceland
45
. It is
possible that some of these countries may have obtained funds
from the U.S. Federal
Reserve.
62. 23
I would like to thank one of our professors, David Baker, for
bringing the following
recent events to my attention.
THE “SECRET” GLOBAL BAILOUT
In October of 2011, the government accountability office
(GAO) conducted an
audit of the Federal Reserve. Ben Bernanke, chairman of the
Federal Reserve vigorously
objected to this audit. He had good reason for his objection. The
results of the audit were
shocking. During the period of the recession (2007-2010), the
Federal Reserve “loaned”
$16 trillion (000,000,000,000) in funds to U.S. banks,
international banks, and
international firms.
46
These funds were loaned at zero percent interest. The Federal
Reserve had not informed the U.S. Congress about this “global
bailout.”
47
It does not
63. seem reasonable that the U.S. Federal Reserve should be
loaning this level of funds to
international banks and international firms during a recession
within the U.S. The list of
institutions that received the most money from the Federal
Reserve can be found on page
131 of the GAO Audit and are as follows:
Economic Status as of Mid-2011
Many economists believe that the global recession ended in
2010. Paul Dales,
64. senior U.S. economist believes that “the economy is unlikely to
grow at a decent rate
anytime in the next year or two.” High oil prices are one reason
that consumers are
spending less than they might have on other things, like
clothing and household goods.
Consumer spending drives about 70 percent of the economy. A
political impasse over
general budget cuts, combined with Europe’s debt crisis, is also
creating uncertainty.
Higher gas and food prices have erased any pay raises workers
are getting.
Americans have responded by spending less. High energy
prices are putting pressure on
businesses to raise their prices. Workers are seeing limited, if
any, pay increases because
they lack leverage in a market where jobs are still hard to find.
This limits businesses
ability to raise prices, even though many companies are facing
higher costs.
Citigroup: $2.5 trillion
Morgan Stanley: $2.04 trillion
Merrill Lynch: $1.949 trillion
65. Bank of America: $1.344 trillion
Barclays PLC (United Kingdom): $868 billion
Bear Sterns: $853 billion
Goldman Sachs: $814 billion
Royal Bank of Scotland (UK): $541 billion
JP Morgan Chase: $391 billion
Deutsche Bank (Germany): $354 billion
UBS (Switzerland): $287 billion
Credit Suisse (Switzerland): $262 billion
Lehman Brothers: $183 billion
Bank of Scotland (United Kingdom): $181 billion
BNP Paribas (France): $175 billion
And many more including banks in Belgium of all places
http://www.scribd.com/doc/60553686/GAO-Fed-Investigation
TABLE 1.3
Institutions Bailed Out by the Federal Reserve
http://www.scribd.com/doc/60553686/GAO-Fed-Investigation
66. 24
U.S. increases in hiring have not manifested themselves in the
first half of 2011.
Disappointing U.S. economic data followed poor manufacturing
reports around the globe.
The numbers, together with evidence of a continuing downdraft
in housing and signs that
companies and consumers remain apprehensive about spending,
suggest the economy
recovery will be slow. With unemployment high, the housing
market not expanding and
ongoing financial turmoil in Europe, the slowdown could turn
into something more
ominous. Despite cautious outlook for 2011, 36 of the 38
economists surveyed oppose
any further efforts by the Fed to invigorate growth. The Fed
has already cut short-term
interest rates to near zero. And it’s ending a program to buy
$600 billion in Treasury
bonds to keep longer-term rates low to help increase spending
and hiring.
Economists say another round of bond-buying wouldn’t provide
much benefit, if
67. any. Some fear it could make things worse by unleashing high
inflation and disrupting
financial markets. When it buys bonds, the Fed, in effect,
prints massive amounts of
money. All that extra money in the system raises the nominal
value of the things we buy,
weakening the dollar, and it can create bubbles in the prices of
stocks and commodities.
Some economists believe that the second half of 2011 will
show improvement in
economic conditions. The reason is that the main causes of the
slowdown – high oil
prices and manufacturing delays because of the disaster in Japan
– have started to fade.
