UNIT IV STUDY GUIDE Strategy Course Learning Outcomes for Unit IV Upon completion of this unit, students should be able to: 1. Analyze the nuances of strategic management. 2. Correlate the characteristics of vision and mission to business success. 5. Diagram the strategy analysis process. 5.1 Describe the strategy analysis process. Reading Assignment Chapter 5: Strategies in Action Chapter 6: Strategy Analysis and Choice Unit Lesson Previously, we have discussed how to assess your internal and external factors. In this unit, we are going to expand on that by discussing strategies. Chapters 5 and 6 will really focus on past strategies that have been successful and effective. These will include formulation and an introduction of the SWOT analysis. This unit will also begin laying the framework for a successful strategic plan. The final project for this course will be initiated during this unit and will build upon each section as we move forward in the term together. Strategy Formulation Every strategy also encompasses long-term and short-term objectives. We will begin with a discussion of long-term objectives and how these impact the strategy. A long-term objective is defined as the results expected from pursing specific strategies. These objectives generally take between two to five years to attain. The objectives must be attainable and realistic for the organization to achieve. Common long-term objectives include growth, profitability, earnings, and social responsibility. Each level within the organization can have long-term objectives. This includes the levels of corporate (highest level), division (middle level), and function (lowest level) within an organization. An example of a long-term oriented company could be your local taxi company and its plans to remain competitive in the digital age. For example, Yellow Cab of Boston could strive to have interactive apps that allow riders to request a ride, split fares, and even receive a digital receipt. Financial Objectives Financial objectives are similar to long-term objectives but are more specific to financial themes. Examples of financial objectives include growth in revenues, profit margins, cash flow, and other financial considerations. There is a delicate balance when considering financial objectives. An organization may create a short-term objective that may be harmful or even detrimental to the organization in the long term. Let us use Kodak as an example; their short-term objective led to their overall failure. Kodak has been around for several decades as the lead photo developer. They produced an array of products to include the introduction of the digital camera. What Kodak failed to do was to ensure they remained technologically savvy with their digital camera production and trademarks. Ultimately, the digital camera (their own creation) put them out of business. BBA 4951, Business Policy and Strategy 1 Because Kodak did not have the foresight to create a long-term (and financial)UNIT objective, they GUIDE were not able x STUDY to remain relevant to consumers and ultimately failed. Title Strategic Model There are many different models that can be incorporated into an organization’s strategy. Most organizations incorporate one strategy to achieve their goals and expected outcomes. A few examples of different types of strategies include: forward integration, market penetration, product development, and liquidation. Below are examples of how these strategies could be applied:      Forward integration: Think of Apple Pay, which would enable the customer to be validated and pay for physical merchandise from a brick and mortar retailer via his or her phone. Market penetration: Coca Cola personalized cans and bottles with individual names and catch phrases, which has increased the popularity of the brand and are an example of this strategy. This personalization has increased Coca Cola’s bottom line and presence in the domestic and international households. Product development: Think of a drug manufacturer creating a vaccine to prevent Ebola. This product would serve a specific purpose and, if successful, would benefit many. Liquidation: An example would be Blockbuster Video selling all of their merchandise before closing all of their stores. This is an opportunity to pay creditors and investors a portion of what is owed before dissolving. Bankruptcy: You may be asking yourself how bankruptcy is a strategy, but it is a potential strategy to assist an organization restructure or dissolve itself. There are five varying types of bankruptcy in the United States. The specific types are Chapter 7, Chapter 9, Chapter 11, Chapter 12, and Chapter 13. The below chart outlines the different chapters of bankruptcy: Bankruptcy Chapter Chapter 7 Chapter 9 Chapter 11 Chapter 12 Chapter 13 Description All of the organization’s assets are wiped out in order to eliminate debt. Municipalities or incorporated areas that file this bankruptcy do not have to shut down vital operations. This type allows for reorganization and a comeback. An example is an airline that reorganized and comes back. This provides special relief to family farmers. Similar to Chapter 11, this provides relief to small businesses. The