1. Copyright 2005 Prentice Hall
Bus 411
Day 7
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2. Agenda Assignment #2 DUE Disney SWOT posted with class slides
Assignment 3 Posted
Due Feb 20
Disney SWOT posted with class slides
Finish Discussion on Internal Assessment
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3. Management Functions of Management Planning Organizing Motivating
Staffing
Controlling
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4. Stage When Most Important
Management
Stage When Most Important
Function
Planning
Strategy Formulation
Organizing
Strategy Implementation
Motivating
Strategy Implementation
Staffing
Strategy Implementation
Controlling
Strategy Evaluation
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5. Management Planning Beginning of management process
Bridge between present & future
Improves likelihood of attaining desired results
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6. Establishing objectives
Management
Forecasting
Establishing objectives
Devising strategies
Developing policies
Setting goals
Planning
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7. Management Organizing Achieves coordinated effort
Defines task & authority relationships
Departmentalization
Delegation of authority
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8. Organizational design
Management
Organizational design
Job specialization
Job descriptions
Job specifications
Span of control
Unity of command
Coordination
Job design
Job analysis
Organizing
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9. Management Motivating Influencing to accomplish specific objectives
Communication – major component
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10. Organizational change
Management
Leadership
Communication
Work groups
Job enrichment
Job satisfaction
Needs fulfillment
Organizational change
Morale
Motivating
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11. Management Staffing Personnel management Human resources management
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12. Management development
Wage & salary admin.
Employee benefits
Interviewing
Hiring
Discharging
Training
Management development
Affirmative Action
EEO
Labor relations
Staffing
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13. Management Controlling Establishing performance standards
Ensure actual operations conform to planned operations
Taking corrective actions
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14. Management Quality Financial Sales Inventory Expense
Analysis of variance
Rewards
Sanctions
Controlling
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15. Management Audit Checklist
Does the firm use strategic management concepts?
Are objectives/goals measurable? Well communicated?
Do managers at all levels plan effectively?
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16. Management Audit Checklist
Do managers delegate well?
Is the organization’s structure appropriate?
Are job descriptions clear?
Are job specifications clear?
Is employee morale high?
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17. Management Audit Checklist
Is employee absenteeism low?
Is employee turnover low?
Are the reward mechanisms effective?
Are the organization’s control mechanisms effective?
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18. Marketing Customer Needs/Wants for Products/Services Defining
Anticipating
Creating
Fulfilling
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19. Marketing Marketing Functions Customer analysis
Selling products/services
Product & service planning
Pricing
Distribution
Marketing research
Opportunity analysis
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20. Marketing Customer surveys Consumer information
Market positioning strategies
Customer profiles
Market segmentation strategies
Customer Analysis
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21. Selling Products/Services
Marketing
Advertising
Sales
Promotion
Publicity
Sales force management
Customer relations
Dealer relations
Selling Products/Services
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22. Copyright © 2009 Pearson Education, Inc.
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23. Planning Product/Service
Marketing
Test marketing
Brand positioning
Devising warrantees
Packaging
Product features/options
Product style
Quality
Planning Product/Service
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24. Marketing Forward integration Discounts Credit terms Condition of sale
Markups
Costs
Unit pricing
Pricing
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25. Marketing Warehousing Channels Coverage Retail site locations
Sales territories
Inventory levels
Transportation
Distribution
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26. Support business functions
Marketing
Data collection
Data input
Data analysis
Support business functions
Marketing Research
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27. Cost/benefit/risk analysis
Marketing
Assessing costs
Assessing benefits
Assessing risks
Cost/benefit/risk analysis
Opportunity Analysis
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28. Marketing Opportunity Analysis Are markets segmented effectively?
Is the organization positioned well among competitors?
Has the firm’s market share been increasing?
Are the distribution channels reliable & cost effective?
Is the sales force effective?
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29. Marketing Opportunity Analysis Does the firm conduct market research?
Are product quality & customer service good?
Are the firm’s products/services priced appropriately?
Does the firm have effective promotion, advertising, & publicity strategies?
