planning college
TRANSCRIPT
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A man in 1962 thought of opening up a running shoecompany and was able to sell 1300 pairs in the first year.
He alongwith his former track coach from the University
of Oregon, started an athletic shoe company called the
Blue Ribbon Sports, to evoke the image of a winner.
That year they sold 1,300 pairs of running shoes at the
local track meets from the trunk of a car.
In the meantime, Knight also worked as a C.P.A and an
accounting professor until 1969, when he decided to
devote himself full time to Blue Ribbon Sports.
Then in 1972, Blue Ribbon Sports became Nike, named
after the mythological Goddess of victory.
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Nike grew out of an idea Philip Knight expressed
in a graduate school paper he wrote in 1962 while he wasgetting his MBA at Stanford.
Between 1972 and 1990, Nike experienced tremendous
growth. Sales in 1972 were $2 million. By 1982 sales
reached $694 million. In 1990, sales reached $2billion.
The Nike/Jordan story began in mid 1980s, when Nike
managers felt the company slipping from its position as the
leading athletic shoe maker in the United States.
In 1984, company earnings dropped for the first time in a
decade.
In 1985, competitor Reebok even captured the market
share lead for a short period of time.
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By mid 1980s, the market experienced a general slow
down.
Nike managers realized that they had lagged behind their
competitors in responding to demands for increasingly
specialized shoe types.
Enter Jordan.
What Jordan brought to Nike was image.
After striking a deal with Nike, Jordan went on to become
one of the most celebrated sports figure of all time, both as
an athlete and as a product endorser.
The ``Air Jordan line of basketball shoes is a product
inextricably linked to a star.
Nike people concentrated their efforts on a single goal: Air
Jordan.
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Nikes director of investor relations, said, ``we pointed all
our guns in the same direction, firing all at once-the
product, the athlete, TV and print ads and point of
purchase displays.
``Every corporate marketing resource was aligned and
timed to coincide with and support the introduction of Air
Jordans.
Jordan rescued Nike from six consecutive quarters of
declining earnings.
Nike expected to sell 1,00,000 pairs of Air Jordan
basketball shoes in the first year the were introduced;actual sales reached three to four million pairs.
``Its one of the best things thats ever happened to us,
said the Nike spokesman.
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On October 6, 1993, 30 year old Michael Jordan, the
Chicago Bulls gravity defying basketball star, retired
from the National Basketball Association (NBA).
In the wake of untimely death of his father, he decided to
put an endfor the time being at least-to his professional
basketball career.
But even before Jordan stunned the sports world with his
retirement announcement, Knight and his managers were
deciding to look out for options , as they knew that as
unique as his talents are, Jordan would not play
professional basketball forever.
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One new venture was the ``Nike Town concept.
A Nike Town was part sports museum, part store, and partamusement park, and was intended to be a celebration of
Nikes ``energy and youth and vitality product image.
Nike towns featured 3-D commercials, giant tropical fish
tanks, and basketball courts.
Nike was planning to open up more of such stores after
opening up in Portland and Chicago.
``Its part of a whole program of image making said
David Manfredi, partner in Elkus/Manfredi Ltd., the
Boston based firm that had designed similar stores for
Sony also.
When the Chicago Nike town opened it attracted 5000
customers a week who spent approx. $50 each.
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To keep up with the changing marketplace, Nike managers
are already diversifying.
In 1992, Nike opened retail outlets in which apparel, shoes,and Nike paraphernalia are sold.
Nike managers attributed a $100 million increase in gross
profits in 1992 to its retail sales division.
In 1993, Nike managers expanded their marketing strategyto focus on women audiences, the presence of whom was
growing in the market.
Nike has also created in-store events, called ``Dialogue
that include, fashion shows of Nike sports apparel andfeature motivational speakers like biathlon champion Liz
Downing and marathon runner Priscilla Welsh.
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The decision to start catering to women was not taken
haphazardly.
Then womens marketing director, kate Bednarski, had to
put in a lot of efforts to make others believe that this move
would not cannibalize sales in mens market.
Once Nike was convinced that there exists a viable market,
the womens team put long hours of brainstorming, and
arrived at a series of ads featuring women as capable, and
powerful people.
Then immediate response within the company was not
very favorable. But they were able to convince themanagement that with low initial investment it was worth a
try.
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Objective is defined as a specific commitment to achieve ameasurable result within a given time frame.
