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Assurance of Learning Exercises With Teaching Notes

PART IV
ASSURANCE OF LEARNING EXERCISES
CHAPTER 1: The Nature of Strategic a!age"e!t
ASSURANCE OF LEARNING EXERCISE 1A: GATHERING STRATEG#
INFORATION
PURPOSE:
The purpose of this exercise is to get you familiar with strategy terms introduced and defined in
Chapter 1. Lets apply these terms to c!onalds Corporation "stoc# sym$ol % C!&.
INSTRUCTIONS:
1. 'o to www.mcdonalds.com( which is c!onalds We$ site. Clic# on the word
)earch. Then type the words Annual Report. Then print the *++, c!onalds
Annual Report. This document may $e 1++ pages( so you may want to copy the
document electronically or order the report directly from c!onalds as indicated on
the We$ site. The Annual Report contains excellent information for de-eloping a list
of internal strengths and wea#nesses for C!.
*. 'o to your college li$rary and ma#e a copy of )tandard . /oors 0ndustry )ur-eys for
the restaurant industry. This document will contain excellent information for
de-eloping a list of external opportunities and threats facing C!.
1. 'o to the www.finance.yahoo.com We$ site. Enter C!. Note the wealth of
information on c!onalds that may $e o$tained $y clic#ing any item along the left
column. Clic# on Competitors down the left column. Then print out the resultant
ta$les and information. Note that c!onaldss two ma2or competitors are 3um4
5rands( 0nc. and 5urger 6ing 7oldings.
8. 9sing the Cohesion Case( the www.finance.yahoo information( the *++, Annual
:eport( and the 0ndustry )ur-ey document( on a separate sheet of paper list what you
consider to $e C!s three ma2or strengths( three ma2or wea#nesses( three ma2or
opportunities( and three ma2or threats. Each factor listed for this exercise must include
a ;( <( =( or ratio to re-eal some >uantified fact or trend. These factors pro-ide the
underlying $asis for a strategic plan $ecause a firm stri-es to ta#e ad-antage of
strengths( impro-e wea#nesses( a-oid threats( and capitali?e on opportunities.
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A. Through class discussion( compare your lists of external and internal factors to those
de-eloped $y other students and add to your lists of factors. 6eep this information for
use in later exercises at the end of other chapters.
B. 5e mindful that whate-er case company is assigned to your andCor your team of
students this semester( you can start to update the information on your company $y
following the steps 2ust listed for any pu$licly held firm.
TEACHING NOTES:
The following are possi$le external opportunitiesCthreats and internal strengthsCwea#nesses for the
c!onalds Cohesion Case. The instructions re>uest three for each category $ut possi$ilities are
listed $elow. :emind students to #eep this information for use in later exercises.
)trengthsD
)1D 7ighly successful and recogni?ed ad-ertising. "0m lo-ing it&
)*D )trong employee training and promotion mostly from within.
)1D )trong 0n-estor :eputation.
)8D )trongest 5rand 0mage as the num$erE1 fastEfood company $y sales( with more than 1*(+++
restaurants in 11F countries.
)AD :ecogni?ed as a community oriented( socially responsi$le company.
)BD )trong 'lo$al /resence and an a$ility to weather local economic fluctuations.
)GD 9se pure ingredients and ta#e food safety -ery seriously.
)FD Consistently solid financial performance.
'ross margins "1B.G;& and net profit margins "1F.*;& a$o-e industry a-erages.
)ales re-enue up 1.1; in *++F( glo$al compara$le sales up B.,;.
Net income up F+; in *++F.
),D )trong inno-ation and product de-elopment.
)1+D Large real estate portfolio.
)11D Economies of )cale H Nearest competitor in 9.). is half c!onalds si?e.
Wea#nessesD
W1D Lowest Customer satisfaction rating in the industry "B,&( e-en $elow 0:).
W*D 7igh employee turno-er.
W1D Assem$ly line approach ma#es it difficult and costly to adapt to changing trends.
W8D Core product line out of sync with trends toward healthier lifestyles for adults and children.
WAD )ales demonstrates seasonal effects.
WBD F+; of restaurants are franchise owned( placing image and reputation in others hands.
WGD I-erEsaturation of real estate in the 9).
WFD )truggles with fluctuations in operating and net profitsD
Iperating profits =8(811 "*++B&( =1(FG, "*++G&( =B881 "*++F&.
Net profits =1(A88 "*++B&( =*(1,A "*++G&( =8(111 "*++F&.
W,D G+; of operating re-enues and 8A; of de$t are in foreign currency.
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IpportunitiesD
I1D Anticipated 8; growth rate in Juic# )er-ice :estaurant industry.
I*D Low fat( low calorie( healthy ham$urger H Could $e first on mar#et.
I1D any restaurants "B+; in 9.).& ha-e outdated appearance. :emodeling can yield co?ier(
upscale setting( and upgrade the image.
I8D :espond to social changes $y inno-ation within healthier lifestyle foods.
IAD 0ncreased $e-erage options "'ourmet coffees& ha-e $een shown to increase customer -isits in
Europe "KG.*;& and ta#es ad-antage of faltering )tar$uc#s.
IBD 5rea#fast not a-aila$le at *A; of locations H can increase return on assets and e>uity.
IGD Loint -entures with retailers "Walmart( etc.& can place new locations in high traffic areas at
lower capital cost.
IFD Continued focus on corporate social responsi$ility( reducing the impact on the en-ironment
and community lin#ages.
I,D 0nternational expansion into emerging mar#ets of China( 0ndia( 5ra?il.
I1+D !i-ersify portfolio "i.e.( similar to what it did $efore di-esting Chipotle( 5oston ar#et&.
ThreatsD
T1D ore health conscious customers.
T*D /articularly -ulnera$le in older( esta$lished mar#ets "9)( E9& to upstarts offering healthier
food offerings and more modern( high tech surroundings.
T1D 'lo$al economic recession causing consumers to spend less "'lo$al '!/ Est.E*.1;&.
T8D ar#ets in 9) and E9 are mature and saturated( $ut G+; of locations.
TAD )u$way and 394 5rands expanding into de-eloping mar#ets at a higher rate.
TBD LitigationD
TGD 5rand e>uity at ris#D F+; of restaurants owned $y franchisees.
TFD Contamination of the food supply( especially eEcoli( or ad cow disease( could damage sales(
reputation( etc.
T,D 0ntense price pressure from competitors li#e 5urger 6ing( Taco 5ell( Wendys( 6MC and any
midErange sitEdown restaurants.
T1+D Negati-e pu$lic opinion campaignsD
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE 1$: STRATEGIC PLANNING FOR #
UNIVERSIT#
PURPOSE:
External and internal factors are the underlying $ases of strategies formulated and implemented $y
organi?ations. 3our college or uni-ersity faces numerous external opportunitiesCthreats and has many
internal strengthsCwea#nesses. The purpose of this exercise is to illustrate the process of identifying
critical external and internal factors.
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INSTRUCTIONS:
1. In a separate sheet of paper( write four headingsD External Ipportunities( External
Threats( 0nternal )trengths( and 0nternal Wea#nesses.
*. As related to your college or uni-ersity( list fi-e factors under each of the four headings.
1. !iscuss the factors as a class. Write the factors on the $oard.
8. What new things did you learn a$out your uni-ersity from the class discussionN 7ow could
this type of discussion $enefit an organi?ationN
TEACHING NOTES:
As# students to #eep results of this exercise $ecause( at the end of each chapter( at least one exercise
applies chapter material to your uni-ersity. While answers to this exercise will -ary for each institution(
a sample is pro-ided $elow.
)trengthsD
1. Location in a state capital with se-eral Mortune A++ companies near$y
*. /u$lic institution with strong financial support from state "compared to other pu$lics in state&
1. !i-erse student $ody and faculty
8. Oisionary presidential leadership
A. NationallyEran#ed programs in se-eral disciplines
B. ost programs accredited $y appropriate organi?ations
G. 0nexpensi-e tuition compared to pu$lic institutions in other states and all pri-ate institutions
F. odern $uildings for most -isi$le programs "engineering and life sciences&
Wea#nessesD
1. 9r$an campus "percei-ed as a safety issue for prospecti-e students and limits space for $uilding
and expanding campus&
*. /ressure to grow si?e of institution from state legislature
1. /ressure from state to admit marginal students in order to pro-ide increased access for underser-ed
minority students
8. /oor student facilities "gyms and other athletic facilities( in particular&
A. Large si?e hinders a$ility to react to change
B. )u$stantial percentage of faculty are near retirement age and drawing high salaries
G. Low le-els of student in-ol-ement
F. Low le-els of alumni gi-ing
,. 7igh percentage of classes taught $y ad2unct faculty
1+. 7igh student to faculty ratio "many classes enroll more than 1++ students per class&
IpportunitiesD
1. 0ncrease in percentage of minority students enrolling in college
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*. 'rowth in adult education programs
1. /otential for international and online programs
8. !e-elopment of new disciplines "e.g.( homeland security&
ThreatsD
1. Competition for prospecti-e students from other institutions( especially forEprofit institutions that
focus on career preparation
*. Moreign institutions see# to retain their $est students "students who pre-iously may ha-e pursued an
education in the 9.).&
1. /otential for decreases in state funding le-els
8. Moreign institutions "particularly those in 0ndia& see# to ac>uire pri-ate research funding that
pre-iously was awarded to 9.). institutions primarily
A. /ressure for career preparation curricula rather than those $ased on li$eral arts and comprehensi-e
education approach
B. Commoditi?ation of education
G. /otential for federal regulations go-erning learning outcomes
F. !isasters that disrupt enrollment and operations "e.g.( 7urricane 6atrina disrupted the operations
and financial sta$ility of se-eral institutions in Louisiana&.