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30. Marketing Opportunity Analysis
Are the marketing planning & budgeting effective?
Do the firm’s marketing managers have adequate experience and training?
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31. Determining financial strengths & weaknesses key to strategy formation
Finance/Accounting
Determining financial strengths & weaknesses key to strategy formation
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32. Finance/Accounting Finance/Accounting Functions
Investment decision (Capital budgeting)
Financing decision
Dividend decision
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33. Financial ratios Business and Company Resource Center
Objective indicators
Two uses
Trending over time
Comparison to industry norms
Websites with definitions and examples
Industry norms are available through UMFK electronic resources
Business and Company Resource Center
Business Source Premier
Valueline
templates\Ratios.xlt
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34. Firm’s ability to meet its short-term obligations
Basic Financial Ratios
Firm’s ability to meet its short-term obligations
Ratios
Current ratio
Quick (or acid test) ratio
Liquidity Ratios
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35. Extent of debt financing
Basic Financial Ratios
Extent of debt financing
Ratios
Debt-to-total assets
Debt-to-equity
Long-term debt-to-equity
Times-interest earned
Leverage Ratios
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36. Effective use of firm’s resources
Basic Financial Ratios
Effective use of firm’s resources
Ratios
Inventory-turnover
Fixed assets turnover
Total assets turnover
Accounts receivable turnover
Average collection period
Activity Ratios
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37. Effectiveness shown by returns on sales & investment
Basic Financial Ratios
Effectiveness shown by returns on sales & investment
Ratios
Gross profit margin
Operating profit margin
Net profit margin
Return on total assets (ROA)
Profitability Ratios
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38. Basic Financial Ratios
Effectiveness shown by returns on sales & investment
Ratios
Return on stockholders equity (ROE)
Earnings per share
Price-earnings ratio
Profitability Ratios (cont’d)
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39. Firm’s ability to maintain economic position
Basic Financial Ratios
Firm’s ability to maintain economic position
Ratios
Sales
Net income
Earnings per share
Dividends per share
Growth Ratios
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40. Natural Environment Perspective EU Countries Impose Curbs on Use of Chemicals
Tough new laws start in 2008
Use of some 30,000 chemicals need to be documented
Cease using 1,500 of the most dangerous chemicals
EU countries need to cut emissions
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41. Finance/Accounting Audit
Where is the firm strong/weak as indicated by financial ratio analysis?
Can the firm raise short-term capital as needed?
Can the firm raise long-term capital as needed through debt and/or equity?
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42. Finance/Accounting Audit
Does the firm have sufficient working capital?
Are capital budgeting procedures effective?
Are dividend payout policies reasonable?
Are the firm’s financial managers experienced & well trained?
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43. Finance/Accounting Audit
Effective Financial Analysis Requires:
Analysis of how the ratios have changed over time
How the ratios compare to industry norms
How the ratios compare with key competitors
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44. Production/Operations
Production/Operations Functions
Process
Capacity
Inventory
Workforce
Quality
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45. Production/Operations
Facility design
Technology selection
Facility layout
Process flow analysis
Facility location
Line balancing
Process control
Process
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46. Production/Operations
Forecasting
Facilities planning
Aggregate planning
Scheduling
Capacity planning
Queuing analysis
Capacity
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47. Production/Operations
Raw materials
Work in process
Finished goods
Materials handling
Inventory
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48. Copyright © 2009 Pearson Education, Inc.
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49. Global Perspective Auto Industry Work Week and Hourly Pay Variation
Germany
$44.05
U.S.
$33.95
Canada
$29.17
Japan
$27.38
France
$26.34
S. Korea
$15.82
Mexico
$ 3.50
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Publishing as Prentice Hall

50. Motivation techniques
Production/Operations
Job design
Work measurement
Job enrichment
Work standards
Motivation techniques
Workforce
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51. Production/Operations
Quality control
Sampling
Testing
Quality assurance
Cost Control
Quality
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52. Production/Operations Audit
Are suppliers of materials, parts, etc. reliable and reasonable?
