chapter 3 4 assignment sm

8/10/2019 Chapter 3 4 Assignment Sm

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Chapter 3

1. Identify two industries experiencing rapid technological changes and three

industries that are experiencing little technological change. How does the need for

technological forecasting dier in these industries? Why?

Answer: he co!puter industry" co!!unications industry" and aerospace industry

are experiencing rapid technological change. hree industries that are experiencing

little technological change are the forest products industry" the shipping industry"

and the dairy industry.

#. $se %orter&s '(e)force !odel to e(aluate co!petiti(eness within the $.*. +an,ing

industry.

Answer: %orter identi'es '(e co!petiti(e forces that deter!ine the intensity of

co!petition in an industry and the total (alue of pro'ts created in a particularindustry. he '(e forces are 1- new entrants" #- su+stitute products or ser(ices" 3-

+argaining power of suppliers" - +argaining power of +uyers" and /- ri(alry a!ong

existing 'r!s.A ,ey to selecting appropriate generic strategies is to analy0e these

co!petiti(e forces in ter!s of trends" opportunities" and threats facing the 'r!.

As, your students to apply an analysis of these forces to the +an,ing industry.

3. What !aor forecasting techni2ues would you use to identify 1- econo!ic

opportunities and threats and #- de!ographic opportunities and threats? Why are

these techni2ues !ost appropriate?

Answer: With the ad(ent of sophisticated co!puters" si!ultaneous syste!s of

regression e2uations ha(e +eco!e the !ost widely used approach for forecasting

econo!ic (aria+les. *cenario de(elop!ent is the !ost popular of all techni2ues for

social and de!ographic forecasting" although sur(eys and !ar,et research are also

widely used.

. As the owner of a s!all +usiness" explain how you would organi0e a strategic)

infor!ation scanning syste!. How would you organi0e such a syste! in a large

organi0ation?

Answer: In +oth s!all and large organi0ations" strategists could assign speci'c

pu+lications to particular indi(iduals who could then !onitor their assigned source

and regularly report strategic infor!ation to a coordinator.Also" +oth s!all


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+usinesspeople and chief executi(e o4cers of large +usinesses could eecti(ely use

on)line data+ases.

/. Construct an 565 7atrix for an organi0ation of your choice.

Answer: An 565 7atrix allows strategists to su!!ari0e and e(aluate econo!ic"

social" cultural" de!ographic" en(iron!ental" political" go(ern!ental" legal"

technological" and co!petiti(e infor!ation. here are '(e steps in de(eloping an

565 7atrix as illustrated in a+le 3)8. 9ist ,ey external factors as identified in the

external)audit process. Include a total of 1)# factors fro! +oth the opportunities

and threats. Assign to each factor a weight fro! . not i!portant- to 1. (ery

i!portant-. hese weights show the relati(e i!portance. he total of all the weights

should e2ual 1.. Assign a 1) rating to each factor to indicate how effecti(ely the

'r!s current response strategy: 1; the response is poor" # ; the response is

a(erage" 3 ; the response is a+o(e a(erage" and ; the response is superior.

7ultiply each factors weight +y its rating to get a weighted score. *u! the

weighted scores for each (aria+le to deter!ine the total weighted score for the

organi0ation. While each answer will (ary for this 2uestion" students should follow

these guidelines.

. As strategist for a local +an," explain when you would use 2ualitati(e (ersus

2uantitati(e forecasts. Answer: ualitati(e forecasts are !ost appropriate when

historical data are not a(aila+le and when relationships a!ong ,ey (aria+les are

expected to (ary greatly in the future. In addition" when conditions are exploratoryin nature" 2ualitati(e data can +e (ery useful. uantitati(e forecasts re2uire access

to 2uantitati(e data.

@. 5xplain how infor!ation technology aects strategies of the organi0ation where

you ha(e wor,ed !ost recently


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. Answer: Answers will (ary for each student. If as,ing this 2uestion as a class

exercise" encourage students to thin, a+out how infor!ation technology !ight ha(e

represented a strength or wea,ness for that organi0ation. In addition" !ention that

rapidly changing infor!ation technology can represent a threat or opportunity for a

'r!.


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8. iscuss the ethics of gathering co!petiti(e intelligence.

Answer: =athering co!petiti(e intelligence infor!ation is not corporate espionage+ecause all the infor!ation needed is a(aila+le +y ethical !eans" !ostly accessi+le

through the Internet. 6ir!s owe it to all their sta,eholders to gather co!petiti(e

intelligence and to perfor! this acti(ity syste!atically and ethically.

1. Why is glo+ali0ation of industries a co!!on factor today?

Answer: he following are trends that are contri+uting to the glo+ali0ation of

industries around the world: y Corporations in e(ery corner of the glo+e are ta,ing

ad(antage of the opportunity to share in the +ene'ts of worldwide econo!icde(elop!ent. y 7ar,ets are shifting rapidly and in !any cases are con(erging in

ter!s of tastes" trends" and prices. y Inno(ati(e transport syste!s are accelerating

the transfer of technology" and shifts in the nature and location of production

syste!s are reducing the response ti!e to changing !ar,et conditions. y 7ore and

!ore countries around the world are welco!ing foreign in(est!ent and capital. y 5)

co!!erce and the instant trans!ission of !oney and infor!ation across

continents.

11. o you agree with IB theorists that external factors are !ore i!portant than

internal factors in a 'r! achie(ing co!petiti(e ad(antage? 5xplain +oth your and

their position.

Answer: While IB theorists clai! that industry factors are !ore i!portant than

internal factors" research 'ndings suggest that only #D of a 'r!&s pro'ta+ility can

+e explained +y industry factors and 3


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Chapter

1. Which of the three basic functions of nance/accounting do you feel is

most important in a small electronics manufacturing concern? Justify

your position.

