1. BUS 411
DAY 1

2. Copyright 2005 Prentice Hall
Agenda
Class roll call
Instructor Introduction
Syllabus review
Instructor’s Educational Philosophy
Web Resources
General Information about class
BlackBoard
A quick look at the Strategic Management Process Model
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3. Copyright 2005 Prentice Hall
Instructor
Tony Gauvin
Associate Professor of E-Commerce
216 Nadeau Hall
(207) or Extension 7519
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4. Instructional Philosophy
Out-Come based education
Would rather discuss than lecture
Requires student preparation
Hate grading assignments
Especially LATE assignments
Use class interaction, assignments, exams (mid-term and final) and Case Study Reports to determine if outcomes are met.
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5. A Philosophy of Education
Secondary Education
Bloom level 1 (mostly) with
some level 2 exposure
100 level course
Bloom level 1 & 2
200 level course
Bloom level 2 & 3 & 4
300 level course
Bloom level 3 & 4 & 5
400 level course (and graduate school)
Bloom 4 & 5 & 6
The practice of Strategic Management is at Bloom level 4, 5 & 6
Chapter 1-9 is Bloom 2, 3, 4 & 5; so is the midterm
My job is to get you to those higher level of cognitive ability
Case Study analysis exposes you to level 4, 5 & 6 cognitive abilities
Final will be at level 2-6
The business management program is beginning to use Bloom taxonomy which is one of the most widely accepted models for student outcome assessment in higher education. The eCommerce program was based on Blooms taxonomy from the very beginning
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Web Resources
Blackboard
Strategic Management Club Online
Instructor’s Web Site
Strategic Management Society (SMS)
Strategic Management At Wharton
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BUS 411 Survival Primer
Read Material BEFORE the class discussion
Conclusion & Key Terms at EOC
Issues for Review at EOC
Experiential Exercises
Check Blackboard Often
Use the additional resources identified in syllabus
ASK questions about what you didn’t understand in readings
DON’T do homework at last minute.
REVEIW lectures and notes
Seek HELP if you are having difficulties
OFFER feedback and suggestions to the instructor in a constructive manner
Student Study Groups are STONGLY Encouraged
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Resource Review
Blackboard
Syllabus
Contract for Classroom behavior
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9. Copyright 2005 Prentice Hall
Bribe List (2012)
1947 HD FLH “knucklehead”
2012 Audi R8
1950 Buick RoadMaster
Convertible or Sedanette
1957 Buick Special
1972 SS 402 El Camino
1970 Oldsmobile 442 (W-30 option)
1965 Shelby Cobra S/C 427
1995 Ferrari 348 Spyder
2006 Dodge Viper SRT
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10. Copyright 2005 Prentice Hall
What is Strategy?
How is this applied to business??
What do you need to know to be able to think strategically?
What is tactical?
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Differences?
Executive
Administrator
Manager
Supervisor
Foreman
Employee
Who is responsible for Strategic Planning?
Who has greater rewards/risk?
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12. Strategic Management Process Model
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13. Copyright 2005 Prentice Hall
Thoughts
If we know where we are and something about how we got there, we might see where we are tending – and if the outcomes which lie naturally in our course are unacceptable, to make timely changes
- Abraham Lincoln
Without a strategy, an organization is like a ship without a rubber, going around in circles. It’s like a tramp it has no place to go.
- Joel Ross and Michael Kami
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14. Assignment 1 Due Jan 26 @ 12:35 PM
Complete the Assurance of Learning Exercise 1A on page 37 of your text with the following modifications. This assignment is intended to be an individual assignment, do your own work.
Step 1. McDonald’s website has changed since the publication of this text. To get the annual reports, do the following; Go to On the red menu, place your mouse pointer on “OUR STORY” and select “Corporate Info” from the drop down menu. On the Corporate Info page click on the “ find out what drives our business” link. Click on the “annual reports” link in the top left of the resulting page.  Save the 2009 Annual report to your computer. There is no need to print the report.
Step 2 The UMFK library does not subscribe to Standards and Poor but you get industry surveys from the Business & Company Resource Center (Search MCD) and the Value Line Research Center (select “Plus Edition>Look Up Company”.  You can get Company and Industry reports from both databases; the databases can be found by selecting the topic “Business” under the Articles for Research link on the Blake Library web page.
Skip step 5, we will do this in class to create a collective SWOT analysis for McDonalds. This collectively created SWOT analysis will be required for future assignments.  
Upload a Word Document with your 12 responses (3 Strengths, 3 Weaknesses, 3 Opportunities & 3 Threats)
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For Next Class
Get familiar with all the resources
Textbook
Blackboard
WebSites
Read Chapter One and McDonalds Case study
Assignment 1  Due Jan 26
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16. Chapter 1 The Nature of Strategic Management
Strategic Management: Concepts & Cases
13th Edition
Fred David
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17. Strategic Management –Defined
Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives
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18. Purpose of Strategic Management
To exploit and create new and different opportunities for tomorrow
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19. Strategic Management
In essence, the strategic plan is a company’s game plan
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20. 3 Stages of the Strategic Management Process
Strategy formulation
Strategy implementation
Strategy evaluation
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21. Strategy Formulation Vision & Mission External Opportunities & Threats
Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection
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22. Issues in Strategy Formulation
Businesses to enter
Businesses to abandon
Allocation of resources
Expansion or diversification
International markets
Mergers or joint ventures
Avoidance of hostile takeover
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23. Strategy Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
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24. Strategy Implementation Steps
Developing a strategy-supportive culture
Creating an effective organizational structure
Redirecting marketing efforts
Preparing budgets
Developing and utilizing information systems
Linking employee compensation to organizational performance
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25. Issues in Strategy Implementation
Action Stage of Strategic Management
Mobilization of employees & managers
Most difficult stage
Interpersonal skills critical
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26. Performance Measurement
Strategy Evaluation
Internal Review
External Review
Performance Measurement
Corrective Action
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27. Prime Task of Strategic Management
Peter Drucker: Think through the overall mission of a business. Ask the key question:
“What is our Business?”
