1. Lecture No 11

2. Research and Development Development of new products before competition Improving product quality Improving manufacturing processes to reduce costs

3. Research and Development R&D budgets Financing as many projects as possible Use percentage-of-sales method Budgeting relative to competitors Deciding how many successful new products are needed

4. Research and Development Audit Does the firm have R&D facilities? Are they adequate? If outside R&D firms are used, are they cost effective? Are the organization’s R&D personnel well qualified? Are R&D resources allocated effectively?

5. Research and Development Audit Are management information and computer systems adequate? Is communication between R&D and other organizational units effective? Are present products technologically competitive?

6. Management Information Systems Purpose – – Improve performance of an enterprise by improving the quality of managerial decisions.

7. Management Information Systems Information Systems CIO/CTO Security User-friendly E-commerce

8. Management Information Systems Audit Do all managers in the firm use the information system to make decisions? Is there a chief information officer or director of information systems position in the firm? Are data in the information system updated regularly?

9. Management Information Systems Audit Do managers from all functional areas of the firm 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?

10. Management Information Systems Audit Is the information system user-friendly? Do all users of the information system understand the competitive advantages that information can provide firms? Are computer training workshops provided for users? Is the firm’s system being improved?

11. Internal Analysis (IFE) Five-Step Process: List key internal factors (10-20)  Strengths & weaknesses Assign weight to each (0 to 1.0)  Sum of all weights = 1.0

12. Internal Analysis (IFE) 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

13. Internal Analysis (IFE) 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, 1.0. Average = 2.5

14. Internal Analysis (IFE).153.05 Financial ratios.153.05 Reputation as family-friendly.204.05 Long-range planning.153.05 Minimal comps provided.153.05 Buffets at most facilities.153.05 Strong management team.604.15 Owns 1 mile on Las Vegas strip.153.05 Increasing free cash flows.404.10 Room occupancy rates over 95%.204.05 Largest casino company in world Weighted score RatingWeight Mandalay Bay Internal Strengths

15. Internal Analysis (IFE) 2.751.0TOTAL (including Strengths).101 Recent loss of joint ventures.101 Laughlin properties.102.05Family reputation, not high rollers.102.05Little diversification.051 Most properties located in Las Vegas Weighted score RatingWeight Mandalay Bay Internal Weaknesses

16. Internal Analysis (IFE) Mandalay Bay (in the previous example), has a total weighted score of 2.75 indicating that the firm is above average in its overall internal strength

17. Key Terms Activity ratios Buying Capital budgeting Communication Computer information systems Controlling Cost/benefit analysis Cultural products Customer analysis

18. Key Terms Distinctive competencies Distribution Dividend decision Financial ratio analysis Financing decisions Functions of finance/accounting Functions of management

19. Key Terms Functions of marketing Functions of production/operations Growth ratio Human resource management Internal audit Internal Factor Evaluation (IFE) Matrix Investment Decision

20. Key Terms Leverage ratios Liquidity ratios Marketing research Motivating Opportunity analysis Organizational culture Organizing Personnel management Planning Pricing

21. Key Terms Product and service planning Production/operations functions Profitability ratios Research and development

22. Key Terms Selling Social responsibility Staffing Synergy Test marketing

23. Thank You