specific chapter a company may choose would depend on its size and goals. For example, Kodak would not file for Chapter 12 bankruptcy as it applies to family farms. The company must also consider whether or not they want to dissolve the business or try and start fresh. However, in looking to start fresh, the company must determine how it will reorganize itself to avoid future issues. Strategy Analysis The SWOT matrix is a tool to assist managers and leaders identify strategies within and outside their organization. The strength, weakness, opportunity, and threat (SWOT) model has four strategies used to evaluate and compare the organization related to its strength and weaknesses. This analysis is often used to compare and contrast an organization against other competing organizations. The analysis is also used to evaluate its internal operations to determine where improvements can be made. The chart below outlines the functions of a SWOT matrix: BBA 4951, Business Policy and Strategy 2 Strategy SO: Strength-opportunity WO: Weakness-opportunities ST: Strength-threats WT: Weakness-threats Description Evaluation of the organization’s internal strengths to identify external opportunities Improving internal weaknesses by taking advantage of external opportunities The reduction of external threats Reducing internal weaknesses UNIT x STUDY GUIDE Title The SWOT matrix and strategy go hand-in-hand. Suggested Reading The chapter presentations below will provide you with additional information on this unit’s concepts. Click here to access the PowerPoint version of the Chapter 5 Presentation. Click here to access the PDF version of the Chapter 5 Presentation. Click here to access the PowerPoint version of the Chapter 6 Presentation. Click here to access the PDF version of the Chapter 6 Presentation. BBA 4951, Business Policy and Strategy 3 UNIT IV STUDY GUIDE Strategy Course Learning Outcomes for Unit IV Upon completion of this unit, students should be able to: 1. Analyze the nuances of strategic management. 2. Correlate the characteristics of vision and mission to business success. 5. Diagram the strategy analysis process. 5.1 Describe the strategy analysis process. Reading Assignment Chapter 5: Strategies in Action Chapter 6: Strategy Analysis and Choice Unit Lesson Previously, we have discussed how to assess your internal and external factors. In this unit, we are going to expand on that by discussing strategies. Chapters 5 and 6 will really focus on past strategies that have been successful and effective. These will include formulation and an introduction of the SWOT analysis. This unit will also begin laying the framework for a successful strategic plan. The final project for this course will be initiated during this unit and will build upon each section as we move forward in the term together. Strategy Formulation Every strategy also encompasses long-term and short-term objectives. We will begin with a discussion of long-term objectives and how these impact the strategy. A long-term objective is defined as the results expected from pursing specific strategies. These objectives generally take between two to five years to attain. The objectives must be attainable and realistic for the organization to achieve. Common long-term objectives include growth, profitability, earnings, and social responsibility. Each level within the organization can have long-term objectives. This includes the levels of corporate (highest level), division (middle level), and function (lowest level) within an organization. An example of a long-term oriented company could be your local taxi company and its plans to remain competitive in the digital age. For example, Yellow Cab of Boston could strive to have interactive apps that allow riders to request a ride, split fares, and even receive a digital receipt. Financial Objectives Financial objectives are similar to long-term objectives but are more specific to financial themes. Examples of financial objectives include growth in revenues, profit margins, cash flow, and other financial considerations. There is a delicate balance when considering financial objectives. An organization may create a short-term objective that may be harmful or even detrimental to the organization in the long term. Let us use Kodak as an example; their short-term objective led to their overall failure. Kodak has been around for several decades as the lead photo developer. They produced an array of products to include the introduction of the digital camera. What Kodak failed to do was to ensure they remained technologically savvy with their digital camera production and trademarks. Ultimately, the digital camera (their own creation) put them out of business. BBA 4951, Business Policy and Strategy 1 Because Kodak did not have the foresight to create a long-term (and financial)UNIT objective, they GUIDE were not able x STUDY to remain relevant to consumers and ultimately failed. Title Strategic Model There are many different models that can be incorporated into an organization’s strategy. Most organizations incorporate one strategy to achieve their goals and expected outcomes. A few examples of different types of strategies include: forward integration, market