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28. Integrating Intuition & Analysis
The strategic management process attempts to organize quantitative and qualitative information under conditions of uncertainty
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29. Integrating Intuition & Analysis
Intuition is based on:
Past experiences
Judgment
Feelings
Intuition is useful for decision making in conditions of:
Great uncertainty
Little precedent
Highly interrelated variables
Several plausible alternatives
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30. Involve management at all levels Influence all analyses
Integrating Intuition & Analysis
Intuition & Judgment
Involve management at all levels
Influence all analyses
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31. Adapting to Change
Organizations should continually monitor internal and external events and trends so that timely changes can be made as needed
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32. Key Terms in Strategic Management
Competitive advantage
Strategists
Vision and mission statements
External opportunities and threats
Internal strengths and weaknesses
Long-term objectives
Strategies
Annual objectives
Policies
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33. Anything that a firm does especially well compared to rival firms
Strategic Management is Gaining and Maintaining Competitive Advantage
Anything that a firm does especially well compared to rival firms
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34. Achieving Sustained Competitive Advantage
1. Continually adapting to changes in external trends and events and internal capabilities, competencies, and resources
2. Effectively formulating, implementing, and evaluating strategies that capitalize on those factors
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35. Strategists Gather Information Analyze Information
Organize Information
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36. Vision and Mission Statements
Vision Statement –
What do we want to become?
Mission Statement –
What is our business?
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37. External Opportunities and Threats
Analysis of Trends
Economic
Social
Cultural
Demographic/Environmental
Political, Legal, Governmental
Technological
Competitors
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38. External Opportunities
External Opportunities and Threats
Basic Tenet of Strategic Management
Take advantage of
External Opportunities
Strategy Formulation
Avoid/minimize impact of
External Threats
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39. Internal Strengths and Weaknesses
Controllable activities performed especially well or poorly
Determined relative to competitors
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40. Internal Strengths and Weaknesses
Typically located in functional areas of the firm
Management
Marketing
Finance/Accounting
Production/Operations
Research & Development
Management Information Systems
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41. Internal Strengths and Weaknesses
Assessing the Internal Environment
Ratios
Internal Factors
Performance Measures
Industry Averages
Survey Data
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42. Long-term means more than one year
Long-Term Objectives
Specific results that an organization seeks to achieve in pursuing its basic mission
Long-term means more than one year
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43. Long-Term Objectives Essential for ensuring the firm’s success
Provide direction
Aid in evaluation
Create synergy
Reveal priorities
Focus coordination
Provide basis for planning, organizing, motivating, and controlling
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44. Strategies Means by which long-term objectives are achieved
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45. Strategies Examples Geographic expansion Diversification Acquisition
Product development
Market penetration
Retrenchment
Divestiture
Liquidation
Joint venture
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46. Sample Strategies Table 1-1 Best Buy Levi Strauss
New York Times Company
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47. Annual Objectives
Short-term milestones that firms must achieve to reach long-term objectives
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48. Policies Means by which annual objectives will be achieved
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50. Strategic Management Model
Strategic Management Process
Dynamic & continuous
More formal in larger organizations
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51. Strategic Management
Communication is a key to successful strategic management
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52. Benefits of Strategic Management
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53. Benefits of Strategic Management
Nonfinancial Benefits
Enhanced awareness of threats
Improved understanding of competitors’ strategies
Increased employee productivity
Reduced resistance to change
Clearer understanding of performance-reward relationship
Enhanced problem-prevention capabilities
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54. Why Some Firms Do No Strategic Planning
Lack of knowledge of strategic planning
Poor reward structures
Fire fighting
Waste of time
Too expensive
Laziness
Content with success
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55. Why Some Firms Do No Strategic Planning (continued)
Fear of failure
Overconfidence
Prior bad experience
Self-interest
Fear of the unknown
Honest difference of opinion
Suspicion
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56. Pitfalls in Strategic Planning
Strategic planning is an involved, intricate, and complex process that takes an organization into uncharted territory
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57. Effective Strategic Planning is:
A people process more than a paper process
A learning process
Words supported by numbers
Simple and nonroutine
Varying assignments, team membership, meeting formats, and planning calendars
Challenging assumptions underlying corporate strategy
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58. Effective Strategic Planning continued
Welcomes bad news
Requires open-mindedness and a spirit of inquiry
Is not a bureaucratic mechanism
Is not ritualistic or stilted
Is not too formal, predictable, or rigid
Does not contain jargon or arcane language
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59. Effective Strategic Planning continued
Is not a formal system for control
Does not disregard qualitative information
Is not controlled by “technicians”
Does not pursue too many strategies at once
Continually strengthens the “good ethics is good business” policy
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60. Comparing Business and Military Strategy
Strategic planning started in the military
Similarity
Both business and military organizations must adapt to change and constantly improve
Difference
Business strategy assumes competition
Military strategy assumes conflict
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61. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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