Oil prices have been falling since Memorial Day (2011).
Economists surveyed by the
Association Press (AP) predicted unemployment would fall to
8.7 percent at year’s end.
However, the economy is still carrying too much baggage from
the financial crisis –
damaged banks, depressed home prices, and debt-burdened
consumers – to achieve much
liftoff.
68. The global economy is expected to grow as reported by the
Organization for
Economic Co-operation and Development (OECD). This
organization’s mission is to
improve the economic and social wellbeing of people around the
world. The member
nations of OECD are Australia, Austria, Belgium, Canada,
Chile, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Iceland, Ireland, Israel,
Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New
Zealand, Norway, Poland,
Portugal, Slovak Republic, Slovenia, Spain, Sweden,
Switzerland, Turkey, United
Kingdom, and the U.S.
OECD economists expect that economic recovery will take
place at different
speeds for different counties. OECD’s projections are
identified in Table 1.3.
Table 1.3
69. Gross Domestic Product (GDP) for 2010 and 2011 Increase (in
percent)
Location 2011 2012
United States 2.6 3.1
European Union 2.0 2.0
Japan 0.9 2.2
Rest of the World 4.2 4.6
While the table shows modest growth rates for all nations, the
statistics show that
the fully developed nations are expected to grow at lower rates
than the remainder of the
25
world. However, there are significant events which could
significantly lower all of these
projections. Risks include possibility of further increases in oil
and commodity prices,
which could feed into cause inflation; a stronger-than-projected
slowdown in China; the
unsettled fiscal situation in the United States and Japan; and
renewed weakness in
70. housing markets in many OECD countries.
The top challenge facing countries is widespread
unemployment, which affects
more than 50 million people of OECD nations. Governments
must ensure that
employment services match the unemployed to jobs. They
should also rebalance
employment protection towards temporary workers; consider
reducing taxes on labor via
targeted subsidies for low paid jobs; and promote work-sharing
arrangements that can
minimize employment losses during downturns.
Economic Status as of 3
rd
Quarter 2011
In the third quarter of 2011, many analysts took the position
that the U.S. may be
entering another recession: this assumes that we came out of the
2007-2010 recession in
2011. In October 2011, Ben Bernanke warned that the “U.S.
economic recovery was
close to faltering.” Bernanke noted that job growth had slowed
from earlier in the year.
71. Further, Bernanke state that “a 9 percent unemployment and
very slow growth is not a
good situation.”
An article in the October 2011 Wall Street Journal stated that
“Stocks Log Worst
Quarter Since 2009.” The Dow Jones industrial average for the
third quarter of 2011 was
down by 12 percent. This was the worst percentage decline
since the first quarter of 2009.
Many Wall Street analysts are reducing their forecasts for
growth and company earnings.
Household income has declined in the third quarter of 2011 to
income levels in
1996. Household income has dropped for the third year in a
row.
The American dream of homeownership has felt its biggest
drop since the Great
Depressions, according to new 2010 census figures. The
analysis by the Census Bureau
found the homeownership rate fell to 65.1 percent last year.
Analysts say the U.S. may
never return to its housing boom peak in which nearly 70
percent of occupied households
were owned by their residents. The reason: a longer-term
72. economic reality of tighter
credit, prolonged job losses and reduced government
involvement. Given depressed
housing values that could continue for at least another four to
five years, it now makes
more sense in most cases to rent than own.
The depressed situation in the U.S. is also being felt in
international markets.
Europe’s financial crisis has intensified as banks moved to
obtain more dollars for loans
to their U.S. customers, and some multinational firms began
looking to banks outside the
European Union for loans. In early October, Bernanke stated
that “Europe has a debt
crisis and world markets are in turmoil.” The European debt
crisis has continued for than
a year. This crisis has made markets worldwide more volatile.
Investors globally have
grown alarmed about the risk of financial chaos spreading from
Europe where banks are
exposed to the shaky finances of Greece and other governments.
Stock markets in the
U.S., Europe, and Japan all posted declines from the second
quarter of 2011.