Are facilities, equipment & machinery in good condition?
Are inventory-control policies and procedures effective?
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53. Production/Operations Audit
Are quality-control policies & procedures effective?
Are facilities, resources, and markets strategically located?
Does the firm have technological competencies?
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54. Research & Development
Research & Development Functions
Development of new products before competitors
Improving product quality
Improving manufacturing processes to reduce costs
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55. Research & Development
Financing as many projects as possible
Use percent-of-sales method
Budgeting relative to competitors How many successful new products are needed
R&D Budgets
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56. Research & Development Audit
Are the R&D facilities adequate?
If R&D is outsourced, is it cost effective?
Are the R&D personnel well qualified?
Are R&D resources allocated effectively?
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57. Research & Development Audit
Are MIS and computer systems adequate?
Is communication between R&D & other organizational units effective?
Are present products technologically competitive?
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58. Management Information Systems
Purpose
Improve performance of an enterprise by improving the quality of managerial decisions.
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59. Management Information Systems
CIO/CTO
Security
User-friendly
E-commerce
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60. Management Information Systems Audit
Do managers use the information system to make decisions?
Is there a CIO or Director of Information Systems position in the firm?
Is data updated regularly?
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61. Management Information Systems Audit
Do managers from all functional areas contribute input to the information system?
Are there effective passwords for entry into the firm’s information system?
Are strategists of the firm familiar with the information systems of rival firms?
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62. Management Information Systems Audit
Is the information system user-friendly?
Do all users understand the competitive advantages that information can provide?
Are computer training workshops provided for users?
Is the firm’s system being improved?
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63. The IFE Matrix
A summary step in conducting an internal strategic-management audit is to construct an IFE Matrix. This strategy-formulation tool summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among these areas.
Intuitive judgments are required in developing an IFE Matrix, so the appearance of a scientific approach should not be interpreted to mean this is an all-powerful technique.
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64. 5 Steps to an IFE
List key internal factors as identified in the internal-audit process. Use a total from ten to twenty internal factors including both strengths and weaknesses.
Assign a weight ranging from 0 (not important) to 1.0 (very important). The weight indicates the relative importance of the factor to being successful in the firm’s industry. The sum of all the weights must equal 1.0.
Assign a 1-4 rating to each factor to indicate whether that factor represents a major weakness (1), minor weakness (2), minor strength (3), or major strength (4).
Multiply each factor’s weight by its rating to determine a weighted score for each variable.
Sum the weighted scores for each variable to determine the total weighted score for the organization.
Total weighted scores of below 2.5 indicate an internally weak organization.
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65. IFE– Gateway Computers (2003)
Key Internal Factors
Weight
Rating
Wtd Score
Strengths
1. Several new senior executive with world-class skills and leadership experience
0.05 4
0.40
2. Continuous decline in operating costs and cost of goods sold 3
0.15
3. Well-known brand name
4. Consumer Reports (Sept 2002) recommended Gateway 500X as #1
0.10
5. As a direct seller, Gateway holds high brand recognition
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66. IFE– Gateway Computers (2003)
Key Internal Factors
Weight
Rating
Wtd Score
Strengths (cont’d)
6. Gateway is diversifying into non-PC products
0.10 3
0.30
7. Good relationship with its suppliers.
0.05 4
0.20
8. Economies of scale, the 6th largest PC maker I the world
9. Gateway retails stores excellent
0.15
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67. IFE– Gateway Computers (2003)
Key Internal Factors
Weight
Rating
Wtd Score
Weaknesses
1. High operating expense (22% of revenue vs. 10% for Dell)
0.05 2
0.10
2. Almost no budget for R&D vs. Dell’s 18% of revenue 1
3. Low return on assets ratio
0.025
4. No niche market
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68. IFE– Gateway Computers (2003)
Key Internal Factors
Weight
Rating
Wtd Score
Weaknesses (cont’d)
5. Shortage of cash due to successive losses
0.10 2
0.20
6. Limited number Gateway stores
0.05
7. Weak performance in overseas market
TOTAL
1.00
2.80
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