ASSURANCE OF LEARNING EXERCISE 1C: STRATEGIC PLANNING AT A LOCAL
COPAN#
PURPOSE:
This exercise is designed to gi-e students practical #nowledge a$out how organi?ations in their
communities are conducting strategic planning. The exercise also gi-es students experience interacting
on a professional $asis with local $usiness leaders.
INSTRUCTIONS:
1. 9se the telephone to contact $usiness owners or top managers. Mind an organi?ation that
does strategic planning. a#e an appointment to -isit with the strategist "president( chief
executi-e officer( or owner& of that $usiness.
*. )ee# answers to the following >uestions during the inter-iewD
a. 7ow does your firm formally conduct strategic planningN Who is in-ol-ed in
the processN !oes the firm hold planning retreatsN 0f yes( how often and
whereN
$. !oes your firm ha-e a written mission statementN 7ow was the statement
de-elopedN When was the statement last changedN
c. What are the $enefits of engaging in strategic planningN
d. What are the ma2or costs or pro$lems in doing strategic planning in your $usinessN
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e. !o you anticipate ma#ing any changes in the strategic planning process at your
companyN 0f yes( please explain.
1. :eport findings in class.
TEACHING NOTES:
Answers to this exercise will -ary for each student. 0n the class discussion( $e sure to emphasi?e the
range of degrees of strategic planning students will li#ely find. Mor instance( the following >uestions can
$e used to guide the class discussion.
7ow many of the organi?ations used formal as opposed to informal planningN 0f a firm uses
informal planning( do they plan more or less fre>uently than those that used a formal planning
approachN
!id the stated mission statements appear accurate for the $usinesses or more aspirational in
natureN
!id the people inter-iewed recogni?e the $enefits of strategic planningN 7ow did they inform
the organi?ations employees of the strategic plans and the $enefits of strategic planningN
What would the students recommend in terms of changes to the strategic planning process used
$y the $usinesses they e-aluatedN
ASSURANCE OF LEARNING EXERCISE 1%: GETTING FAILIAR &ITH SCO
PURPOSE:
This exercise is designed to help strategy students $ecome familiar with the )trategic
anagement Clu$ Inline ")CI&. The )CI offers templates for the case analysis exercises in
this course.
INSTRUCTIONS:
1. 'o to the www.strategyclu$.com We$ site. :e-iew the -arious sections of this site.
*. )elect a section of the )CI site that you feel will $e most useful to you in this class.
Write a oneEpage summary of that section and why you feel it will $enefit you most.
TEACHING NOTES:
Answers to this exercise will -ary for each student. The )CI we$site pro-ides lin#s to we$sites
with information useful for case analysis such as corporate we$sites( $usiness analysis ser-ices(
news sites( maga?ines( go-ernmental sites( and financial ratio analyses. 0t also pro-ides lin#s to
2o$ search we$sites( graduate school we$sites( and we$sites related to strategic planning. )e-eral
software pac#ages are a-aila$le for purchase on the site including a template for generating the
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matrices re>uired for case analyses. Any of these tools may $e mentioned $y students in their
summaries.
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CHAPTER '
ASSURANCE OF LEARNING EXERCISE 'A: EVALUATING ISSION STATEENTS
PURPOSE:
A $usiness mission statement is an integral part of strategic management. 0t pro-ides direction for
formulating( implementing( and e-aluating strategic acti-ities. This exercise will gi-e you practice
e-aluating mission statements( a s#ill that is a prere>uisite to writing a good mission statement.
INSTRUCTIONS:
1. In a clean sheet of paper( prepare a , x 1 matrix. /lace the nine mission statement
components down the left column and the following three companies across the top of
your paper.
*. Write PyesQ or PnoQ in each cell of your matrix to indicate whether you feel the particular
mission statement has included the respecti-e component.
1. Turn your paper in to your instructor for a class wor# grade.
ISSION STATEENTS:
General Motors
Iur mission is to $e the world leader in transportation products and related ser-ices. We aim to
maintain this position through enlightened customer enthusiasm and continuous impro-ement
dri-en $y the integrity( teamwor#( inno-ation and indi-idual respect and responsi$ility of our
employees.
North Carolina Zoo
Iur mission is to encourage understanding of and commitment to the conser-ation of the worlds
wildlife and wild places through recognition of the interdependence of people and nature. We will
do this $y creating a sense of en2oyment( wonder and disco-ery throughout the /ar# and in our
outreach programs.
Samsonite
Iur mission is to $e the leader in the tra-el industry. )amsonites am$ition is to pro-ide
unparalleled dura$ility( security and dependa$ility in all of its products( through leading edge
functionality( features( inno-ation( technology( contemporary aesthetics and design. 0n order to fill
e-ery niche in the tra-el mar#et( )amsonite will see# to create strategic alliances( com$ining our
strengths with other partners in our $rands.
TEACHING NOTES:
E-aluation atrix of ission )tatementsH)olutions
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Components 'eneral otors North Carolina Roo )amsonite
Customers 3es No 3es
/roducts 3es No 3es
ar#ets 3es No 3es
Technology 3es No 3es
Concern for )ur-i-al(
'rowth( /rofita$ility
No No No
/hilosophy 3es 3es 3es
)elfEconcept 3es 3es 3es
Concern for pu$lic image 3es 3es 3es
Concern for employees 3es No No
ASSURANCE OF LEARNING EXERCISE '$: &RITING A VISION AN% ISSION
STATEENT FOR C%ONAL%(S CORPORATION
PURPOSE:
There is always room for impro-eme nt in regar d to an existing -ision and
mission st at e me nt . Currentl y c!onal dS s does not ha-e a -ision st at e me nt
or mission st at e me nt ( so this exercise will as# you to de-el op one.
INSTRUCTIONS:
1. :efer $ac# to page 11 the Cohesion Case for a list of c!onalds Corporations
-alues.
*. In a clean sheet of paper( write a oneEsentence -ision statement for c!onalds.
1. In that same sheet of paper( write a mission statement for c!onalds.
TEACHING NOTES:
This is an excellent exercise that should generate a high degree of interest $ecause most students are
familiar with c!onalds. 5efore they $egin( encourage your students to re-iew the chapter and ma#e
sure they are confident a$out what an effecti-e -ision and mission statement should loo# li#e. Tell your
students to #eep a copy of the -ision and mission statements that they de-elop to refer to future
exercises in the $oo#.
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The statements will -ary from student to student $ut should include the nine essential components of
mission statements.
)ample statements are pro-ided $elow.
Nine Essential Components of ission )tatements
1. Customers
*. /roducts
1. ar#ets
8. Technology
A. Concern for )ur-i-al( 'rowth( /rofita$ility
B. /hilosophy
G. )elfEConcept
F. Concern for /u$lic 0mage
,. Concern for Employees
c!onalds /roposed Oision )tatementD c!onalds stri-es to $e the worlds preferred and
$est >uic# ser-ice restaurant $y pro-iding outstanding >uality( ser-ice( cleanliness( and -alue to
the delight of each and e-ery customer in e-ery restaurant.
c!onalds :e-ised ission )tatementD
Iur mission is to P$e our customers fa-orite place and way to eatQ
.
We will align our worldwide operations around a glo$al strategy called the P/lan to WinQ
centering on the fi-e $asics of an exceptional customer experience H /eople( /roducts(
/lace( /rice( and /romotion.
Through technological leadership( $rand strength( the highest of >uality standards( and
superior people( products and ser-ices( we are committed to impro-ing our operations and
enhancing our customers experience.
We will stri-e to $uild on our strong financial position( dedication to the de-elopment and
enrichment of our employees( commitment to operate as good corporate citi?ens of our
local and glo$al communities( and our strong desire to $e en-ironmentally responsi$le and
support the health( safety( and -itality of our employees and customers.
We will remain dedicated to thoroughly delight our customers( employees( shareholders
and neigh$ors.