73. The state of affairs in emerging markets is also unstable.
Historically, China has
been a growth market. This market is slowing down. Greece
continues to be in a debt
crisis. Indian stocks lost more than four percent in the third
quarter of 2011. Indonesian
stocks fell by nine percent and Mexican stocks also dropped by
five percent in 2010.
However the 1
st
quarter of 2012 showed very positive results within the United
States.
26
U.S. Economic Conditions During First Quarter of 2012
As of the first quarter of 2012, the U.S. economy was moving
from a period of
recession to a period of growth.
During these first few months of 2012, financial conditions in
the United States
have improved. As of March 1, 2012, the Dow Jones Industrials
closed above the 13,000
74. points for the first time since April 25, 2007. The other
industrial averages have also
fared well as of this point in time. The Standard & Poor’s 500
is up 9 percent, the
Russell 2000 index of smaller stocks is up 11 percent , and the
Nasdaq composite index,
dominated by technology stocks, is up 14%.
48
The Nasdaq has not traded so high since December 2000, during
the bursting of
the bubble in technology stocks.
49
Likewise, the Nasdaq composite index briefly broke
through 3,000 on Wednesday, Feb. 29, 2012. This was the first
time since the collapse in
dot-com stocks more than a decade ago. February 2012, was the
best month on Wall
Street in 14 years.
50
Apple, Nasdaq’s biggest component, topped $500 billion in
market value, the
only company above the half-trillion mark and only the sixth in
75. U.S. corporate history to
grow so big.
There is good news from an unemployment perspective also.
The economy has
been creating more jobs since last fall, producing an average of
223,000 new jobs in the
months of December and January.
51
U.S. companies have emerged from the recession more
productive, more
profitable, flush with cash and less burdened by debt.
52
An analysis by the Wall Street
Journal of corporate financial reports finds that cumulative
sales, profits and employment
last year among members of the Standard & Poor’s 500-stock
index, exceeded the totals
of 2007. This was before the recession and financial crisis.
53
27
76. Table 1.4
U.S. Recovery 2011
Measure Increase from 2007 to 2011
Revenues 17.1
Net Income 22.7
Employees 5.1
Cash 49.9
Capital Spending 16.3
Source: Standard &Poors 2012
Many measures from firms in the Standard & Poors index have
increased
significantly since 2007 (Table 1.4). Increasing cash revenues
(49.9%) have led to an
increase in capital spending (16.3%). Net income for the
Standard & Poor’s firms has
increased by 22.7%. These are very dramatic indicators which
are a sign that the U.S.
economy is now in a growth mode.
54
However, it must be remembered that Europe is
77. still in the recession and growth in China is slowing.
55
While we may be beyond the global economy recession,
turbulent times will
come again. Changing economic conditions can occur all the
time. In order to stay
ahead of changing and/or turbulent environments, Figure 1.1
provides a guide to growing
within changing times. Figure 1.1 is also applicable during
transition from weak to
strong economies.
28
Figure 1.1: Growth Within Changing or Turbulent Environments
79. Dictated by Customers
Capitalize Upon
Errors of
Competitors
Achieving a Series of
Temporary Advantage
Environmental
Scanning
Flexibility
which is built
into Resources
Resource
Reconfiguration to
Capitalize Upon
Competitors
Weaknesses
Learning
Knowledge Base to
81. 29
First, firms must develop the capability to scan the changing
environment to
identify how a specific industry is changing and why it is
changing in this direction. For
several years, Caterpillar has been experiencing record profits
and record growth.
However, its most profitable division, mining equipment, cannot
achieve profitability
under current economic conditions (2009-2010). Its mining
trucks are used to extract oil
from sand. If the price of oil is greater than $40/barrel, these
mining processes are
profitable. If the price is below $40/barrel, the processes are
not profitable. Knowing
this fact, Caterpillar is developing mining equipment which
could be profitably used at
prices less than $40/barrel. During 2010, the global mining
industry became very
profitable throughout the world. Caterpillar now (2011) has an
18 month back log on its
mining trucks. In 2010 and 2011, Caterpillar generated records
in terms of revenues and
82. profits.
