364 Midterm 2 Review

364 Midterm 2 Review - PPT #1 Strategic Management Does...

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PPT #1 Strategic Management – Does Strategy Matter Industry profitability – measured by return on invested capital o Soft drinks, prepackaged software = good Airlines, Books, Hotels = Bad External environment = Organization (5 forces) + External (Technology, laws, social values) Newspaper industry down, had to adapt by offering online options Strategy – Unique strategies that are hard to replicate, provide value to customers, creates competitive adv. o “Strategy is choosing what not to do.” o Not just about what the strategy is but how to execute it Strategic Planning Process o Establish what you want to do o Analyze own strengths and weaknesses o Analyze external opportunities and threats (Aid in SWOT analysis and strategy formation) o Develop strategy then evolve it Good SWOT is not just brainstorming its FACT + LOGIC Opportunities and threats o Legal changes, technological, macro/socioeconomic, consumer tastes, changes in competitive conduct and business models Strengths and weaknesses o Structure (What you have and how you will specialize based on it) o Systems (What you do), more powerful than given credit o Staff (People, HR Management, Developing employees) o Skills (What company does best) o Shared Values/Superordinate goals (Ideas around which business is built) o Style/Culture (Organizational culture, leadership style) Porters 5 Forces – Supplier power, buyer power, barriers of entry, substitutes, rivalry SCP Analysis - MIGHT WANT TO COME BACK TO Punctuated Equilibrium (Airlines) – Revolutionary period (9/11, high fuel costs) are followed eventually by period of growth/equilibrium until another RP hits o Airline industry took a while to react and get back to equilibrium after deregulation Porters 5 Forces for Airline Industry o Threat of new entrants = Moderate to high (Due to leasing of planes), Threat of substitutes = Low to moderate, Buyer power = high, Supplier power = moderate to high, rivalry = high Southwest – Compete on price, ease, Point to point, quick turnarounds, good service, o Cheap, fast, least stressful way to travel Skybus – Two hubs, everything goes through them, pay for what you want, cheap ticket but you must buy EVERYTHING else, fly out of non major airport o Ultimately failed, but partially due to the time period they entered the market Virgin – Point to point service between major cities, provides you with products you would want on fly (Movies, MP3s, good food, mood lighting), makes flying enjoyable, more expensive Whole Foods vs. Aldi – Price VS Quality o Whole Foods – High quality, premium price, many organics
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o Aldi – Don’t advertise, no organics, no name brands, don’t price up, generic foods at cheap values – no fresh offerings, charged for shopping bags, sometimes can’t use credit PPT #2 Decision Making Red Ocean Strategy (Industry Based View) – Compete in existing market space, beat competition, exploit existing demand, ensure all systems are in place to achieve low cost
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364 Midterm 2 Review - PPT #1 Strategic Management Does...

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