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE 'C: &RITING A VISION AN% ISSION
STATEENT FOR # UNIVERSIT#
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PURPOSE:
ost uni-ersities ha-e a -ision and mission statement. The purpose of this exercise is to gi-e you
practice writing a -ision and mission statement for a nonprofit organi?ation such as your own
uni-ersity.
INSTRUCTIONS:
1. Write a -ision statement and mission statement for your uni-ersity. 3our mission statement
should include the nine characteristics summari?ed in Ta$le *EA.
*. :ead your -ision and mission statements to the class.
1. !etermine whether your institution has a -ision andCor mission statement. Loo# in the front
of the college hand$oo#. 0f your institution has a written statement( contact an appropriate
administrator of the institution to in>uire as to how and when the statement was prepared.
)hare this information with the class. Analy?e your colleges mission statement in light of
concepts presented in this chapter.
TEACHING NOTES:
Answers to this exercise will -ary $y institution. 5efore writing a -ision and mission statement for their
uni-ersity( encourage students to thin# carefully a$out what their uni-ersity is "or should $e& and what
its am$itions are "or should $e& for the future. After a first draft is written( encourage your students to
step $ac# and loo# at their mission statements and -ision statements with a discerning eye. The mission
statement should accurately define the reason that the uni-ersity exists and who it wants to ser-e. The
-ision statement should accurately reflect what the uni-ersity wants to $ecome in the future. 9se the
nine components to e-aluate the mission statement. 5e sure to compare what they write to the actual
statements for the uni-ersity andCor $usiness school.
As an example( the Tulane 9ni-ersity -ision and mission statements are pro-ided $elow "see
httpDCCwww.tulane.eduC;GEstrplanCindex.shtml for more information on Tulanes strategic plan&. The
mission statement is coded to identify the nine components that should $e included in mission
statements.
Tulanes Oision )tatementD
Tulane will $e #nown as one of the most distinguished and respected uni-ersities anywhere
$ecause we ha-e $een successful in charting and executing an academic course that is firmly
rooted in our history( location and uni>ue strengths. Tulane will $e an institution that represents
the $est of the modern research uni-ersity( anticipating and meeting national and societal needs at
the dawn of the *1st century and $eyond. We will $e a model for higher education nationally and
internationally.
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Tulane will $e a leader( not a follower( in setting the agenda for higher education. Tulane will $e a
hot$ed of ideas and de$ate on the issues facing our nation and higher education today and in the
future.
Tulane will $e a uni-ersity in ser-ice to the pu$lic( a uni-ersity truly committed to $uilding and
renewing the communities in which its people li-e and wor#( from those in New Irleans and
Louisiana to those in the far reaches of the world where Tulane has a presence. We will $e
engaged in community acti-ities that are inno-ati-e( of the highest >uality and impact( and
integrated with our missions of learning and research.
Tulane will $e a uni-ersity acting as a community with shared aspirations( -alues( and goals( an
institution where the whole is greater than the sum of its parts. 0t will $e a community where
mem$ers welcome di-ersity of all types( and retain and applaud certain -alues( including academic
freedom and shared go-ernance. We will $e the firstEchoice institution for the -ery $est faculty(
staff and students.
Tulanes ission )tatementD
TulaneSs purpose is to create( communicate( and conser-e #nowledge "*& in order to enrich the
capacity of indi-iduals( organi?ations and communities "1( 1& to thin#( to learn( and to act and
lead with integrity and wisdom "B( G&.
Tulane pursues this mission $y culti-ating an en-ironment that focuses on learning and the
generation of new #nowledge "*( G&T $y expecting and rewarding teaching and research of
extraordinarily high >uality and impact "1( G( F( ,&T and $y fostering communityE$uilding initiati-es
as well as scientific( cultural and social understanding that integrate with and strengthen learning
and research "1( 8( B( G( F&. This mission is pursued in the context of the uni>ue >ualities of our
location in New Irleans and our continual aspiration to $e a truly distincti-e international
uni-ersity "A&.
6ey E Nine Essential Components of ission )tatements
1. Customers
*. /roducts
1. ar#ets
8. Technology
A. Concern for )ur-i-al( 'rowth( /rofita$ility
B. /hilosophy
G. )elfEConcept
F. Concern for /u$lic 0mage
,. Concern for Employees
ASSURANCE OF LEARNING EXERCISE '%: CON%UCTING ISSION STATEENT
RESEARCH
PURPOSE:
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The exercise gi-es you the opportunity to study the nature and role of -ision and mission statements in
strategic management.
INSTRUCTIONS:
1. Call -arious organi?ations in your city or country to identify firms that ha-e de-eloped a
formal -ision andCor mission statement. Contact nonprofit organi?ations and go-ernment
agencies in addition to small and large $usinesses. As# to spea# with the director( owner( or
chief executi-e officer of each organi?ation. Explain that you are studying -ision and
mission statements in class and are conducting research as part of a class acti-ity.
*. As# se-eral executi-es the following four >uestions and record their answersD
1. When did your organi?ation first de-elop its -ision andCor mission statementN Who was
primarily responsi$le for its de-elopmentN
*. 7ow long ha-e your current statements existedN When were they last modifiedN Why
were they modified at that point in timeN
1. 5y what process are your firms -ision and mission statements alteredN
8. 7ow are your -ision and mission statements used in the firmN
1. /ro-ide an o-er-iew of your findings to the class.
TEACHING NOTES:
0f insufficient class time is a-aila$le to conduct the entire exercise( an a$$re-iated -ersion of the
exercise could $e accomplished $y as#ing students to search the we$sites of local $usinesses to see
which $usinesses ha-e posted their mission statements on their we$sites. The students could then
contact one or more of these $usinesses and as# the >uestions suggested $y the exercise. Encourage
your students to as# the $usinesses why they posted their mission statement on their we$site.
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CHAPTER )
ASSURANCE OF LEARNING EXERCISE )A: %EVELOPING AN EFE ATRIX FOR
C%ONAL%(S CORPORATION
PURPOSE:
This exercise will pro-ide practice de-eloping an EME atrix. An EME atrix summari?es the results
of an external audit. This is an important tool widely used $y strategists.
INSTRUCTIONS:
1.Loin with two other students in class( and 2ointly prepare an EME atrix for c!onalds
Corporation. :efer $ac# to the Cohesion Case and to Exercise 1A( if necessary( to identify
external opportunities and threats. 9se the information in the )./ 0ndustry )ur-eys that you
copies as part of Assurance of Learning Exercise 1A. 5e sure not to include strategies as
opportunities( $ut do include as many monetary amounts( percentages( num$ers( and ratios as
possi$le.
*.All threeEperson teams participating in this exercise should record their EME total weighted scores
on the $oard. /ut your initials after your score to identify it as your teams.
1.Compare the total weighted scores. Which teams score came closest to the instructors answerN
!iscuss reasons for -ariation in the scores reported on the $oard.
TEACHING NOTES:
This is an excellent exercise that gi-es students PhandsEonQ experience de-eloping an EME atrix.
Although answers will -ary( the following pro-ides the steps and an example of what an EME atrix
for c!onalds should loo# li#e.
Mi-e )teps for !e-eloping an EME atrixD
1& List external factors.
*& Assign a weight from +E1 with + $eing not important and 1 $eing -ery important. The total weights
assigned must e>ual 1.
1& Assign a 1E8 rating to each external factor $ased on effecti-eness of current strategy. 1 % /oor( * %
A-erage( 1 % A$o-e a-erage( and 8 % )uperior.
8& Calculate weight U rating.
A& )um. The highest score is 8 while the lowest is 1. The a-erage is *.A.