Second, during times of economic turbulence, firms must be
able to analyze
industries to determine strategic industry factors
56
. Strategic industry factors are factors
which dictate consumer buying decisions. What the firm needs
to do is to identify the
current customer needs while developing the capacity to
identify emerging customer
needs
57
. Cell phone manufacturers have sequentially added features as
the industry has
evolved to require additional technology capabilities.
Third, in an economic crisis, firms need to develop resources
which have
flexibility. Resource flexibility is crucial for growth
58
. In many cases, the direction a
firm will grow is not known before the fact. For example,
Toyota has been successful
83. because its production processes are designed to support
different models of cars with
minimal modification.
Fourth, a firm needs resources that can be developed to address
current strategic
industry factors. In an effort to reduce costs, many universities
have developed distance
learning or online courses. This approach is also beneficial to
students because they do
not need to incur additional expenses, such as gas or time
commuting to a centralized
location.
Fifth, during times of turbulence a firm’s resources need to be
combined and
reconfigured to meet the needs of significant environmental
change
59
. As this happens
firms develop new resources which have the capability to create
new and/or improved
products. As the price of oil continues to climb, global auto
manufacturers have
responded by developing alternative forms of fuel which are not
dependent upon oil. The
84. significant point with respect to the creation of new resources is
that they make existing
and/or related resources better from a differentiation
perspective. The new resources
should be put to their most productive use by developing
capabilities which add value
(e.g. process and product R & D). The firms that experience the
highest growth rates are
able to develop a sequence of temporary advantages that are
linked over time to provide
long-term growth. The pharmaceutical industry is an example
of an industry which
requires firms to continuously develop new products to replace
existing products which
are coming off patent protection (e.g. Lipitor).
Fundamentally a firm must grow with its customer base over
time. It is of critical
importance that the firm stays close to the customer to ascertain
how strategic industry
factors change over time. This is becoming increasingly
difficult as email and fax
become routine modes of communication. To fully understand
the evolutionary needs of
85. its customer base, the firm must keep in close, personal contact
with them. If they do not,
its competitors may develop goods and services which meet
customers’ needs and take
significant revenues from the initial firm. This is what
happened to the U.S. auto industry
as European and Asian auto manufacturers entered and
established strong positions
30
within the U.S. These international firms maintained these
positions over time by
continuously developing new automobiles which addressed
current consumer needs.
Sixth, take advantage of the strategic errors of competitors.
The crux of strategy
is to gain a position of advantage and then sustain that position
over time
60
. Established
business models may not work.
The deregulation of the trucking industry was one case. During
the initial phase
86. of the deregulation of the U.S. trucking industry, trucking firms
attempted to move into
related industries before they had fully developed their
operational infrastructure; all
these firms went out of business. From a trucking prospective,
if a firm’s infrastructure is
not fully developed, it is difficult to meet the needs of a
customer base which is
expanding geographically. In this industry a fully developed
infrastructure is a
prerequisite for growth. In the trucking industry, those firms
which established this
complete infrastructure grew after the industry was deregulated.
Those firms which did
not went out of business.
The fast food industry provides another example of firms
taking share from
competitors. Some customers now prefer fast food restaurants
to provide meals which
are low in calories and fat. McDonalds has recognized this
need and has developed
several options for its customers seeking healthy options.
Hardees’ is a fast food
restaurant which has not.
87. As these firms continue to grow learning becomes important.
Learning from
other firms can be an important factor. The airfreight firms
learned from the telephone
companies the benefits of a hub and spoke network. They
learned that they could
significantly reduce transit time and overall costs by developing
an integrated air-ground,
hub-and-spoke operating system. By developing global hub-
and-spoke operating
systems, carriers provide shippers with total global coverage.
This learning provides a
knowledge base for firms to make better strategic decisions
during periods of significant
economic change.
