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MAN 320F:Exam 2
US Consumption of CSD
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33% of US liquid, 50 gallons per person, same as beer/milk/bottled water combined
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Scale Economies in Advertising
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Coke $15m in ads, Dr. P $19m
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Barriers to Entry for Soft Drinks
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Brand equity, Limited shelf space/vending/fountains, bottling is capital intensive
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CSD keep prices high
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Substitutes not convenient, impulse buy, lifestyle choice, addiction
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CSD 5 Forces
Bottler's Power
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Little power, high switching costs, franchise agreement, competitors are large
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Rivalry
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High degree differentiation, dominant players, competition on shelf space/brand/discounts/diet drinks, concentrate prices not a major factor, small companies lose, coke and pepsi determine structure for everyone
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Blue Ocean key success
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Market opportunity
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2 main reasons VC won't invest
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think management can't pull it off, rate of return isn't good
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Strategic Management
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satisfy stakeholders, understanding strength/weakness/vulnerabilities/strategies, undergoes a study to satisfy stakeholders
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3 levels of strategic management
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broad environment, task environment, organization
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Organization Level
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owners, board, employees, managers
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Task Environment
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groups that have vested interest: competitiors, suppliers, customers, government, activist, local communities
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Broad Environment
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look for irreversible trends: sociocutural forces, economic forces, technological forces, political/legal forces
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Internal Analysis
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SWOT, determine strengths and weaknesses and advantages
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Global Strategic Management
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look to grow and develop falling barriers/profitable foreign markets/saturated domestic markets, shift toward market economies, english is business language, low cost resources, new tech, learning opportunities
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5 Forces
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power of customers, power of suppliers, threat of potential entrants, availability of substitutes, competition among existing competitors
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When Customers Have Power
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small number, high volume purchase, undifferentiated products, easily switch sellers
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Suppliers Have Power
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small number, few substitutes, costly to switch, suppliers aren't dependent on buyers, buyers must have product
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Rivalry is High
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slow industry growth, high fixed costs, undifferentiated products, large number of competitors
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Indirect competitors/substitutes
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substitutes are products and services from another industry (contacts, glasses, Lasik)
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BIDMC Situation
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troubled org, dysfunctional behavior, merger of equals, healthcare market under pressure, unsuccessful turnarounds
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Paul Levy
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proven track record, significant operating experience, well connected, familiar with hospital, developed clear diagnosis
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BIDMC Solution
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signal clearly that there's a new order, sense of urgency, articulate plan and gain acceptance, short term wins, negotiate relationships
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Globalization Era
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1.0 = 1492-1800 countries driving force
2.0 = 1800-2000 multinational corporations in charge
3.0 = 2000-present individual is main player
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10 forces flatten the world
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Fall of Berlin wall Rise of internet Workflow revolution Uploading Outsourcing Offshoring Supply-chaining Incourcing Informing Steroids (skype, wireless)
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Untouchable Jobs
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Cat 1 = individual talents and skill (actors, Einstein)
Cat 2 = localized that require hands on (dentists)
Cat 3 = ability to collaborate analyze, organize, adapt, explain (think, create, adapt)
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Speaker
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Barry Bales (LBJ Public Affairs)
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Leverage
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Biggest bang for the buck
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Rules
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define behavior, we address without questioning
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Linear Problem Solving
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communication, practice as a unit, leader, strategy
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Systems thinking
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Looking at issues that affect behaviors in an organization
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Reductionist Problem Solving
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something is nothing more than the sum of its parts, everyone has a different perspective so we should combine them all
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Keys to Systems Thinking
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1. Structure drives behavior (policies, rules, processes) 2. Cause and effect always exist (even if we don't see it) 3. Tendency to focus on the symptom rather than problem 4. Bottom line of systems thinking is leverage 5. Difference in short term and long term (need to know both)
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AES
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Honeycomb team structure, lost 90% of profits, fired the founders, 4 values (integrity, fairness, social responsibility, fun)
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Management
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getting others to comply with goals, cope with complexity, bring about order and consistency, plan/organize/control, mitigate risk
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Leadership
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influence group, create change, establish direction, align resources, inspire and energize, thrive on risk, display unique behavior
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Declaration of Independence
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Pledged: lives, fortunes, sacred honor
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Trait Theory
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leaders are born not made
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Behavioral Theory
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leaders can be taught
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Grid Theory
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result orientated versus people oriented (best leaders are both)
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Dark Side of leadership
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allow self interest and personal goals to interfere, remake company in their image, use resources for personal benefit, don't act in best interest
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Ethical Leadership
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great power = great responsibilites, engage in social constructive behavior, work to positively change attitudes and behaviors, don't abuse power
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Restructuring
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change anatomy of org
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Reengineering
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alters organization physiology
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Jack Welch motto
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Be #1 or #2- fix it, sell it, close it
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3 Circles
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Service, Technology, Core
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Jack Welch
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1980s - lay offs, delayering, destaffing, restructuring, Neutron Jack
1990's - expansion, encouraged input, management in listening mood, bottom up authority
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Apple Competitive Advantage
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ease of use, buyer and brand loyalty, proprietary system, brand recognition, creative design
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Computer Industry 1990
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managers buying a few PCs, unsophisticated, brand/applications/service, IBM was leader, easy customers
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Computer industry 2014
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sophisticated, performance and price, powerful customers know what they want
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Buyer Power
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firms buy in bulk every 3-4 years; consumers are price sensitive, see it as a commodity, not willing to pay for support
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Rivalry in PC Industry
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fierce, continuous rise in cost, strong buyers, rapid obsolescence, margins in single digits, low barriers to entry
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Apple
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hard to imitate, big hit products, not in the "computer" industry, high switching costs, product strategy, ecosystem
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Sources of Startup Funding
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Angel investors, friends and family, state funds, venture capital
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Angel Investors
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US millionaires, informal investors, center for venture research, angel groups
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What VC wants
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experienced management, great concept (proprietary), can't be duplicated, large market, high rate of return, intellectual property, zero risk
[won't actually get this]
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3 Laws of Business
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1. Will always cost more than you thought
2. Will always take longer than anticipated
3. Things continuously change
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Find the Right VC
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Talk to allied professionals, use who you know, find VC specialized to industry
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Prepare
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honest business plan, team members and where to find them, clear goals and plan, potential customers, path towards liquidity
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Get check from VC
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follow their advice, be ready for the fast lane, have a competitive deal, must give up a lot of stock
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