OPPORTUNITIES &eight Rati!g &eighte*
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Score
I1D Anticipated 8; growth rate in J): industry. +.+B 1 +.1F
I*D Low fat( low calorie( healthy ham$urger H first on mar#et. +.+G 1 +.+G
I1D any restaurants ha-e outdated appearance. +.+B 1 +.1F
I8D :espond to social changes $y healthy food inno-ations. +.+8 1 +.1*
IAD 0ncreased $e-erage options "'ourmet coffees&. +.+B 1 +.1F
IBD 5rea#fast not a-aila$le at *A; of locations. +.+B 1 +.1F
IGD Loint -entures with retailers can place new locations in
high traffic areas at lower capital cost. +.+1 8 +.1*
IFD Continued focus on corporate social responsi$ility. +.+* * +.+8
I,D 0ntl expansion into emerging mar#ets. +.+B 1 +.1F
I1+D !i-ersify portfolio. +.+1 * +.+B
THREATS &eight Rati!g
&eighte*
Score
T1D ore health conscious customers. +.+G 1 +.*1
T*D Oulnera$ility in older( esta$lished mar#ets to modern
upstarts. +.+8 1 +.1*
T1D 'lo$al economic recession % reduced consumer spending. +.+B 8 +.*8
T8D ar#ets in 9) and E9 are mature and saturated. +.+G 1 +.*1
TAD )u$way and 394 5rands expanding into de-eloping
mar#ets at a higher rate. +.+B * +.1*
TBD Litigation +.+1 1 +.+,
TGD 5rand e>uity at ris#D F+; of restaurants owned $y
franchisees. +.+8 1 +.1*
TFD Contamination of the food supply could damage sales(
reputation( etc. +.+8 8 +.1B
T,D 0ntense price pressure from competitors. +.+G 8 +.*F
T1+D Negati-e pu$lic opinion campaigns. +.+1 * +.+B
TOTAL: 1+,, '+-'
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE )$: THE EXTERNAL ASSESSENT
PURPOSE:
This exercise will help you $ecome familiar with important sources of external information a-aila$le in
your college li$rary. A #ey part of preparing an external audit is searching the 0nternet and examining
pu$lished sources of information for rele-ant economic( social( cultural( demographic( en-ironmental(
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political( go-ernmental( legal( technological( and competiti-e trends and e-ents. External opportunities
and threats must $e identified and e-aluated $efore strategies can $e formulated effecti-ely.
INSTRUCTIONS:
1. )elect a company or $usiness where you currently or pre-iously ha-e wor#ed. Conduct an
external audit for this company. Mind opportunities and threats in recent issues of
newspapers and maga?ines. )earch for information using the 0nternet. 9se the following
We$ sitesD
httpDCCmar#etwatch.multexin-estor.com
www.hoo-ers.com
httpDCCmoneycentral.msn.com
httpDCCfinance.yahoo.com
www.clearstation.com
httpsDCCus.etrade.comCeCtCin-estCmar#ets
*. In a separate sheet of paper( list ten opportunities and ten threats that face this company.
5e specific in stating each factor.
1. 0nclude a $i$liography to re-eal where you found the information.
8. Write a threeEpage summary of your findings( and su$mit it to your instructor.
TEACHING NOTES:
Answers to the exercise will -ary for each organi?ation. This acti-ity is analogous to the 0nternet wor#
needed in preparing a $usiness policy case analysis. This is a good exercise for extra credit. 0nteraction
$etween $usiness students and actual $usiness managers is an important learning experience in this
course.
ASSURANCE OF LEARNING EXERCISE )C: %EVELOPING AN EFE ATRIX FOR #
UNIVERSIT#
PURPOSE:
ore colleges and uni-ersities are em$ar#ing upon the strategicEmanagement process. 0nstitutions are
consciously and systematically identifying and e-aluating external opportunities and threats facing
higher education in your state( the nation( and the world.
INSTRUCTIONS:
1. Loin with two other indi-iduals in class and 2ointly prepare an EME atrix for your
institution.
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*. 'o to the $oard and record your total weighted score in a column that includes the scores
$y all threeEperson teams participating. /ut your initials after your score to identify it as
your teams.
1. Which team -iewed your colleges strategies most positi-elyN Which team -iewed your
colleges strategies most negati-elyN !iscuss the nature of the differences.
TEACHING NOTES:
Answers to this exercise will -ary for each institution. )tudents should use the fi-e steps in
de-eloping an EME atrix.
List #ey external factors as identified in the externalEaudit process. 0nclude a total of 1+E*+ factors
from $oth the opportunities and threats.
Assign to each factor a weight from .+ "not important& to 1.+ "-ery important&. These weights
show the relati-e importance. The total of all the weights should e>ual 1.+.
Assign a 1E8 rating to each factor to indicate how effecti-ely the firms current response strategyD 1
% the response is poor( * % the response is a-erage( 1 % the response is a$o-e a-erage( and 8 % the
response is superior.
ultiply each factors weight $y its rating to get a weighted score.
)um the weighted scores for each -aria$le to determine the total weighted score for the
organi?ation.
An example is pro-ided $elowD
O..ortu!itie/: &eight Rati!g &S
1. 0ncrease in percentage of minority students enrolling in
college
.+A 1 .1A
*. 'rowth in adults pursuing higher education .1+ 1 .1+
1. /otential to reach foreign mar#ets through international
and online programs
.1+ 8 .8+
8. !e-elopment of programs in new disciplines "e.g.(
homeland security&
.1+ 8 .8+
Threat/:
1. Competition for prospecti-e students .1A * .1+
*. Moreign institutions retaining high a$ility students .1+ * .*+
1. /otential for go-ernmental funding decreases .1+ * .*+
8. 0ncreased competition for pri-ate funding .+A * .1+
A. Emphasis on career preparation rather than
comprehensi-e education
.1+ 1 .1+
B. Commoditi?ation of education .+A * .1+
G. /otential for federal regulations of learning outcomes .+A 1 .+A
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F. !isasters that affect operations .+A 1 .+A
Total Weighted )core 1.+ *.AA
ASSURANCE OF LEARNING EXERCISE )%: %EVELOPING A COPETITIVE
PROFILE ATRIX FOR C%ONAL%(S CORPORATION
PURPOSE:
onitoring competitors performance and strategies is a #ey aspect of an external audit. This exercise
is designed to gi-e you practice e-aluating the competiti-e position of organi?ations in a gi-en industry
and assimilating that information in the form of a Competiti-e /rofile atrix.
INSTRUCTIONS:
1. 'ather information from Assurance of Learning Exercise 1A. Also( turn $ac# to the
Cohesion Case and re-iew the section on competitors "pages 11E1A&.
*. In a separate sheet of paper( prepare a Competiti-e /rofile atrix that includes
c!onalds( 5urger 6ing 7oldings( and 3um4 5rands( 0nc.
1. Turn in your Competiti-e /rofile atrix for a class wor# grade.
TEACHING NOTES:
Answers to this >uestion will -ary depending on the factors chosen and the competitors analy?ed.
The following is what a typical answer might loo# li#e.
List critical success factors identified in the internal and external analysis.
Assign to each factor a weight from .+ "not important& to 1.+ "-ery important&. These weights
show the relati-e importance. The total of all the weights should e>ual 1.+.
Assign a 1E8 rating to each factor to descri$e the factorD 1% ma2or wea#ness( * % minor wea#ness(
1 % minor strength( and 8 % ma2or strength.
ultiply each factors weight $y its rating to get a weighted score.
)um the weighted scores for each -aria$le to determine the total weighted score for the
organi?ation.
!o the same for one or more competing organi?ations using the same critical success factors and
weights.
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c%o!a0*1/ #U2 $ra!*/ $urger 3i!g
Critica0 Succe// Factor/ &eight Rati!g Score Rati!g Score Rati!g Score
'lo$al /resence +.11 8 +.A* 1 +.1, * +.*B
ar#et )hare +.+G 8 +.*F 1 +.*1 1 +.18
/roduct Juality +.+, 1 +.*G * +.1F 8 +.1B
Customer )atisfaction +.+F * +.1B 1 +.*8 8 +.1*
Minancial )ta$ility +.18 8 +.AB * +.*F 1 +.8*
Technology +.+F 8 +.1* 1 +.*8 1 +.1B
/roduct !e-elopment +.+A 8 +.*+ 1 +.1A * +.1+
5rand Awareness +.1B 8 +.B8 1 +.8F 1 +.1*
/rice Competiti-eness +.11 8 +.A* 1 +.1, 1 +.*B
!i-ersification +.+G 1 +.*1 8 +.*F 1 +.18
TOTALS: 1+,, )+45 '+56 '+65
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE )E: %EVELOPING A COPETITIVE
PROFILE ATRIX FOR # UNIVERSIT#
PURPOSE:
3our college or uni-ersity competes with all other educational institutions in the world( especially those
in your own state. )tate funds( students( faculty( staff( endowments( gifts( and federal funds are areas of
competiti-eness. Ither areas include athletic programs( dorm life( academic reputation( location( and
career ser-ices. The purpose of this exercise is to gi-e you practice thin#ing competiti-ely a$out the
$usiness of education in your state.
INSTRUCTIONS:
1. 0dentify two colleges or uni-ersities in your state that compete directly with your institution
for students. 0nter-iew se-eral persons( perhaps classmates( who are aware of particular
strengths and wea#nesses of those institutions. :ecord information a$out the two
competing uni-ersities.
*. /repare a Competiti-e /rofile atrix that includes your institution and the two competing
institutions. 0nclude at least the following ten factors in your analysisD
a. Tuition costs
$. Juality of faculty
c. Academic reputation
d. A-erage class si?e
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e. Campus landscaping
f. Athletic programs
g. Juality of students
h. 'raduate programs
i. Location of campus
2. Campus culture
1. )u$mit your Competiti-e /rofile atrix to your instructor for e-aluation.
TEACHING NOTES:
While each answer will -ary for this >uestion( students should follow these guidelines.