The role of alliances is becoming increasingly important in the
twenty-first
century. Many firms that have grown in volatile environments
have developed strategic
alliance networks that provide for global coverage. The Star,
One World, and SkyTeam
alliances have provided airlines throughout the world with
global coverage. These
88. alliances permit access to market positions without significant
incremental costs being
incurred. Airlines who are members of these international
alliances obtain a global
coverage advantage over carriers that have not engaged in
international airline alliances.
As firms begin to grow within domestic environments, alliances
provide firms with the
capability to grow over time in changing environments. As they
move into international
markets, as a result of these alliances, firms continue to learn
how to grow in different
types of international environments. This new knowledge base
allows firms to grow
based upon what has been learned. The lessons learned in the
2007-2010 recession
provide valuable insights for future recessions.
89. 31
Discussion Questions
1. Explain how the current economic recession differs from the
depression in the
1930’s.
2. Why has the U.S. Government taken a significant ($787
billion) role in the
current economic recession?
3. What led to the collapse of the economic environment within
the U.S.? Answer
the same question from an international perspective.
4. What can we learn from Table 1.2?
5. Why has Mexico encountered such a significant collapse from
an economic
perspective?
6. For a firm of your choice, explain how this firm can grow
within turbulent
environments using Figure 1.
7. What is one of the single most important factors to judge
whether a country is
recovering from the global economic recession?
90. 32
References
1
. _______ “Business Cycle Expansion and
Contractions.”National Bureau of Economic
Research 2010.
2.
Ibid
3.
Ibid
4.
J. Lahart, “How a Modern Depression Might Look if the U.S.
Gets There,” Wall Street
Journal, March 30, 2009.
5.
Ibid
91. 6.
F. Moseley, “The U.S. Economic Crisis; Causes and
Solution
s,” International
Economic Review, March-April 2009.
7.
____________ “Strategic Planning in a Crisis,” McKinsey
Quarterly, 2009.
8.
Moseley, 2009
9.
93. 14.
E. Andrews and S. Labarion, “Bailout Plan: $2.5 trillion and a
strong U.S. Hand,”
Wall Street Journal, February 10, 2009.
15.
Ibid
16.
Ibid
17.
Ibid
18.
94. J. Hahart, “Gauging the Economy’s Engine as it Sputters
Again,” Wall Street Journal,
May 19, 2009.
19.
Ibid
20.
Ibid
33
21.
Ibid
95. 22.
Ibid
23.
__________ “6.7 Million Americans Unemployed: Highest
Since 1967,” New York
Times, May 19, 2009.
24.
N. King and J. Stoll, “Government Forces Out Wagner at
G.M.,” Wall Street Journal,
March 30, 2009.
25.
Ibid
96. 26.
N. King and S. Terlep, “G.M. Collapses into Government
Arms,” Wall Street Journal,
June 2, 2009.
27.
____ “U.S. Treasury Lends $15.4 billion to G.M.,” Wall Street
Journal, April 25,
2009.
28.
S. Tercep and N. Shirouzu, “G.M. Gets $4 billion in New U.S.
Funds,” Wall Street
Journal, May 23, 2009
97. 29.
____ “Pontiac, 21,000 Workers to be cut in G.M. Plan,” New
York Times, April 28,
2009
30.
S. Tercep, “G.M. to Close 1,100 Dealerships,” Wall Street
Journal, May 16, 2009.
31.
J. Bennett and A. Kellogg, “New Day for Chrylser as Fiat
Arrives,” Wall Street
Journal, June 12, 2009.
32.
99. 37.
V. Bajaj, “Stocks are Hurt by Latest Fear: Declining Prices,”
New York Times,
November 20, 2008.
38.
B. Davis, “World Economies Plummet,” Wall Street Journal,
May 21, 2009.
39.
Ibid
34
100. 40.
L. Bryan and D. Farrell, “Leading through Uncertainty,”
McKinsey Quarterly,
December 2008.
41.
D. Luhnow and A. Harrup, “Mexico’s Economy Slumps,
Dragged Down by the U.S.”
Wall Street Journal, May 21, 2009.
42.
Ibid
43.
Tanneau, 2009.