Goals provide a sense of direction
Goals focus our efforts
Goals guide our plans and decisions
Goals help us evaluate our progress
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A process planners use, within time and resource
constraints, is to gather, interpret, and summarize all
information relevant to the planning issue under
consideration.
Study past and current conditions, and forecast future
trends.
Focus on internal forces and influences from the external
environment.
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Generate alternative future goals and plans to achieve
them.
Goals -targets or ends the manager wants to reach.
Plans-the actions or means to achieve goals.
Identify alternative actions, resources needed, and
potential obstacles.
Single use plan-designed to achieve goals that are
unlikely to be repeated in the future.Standing plan- designed to achieve an enduring set of
goals.
Contingency plan- actions to be taken if initial plans
fail.
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Evaluate the advantages, disadvantages, and potentialeffects of each alternative goal and plan.
Prioritize those goals.
Consider the implications of alternative plans.
Identify the priorities and trade-offs among goals and
plans.
Leads to a written set of goals and plans that areappropriate and feasible within a predicted set of
circumstances.
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Plans are useless unless they are implemented properly.
managers must understand the plan, have the necessary
resources, and be motivated to implement it.
Must continually monitor the actual performance in
relation to the goals and plans.
Develop control systems to take corrective action.
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4-16
Specificformal
planningsteps
Identifying and
diagnosing the problem
Generating alternative
solutions
Evaluating
alternatives
Making the
choice
Implementing
Evaluation
Situational
analysis
Alternative
goals and plans
Goal and
plan evaluation
Goal and
plan selection
Implementation
Monitor and
control
Generaldecision
-
m
akingstages
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Mission Statement
Strategic Plans
Operational Plans
Founder, BoD,
Top Managers
Top & Middle
Managers
Middle & First
Line Managers
This is an ideal situation. However, this may vary with
size of the organization, level of
centralization/decentralization, management philosophy
and the like.
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Defines organization for key stakeholders.
Creates an inspiring vision of what organization can be and
can do.
Outlines how the vision is to be accomplished.
Establishes key priorities.
States a common goal and fosters a sense of togetherness.
*Sony Corporation of Japan, founded after World War II, has
become a leading manufacturer of a variety of productssuch as audio, video and information technology products.
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Also one of the most recognized entertainment company.
The company emphasizes on innovation and product
development.
The company is driven by its mission which is stated in its
founding prospectus which emphasizes on open
mindedness and an environment in which engineers have a
great deal of freedom that encourages innovation andapplication of advanced technologies.
Sony emphasizes on adaptation, innovation, and risk taking
contributed to the firms success.
Guided by its mission, Sony developed great strengths indeveloping high quality products in the six business
segments: electronics, games, music, pictures, insurance,
and others.
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Sony aims for greater eco-efficiency in its businessactivities through maximizing the efficiency of non-
renewable energy and resource use and providing products
and services with greater added value.
Efforts will be on reducing harmful effects on the
environment by ensuring compliance with all applicable
environmental regulations and reducing the environmental
impact of energy and resource use on a continuous basis.
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To be a competitive value provider in internationalbusiness for Group companies and all our partners.
Become a globally networked enterprise seizing
opportunities worldwide to generate USD 25 million
annual profits by 2008.
Vivid description of vision by 2008, we would have:
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Achieved aggressive and profitable growth of our 5 core
businesses & initiated new businesses.
Consistently achieved customer delight by focusing on
value adding activities throughout our value chain.
A strong global supply base for world class goods &
services.
Institutionalized Tata Excellence Business Model and
achieved best in class status.
Become an exciting organization which attracts & retains
best talent worldwide for global competitiveness.
Become a proactive, integral & responsible member of our
environment & communities.
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Integrity
Spirit of Entrepreneurship
Agility
Passion for Excellence
Unity
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Mission captures the very essence of the organization.
Mission statement moves the strategic planning process
from the present to the future. The mission statement must ``work not only today but
for the intended life of the strategic plan.
Mission statement has both an internal and an external
dimension.
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The strategy team needs to develop a compelling vision for
the future.
A vision statement describes a picture of the preferredfuture.
The vision should project a compelling story about the
future.
A vision statement describes how the future will look if theorganization achieves its mission.
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A mission statement
concerns what an
enterprise is all about.
A vision statement is
what the enterprise
wants to become.
Strategic planning is asystematic process
whose purpose is to
map out how the
enterprise should getfrom where it is today to
the future it envisions.