A template is pro-ided $elow.
List critical success factors identified in the internal and external analysis.
Assign to each factor a weight from .+ "not important& to 1.+ "-ery important&. These weights
show the relati-e importance. The total of all the weights should e>ual 1.+.
Assign a 1E8 rating to each factor to descri$e the factorD 1% ma2or wea#ness( * % minor wea#ness(
1 % minor strength( and 8 % ma2or strength.
ultiply each factors weight $y its rating to get a weighted score.
)um the weighted scores for each -aria$le to determine the total weighted score for the
organi?ation.
!o the same for one or more competing organi?ations using the same critical success factors and
weights.
9ni-ersity 1D 9ni-ersity *D 9ni-ersity 1D
Critical )uccess Mactors Weight :ating W) :ating W) :ating W)
Tuition costs
Juality of faculty
Academic reputation
A-erage class si?e
Campus facilities
Athletic programs
Juality of students
'raduate programs
Location of campus
Campus culture
Totals 1.+

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CHAPTER 6: The I!ter!a0 A//e//"e!t
ASSURANCE OF LEARNING EXERCISE 6A: PERFORING A FINANCIAL RATIO
ANAL#SIS FOR C%ONAL%S CORPORATION

PURPOSE:
Minancial ratio analysis is one of the $est techni>ues for identifying and e-aluating internal strengths and
wea#nesses. /otential in-estors and current shareholders loo# closely at firms financial ratios( ma#ing
detailed comparisons to industry a-erages and to pre-ious periods of time. Minancial ratio analyses
pro-ide -ital input information for de-eloping an 0ME atrix.
INSTRUCTIONS:
1. In a separate sheet of paper( num$er from 1 to *+. :eferring to c!onalds income
statement and $alance sheet "pp 11E1*&( calculate *+ financial ratios for *++F for your
company. 9se Ta$le 8EB as a reference.
*. 0n a second column( indicate whether you consider each ratio to $e a strength( a wea#ness(
or a neutral factor for c!onalds.
1. 'o to the We$ sites in Ta$le 8EA that calculate c!onalds financial ratios( without your
ha-ing to pay a su$scription "fee& for the ser-ice. a#e a copy of the ratio information
pro-ided and record the source. :eport this research to your classmates and your
professor.
TEACHING NOTES:
Ratio 7',,58 c%o!a0*(/ E9a0uatio!
Liquidity Ratios
Current 1.1, )trength
Juic# 1.18 )trength
Leverage Ratios
!e$t to total assets .1B Neutral
!e$t to e>uity 1.11 Neutral
LongEterm de$t to e>uity +.GB Neutral
TimesEinterestEearned ratio 1*.GF )trength
Activity Ratios
Mixed Assets Turno-er 1.1B Neutral
Total Assets Turno-er +.F+ Wea#ness
0n-entory Turno-er 1*,.8 )trength
Profitaility Ratios
'ross profit margin 1B.G; Neutral
Iperating profit margin *G.8; Neutral
Net profit margin 1F.1; )trength
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:eturn on assets 1A.*; )trength
:eturn on e>uity 1*.*; Neutral
/riceEearnings ratio 1B.+G Neutral
E/) 1.F1 Neutral
Gro!th Ratios
)ales 'rowth ; "1Eyear& B.1; Neutral
Net 0ncome 'rowth ; "1Eyear& *1.F; )trength
Earnings per share 'rowth ; "1Eyear& 1+; Neutral
!i-idends per share 'rowth ; "1Eyear& *,; Neutral
ASSURANCE OF LEARNING EXERCISE 6$: CONSTRUCTING AN IFE ATRIX FOR
C%ONAL%S CORPORATION
PURPOSE:
This exercise will gi-e you experience de-eloping an 0ME atrix. 0dentifying and prioriti?ing factors to
include in an 0ME atrix fosters communication among functional and di-isional managers. /reparing
an 0ME atrix allows human resource( mar#eting( productionCoperations( financeCaccounting( :.!(
and management information systems managers to articulate their concerns and thoughts regarding the
$usiness condition of the firm. This results in an impro-ed collecti-e understanding of the $usiness.
INSTRUCTIONS:
1. Loin with two other indi-iduals to form a threeEperson team. !e-elop a team 0ME atrix
for c!onalds.
*. Compare your teams 0ME atrix to other teams 0ME atrices. !iscuss any ma2or
differences.
1. What strategies do you thin# would allow c!onalds to capitali?e on its ma2or strengthsN
What strategies would allow c!onalds to impro-e upon its ma2or wea#nessesN
TEACHING NOTES:
The steps for completing an 0ME atrix are as followsD
1. List #ey internal factors as identified in the internalEaudit process. 9se a total of ten to twenty
internal factors( including $oth strengths and wea#nesses. List strengths first and then wea#nesses.
*. Assign a weight that ranges from .+ "not important& to 1.+ "all important& to each factor. The
weight assigned to a gi-en factor indicates the relati-e importance of the factor to $eing successful
in the firms industry. The sum of all weights must e>ual 1.+.
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1. Assign a 1E8 rating to each factor to indicate whether that factor represents a ma2or wea#ness "1&( a
minor wea#ness "*&( minor strength "1&( or ma2or strength "8&. )trengths must recei-e a 1 or 8 and
wea#nesses must recei-e a 1 or *.
8. ultiply each factors weight $y its rating to determine its weighted score for each -aria$le.
A. )um the weighted scores for each -aria$le to determine the total weighted score for the
organi?ation.
An example is pro-ided $elowD
Stre!gth/: &eight Rati!g &S
)1D 7ighly successful and recogni?ed ad-ertising. "0m
lo-ing it& +.+F 8 +.1*
)*D )trong employee training and promotion mostly from
within. +.+* 1 +.+B
)1D )trong 0n-estor :eputation. +.+B 8 +.*8
)8D )trongest 5rand 0mage. +.+G 1 +.*1
)AD c!onalds is recogni?ed as a community oriented(
socially responsi$le company. +.+1 * +.+*
)BD )trong 'lo$al /resence +.+F 1 +.*8
)GD 9se pure ingredients and ta#e food safety -ery
seriously. +.+8 1 +.1*
)FD Consistently solid financial performance. +.+A 1 +.1A
),D )trong inno-ation and product de-elopment. +.+1 * +.+B
)1+D Large real estate portfolio. +.+* 1 +.+B
)11D Economies of )cale H Nearest competitor in 9.). is
half c!onalds si?e. +.+A 8 +.*+
&ea:!e//e/: &eight Rati!g &S
W1D Lowest Customer satisfaction rating in the industry
"B,&( e-en $elow 0:). +.1+ 1 +.1+
W*D 7igh employee turno-er in their restaurants. +.+8 * +.+F
W1D Assem$ly line approach ma#es it difficult and costly
to adapt to changing trends( li#e organic foods and
healthier offerings. +.+F * +.1B
W8D Core product line out sync with trends toward
healthier lifestyles for adults and children. 7ighly negati-e
health image ")uper si?e me4& +.+G * +.18
WAD )ales demonstrates seasonal effects. +.+* * +.+8
WBD F+; of restaurants are franchise owned( placing
image and reputation in others hands. +.+A * +.1+
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WGD I-erEsaturation of real estate in the 9). +.+8 1 +.1*
WFD )truggles with fluctuations in operating and net
profits( which has impact on in-estor relations. +.+1 1 +.+,
W,D G+; of operating re-enues and 8A; of de$t are in
foreign currency. +.+B 1 +.1F
TOTAL: 1+,, '+5-
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE 6C: CONSTRUCTING AN IFE ATRIX FOR
# UNIVERSIT#
PURPOSE:
This exercise gi-es you the opportunity to e-aluate your uni-ersitys ma2or strengths and wea#nesses.
As will $ecome clearer in the next chapter( an organi?ations strategies are largely $ased on stri-ing to
ta#e ad-antage of strengths and impro-ing on wea#nesses.
INSTRUCTIONS:
1. Loin with two other indi-iduals to form a threeEperson team. !e-elop a team 0ME atrix
for your uni-ersity. 3ou may use the strengthsCwea#nesses determined in Assurance of
Learning Exercise 1!.
*. 'o to the $oard and diagram your teams 0ME atrix.
1. Compare your teams 0ME atrix to other teams 0ME atrices. !iscuss any ma2or
differences.
8. What strategies do you thin# would allow your uni-ersity to capitali?e on its ma2or
strengthsN What strategies would allow your uni-ersity to impro-e upon its ma2or
wea#nessesN
TEACHING NOTES:
Answers to this exercise will -ary for each institution. The matrix $elow can $e used as a guide. )ome
possi$le factors to consider includeD >uality of faculty( >uality of students( accreditation( si?e of
endowment( location( a-aila$le technology( academic ran#ings( and si?e of classes.