penetration, product development, and liquidation. Below are examples of how these strategies could be applied:      Forward integration: Think of Apple Pay, which would enable the customer to be validated and pay for physical merchandise from a brick and mortar retailer via his or her phone. Market penetration: Coca Cola personalized cans and bottles with individual names and catch phrases, which has increased the popularity of the brand and are an example of this strategy. This personalization has increased Coca Cola’s bottom line and presence in the domestic and international households. Product development: Think of a drug manufacturer creating a vaccine to prevent Ebola. This product would serve a specific purpose and, if successful, would benefit many. Liquidation: An example would be Blockbuster Video selling all of their merchandise before closing all of their stores. This is an opportunity to pay creditors and investors a portion of what is owed before dissolving. Bankruptcy: You may be asking yourself how bankruptcy is a strategy, but it is a potential strategy to assist an organization restructure or dissolve itself. There are five varying types of bankruptcy in the United States. The specific types are Chapter 7, Chapter 9, Chapter 11, Chapter 12, and Chapter 13. The below chart outlines the different chapters of bankruptcy: Bankruptcy Chapter Chapter 7 Chapter 9 Chapter 11 Chapter 12 Chapter 13 Description All of the organization’s assets are wiped out in order to eliminate debt. Municipalities or incorporated areas that file this bankruptcy do not have to shut down vital operations. This type allows for reorganization and a comeback. An example is an airline that reorganized and comes back. This provides special relief to family farmers. Similar to Chapter 11, this provides relief to small businesses. The specific chapter a company may choose would depend on its size and goals. For example, Kodak would not file for Chapter 12 bankruptcy as it applies to family farms. The company must also consider whether or not they want to dissolve the business or try and start fresh. However, in looking to start fresh, the company must determine how it will reorganize itself to avoid future issues. Strategy Analysis The SWOT matrix is a tool to assist managers and leaders identify strategies within and outside their organization. The strength, weakness, opportunity, and threat (SWOT) model has four strategies used to evaluate and compare the organization related to its strength and weaknesses. This analysis is often used to compare and contrast an organization against other competing organizations. The analysis is also used to evaluate its internal operations to determine where improvements can be made. The chart below outlines the functions of a SWOT matrix: BBA 4951, Business Policy and Strategy 2 Strategy SO: Strength-opportunity WO: Weakness-opportunities ST: Strength-threats WT: Weakness-threats Description Evaluation of the organization’s internal strengths to identify external opportunities Improving internal weaknesses by taking advantage of external opportunities The reduction of external threats Reducing internal weaknesses UNIT x STUDY GUIDE Title The SWOT matrix and strategy go hand-in-hand. Suggested Reading The chapter presentations below will provide you with additional information on this unit’s concepts. Click here to access the PowerPoint version of the Chapter 5 Presentation. Click here to access the PDF version of the Chapter 5 Presentation. Click here to access the PowerPoint version of the Chapter 6 Presentation. Click here to access the PDF version of the Chapter 6 Presentation. BBA 4951, Business Policy and Strategy 3 UNIT VI STUDY GUIDE Evaluating Strategies Course Learning Outcomes for Unit VI Upon completion of this unit, students should be able to: 7. Establish a strategic management follow-up process. 9. Assess the strategy evaluation process. Reading Assignment Chapter 9: Strategy Review, Evaluation, and Control Unit Lesson Chapter 9 describes how to effectively evaluate strategies and make timely changes as needed. In this context, Chapter 9 explains how to develop a balanced scorecard and utilize contingency planning. Every strategy must have the ability to be flexible and adaptable. Anytime an organization’s environment changes, the existing strategy must be updated or replaced. In this unit, we will dive deeper into the strategy evaluation phase. There are three main types of strategy evaluations, as described below: 1. understanding the foundation of the firm’s strategy, 2. analyzing and comparing expected and actual results, and 3. implementing actions to ensure the performance is consistent with the plan. When you have an opportunity, please take a look at the case study on page 280 of the course textbook titled Exemplary Company Showcase: Nike, Inc. (NKE). Personally reflect on how this organization has been adaptable and successful for so many years. Models There are many different criterions and models for evaluating strategies. One example listed in your textbook is Rumelt’s Criteria for Evaluating Strategies. This criteria is often used in the industry because it is proven and vetted among many