101. 44.
___ “Financial Crisis of 2007-2009,”
www.en.wikipedia.org/wiki/financialcrisis
45.
Ibid
46.
R. Paul. “Audit of the Federal Reserve Reveal 16 Trillion in
Secret Bailouts,” 2012.
47.
Ibid
48.
Wagner, Daniel, “Dow closes above 13,000, first time since
crises”, The Boston
102. Globe, February 29, 2012
49.
The Herald-Dispatch, “Nasdaq Cracks 3000, but stocks fall”,
03/01/2012,
http://www.herald-dispatch.com/business/x1744743793/Nasdaq-
cracks-3-000-but-stocks-
fall
50.
Ibid
51.
Mullaney, Tim, “Jobless Rate Falling Faster than Many
Predicted”, The USA Today,
104. Ibid
56.
R. Amit and P. Schumacher, “Strategic Assets and
Organizational Rent,” Strategic
Management Journal, 1993, 14: 33-46.
57.
B. Wernerfelt, “A Resource-Based View of the Firm,” Strategic
Management Journal,
1984, 5: 171-180.
58.
R. Sanchez, “Strategic Flexibility in Product Competition,”
Strategic Management
107. Harvard Business Cases for Chapter 1
Toyota: The Accelerator Crisis
Product Number TB0243
Google’s Andriod: Will it shake up the wireless industry in
2009 and beyond?
Product Number SM176
Professor Case for Chapter 1
108. General Motors (G.M.)
Discussion Question:
Explain G.M.’s strategy as it exited Chapter 11 bankruptcy
protection. Has this been a
viable strategy? Explain why or why not.
37
109. Chapter 2
Industry Analysis and Industry Evolution for the
21
st
Century
38
Learning and Assessment Goals
1. Understand the challenges of the 21
st
century.
110. 2. Obtain the ability to conduct an industry analysis.
3. Determine at what stage firms are in from an industry
evolution perspective.
4. Understand the relationship between industry analysis and
industry evolution.
5. Understand how Porter’s (1980) 5 forces model changes as a
firm moves from
one stage of industry evolution to the next.
111.
112. 39
Firms need to have a very clear objective. This objective is
referred to as the
mission statement. All stakeholders of the organization should
understand the mission
statement. For example, Southwest Airlines mission statement is
“dedicated to the
highest quality of customer service delivered with a sense of
warmth, friendliness,
individual pride, and company spirit.” In an era of cost-
oriented airlines, Southwest
wishes to become the airline that provides its customers the
highest quality of airline
transportation service. This mission may be one reason
Southwest Airlines is the only
airline that has been profitable every year since the airline
113. industry was deregulated in
1978.
While the mission statement is what the firm wishes to become,
the statement of
strategic intent is how a firm is to accomplish its mission.
Strategic intent identifies how
the firm uses its resources to achieve advantage within a
competitive environment. The
competitive environment of the 21
st
century differs significantly from the competitive
environment of the 1990’s.
The Competitive Environment in the 21
st
Century
Some believe that the 21
114. st
century will bring significant change. Gary Hamel (co-
author of The Future of Management) believes that strategic
leaders will need to greatly
change how they manage. The 20
th
century model of designing and managing
companies, which emphasized hierarchy and the importance of
labor and capital inputs, is
no longer applicable
1
. Forward-looking executives will respond to this challenge by
developing new ways to bring innovative products and services
to the marketplace
2
. New
approaches to managing employees and organizing talent to
maximize wealth creation
115. may provide companies with a competitive advantage. As
companies change the
direction of the firm, they will have to balance revolutionary
thinking with practical
experience
3
.
Scholars believe that the management of technology will be
crucial for success
within the first few decades of this century. There are three
reasons why technology will
be important in the current and future environment
4
. As Lowell (author of Mobilizing
Minds) says, first is the impact of new technology. Technology
provides the availability
of powerful new tools for coordinating human effort. Second,
116. increasing global demand
for goods and services will require companies to be adaptable
and innovative
5
. Third,
technology can be used to identify unmet consumer needs much
more quickly than in the
past (e.g., iPhone)
6
.