3e; I!ter!a0 Factor &eight Rati!g &S
Stre!gth/
Location .1+ 1 .1+
/u$lic institution with strong state support .1+ 1 .1+
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!i-erse community .+1 8 .1*
Oisionary leadership .1+ 8 .8+
:an#ed programs .1+ 1 .1+
Accreditation of ma2or programs .+A 1 .1A
Tuition is low compared to other institutions .+* 1 .+B
odern facilities for high -isi$ility programs .+A 8 .*+
&ea:!e//e/
9r$an campus "percei-ed safety issues and lac# of
space for expansion&
.+A 1 .+A
/ressure to admit marginal students .+A 1 .+A
/oor student facilities .1+ 1 .1+
Large si?e .+* 1 .+*
Ilder( more expensi-e faculty .+1 * .+B
Low le-els of student in-ol-ement .+A * .1+
/oor alumni in-ol-ement and gi-ing .+A 1 .+A
/oor endowment .+A 1 .+A
7igh percentage of classes taught $y ad2uncts .+1 * .+B
7igh studentEtoEfaculty ratio .+* * .+8
Totals 1.+ *.81
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CHAPTER <: Strategie/ i! Actio!
ASSURANCE OF LEARNING EXERCISE <A: &HAT STRATEGIES SHOUL%
C%ONAL%(S PURSUE IN ',11=',1)>
PURPOSE:
0n performing strategic management case analysis( you can find information a$out the respecti-e
companys actual and planned strategies. Comparing what is planned -ersus what you would ha-e
recommended is an important part of case analysis. !o not recommend what the firm actually plans(
unless inEdepth analysis of the situation re-eals those strategies to $e $est among all feasi$le
alternati-es. This exercise gi-es you experience conducting li$rary and 0nternet research to determine
what c!onalds should do in *+11E*+11.
INSTRUCTIONS:
1. Loo# up c!onalds "C!& and 5urger 6ing 7oldings "56C& using the sites pro-ided in
Ta$le 8EA. Mind some recent articles a$out firms in this industry. )can oodys( !un .
5radstreet( and )tandard . /oors pu$lications for information.
*. )ummari?e your findings in a threeEpage report titled P)trategies 5eing /ursued $y
c!onalds in *+1+.Q
TEACHING NOTES:
Encourage your students to find the resources needed to complete this assignment on the 0nternet or in
li$rary data$ases to complete this assignment. 5elow is a list of potential strategies that were de-eloped
following a c!onalds case analysis.
1. /lan to Win $y de-eloping a dualEtier mar#et strategy in 9.). And European mar#ets.
a. cCafe H more upscale( healthier( adult focus
$. c!onaldVs H traditional( low cost( #id focus
*. 5uy $ac#( remodel( reE$adge( reEimage( reEsell 1+++ restaurants per year in 9.). and
Europe.
1. Expand more rapidly in China( 0ndia( 5ra?il $y adding *+++ new restaurants per year.
8. Continue cCafe $e-erage rollout in 9.). "FA++& and Europe "*1++& through *+11.
A. Continue to expand operating hours to include $rea#fast( late night in 9.). "**++& and
Europe "F++& through *+11.
B. !e-elop and rollout of PgreenP product pac#aging in *+1+.
G. :estructure to support /lan To Win strategy.
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE <$: EXAINING STRATEG# ARTICLES
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PURPOSE:
)trategy articles can $e found wee#ly in 2ournals( maga?ines( and newspapers. 5y reading and studying
strategy articles( you can gain a $etter understanding of the strategicEmanagement process. )e-eral of
the $est 2ournals in which to find corporate strategy articles are Advanced Management "ournal#
$usiness %ori&ons# Long Range Planning# "ournal of $usiness Strategy( and Strategic Management
"ournal. These 2ournals are de-oted to reporting the results of empirical research in management. They
apply strategicEmanagement concepts to specific organi?ations and industries. They introduce new
strategicEmanagement techni>ues and pro-ide short case studies on selected firms.
Ither good 2ournals in which to find strategicEmanagement articles are %arvard $usiness Revie!#
Sloan Management Revie!# $usiness %ori&ons# California Management Revie!# Academy of
Management Revie!# Academy of Management "ournal# Academy of Management '(ecutive#
"ournal of Management( and "ournal of Small $usiness Management.
0n addition to 2ournals( many maga?ines regularly pu$lish articles that focus on $usiness strategy.
)e-eral of the $est maga?ines in which to find applied strategy articles are )un*s $usiness Month#
+ortune# +ores# $usiness ,ee-# .nc/ Maga&ine( and .ndustry ,ee-. Newspapers such as 0SA 1oday(
,all Street "ournal( Ne! 2or- 1imes( and $arron*s co-er strategy e-ents when they occurWfor
example( a 2oint -enture announcement( a $an#ruptcy declaration( a new ad-ertising campaign start(
ac>uisition of a company( di-estiture of a di-ision( a chief executi-e officers hiring or firing( or a
hostile ta#eo-er attempt.
0n com$ination( 2ournal( maga?ine( and newspaper articles can ma#e the strategic management course
more exciting. They allow current strategies of profit and nonprofit organi?ations to $e identified and
studied.
INSTRUCTIONS:
1. 'o to your college li$rary and find a recent 2ournal article that focuses on a strategicE
management topic. )elect your article from one of the 2ournals listed a$o-e( not from a
maga?ine. Copy the article and $ring it to class.
*. 'i-e a threeEminute oral report summari?ing the most important information in your article.
0nclude comments gi-ing your personal reaction to the article. /ass your article around in
class.
TEACHING NOTES:
This is an excellent acti-ity that introduces students to academic 2ournals and as#s students to
actually read and comment on a 2ournal article on a strategic management topic. This may $e the
only occasion in a students undergraduate education that he or she is as#ed to comment on an
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academic 2ournal article "li#e those found in the Academy of Management "ournal or the
Strategic Management "ournal&.
ASSURANCE OF LEARNING EXERCISE <C: CLASSIF#ING SOE #EAR ',,-
STRATEGIES
PURPOSE:
This exercise can impro-e your understanding of -arious strategies $y gi-ing you experience classifying
strategies. This s#ill will help you use the strategyEformulation tools presented later. Consider the
following F actual yearE*++, strategies $y -arious firmsD
1. icrosoft de-el oped a new -ideo camer a for its X$ox 1B+ consol e that
allowed player s to cont rol games with the mo-eme nt of their $odi es(
rat her than $y holding a plastic wand in their hands( as re>uired with
Nint endoS s popul ar Wii game consol e.
*. Wells Margo and 5an# of America $egan to Ytweet Y E post mess ages of
18+ char act er s or less on Twitt er. com( so cust omer s could see product
feat ur es. 5an#s are also put ti ng mar#et i ng -ideos on 3ouTu$e.
1. The 9nited 6ingdomS s huge telecom firm( 5T 'roup /LC( cut 1A( +++
mor e 2o$s on top of the 1A( +++ the prior year.
8. Lapanes e elect roni cs ma#er /anasoni c Corp. ac>uir ed Isa#a( LapanE
$ased )anyo Electric Company.
A. News Corp. sold off many of its tel e-ision st ations.
B. ore than 1(+++ Chrysl er deal ers closed their doors and ceas ed doing
$usines s.
G. 'ermanyS s etro A'( the worldS s fourt hE larges t ret ail er aft er WalE art(
Carrefour )A( and 7ome !epot ( is expandi ng aggr es si -el y into China.
F. Time Warner plans to spin off or sell part of AIL.
INSTRUCTIONS:
1. In a separate sheet of paper( num$er from 1 to F. These num$ers correspond to the
strategies descri$ed a$o-e.
*. What type of strategy $est descri$es the F actions citedN 0ndicate your answers.
1. Exchange papers with a classmate and grade each others paper as your instructor gi-es the
right answers.
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TEACHING NOTES:
)tudents should classify these strategies $ased on the alternati-e strategies descri$ed in Ta$le AE8.
E?a".0e Strateg; C0a//ificatio!
1. icrosoft de-el oped a new -ideo camer a
for its X$ox 1B+ consol e.
/roduct !e-elopment
*. Wells Margo and 5an# of America $egan to
Ytweet Y so cust omer s could see product
feat ur es. 5an#s are also put ting mar#eti ng
-ideos on 3ouTu$e.
ar#et /enetration
1. The 9nited 6ingdomS s huge tel ecom firm(
5T 'roup /LC( cut 1A( +++ mor e 2o$s on top
of the 1A( +++ the prior year.
:etrenchment
8. Lapanes e elect ronics ma#er /anasoni c
Corp. ac>uir ed Isa#a( LapanE $ased )anyo
Electric Company.
7ori?ontal 0ntegration
A. News Corp. sold off many of its tele-ision
st ati ons.