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Personal mission statementencompasses life philosophy
and says who you are, what your life goals are, why you
live, and what your deepest aspirations are.
Yourpersonal vision statement is a description of where
you are going, which values and principles guide you to
reach that point., what you want to help realize in your life,what ideal characteristics you would like to have, and what
your ideal profession, living and health conditions are.
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Organizational mission encompasses the identity andthe core competence of the firm and indicates its reasons
for existence, for who it exists, why it exists, what itsprimary goal is, and who are its most importantstakeholders.
Mission of ESSO Imperial Oilthe companys missionis to create shareholder value through the development
and sale of hydrocarbon energy and related products. Organizational vision encompasses a long-term dream
of the firm and indicates the transformation pathnecessary to accomplish this. Vision is an image of the
desired future. The organizational vision is, contrary to the
organizational mission, tied to a time horizon and therelated concrete goals.
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The organizational vision is also linked to a number of
core values, in order to strengthen the one-mindedness of
the employees, and favorably influence their behavior andthe organizational culture.
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Organizational mission, vision, objectives and strategies of
Shell Oil Refinery Pernis
In 1998, Shell Pernis has taken it upon itself to be a world
class refinery: a refinery with a perfect operation that
belongs to the best in Europe and the top in the Benelux.
To achieve this, plan PERFECT 98 was launched in mid
1996 within the organization to change and attune theorganization optimally to the dynamics of the market.
The decentralization of the functional structure was
central, whereby the activities were organized as much as
possible around the primary process, which is ``theproduction of oil and chemical products for shell
companies.
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Mission
Profitable production of oil and chemical products for shell
companies all over the world.
Vision
To achieve the mission Shell Pernis wants to be a bigproducer who:
Is efficient, cheap, and as much competitive.
Worker, customer-oriented and delivers the agreed upon
quality. Acts safe and eco-conscious.
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Time Horizons
Scope
Degree of Detail
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The Balanced Scorecard (BSC) began as a concept for
measuring whether the smaller-scale operational activities
of a company are aligned with its larger-scale objectives interms of vision and strategy.
It was developed and first used at Analog Devices in 1987.
By focusing not only on financial outcomes but also on the
human issues, the Balanced Scorecard helps provide a more
comprehensive view of a business, which in turn helps
organizations act in their best long-term interests
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To use the scorecard for planning, it is necessary to:
o clarify the vision
o develop business unit scorecards
o review business unit scorecards
o communicate the scorecard to the entire
companyo conduct annual strategy reviews
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CustomerStriving to be 3rdplace Repeat business 30-40% annual expansion Brand extension
Process Brewing the perfect cup Brewing the perfect cup at home Retail skills and customer service Coffee knowledge Empowerment
Financial $1 billion company (market value) $100 million annual profits 800% stock appreciation 2000+ stores
People/LearningCommitment/trust (low turnover) Training Beanstock program Opinion surveys Flexible schedules
Vision
And
Strategy
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A companys strategy consists of the competitive moves,
internal operating approaches, and action plans devised by
management to produce successful performance.
Strategy is managements game plan for running the
business.
Managers need strategies to guide HOW theorganizations business will be conducted and HOW
performance targets will be achieved.
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Where Are We Now?
Where Do we Want toGo?
How Will We Get There?
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A strategic plan specifies
where a company is
headed and HOW
management intends to
achieve the targeted levels
of performance.
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Developing a mission and a vision Setting Objectives
Analysis of internal strengths and weaknesses and analysis
of external opportunities and threats.
Crafting a Strategy (Strategy Formulation)
Implementing and Executing Strategy (Administration)
Evaluating Performance, Reviewing the Situation and
Initiating Corrective Action (Strategic Control)
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Reflects managements vision ofwhat the organization seeks to do
and to become.
Sets forth a meaningful direction forthe organization.
Outline Who we are, What we do,
and Where we are headed.
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The purpose is to convertthe mission into Specific
Performance Targets
Serve as yardsticks fortracking company
progress and performance.
Should be set at levels thatrequire stretch and
disciplined effort.
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HOW to outcompete rivals and win acompetitive advantage.
HOW to respond to changing industry and
competitive conditions.
HOW to defend against threats to the
companys well-being.
HOW to pursue attractive opportunities.
