MAN 320F Lecture 8 Outline of Last Lecture I Composition II Size III Cohesiveness IV G r o u p Processes Prototyping V Group Processes Conflict VI Functional vs Dysfunctional Conflict VII Types of Conflict A Task B Process C Relationship VIII Conflict and Group Performance IX Iceberg of Interpersonal Conflict X Five Conflict Management Styles A Avoidance B Accommodation C Competition D Compromise E Collaboration XII Conflict Management Techniques XIII Why have teams become so popular XIV MB Readings XV Chapter 9 Strategic Management XVI Strategy Think Pair Share XVII Business model XVIII Why is Strategy Important The Strategic Management Process Outline of Current Lecture XIX Organizational Mission and Goals XX Strategic Analysis Tools A External Analysis i STEEP remote environment ii 5 Forces industry environment B Internal Analysis i Resource Based View C Decision Analysis i SWOT XXI Sustainable Competitive Advantage A The Question of Value B The Question of Rareness C The Question of Imitability D The Question of Substitutability E The Question of Exploitation SWOT Matrix Types of Organizational Strategies Corporate Portfolio Analysis The BCG Matrix Competitive Level Strategies Functional Level Strategies Strategic Management Today Manager s Bookshelf XXII XXIII XXIV XXV XXVI XXVII XXVIII Current Lecture Chapter 13 Continued Chapter 9 Organizational Mission and Goals o Mission Statement of organization s purpose The scope of its products and services Examples UT Seton 3M o o Goals Measurable performance targets Foundation for further planning Example McCombs School Strategic Analysis Tools o External Analysis Opportunities Threats STEEP remote environment 5 Forces industry environment o Internal Analysis Strengths Weaknesses Resource Based View RBV Easier resource than in book o Decision Analysis SWOT strengths weaknesses opportunities threats External Analysis STEEP Laczniak Lusch 1986 o Social o Technological o Economic o Ecological o Political External Analysis 5 Forces Porter 1980 o Defines how profit friendly the industry is o o What is driving the emergence of healthy alternatives in fast food snack food industries Public desire for healthy food Copying competitors Responding to substitutes home cooking All of the above Internal Analysis o Assessment of the organization s resources and performance capabilities o Used to identify Strengths and Weaknesses for SWOT analysis Core competencies unique exceptional organizational capabilities or resources potential source of competitive advantage o Internal Analysis Resource Based View of the Firm RBV Barney 1991 Tangible Assets Items on balance sheet Bigger generallyis better Intangible Assets Reputation Employee morale Learning culture Organizational Capabilities Processes Customer service Supply chain management Knowledge management Sustainable Competitive Advantage o To produce SCA the resource capability must o 1 Produce value o 2 Be rare o 3 Imperfectly imitable i e not easily Imitated Substituted o 4 Be exploitable by the organization o The Question of Value Increase efficiency outputs inputs Information system reduces employees required or increases the number of calls each employee can answer Increase effectiveness enable new capability Opening a new regional campus enables outreach to a new market of students o The Question of Rareness Resources capabilities shared by lots of firms in an industry cannot be create SCA Which of these are rare A web server An MIS instructor A state of the art stamping press None of the above o The Question of Imitability Ways imitation can be avoided Unique historical conditions Enron Causal ambiguity Apple o Others cannot duplicate SCA because they do not understand why it is successful Social Complexity SW Airlines o trust teamwork informal relationships o The Question of Substitutability No equivalent resources exist that can be used to implement the same strategies Examples of substitutability A superior marketing strategy for a recognized brand name A superior technical support group for an intelligent diagnostic software package o The Question of Exploitation Is a firm organized to exploit the full competitive potential of its resources and capabilities Are systems in place to enable firms to support the execution of a particular strategy E Toys Notes on Sustainable o Barney When the efforts by competitors to copy beat the advantage stop o Porter When advantage provides above average returns in the long run o Sustainable does not mean the advantage will last forever Gap Analysis SWOT o Internal Analysis Strengths Weaknesses Matching firm s resources and capabilities o External Analysis Opportunities Threats To the competitive environment where it operates SWOT o A firm shouldn t judge opportunities by pure financial measures o Competitive advantage often lies in identifying A fit between the firm s strengths and upcoming opportunities A weakness that must be dealt with to allow the firm to pursue an upcoming opportunity o Use information to evaluate companies Business Source Complete Publication type SWOT analysis SWOT Matrix TEST QUESTION Strengths Weaknesses Opportunities S O W O Threats S T W T S O pursue opportunities that fit with company strengths W O overcome company weaknesses to pursue opportunities S T identify ways to use strengths to reduce vulnerability to current threats W T establish a defensive plan to prevent weaknesses from making firm highly susceptible to external threats Types of Organizational Strategies o o o o Corporate Level Strategies o What businesses a company should be in o Growth She will give examples Concentration Keep opening new stores Vertical integration Backward buy suppliers Forward buy distributors Horizontal integration Buying up competitors Combine operations with competitor Diversification Related buy something different but related Unrelated no relation between what they re buying o Stability o Renewal Retrenchment Turnaround Corporate Portfolio Analysis The BCG Matrix o Competitive Level Strategies o How an organization should compete in each of its businesses o Zappos video o Porter s Generic Strategy You can t be all things to all people Select strategy that reflects and augments your competitive advantage Competitive Level Strategies Porter s Generic Strategy o Cost Leadership Wal Mart Sify Mall Maximize economies of scale Stress decreasing overhead admin costs o Differentiation Nordstroms Ernest Sewn banana republic New high quality