MGT 535 Policy, Strategy and Goals Professor Cynthia Miree 413 Elliott Hall (248)

Technical Skills Human Relations Skills Conceptual Skills Technical Skills Human Relations Skills Conceptual Skills Technical Skills Human Relations Skills Conceptual Skills Top Managers Middle Managers First-line Managers Skills Needed at Different Levels Administrative Skills, Critical Thinking Skills and Emotional Intelligence

Strategy The creation of a unique and valuable position involving a different set of coordinated and internally-consistent activities. (Porter, 1998)

TerraCycle produces a potent, all-natural, eco-friendly plant food that is the first mass- produced product in the world to be packaged in used plastic soda bottles. The company is located in Trenton, NJ Business Definition: Eco-capitalisim TerraCycle seeks to take waste, process it, and turn it into a useful product.

Business Model Answers the following questions: How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost?

Revenue Streams -Sale of organic and natural plant foods and fertilizers, bird feeders, potting mix, seed starter and Deer Repellent -Customers (Whole Foods, Home Depot, Wal-Mart) Expenses are contained through -Containers are reused soda bottles (partnerships with recycling centers and environmental fundraisers -Spray tops are unwanted extras that have been dumped by the manufacturer -Boxes used in shipping are misprinted rejects -Raw Materials: Worms do not charge for their labor, never take a day off, produce their body weight in waste every 24 hours, copulate while they eat (thereby doubling their numbers every three months - Low/no cost facilities and production equipment

Unique? Why or why not? Valuable?

Unique? Why or why not? Valuable? (TerracycleRetailers have gross margins 2-3 times higher than competitor products)

Managers’ Mental Models Beliefs and Understandings About: Macro Env. Industry Env. Appropriate Size and Diversity How to Organize Decisions about Business Definition Mission and Objectives Decision about Corporate Strategy and Diversification Decisions about Business Strategy Decisions about Organizational Structure and Implementation Activities, Resources and Capabilities Market Position Performance and Competitive Advantage Feedback (Reinforces or suggests changes in managers’ mental models)

Decisions about Where and How to Compete Corporate Level Strategy (Defines Scope: What industries should the firm compete in?) Business Level Strategy (Defines Positioning: How will the firm compete?) Functional Level Strategy (Maximizes resource productivity)

Decisions about Where and How to Compete Corporate Level Strategy (Defines Scope: What industries should the firm compete in?) (None) Business Level Strategy (Defines Positioning: How will the firm compete?) Best Cost (Value for Low Price) What are some of the key differentiators? Functional Level Strategy (Maximizes resource productivity) How do they do this?

Competitive Advantage The set of internal (e.g., resources/capabilities and external factors (macro, industry, etc.) that allow a firm to consistently outperform its rivals. A competitive advantage is good………. a sustained competitive advantage is better. Is TerraCycle’s “competitive advantage” sustainable?

Strategic Issues and Decisions 1.Involve a Significant Commitment of Resources 2.Not Easily Reversible 3.Involve Multiple Areas of the Firm

Mission Statements Vision: What do we want to become (an ideal state, a utopia); What the organization hopes to become in the future. Mission: What is our business? (typically associated with the present) What are the basic purposes and activities of the organization What does the organization seek to achieve over the long term? Does every organization need one of each? If not, who doesn’t need one? Why wouldn’t they need one?

What Makes a Mission Statement Effective? Process Used to Develop the Mission Organizational Commitment Credibility of Seller (e.g., Top Management) Mission Specific Characteristics Process of Selling the Mission