SWOT analysis
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Elements Of Environmental Analysis
Social
analysisHuman resources
analysis
Industry and
market analysis
Environmental
Analysis
Competitor
analysis
Technological
analysis
Macroeconomic
analysisPolitical and
regulatory analysis
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Resourcesare rare
Resources
are
organized
Resources
are
inimitable
Resources
are
valuable
Core
competencies
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Marketing auditOperations
analysis
Financial
analysis
Internal
Resource
Analysis
Human resource
assessment
Other internal
resource analysis
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Process of assessing how well one companys basic
functions and skills compare to those of othercompanies.
Goal is to thoroughly understand the best practices of
other firms.
Xerox & L.L. Bean
Comparison of strengths, weaknesses, opportunities,
and threats.
Helps summarize the major facts and forecasts derivedfrom external and internal analyses
Used as the basis for identifying primary and secondary
strategic issues confronting the organization
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focuses on domainselection; where will they compete.
E,g., Visteon Corporation vis--vis Ford Growth & diversification
IBM & GE
GEs CEO Geffrey Immelt has stated
that GEs future depends on pursuingbusinesses that leverage humancapital.
Mergers & acquisitions
HP & Compaq
Strategic alliances & joint ventures
Sony Ericsson
Renault SA and Mahindra &Mahindra Ltd.
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Sony Ericsson is a joint venture established in 2001 by
the Japanese consumer electronics company Sony
Corporation and the Swedish telecommunicationscompany Ericsson to make mobile phones.
Reason was to combine Sonys consumer electronics
expertise with Ericssons technological leadership.
Renault is Frances largest car maker and Mahindra &Mahindra Ltd. Is Indias largest maker of SUVs. The
two companies have come together to make Logan
Sedan in India.
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Viewed in terms of domain navigation;how the company will compete against
rival firms in order to create value forcustomers.
Low cost strategy: compete on
productivity & efficiency
Wal-Mart, Southwest Airlines
Outsourcing
Differentiation strategy: compete onvalue addition
Fed-Ex
Sony
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translate strategic prioritiesinto functional areas of organization. In thisregard, for example, HR policies & practicesneed to achieve two types of fit: external &internal.
External Fit/Alignment
Focuses on fit between the business objectives
and & the major initiatives in HR. Internal Fit/Alignment
HR practices should be aligned with oneanother internally to establish a configurationthat is mutually reinforcing.
Job design, staffing, training, PA,compensation, all need to focus on the sameworkforce objectives.
Charles Schwab & Co.
.
.
.
.
.
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Changing market conditions Moves of competitors
New technologies and production capabilities
Evolving buyer needs and preferences
Political and regulatory factors New windows of opportunity
Fresh ideas to improve the current strategy
A crisis situation
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The managers of FedEx had transformed the company
from a small package-delivery service into the major forcein overnight delivery.
However, as competition was closing in from several sides,
they needed to decide on directions for the future.
FedEx managers didnt see FedEx only as a package-delivery service, but as part of a larger, more complex
industry, in terms of``information delivery.
But even other overnight carriers and competitors like
United Parcel Service and the U.S. Postal Service werealso worried about information carriers such as MCI,
AT&T, and other telecommunication companies.
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Therefore, it was important for company managers to
speculate on future directions of all these companies.
FedEx managers wanted to keep its image of being at theforefront of trends alive.
The company had started with overnight delivery long
before anyone realized that this service could become such
an integral part of doing business. The technology and the innovation made it possible to go
from handling 40 packages a night to 1.7 million .
Now managers needed to plan how to use these assets to
meet the information delivery needs of the future.
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Since, 1979, the processes of doing business have changed
drastically.
For important documents, businesses now think in terms ofhours instead of days.
FedEx had to be ready to meet the needs of tomorrows
businesses, and to it had to anticipate the needs today.
The postal service was obviously a threat its operationswere somewhat limited as to future directions.
Though it could challenge in terms of price and service, it
would probably continue to specialize in the same type
of product.
United parcel Services was also a direct challenger.
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Zapmail seemed a well timed innovation and a way to stay
ahead of the competition, but FedEx managers didnt
anticipate the number of businesses that would buy theirown FAX machines.
They discontinued Zapmail in 1986.
The Zapmail was just one example ofCEO Fred Smiths
responsiveness to the rapidly changing world ofinformation delivery.
To stay on top , FedEx had to become a global player,
Smith & his top managers concentrated on foreign
markets & acquisitions. However these efforts were very frustrating at many
accounts.