Lowell believes that strategic leadership must include
innovation. The scarce
resources in any company today are discretionary spending,
talent, and knowledge. The
issue isn’t just innovation, but being able to implement the
innovation throughout the
company. Bryan believes that the ideas on how to run firms in
the 21
117. st
century have now
reached a stage of maturity which will require managers to
consciously innovate.
Bryan believes that we may be entering an area of new
technology innovation
which will cause managers to adapt to new environments. This
will lead to a continued
importance of developing innovative as a result of increases in
intellectual capital. If
innovation can be realized, firms will participate in the new
products environment.
Otherwise, these other firms will not.
A firm’s competitive environment will consist of firms within
its industry and
may consist of firms in other industries. As such, it is
important to identify industry
118. boundaries.
40
Industry Structure
From an industry analysis perspective, the structure of an
industry can take many
forms which impact competition in different ways. Table 2.1
shows a number of
structures an industry may take.
Table 2.1
Selected Industry Structures
Type of Structure Number of
119. Competitors
Ease of Entry into
Market
Product
Monopoly One Many barriers Almost no
substitutes
Oligopoly Few Some barriers Homogeneous or
differentiated (with
real or perceived
differences)
Monopolistic
competition
Many Few barriers Product
120. differentiation, with
many substitutes
Pure competition Unlimited No barriers Homogeneous
products
Monopoly A competitive structure in which an organization
offers a product that has no
close substitutes, making that organization the sole source of
supply. The United States
Postal Service (USPS) is the only entity that can deliver first
class mail.
Oligopoly A competitive structure in which a few sellers control
substantial market
shares. The worldwide steel industry would be an example of
an industry which would
121. be an oligopoly. Three firms dominate the industry:
ArcelorMittal, Nippon (Japan), and
Posco (South Korea).
Monopolistic competition A competitive structure in which a
firm has many potential
competitors and tries to develop a marketing strategy to
differentiate its product. A good
example of monopolistic competition would be the auto
industry. The number of global
auto manufacturers is quite large.
Pure competition A market structure characterized by an
extremely large number of
sellers, none strong enough to significantly influence price or
supply. Bottled water firms
122. would be an example of pure competition. No one firm can
influence price or supply.
Industry Classification
The U.S. government has developed a classification system to
group firms into
industries. This system, the Standard Industrial Classification
(SIC) System, groups
firms that produce similar goods and/or services. This system is
being replaced by the
North American Industry Classification System (NAICS).
The newer system is a result of the North American Free Trade
Agreement
(NAFTA) that reduced trade barriers between the United States,
Canada, and Mexico.
This system classifies firms in the U.S., Canada, and Mexico
into industries. The NAICS
123. 41
is based upon the International Standard Industrial
Classification (ISIC) System, which is
used to classify firms into industry groups throughout the
world.
Table 2.2
Comparison of SIC and NAICS
SIC code sequence for chewing gum, bubble gum manufacturers
SIC
Code
Type of Code Description
124. 20 Sector Food and kindred products
206 3 digit sub-sector Sugar and confectionary product
manufacturing
2067 4 digit sub-sector Chewing gum, bubble gum, and chewing
gum
base
NAICS code sequence for chewing gum, bubble gum
manufacturers
NAICS
Code
Type of Code Description 1997 Value of
Product
Shipments
125. ($1,000)
311 3 digit sub-
sector
Food manufacturing 423,262,220
3113 4 digit sub-
sector
Sugar and confectionary
product manufacturing
24,301,957
311340 U.S. Industry
Code
Non-chocolate confectionary
126. manufacturing
5,080,263
3113404 Product Class Chewing gum, bubble gum,
and chewing gum base
1,310,938
Source: Adapted with the permission of Prentice Hall, from
Strategic management by Stephen Porth, 108.
2003.
As shown in Table 2.2, the NAICS provides more detailed
information than the
SIC system. Once industries have been classified, a process
needs to be developed to
examine the differences between industries.