organizations. There are four main criterion that include consistency, consonance, feasibility, and advantage (David & David, 2017). The chart below gives a brief description of each: Rumelt’s Criteria Consistency Description Example Organization must present consistent goals and policies. Consonance Organization must evaluate strategies according to societal and/or individual trends. Feasibility Strategies must be feasible and not over burdensome Have you noticed that CocaCola tastes the same in one part of the U.S. as compared to another part of the U.S.? Look at the television trends from the 1990s to present. In an effort to remain relevant, organizations must be able to adapt. Could you imagine if Starbucks attempted to open 500 new stores in a onemonth period? This is not BBA 4951, Business Policy and Strategy 1 Advantage Strategies, in regard to 1) resources, 2) skills, and 3) position, must be assessed for competitive advantage. feasible and would create a UNIT x STUDY GUIDE burden. Title The iPhone would be a great example of having a competitive advantage among other phone developers. Measuring Organizational Performance Measuring organizational performance can be accomplished by evaluating the expected results and comparing that data to the actual results. Also, the long-term and short-term objectives are evaluated. If it is noted that an organization did not achieve its expected outcomes related to goals and objectives, the organization must implement corrective actions. In an ideal situation, these corrective actions have already been developed; if not, the actions must be developed and implemented. Time is critical in relation to corrective actions, and any corrections must be implemented quickly. Both internal and external factors must be considered when developing any corrective actions. Also, policies, trends, and other factors need to be considered in an effort to effectively resolve any variable. An example is office supply stores in the United States. Organizations, such as Staples, Office Max, and Office Depot, have noticed major trends in the industry and are making every attempt to remain relevant and adaptable. They face great challenges as more and more office supplies become obsolete due to technology, and the ability and ease of access of ordering supplies online becomes more and more available versus having to shop in a physical store. It is often difficult for these organizations to make the online-only switch because they would lose brand recognition, and they also face steep competition in the online marketplace. Effective Evaluation System There are multiple requirements for a strategy to be successful. Strategies must be formed according to economic factors, meaningfulness, and timeliness; strategies must also clearly articulate an overall image of what is happening within the organization. It is also recommended that the strategy evaluation be simple and to the point. When the evaluation becomes complex, it enhances confusion and frustration among the participants. As stated earlier, it is imperative that the organization creates a contingency plan that identifies alternative plans in the event that the strategy does not move forward in the direction that was expected. Contingency plans include avoidance of profit losses, how to meet higher demand, and technology advancements. Reference David, F. R., & David, F. R. (2017). Strategic management: A competitive advantage approach, concepts and cases (16th ed.) [VitalSource Bookshelf version]. Retrieved from https://online.vitalsource.com/#/books/9780134167947 Suggested Reading The chapter presentations below will provide you with additional information on this unit’s concepts. Click here to access the PowerPoint version of the Chapter 9 Presentation. Click here to access the PDF version of the Chapter 9 Presentation. In the Unit VI Paper Segment, you will be completing a SWOT analysis. The website below will give you additional information on how to complete this task, including a helpful video and specific questions to answer for each category of the SWOT analysis. Go to https://www.mindtools.com, click on the search icon, and search “SWOT Analysis.” BBA 4951, Business Policy and Strategy 2 UNIT VIII STUDY GUIDE International Issues Course Learning Outcomes for Unit VIII Upon completion of this unit, students should be able to: 8. Examine the process of implementing strategies across business operations. Reading Assignment Chapter 11: Global and International Issues Unit Lesson Overview Welcome to our final unit for the course. During this unit, we will focus on the global impacts and issues related to strategic management. As previously discussed, the overall health of the United States economy is based on the global economy condition and outlook. Domino’s is a prime example of how a company can tap into the global market to include areas that are still developing. If you do a quick Internet search, you will find that Domino’s operates franchised pizza eateries in over 70 locations, grossing more sales internationally than domestically in the United States. Previous to globalization of the markets, each nation or geographic area had its distinct market areas and rarely