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Difficulties in gaining access to specific foreign delivery
routes and government restrictionsfavoring domestic
services, coupled with thehigh cost of flying smallpackages in large planes, created a spotty network of
service running at high cost.
But all this didnt faze Smith.
Smith made two key moves to demonstrate hiscommitment to global information services.
First, he acquired Tiger International, the worlds
largest cargo hauler in 1989.
This gave FedEx access to the vast network of routesTiger had won over the previous 40 years.
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These routes gave FedEx a direct competitive
advantage in such nations such as Australia, Malaysia,
and the Philippines, where landing rights wereextremely difficult to come by.
It also allowed Smith to mix in Federal Express small
parcels with Tigers larger cargo, providing a more
efficient use of space. And also, acquiring Tigers squadron of long haul aircraft
allowed FedEx to move its fleet of DC-10s back to the
higher volume parcel routes in the United States.
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Second, FedEx built a new facility in Alaska.
This location is the centre of transportation triad, putting
FedEx within seven hours of key markets in Asia,Europe and the United States.
This move caught the competitors off guard forcing them
to follow Smiths lead.
In words of one of the expert, these two moved madeFedEx the ``undisputed leader in information delivery.
Now FedEx has entered into another market: logistics
planning for global companies.
Logistics involves managing the movement and storage ofmaterials, parts, and finished goods from suppliers,
through the firm, and to the customer.
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FedEx guarantees 2 day delivery, a reduction from the
manufacturers previous 5-18 day cycles.
For instance, National Semiconductor managementrecently awarded FedEx its finished goods delivery
business from Southwest Asia to consumers worldwide.
FedEx will use its own Singapore warehouse to store
finished goods from National Semiconductor's SoutheastAsia assembly points, ship the goods, clear them through
customs, and deliver them to customers.
National Semiconductor will enter orders directly into
FedExs database and will be able to track them as they aremoved from inventory, packed, shipped, and signed for by
the customer.
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The most difficult question managers of todays complex
organizations face: what allocation of resources to
business units, product lines, R&D projects, or other
business initiatives will best balance risk diversification,
short term earnings, and long term shareholder value?
A business portfolio is the collection of strategic business
units (SBU) that make up a corporation. The optimal
business portfolio is one that fits perfectly to the
companys strengths and helps to exploit the mostattractive industries or markets.
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To analyze its current business portfolio and decide which
SBUs should receive more or less investment.
To develop growth strategies for adding new products and
business to the portfolio.
To decide which businesses or products should no longer
be retained.
The BCG (Boston Consulting Group) matrix is one of the
best known portfolio planning framework.
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The BCG Growth-Share Matrix is a portfolio planning
model developed by Bruce Henderson of the Boston
Consulting Group in the early 1970's.
It is based on the observation that a company's business
units can be classified into four categories based on
combinations of market growth and market share relativeto the largest competitor.
Business growth serves as a proxy for industry
attractiveness, and relative market share serves as a proxyfor competitive advantage.
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This framework assumes that an increase in relative market
share will result in an increase in the generation of cash.
Second assumption is that a growing market requires
investment in assets to increase capacity and therefore
results in the consumption of cash.
Henderson reasoned that the cash required by rapidly
growing business units could be obtained from the firm's
other business units that were at a more mature stage and
generating significant cash.
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Dogs have low market share and a low growth rate and
thus neither generate nor consume a large amount of cash.
Dogs are cash traps because of the money tied up in a
business that has little potential.
Such businesses are candidates for divestiture.
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Question marks are growing rapidly and thus consume
large amounts of cash, but because they have low marketshares they do not generate much cash.
The result is a large net cash consumption.
A question mark (also known as a "problem child") has the
potential to gain market share and become a star, and
eventually a cash cow when the market growth slows.
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If the question mark does not succeed in becoming the
market leader, then after perhaps years of cash
consumption it will degenerate into a dog when the marketgrowth declines.
Question marks must be analyzed carefully in order to
determine whether they are worth the investment requiredto grow market share.
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Stars generate large amounts of cash because of their
strong relative market share, but also consume largeamounts of cash because of their high growth rate;
therefore the cash in each direction approximately nets out.
If a star can maintain its large market share, it will becomea cash cow when the market growth rate declines.
The portfolio of a diversified company always should have
stars that will become the next cash cows and ensure futurecash generation.
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As leaders in a mature market, cash cows exhibit a return
on assets that is greater than the market growth rate, andthus generate more cash than they consume.