!i-estiture
B. ore than 1(+++ Chrysl er deal er s closed
their doors and ceas ed doing $usines s.
Li>uidation
G. 'ermanyS s etro A'( the worldS s fourt hE
largest ret ail er( is expandi ng aggr es si -el y
into China.
ar#et !e-elopment
F. Time Warner plans to spin off or sell part of
AIL.
!i-estiture
ASSURANCE OF LEARNING EXERCISE <%: HO& RIS3# ARE VARIOUS
ALTERNATIVE STRATEGIES>
PURPOSE:
This exercise focuses on how ris#y -arious alternati-e strategies are for organi?ations to pursue.
!ifferent degrees of ris# are $ased largely on -arying degrees of e(ternality( defined as mo-ement
away from present $usiness into new mar#ets and products. 0n general( the greater the degree of
externality( the greater the pro$a$ility of loss resulting from unexpected e-ents. 7ighEris# strategies
generally are less attracti-e than lowEris# strategies.
INSTRUCTIONS:
1. In a separate sheet of paper( num$er -ertically from 1 to 1+. Thin# of 1 as Pmost ris#yQ( *
as Pnext most ris#y( and so forth to 1+( Pleast ris#y.Q
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*. Write the following strategies $eside the appropriate num$er to indicate how ris#y you
$elie-e the strategy is to pursueD hori?ontal integration( related di-ersification( li>uidation(
forward integration( $ac#ward integration( product de-elopment( mar#et de-elopment(
mar#et penetration( retrenchment( and unrelated di-ersification.
1. 'rade your paper as your instructor gi-es you the right answers and supporting rationale.
Each correct answer is worth 1+ points.
TEACHING NOTES:
The following strategies are listed in terms of ris#iness( where the first is the most ris#y and the tenth is
the least ris#y. I$-iously( there are many -ariations of each of these strategies( so the se>uential
ordering is only suggesti-eT it does not always hold true.
1. :elated di-ersification
*. 9nrelated di-ersification
1. Li>uidation
8. 7ori?ontal integration
A. Morward integration
B. 5ac#ward integration
G. ar#et de-elopment
F. /roduct de-elopment
,. !i-estiture
1+. :etrenchment
11. ar#et penetration
EXPERIENTIAL EXERCISE <E: %EVELOPING ALTERNATIVE STRATEGIES FOR #
UNIVERSIT#
PURPOSE:
0t is important for representati-es from all areas of a college or uni-ersity to identify and discuss
alternati-e strategies that could $enefit faculty( students( alumni( staff( and other constituencies. As you
complete this exercise( notice the learning and understanding that occurs as people express differences
of opinion. :ecall that the process of planning is more important than the document/
INSTRUCTIONS:
1. :ecall or locate the external opportunityCthreat and internal strengthCwea#ness factors that
you identified as part of Exercise 1!. 0f you did not do that exercise( discuss now as a class
important external and internal factors facing your college or uni-ersity.
*. 0dentify and put on the chal#$oard alternati-e strategies that you feel could $enefit your
college or uni-ersity. 3our proposed actions should allow the institution to capitali?e on
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particular strengths( impro-e upon certain wea#nesses( a-oid external threats( andCor ta#e
ad-antage of particular external opportunities. List 1+ possi$le strategies on the $oard.
Num$er the strategies as they are written on the $oard.
1. In a separate sheet of paper( num$er from 1 to 1+. E-eryone in class should indi-idually
rate the strategies identified( using a 1 to 1 scale( where 1 % 0 do not support
implementation( * % 0 am neutral a$out implementation( and 1 % 0 strongly support
implementation. 0n rating the strategies( recogni?e that your institution cannot do
e-erything desired or potentially $eneficial.
8. 'o to the $oard and record your ratings in a row $eside the respecti-e strategies. E-eryone
in class should do this( going to the $oard perhaps $y rows in the class.
A. )um the ratings for each strategy so that a prioriti?ed list of recommended strategies is
o$tained. This prioriti?ed list reflects the collecti-e wisdom of your class. )trategies with
the highest score are deemed $est.
B. !iscuss how this process could ena$le organi?ations to achie-e understanding and
commitment from indi-iduals.
G. )hare your class results with a uni-ersity administrator and as# for comments regarding the
process and top strategies recommended.
TEACHING NOTES:
Answers to this exercise will -ary for each institution( $ut generally include the following types of
actionsD
1. :aiseClower tuition
*. 0mpro-e student union
1. 5uild new dorms
8. 5uild new par#ing lots
A. Add more online courses
B. Expand fundraising acti-ities
G. Expand experiential learning acti-ities
F. 0ncrease collegeEsponsored consulting
,. Iffer new ma2ors
1+. 0mpro-e 2o$ placement acti-ities of the college
ASSURANCE OF LEARNING EXERCISE <F: LESSONS IN %OING $USINESS
GLO$ALL#
PURPOSE:
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The purpose of this exercise is to disco-er some important lessons learned $y local $usinesses that do
$usiness internationally.
INSTRUCTIONS:
Contact se-eral local $usiness leaders $y telephone. Mind at least three firms that engage in international
or export operations. Oisit the owner or manager of each $usiness in person. As# the $usiness person
to gi-e you se-eral important lessons that his or her firm has learned in glo$ally doing $usiness. :ecord
the lessons on paper and report your findings to the class.
TEACHING NOTES:
This is an excellent pro2ect for extra credit or for a class paper or pro2ect. Encourage students to
consider the primary challenges reflected in the $usiness leaders responses a$out competing in a glo$al
$usiness. Mor instance( how did the lessons learned relate to strategic planningN Could the $usinesses
ha-e $een $etter prepared for the situations they faced if they had applied strategic planning principlesN
!id the lessons relate to differences in culture $etween the 9.). and the other countries where the
$usinesses competedN 7ow could other $usinesses $etter prepare for cultural differencesN A good way
to end this exercise is to de-elop a list of $est practices $ased on the students reports.
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CHAPTER 4
ASSURANCE OF LEARNING EXERCISE 4A: %EVELOPING A S&OT ATRIX FOR
C%ONAL%(S
PURPOSE:
The most widely used strategyEformulation techni>ue among American firms is the )WIT atrix.
This exercise re>uires de-elopment of a )WIT atrix for c!onalds. atching #ey external and
internal factors in a )WIT atrix re>uires good intuiti-e and conceptual s#ills. 3ou will impro-e with
practice in de-eloping a )WIT atrix.
INSTRUCTIONS:
:ecall from Exercise 1A that you already may ha-e determined c!onalds external opportunitiesC
threats and internal strengthsCwea#nesses. This information could $e used to complete this exercise.
Mollow the steps outlines as followsD
1. In a separate sheet of paper( construct a large nineEcell diagram that will represent your
)WIT matrix. Appropriately la$el the cells.
*. Appropriately record c!onalds opportunitiesCthreats and strengthsCwea#nesses in your
diagram.
1. atch external and internal factors to generate feasi$le alternati-e strategies for
c!onalds. :ecord )I( WI( )T( and WT strategies in appropriate cells of the )WIT
atrix. 9se the proper notation to indicate the rationale for the strategies. 3ou do not
necessarily ha-e to ha-e strategies in all four strategy cells.
8. Compare your )WIT atrix to another students )WIT atrix. !iscuss any ma2or
differences.
TEACHING NOTES:
There are eight steps in-ol-ed in constructing a )WIT atrix.
1. List the firms #ey external opportunities.
*. List the firms #ey external threats.
1. List the firms #ey internal strengths.
8. List the firms #ey internal wea#nesses.
A. atch internal strengths with external opportunities and record the resultant )I )trategies in the
appropriate cell.
B. atch internal wea#nesses with external opportunities and record the resultant WI )trategies.
G. atch internal strengths with external threats and record the resultant )T )trategies.
F. atch internal wea#nesses with external threats and record the resultant WT )trategies.
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0n class( as# students to re-eal feasi$le strategies formulated in the )WIT atrix cells. The following
is a possi$le answer to this exercise.
Stre!gth/ @ S
1. 7ighly successful and
recogni?ed ad-ertising.
*. )trong employee training and
promotion mostly from within.
1. )trong 0n-estor :eputation.
8. )trongest 5rand 0mage.
A. :ecogni?ed as a community
oriented( socially responsi$le.
B. )trong 'lo$al /resence
G. 9se pure ingredients and ta#e
food safety -ery seriously.
F. Consistently solid financial
performance.
,. )trong inno-ation and product
de-elopment.
1+. Large real estate portfolio.
11. Economies of )cale
&ea:!e//e/ @ &
1. Lowest Customer satisfaction
rating in the industry.
*. 7igh employee turno-er in their
restaurants.
1. Assem$ly line approach ma#es it
difficult and costly to adapt
8. Core product line out of sync with
healthy lifestyle trends.