127. 42
Porter’s Five Forces
Michael Porter at Harvard University has developed a
framework for analyzing
industries
7
. His five forces model is illustrated in Figure 2.1.
Figure 2.1
Porter’s Model of Industry Competition
128.
129. Source: Adapted with the permission of the Free Press from
Competitive advantage: creating and
sustaining superior performance by Michael Porter, 5. 1985
The figure identifies 5 key structural features that determine the
degree of
competition within an industry. Each element of the figure will
now be discussed.
Potential Entrants (Threat of New Entrants)
This force addresses the likelihood that firms, which are
currently outside an
industry, will enter the industry
8
. If firms within the industry have significant economies
134. Threat of substitute products or services
43
of scale, these scale economies act as a deterrent to entry. For
example, firms are not
likely to enter the ground transportation shipping industry in the
U.S. because United
Parcel Service (UPS), FedEx, and DHL deliver millions of
shipments each day.
Brand name can also deter firms from entering an industry.
Coke and Pepsi have
such strong brands in the soft drink industry that it would be
difficult for new entrants to
compete in the beverage industry. Even if entrants attempted to
enter a segment (such as
135. bottled water) firms of the industry, they would be likely to face
significant competition.
For example, Coke has acquired Dasani and Pepsi has acquired
Aquafina.
Making sure certain goods and services are available to
customers requires
establishing an inbound and outbound transportation system. A
fully developed
distribution infrastructure provides customers easy access to a
firm’s products/services.
Building infrastructure is expensive and time consuming. In
addition, new entrants
would need to offer a product and/or service that induces the
consumer to switch brands.
For example, a firm would be unlikely to enter the P.C. industry
in the U.S. due to the
136. extensive infrastructure and brand name that Dell has created.
The P.C. industry is
comprised of large-scale players who primarily compete on
price. These industry
conditions make it difficult for new entrants to establish a
viable position within this
industry.
Government policy may also impact a firm’s entry into an
industry. For example,
the United States Postal Service (USPS) is a monopoly with
respect to delivery of
government mail. As such, competitors are not permitted to
enter this segment of the
industry.
Bargaining Power of Suppliers
This force addresses the degree to which inputs into the
137. industry affect the
relationship between sellers and buyers
9
. If pilots decided not to fly, the airline industry
would not function. By having large capital resources (e.g.
aircraft) not being utilized,
the airlines would be losing even more money than they are
currently.
The greater the degree of concentrations of suppliers, the
greater the power these
suppliers can impact an industry. The OPEC cartel is one
reason that gasoline prices are
high in 2011. Because final consumers have very few options
with respect to travel by
car (e.g. train), the suppliers have a significant impact upon the
industry. While auto
manufacturers are introducing alternative types of cars (e.g.
138. electric), the vast majority of
vehicles are still dependent upon oil for fuel.
Bargaining Power of Buyers
This force addresses how much influence customers have
within the industry
10
.
Where switching costs are low, consumers exert significant
power. Switching costs
determine how easy it is for consumers to change
products/services. Within the auto and
brewing industries, consumers have many options; thus,
consumers have significant
power as to what products/services are manufactured. On the
other hand, the
139. pharmaceutical industry has significant control over buyers
because drugs are protected
by 17 years of patent protection.
Threat of Substitutes
This force addresses how products/services are perceived from
the customer’s
perspective
11
. The more options that the final consumer has, the greater the
threat of
substitute products. With respect to cell phone manufacturers,
consumers have a broad
selection. As such, price becomes an elastic variable. Because
the functionality is
140. 44
primarily the same, the only option for manufacturers is to
compete on price. For
industries which do not have brand equity and which have
products with similar
functionality, price becomes a key variable. Commodity
industries such as mining and
steel manufacturing tend to be price sensitive markets.
On the other hand, the fashion industry is relatively inelastic
with respect to price
due to branding (e.g. Gucci). The same brand perception
applies to service industries: the
Mayo Clinic has one of the best brand reputations for healthcare
in the world. To a lesser
degree, some management-consulting firms have excellent brand
reputations (e.g.