Answer: According to Fa!es Gan Horne" the three +asic functions of 'nance are the

in(est!ent decision" the 'nancing decision" and the di(idend decision. In a s!all

electronics !anufacturing concern" the 'nancing decision could +e considered !ost

i!portant +ecause it includes exa!ination of the (arious !ethods +y which the 'r!

could raise capital.

2. Do you think aggregate RD e!penditure for ".# rms $ill increase or

decrease ne!t year? Why?

%. &!plain ho$ you $ould moti'ate managers and employees to

implement a ma(or ne$ strategy.

Answer: here is a need to de!onstrate clearly how the new strategy will +ene't

!anagers and e!ployees of the organi0ation. Articulate eecti(ely why the new

strategy is needed" gi(en co!petitors& strategies" products" and ser(ices. *tri(e to

!o+ili0e the 'r!&s cultural products to support the new strategy. In(ol(e as !any

!anagers as possi+le in discussions a+out how to eecti(ely i!ple!ent the

strategy. he process is !ore i!portant than the plan.

). Why do you think production/operations managers are often not

directly in'ol'ed in strategy*formulation acti'ities? Why can this be a

ma(or organi+ational $eakness?

Answer: here is an unfortunate stig!a in !any organi0ations that

productionBoperations !anagers do not need to +e in(ol(ed in strategy)for!ulation


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decisions they only i!ple!ent strategies. his attitude can represent a !aor

wea,ness in any organi0ation +ecause !ore than @ percent of co!pany assets are

generally tied up in productionBoperations facilities" !aterials" plants" e2uip!ent"

in(entory" and !achines. %roduction !anagers& input into strategy)for!ulation

acti(ities can help assure that cost)eecti(e strategies are selected for

i!ple!entation.

,. Would you e'er pay out di'idends $hen your rm-s annual net prot is

negati'e? Why? What eect could this ha'e on a rm-s strategies?

Answer: 6or the following reasons" di(idends are so!eti!es paid e(en when a 'r!&s

annual net pro't is negati(e:

%aying cash di(idends is custo!ary. 6ailure to do so could +e though of as a

stig!a. A cash di(idend is considered a signal a+out the future.

i(idends represent a sales point for in(est!ent +an,ers. *o!e institutions can

only +uy di(idend)paying stoc,s.

*hareholders often de!and di(idends" e(en in co!panies with great

opportunities for rein(esting all a(aila+le funds.

A !yth exists that paying di(idends will result in a higher stoc, price.

. 0f a rm has +ero debt in its capital structure is that al$ays an

organi+ational strength? Why or $hy not?

Answer: Whene(er an organi0ation&s return on in(est!ent or pro't !argin exceeds

the cost of de+t" it !ay +e ad(isa+le to use de+t to 'nance the 'r!&s strategies.

hus" it is not always an organi0ational strength to ha(e 0ero de+t in a 'r!&s capital

structure. As an indi(idual" if you were sure you could !a,e 1/ percent on !onies

in(ested" then you would pro+a+ly o+tain a su+stantial a!ount of de+t at 1

percent to in(est at that higher le(el.

. Describe the production/operations system in a police department.

Answer: he production function of a +usiness consists of all those acti(ities that

transfor! inputs into goods and ser(ices. 6or a police depart!ent" the inputs wouldinclude la+or" capital" !achines" and facilities. he outputs could include a lower

cri!e rate" law and order in the co!!unity" and s!ooth tra4c ows. A police

depart!ent" li,e any organi0ation" should pursue strategies to capitali0e on

production syste! strengths and to o(erco!e wea,nesses.


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3. 4fter conducting an internal audit a rm disco'ers a total of 155

strengths and 155 $eaknesses. What procedures could be then used to

determine the most important of these? Why is it important to reduce

the total number of key factors?

Answer: Jo!inal grouping is an eecti(e procedure for reducing !any strengthsand wea,nesses to a !anagea+le nu!+er of fro! /)#. It is i!portant in strategy

for!ulation to identify the !ost i!portant 1)#- ,ey factors rather than including

all factors in an I65 7atrix. Jo!inal grouping is also an eecti(e approach for

de(eloping an 565 7atrix.

6. Why do you belie'e cultural products aect all the functions of

business?

Answer: Cultural products per!eate e(ery acti(ity in an organi0ation. %eople

+eco!e attached to cultural products and often resist changes in rites" rituals"

(alues" +eliefs" and nor!s. Whether people wor, in !ar,eting" !anufacturing"

personnel" or 'nanceBaccounting" they li,ely feel strongly a+out a 'r!&s culture.

15. What are the most important characteristics of an eecti'e

management information system?

Answer: A !anage!ent infor!ation syste! utili0es hardware" software" !odels for

analysis" and a data+ase. he syste! !ust +e econo!ical" widely understood"

practical" and updated regularly.

11. Dene and discuss 7empirical indicators.8

Answer: 5!pirical indicators refer to the characteristics of resources that ena+le a'r! to i!ple!ent strategies that i!pro(e its e4ciency and eecti(eness and

ulti!ately lead to a sustaina+le co!petiti(e ad(antage. he three e!pirical

indicators for a resource to +e (alua+le are that the resource should +e rare" hard to

i!itate" and not easily su+stituta+le.

12. Dene and e!plain 'alue chain analysis 9:;4


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of (alue chain acti(ities across an industry to deter!ine L+est practicesM a!ong

co!peting 'r!s for the purpose of duplicating or i!pro(ing upon those +est

practices.

chapter 3 4 assignment sm

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