interacted with other markets. This has drastically changed with the increase of air travel, communication capabilities, and overall reliance of a global-based economy. In 2005, Thomas L. Friedman released his book The World Is Flat: A Brief History of the Twenty-first Century. In his book, Friedman tried to highlight the “flattening” of the world economy. His work attempts to help us gain a greater understanding of the impact that the growing middle class is having on the worldwide economy; Friedman discussed how the global supply/demand scenario we grew up with has changed, and he warned about the struggles the western world will have to adjust to the changes (Friedman, 2005). Made in Everywhere Take a look around your house or apartment, and think about how many products are made in other countries and shipped into the United States. Clothing is a great example of a product that is made all around the world. Also, consider how many entities have developed, created, shipped, marketed, stored, and displayed the product you purchased. Even though the product may have been made overseas, that product does create and maintain jobs in the United States because of the distribution network. Take a look at the five largest companies in each country. What would happen if these companies decided to only place their product or service within their respective country? Would this cause severe economic losses and strategic challenges for the companies? The consequences could be stagnant growth, overbearing competition from competing entities, and a limited workforce. Globalization Many of the firms located around the world are not always considered as specific country based, but are considered as international. Other corporations may be U.S.-based, or headquartered, entities but are aggressively establishing themselves in the international marketplace. A recent example is Uber Technologies based out of California, which is a company that provides a technological medium that connects screened drivers with requesting riders. This service-based corporation has minimal overhead cost (services only) and is rapidly expanding to other countries. Competitors, such as taxi services, describe Uber’s platform BBA 4951, Business Policy and Strategy 1 as disruptive and not legitimate. Uber describes its service as an alternative customer choice in a market that UNIT x STUDY GUIDE does not give its consumers the freedom to choose service with the ease and Title reliability of a smartphone. Corporate Taxes Most counties have a set tax rate for doing business in their country. Existing and prospective corporations consider these tax implications before setting up their entity in a country. The tax rates can vary throughout the world. Rates range from 12% up to 35%. The United States has the highest corporate tax rate in the world, currently set at 35%. This rate is considered very high for some corporations, thus limiting corporate investment in the United States. Other entities see the United States as a must-have market for their portfolio and are willing to pay the steep corporate tax rate. Connecting the Dots We have covered a great deal of content. Your previous coursework toward your degree has provided you with skills and knowledge essential to future professional success. This class has asked you to begin to look at your future and strategically implement what you have learned. As you progress forward in your educational and professional endeavors, consider the strategy implications of each choice and decision you make. For example, is it realistic to try to complete an undergraduate degree in one year? A more realistic goal would allow four to five years to complete a program of this magnitude. Also, consider incorporating some of the tools that we learned about during our time together. A great example is the SWOT analysis and its practicality for major life choices. For example, if you are considering switching to a new employer, consider the (S)trength, (W)eakness, (O)pportunities, and (T)hreats of transitioning. In previous units, as well as in this unit, you have worked on an implementation plan for a company you selected. Within this unit, you will gauge the outlook for your company and its prospects for the future. When doing so, consider the previous investigation you have done for this course. If you were to combine the work from the previous units along with what you will add from this unit, you will see the full implementation plan. Consider how you would use plans such as this for your employer or your own business. This is a great opportunity for you to demonstrate your understanding of the concepts of strategic management and its application to organizations. Reference Friedman, T. L. (2005). The world is flat: A brief history of the twenty-first century. New York, NY: Farrar, Straus, & Giroux. Suggested Reading The chapter presentation below will provide you with additional information on this unit’s concepts. Click here to access the PowerPoint version of the Chapter 11 Presentation. Click here to access the PDF version of the Chapter 11 Presentation. BBA 4951, Business Policy and Strategy 2 
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