1. Strategic Management
Outline
Vision
Mission

2. A Comprehensive Strategic-Management Model
Feedback
External
Assessment
Chapter3
Develop Vision
& Mission
Statement
Chapter 2
Establish Long-
Term Objectives
Chapter 5
Generate,
Evaluation and
Select Strategies
Chapter 6
Implement
Strategies-
Management
Issues
Chapter 7
Implement
Strategies---
Marketing,
Finance, R&D
Chapter 8
Measure &
Evaluate
Performance
Chapter 9
Internal
Assessment
Chapter 4
Strategy Formulation
Strategy Implementation
Strategy Evaluation

3. Importance of a Vision Statement
-Vision statement answers the question:
“What do we want to become?”
A clear vision provides foundation for
comprehensive mission statement
Vision statement developed first
Short – preferably one sentence
Broad management involvement

4. Vision Statements---Examples
To Be The Best And Biggest World Brand In Apparel Retailing ---Giordano’s Vision
. ---Vitasoy’s Vision To maintain the leadership in promoting superior quality of life through the production of high quality, great tasting nutritious products that satisfy customers in all markets

5. Mission Statements “What is our business?”
Recent Data indicates that 90% of all companies have used a mission statement sometime in the previous five years.
Mission statement answers the question:
“What is our business?”

6. Mission Statements
Mission Statement is to reveal what an organization wants to be and whom it wants to serve
Essential for effectively establishing objectives and formulating strategies

7. Mission Components Customers Products or services Markets Technology
Survival, growth, and profitability
Philosophy
Self-concept
Concern for public image
Concern for employees

8. PepsiCo Mission Statement
PepsiCo’s mission is to increase the value of our shareholders’ investment. We do this through sales growth, cost controls, and wise investment resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.

9. Vitasoy Mission Statement
At Vitasoy, promoting consumer well-being is our number one priority. This is achieved through the provision of a variety of high-quality nutritious foods and beverages. Vitasoy is an innovative company, a reliable employer, and a responsible corporate citizen dedicated to creating value for our shareholders.
Giordano Mission Statement
To make people “feel good” and “look great”
Nike Mission Statement
To bring inspiration and innovation to every athlete in the world

10. Chapter 3: External Assessment Outline
The Nature of an External Audit: Five Keys Factors
Economic Forces
Social,Cultural,Demographic & Environmental Forces
Political, Governmental, and Legal Forces
Technological Forces
Competitive Forces

11. Chapter Outline (con’d)
Competitive Analysis:
Porter’s Five-Forces Model
Source of External Information
The Global Challenge
Industry Analysis:
The External Factor Evaluation Matrix
The Competitive Profile Matrix

12. External Strategic Management Audit
Also called:
Environmental scanning
Industry analysis
Purpose:
Opportunities to be explored
Threats to be avoided

13. Special Interest Groups
Relationships Between Key External Forces and an Organization
Competitors
Suppliers
Distributors
Creditors
Customers
Employees
Communities
Managers
Stockholders
Labor Unions
Special Interest Groups
Products
Services
Key Forces
-Economic forces
-Social, cultural, demographic & environment forces
-Political, legal forces government
-Technological force
-Competitive forces
Opportunities
&
Threats

14. Key External Forces Economic forces
Five (5) Key Forces affecting the Opportunities and Threats:
Economic forces
Social, cultural, demographic, & environmental forces
Political, governmental, and legal forces
Technological factors
Competitive forces

15. Economic Forces Monitor Key Economic Variables: Availability of credit
Level of disposable income
Interest rates
Inflation rates
Federal government budget deficits
Gross domestic product trend
Consumption patterns
Unemployment trends
Worker productivity levels
Value of the dollar in world markets
Stock market trends
Foreign countries’ economic conditions
Import/export factors
Demand shifts for goods/services
Income differences by region/customer
Price fluctuations
Monetary policies
Fiscal policies
Tax rates
OPEC policies

16. Social, Cultural, Demographic & Environmental Forces
Key variables –
Number of special-interest groups
Number of marriages
Number of divorces
Number of births
Number of deaths
Immigration & emigration rates
Life expectancy rates
Per capita income
Attitudes toward business
Average disposable income
Buying habits
Ethical concerns
Attitudes toward saving
Racial equality
Average level of education
Government regulation
Attitudes toward customer service
Attitudes toward product quality
Energy conservation
Social responsibility
Value placed on leisure time
Recycling
Waste management
Air & water pollution

17. Social, Cultural, Demographic & Environmental Forces
Major impact on:
Products
Services
Markets
customers

18. Political, Govt., & Legal Forces
Key Political, govt., & legal variables:
Government regulation/deregulation
Tax law changes
Special tariffs
Number of patents
Changes in patent laws
Import-export regulations
Monetary policy
Political conditions in other countries
Government budgets
World oil, currency & labor markets
Location and severity of terrorist activities
Environmental protection laws
Equal employment legislation
Level of government subsidies
Antitrust legislation/enforcement
Sino-American relationships