Such business units should be "milked", extracting the
profits and investing as little cash as possible.
Cash cows provide the cash required to turn question
marks into market leaders, to cover the administrative costs
of the company, to fund research and development, toservice the corporate debt, and to pay dividends to
shareholders.
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The BCG Matrix method can help understand a
frequently made strategy mistake: having a one-size-fits-
all-approach to strategy, such as a generic growth target (9
percent per year) or a generic return on capital of say 9.5%
for an entire corporation.
In such a scenario:
A. Cash Cows Business Units will beat their profit target
easily; the management has an easy job and is often
praised anyhow. Even worse, they are often allowed to
reinvest substantial cash amounts in their businesses which
are mature and not growing anymore.
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B. Dogs Business Units fight an impossible battle and,
even worse, investments are made now and then in
hopeless attempts to 'turn the business around'.
C. As a result (all) Question Marks and Stars Business
Units get mediocre size investment funds. In this way they
are unable to ever become cash cows. These inadequateinvested sums of money are a waste of money. Either these
SBUs should receive enough investment funds to enable
them to achieve a real market dominance and become a
cash cow (or star), or otherwise companies are advised to
disinvest and try to get whatever possible cash out of the
question marks that were not selected.
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High market share is not the only success factor.
Market growth is not the only indicator for attractiveness
of a market.
Low share businesses can be profitable too.
The problems of getting data on the market share and
market growth.
The model uses only two dimensions.
A high market share does not necessarily lead to
profitability at all times.
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CI is the fastest growing area of SWOT analysis.
Seeks basic information about competitors: who are they?
What are they doing? What affect will it have on us?
Michael Porter provides a framework that models an
industry as being influenced by five forces.
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(Michael Porter)
Bargaining
power of
Suppliers
Rivalrywithin an
industry
Threat of NewEntrants
Threat ofSubstitute
Products
Bargaining
Power of
Customers
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Entry of competitors
How easy or difficult is it for new entrants to start tocompete.
Number and size of firms, Industry size and trends,product/service ranges, differentiation strategy.
Threat of substitutes
How easy can a product or service be substituted,
especially cheaper. Relative price performance of substitutes, buyer
switching costs, perceived level of productdifferentiation.
Bargaining power of buyers How strong is the position of buyers
Buyer volume, buyer switching costs, buyerinformation availability, product/service importance.
Bargaining power of suppliers
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g g p f pp
How strong is the position of sellers, are there many oronly a few suppliers, is there a monopoly.
Supplier switching costs, presence of substitute inputs,cost of inputs relative to price of the product.
Rivalry among the existing players
Do rivals compete aggressively, on what dimensions dothey compete.
Number of competitors, rate of industry growth, levelof advertising expense, economies of scale,informational complexity
Rival Firms Toys R Us
Competitors: Schwarz or KB Toys.
Wal-Mart & Target Stores
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Source: McKinsey & Co.
Systems
Style
Shared
Values
Structure
Staff
Strategy
Skills
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lays out the route that the organization will take in
future.
is the framework in which activities ofthe organization members are coordinated.
S and processes consist of all the formal & informal
procedures that allow the organization to function,
including capital budgeting, training etc. doesn't refer to personality, but to the pattern of
substantive and symbolic actions undertaken by topmanagers.
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act as a guiding parameter for strategic
planning.
relate directly to the concerns of humanresource management and points out the critical role of HRin strategy implementation.
Each of the factors is equally important for execution andinteracts with all other factors.
Circumstances may dictate which of the factors will be the
driving force in the execution of any particular strategy.
The model emphasizes that, in practice, the development
of strategies poses less of a problem than their execution.
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Management by objectives (MBO) is a systematic and
organized approach that allows management to focus onachievable goals and to attain the best possible results from
available resources.
The concept of MBO was first given by Peter Drucker in
1954 in his book 'The Practice of Management'. It can be defined as a process whereby the employees and
the superiors come together to identify common goals, the
employees set their goals to be achieved, the standards to
be taken as the criteria for measurement of theirperformance and contribution and deciding the course of
action to be followed.
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It aims to increase organizational performance by aligning
goals and subordinate objectives throughout the
organization.
The heart of MBO are the objectives, which spell out the
individual actions needed to fulfill the units functional
strategy and annual objectives.
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SMART Goals
Specific
Measurable
Achievable
Realistic, and
Time bound.