BU111 Midterm Review.docx

BU111 Midterm Review.docx - BU111 Midterm Review Critical...

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BU111 Midterm Review Critical Success Factors Roadmap Strategy Vision/Mission Internal organization allows you to execute and drive your strategy Environment can either help or throw off course o Strategy must accommodate to environment o PEST (political, economic, social, and technological) environment o Industry forces - environment varies from industry to industry Why Critical Success Factors? Guide strategic and daily details Ensures holistic thinking Ensure success overtime Critical Success Factors Achieving financial performance (bulls eye) - ROI, profits, growth Meet customer needs - understanding, anticipating, and fulfilling needs o Important for revenues o Keeping customer commitment Gaining employee commitment - passionate, loyal o Happy employees are more productive o Care about customers because they care about company o Reduce turnover costs Encourage innovation and creativity - rewarding and encouraging ideas o Stay fresh and relevant o Encourages employees to be creative and stay (reduce turnover) o Competitive advantage to get ahead of other organizations o Identifies and anticipates customer needs Building quality products & services - value, consistency, and reliability o Reputation for products & services o Reliability o Meet customer needs - revenues Distinctive competitive advantage - unique, inimitable o Different and better than competitors o Attracts employees, customers, investors o Lower turnover Diamond-E Framework Strengths and weaknesses (internal) Opportunities & threats (external)
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External - PEST, five forces Internal - Management preferences, organization, resources, strategy Each variable effects others Strategy-Links internal to external Internal: what can we do? External: what should we do? Strategy is the plan that the business uses to pursue opportunities & achieve CSF The critical linking variable between organization and environment Diamond-E - Principal Logic Principal logic is consistency or alignment Consistency internally leads to performance Alignment externally ensures strategy is right for the given environment Warning: environment is always changing Diamond-E - Why? Assesses current strategy Generate new strategic proposals Evaluate strategic proposals Diamond-E - How? First deal with strategy-environment link Assess forces at work and their implications Adjust internal qualities or adjust strategy Looking Internally Management preferences - vision, mission, preferences & biases o Make the ultimate decisions o Assess and understand management Organization - culture, capabilities, structure o Know company’s capabilities and use them o Divide work effectively, focus in right area Resources - human, capital, financial External Analysis External Analysis
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Process of scanning and evaluating the external environment Identifying opportunities & threats Firms face multiple environments o General environment - affects all businesses i.e. tax rates, level of unemployment
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