19. Political, Govt., & Legal Forces
Government Regulation
Key opportunities & key threats
Antitrust legislation (Microsoft)
Tax rates
Patent laws
Increasing Global Interdependence
Impact of political variables
Formulation of Strategies
Implementation of Strategies

20. Political, Govt., & Legal Forces
Globalization of Industry
Worldwide trend toward similar consumption patterns
Global buyers & sellers
E-commerce
Instant transmission of money & information across continents

21. Political, Govt., & Legal Forces
Increasing Global Interdependence
Strategists in a global economy
Forecast political climates
Legalistic skills
Diverse world cultures

22. Technological Forces Revolutionary technological forces:
Profound impact on organizations
Internet
Semiconductors
XML technologies
可擴展標示語言」(eXtensible Markup Language) 是用於標示具有結構性資訊的電子文件的標示語言。 XML 是根據一個國際標準 -- Standard Generalized Markup Language (SGML) -- International Organization for Standardization (ISO) ISO 8879:1986 所製定而成的. XML 的格式類似 HTML, 但是您可以使用自行定義 的標籤及文件結構. 也可以由資料庫中取得資料，再用 XML 進行 串列化 (serializing) 的工作。

23. Technological Forces Alters life cycle of products
Internet changes the nature of opportunities and threats --
Alters life cycle of products
Increases speed of distribution
Creates new products and services
Eases limitations of geographic markets
Alters economies of scale
Changes entry barriers

24. Capitalizing on Information Technology (IT)
Technological Forces
Capitalizing on Information Technology (IT)
Chief Information Officer (CIO)
Chief Technology Officer (CTO)

25. Competitive Forces
Collection and evaluation of information on competitors is essential for successful strategy formulation
Identifying rival firms
Strengths
Weaknesses
Capabilities
Opportunities
Threats
Objectives
Strategies

26. Competitive Forces Key Questions About Competitors: Their strengths
Their weaknesses
Their objectives and strategies
Their responses to all external variables (e.g. social, political, demographic, etc.)
Their vulnerability to our alternative strategies

27. Competitive Forces Key Questions About Ourselves:
Our vulnerability to successful strategic counterattack
Our product and service positioning relative to competitors
Entry and exit of firms in the industry
Key factors for our current position in industry
Sales and profit rankings of competitors over time
Nature of supplier and distributor relationships
The threat of substitute products or services

28. Competitive Forces 7 Characteristics of most competitive U.S. firms:
Market share matters
Understand what business you are in
Broke or not, fix it
Innovate or evaporate
Acquisition is essential to growth
People make a difference
No substitute for quality

29. Competitive Analysis: Porter’s Five-Forces Model
Potential development
of substitute products
Rivalry among
competing firms
Bargaining power
of suppliers
Bargaining power
of consumers
Potential entry of new competitors

30. Global Challenge International Challenge faced by U.S. firms:
How to gain and maintain exports to other nations
How to defend domestic markets against imported goods

31. Industry Analysis (EFE)
External Factor Evaluation Matrix
Summarize & evaluate:
Competitive
Political
Cultural
Technological
Environmental
Social
Governmental
Demographic
Economic

32. Industry Analysis (EFE)
Five-Step process:
List key external factors (10-20)
Opportunities & threats
Assign weight to each (0 to 1.0)
Sum of all weights = 1.0
Assign 1-4 rating to each factor
Firm’s current strategies response to the factor
Multiply each factor’s weight by its rating
Produces a weighted score

33. Industry Analysis (EFE)
Five-step process:
Sum the weighted scores for each
Determines the total weighted score for the organization.
Highest possible weighted score for the organization is 4.0; the lowest, Average = 2.5

34. UST—Key External Factors
.20 1
Clinton Administration 2
.10
Bad media exposure from FDA
.05
Smokeless market SE region U.S.
.15 3
Production limits on tobacco
Legislation against the tobacco industry
Threats
.30
More social pressure to quit smoking
2.10
1.00
TOTAL
.60 4
Pinkerton leader in discount market
Astronomical Internet growth
Increased demand
Global markets untapped
Weighted
score
Rating
Weight
UST—Key External Factors
Opportunities

35. Industry Analysis (EFE)
Total weighted score of 4.0 =
Organization response is outstanding to threats & weaknesses
Total weighted score of 1.0 =
Firm’s strategies not capitalizing on opportunities or avoiding threats

36. Industry Analysis (EFE)
UST (in the previous example), has a total weighted score of 2.10 indicating that the firm is below average in its effort to pursue strategies that capitalize on external opportunities and avoid threats.

37. Industry Analysis (EFE)
Important
Understanding of the factors used in the EFE Matrix is more important than the actual weights and ratings assigned.

38. Industry Analysis (CPM)
Competitive Profile Matrix
Identifies firm’s major competitors and their strengths & weaknesses in relation to a sample firm’s strategic position

39. (CPM) Procter
Avon L’Oreal & Gamble
2.80
3.25
3.15
1.00
Total
0.15 3
0.20 4
0.05 1
Market Share
0.40 2
0.80
Global Expansion
0.10
Customer Loyalty
0.45
0.60
Financial Position
0.30
Management
Price Competition
Product Quality
Advertising
Score
Rating
Weight
Critical Success Factor