A. )ales demonstrate seasonal
effects.
B. F+; of restaurants are franchise
owned.
G. I-erEsaturation of real estate in
the 9).
F. )truggles with fluctuations in
operating and net profits.
,. Moreign currency re-enue and
de$t.
O..ortu!itie/ @ O
1. 'rowth in Juic# )er-ice
:estaurant industry.
*. Low fat( low calorie( healthy
ham$urger
1. any restaurants ha-e outdated
appearance.
8. 7ealthier lifestyle trends.
A. 0ncreased $e-erage options.
B. 5rea#fast not a-aila$le at *A;
of locations.
G. /otential for 2oint -entures with
retailers.
F. Mocus on corporate social
responsi$ility( sustaina$ility.
,. 0nternational expansion into
emerging mar#ets.
1+. !i-ersify portfolio.
SO Strategie/
1. !e-elop and hea-ily mar#et
more en-ironmentally friendly
product pac#aging ")1(),(IF&
*. *. Accelerate growth in
China( 0ndia( 5ra?il ")8()B(I,&
1. !e-elop a PhealthierQ
ham$urger( and $e first on the
mar#et "),(I*&
8. Continue to introduce healthier
product offerings into the menu
"),GI8&
A. Ipen a new( healthier( more
upscale chain
")1+()11(I8(I1+&
&O Strategie/
1. :emodel restaurants in 9) and
Europe "W1(I1&
*. *. :oll out cCafe $e-erage
ser-ice into greater num$er of
9) and E9 restaurants
"W1(IA&
1. 0ncrease operating hours to
include $rea#fast in more 9)
and E9 locations to increase
return on assets "W1(IB&
8. 9se real estate holdings for
2oint -enture or new restaurant
chain "WG(I1+&
Threat/ @ T
1. ore health conscious
customers.
*. Oulnera$le in older( esta$lished
mar#ets to upstarts
1. 'lo$al economic recession.
8. ar#ets in 9) and E9 are
mature and saturated.
A. Competitors expanding into
de-eloping mar#ets.
B. LitigationD
G. 5rand e>uity at ris#.
F. Mood contamination could
ST Strategie/
1. 0ncrease ad-ertising focus on
healthier food offerings and $etter
nutritional info ")1(T1&
*. 7igh focus on purity and >uality
ingredients ")G(TF&
1. 0ncrease !ollar enu items to
increase customer traffic in down
economy ")F()11(T1&
8. )tar-e out competitors $y
le-eraging supply chain and
economies of scale to lower prices
")F()11(T,&
&T Strategie/
1. 0mplement a franchise P$uy$ac#(
shapeEup( and sellQ program(
financed $y selling off some
company owned stores "W1(TG&
*. *. 0ncrease restaurant
automation to lower operating
costs( employ less la$or
"W1(W1(T1(T,&
1. 1. Trim operations in the 9)
and Europe and focus on
de-eloping areas where health is
of less concern "W8(T1(T8&
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damage sales( reputation( etc.
,. 0ntense price pressure from
competitors.
1+. Negati-e pu$lic opinion
campaigns
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE 4$: %EVELOPING A SPACE ATRIX FOR
C%ONAL%S
PURPOSE:
)hould c!onalds pursue aggressi-e( conser-ati-e( competiti-e( or defensi-e strategiesN !e-elop a
)/ACE atrix for c!onalds to answer this >uestion. Ela$orate on the strategic implications of your
directional -ector. 5e specific in terms of strategies that could $enefit c!onalds.
INSTRUCTIONS:
1. Loin with two other persons in class and de-elop a 2oint )/ACE atrix for c!onalds.
*. !iagram your )/ACE atrix on the $oard. Compare your matrix with other teams
matrices.
1. !iscuss the implications of your )/ACE atrix.
TEACHING NOTES:
This is a fun "and learning focused& way to approach this concept. As# teams of students to prepare
this in class. 5elow is an example layout of the )/ACE atrix for c!onalds. :emem$er that
student responses may -ary $ecause they select sets of -aria$les and assign the -alues for those
-aria$les.
)teps in de-eloping a )/ACE atrixD
1. )elect a set of -aria$les to define Minancial /osition( Competiti-e /osition( )ta$ility /osition( and
0ndustry /osition.
*. Assign a numerical -alue ranging from K1 "worst& to KB "$est& to each of the -aria$les that ma#e
up the M/ and 0/ dimensions. Assign a numerical -alue ranging from H1 "$est& to HB "worst& to
each of the -aria$les that ma#e up the )/ and C/ dimensions.
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1. Compute an a-erage score for M/( C/( 0/( and )/ $y summing the -alues gi-en to the -aria$les of
each dimension and di-iding the num$er of -aria$les included in the respecti-e dimension.
8. /lot the a-erage scores for M/( 0/( )/( and C/ on the appropriate axis in the )/ACE atrix.
A. Add the two scores on the xEaxis and plot the resultant point on X. Add the two scores on the yE
axis and plot the resultant point on 3. /lot the intersection of the new xyEpoint.
B. !raw a directional -ector from the origin of the )/ACE atrix through the new intersection
point. This -ector re-eals the type of strategies recommended for the organi?ationD
aggressi-e( competiti-e( defensi-e( or conser-ati-e.
3 a(is
0ndustry /osition K8.++ K1 worst to KB $est X axisD 8.+ E1.BG % *.11
Competiti-e /osition E1.BG E1 $est to EB worst
2 a(is
Minancial /osition K8.F1 K1 worst to KB $est 3 axisD 8.F1 H *.BG % *.1B
)ta$ility /osition E*.BG E1 $est to EB worst
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
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ASSURANCE OF LEARNING EXERCISE 4C: %EVELOPING A $CG ATRIX FOR
C%ONAL%(S
PURPOSE:
/ortfolio matrices are widely used $y multidi-isional organi?ations to help identify and select strategies
to pursue. A 5C' analysis identifies particular di-isions that should recei-e fewer resources than
others. 0t may identify some di-isions to $e di-ested. This exercise can gi-e you practice de-eloping a
5C' atrix.
INSTRUCTIONS:
1. /lace the following fi-e column headings at the top of a separate sheet of paperD !i-isions(
:e-enues( /rofits( :elati-e ar#et )hare /osition( and 0ndustry 'rowth :ate. !own the far left of
your page( list C!s geographic di-isions. Now turn $ac# to the Cohesion Case and find
information to fill in all the cells in your data ta$le from page 1+.
*. Complete a 5C' atrix for c!onalds.
1. Compare your 5C' atrix to other students matrices. !iscuss any ma2or differences.
TEACHING NOTES:
!i-isions :e-enues /rofits ar#et )hare
/osition
; 0ndustry
'rowth :ate
9nited )tates =F(+GF(1++ =1(+A,(G++ 1 wea#
Europe ,(,**(,++ *(B+F(+++ 1 wea#
A/EA 8(*1+(F++ F1F(F++ 1 good
:est of the World 1(*,+(8++ "81(B++& 1 good
Tota0 A')B<''B6,, A4B66'B-,, 1
According to the 5C' atrix( all of c!onalds geographic di-isions fall in the stars category.
Relative Market Share
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Low 0.0 Medium .50 High 1.0
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Stars Question Marks
Cash Cows Dogs
ASSURANCE OF LEARNING EXERCISE 4%: %EVELOPING A CSP FOR
C%ONAL%(S
PURPOSE:
This exercise can gi-e you practice de-eloping a Juantitati-e )trategic /lanning atrix "J)/& to
determine the relati-e attracti-eness of -arious strategic alternati-es.
INSTRUCTIONS:
1. Loin with two other students in class to de-elop a 2oint J)/ for c!onalds.
*. 'o to the $lac#$oard and record your strategies and their )um Total Attracti-eness )cores.
Compare your teams strategies and sum total attracti-eness scores to those of other teams.
5e sure not to assign the same A) score in a gi-en row. :ecall that dashes should $e
inserted all the way across a gi-en row when used.
1. !iscuss any ma2or differences.
TEACHING NOTES:
!o this exercise in teams and allow teams to record their strategies and sum total attracti-eness scores
on the $oard. !iscuss the nature of differences in scores among teams.
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Medium 0
Low -20
Industry Sales
Growth Rate
A/E
A
:est of
World
Europe
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)teps in de-eloping a J)/D
1. a#e a list of the firms #ey external opportunitiesCthreats and internal strengthsCwea#nesses in the
left column of the J)/.
*. Assign weights to each #ey external and internal factor.
1. Examine the )tage * "matching& matrices and identify alternati-e strategies that the organi?ation
should consider implementing. :ecord these in the top row of the J)/. 'roup the strategies into
mutually exclusi-e sets if possi$le.
8. !etermine the Attracti-eness )cores "A)&D 1 % not attracti-e( * % somewhat attracti-e( 1 %
reasona$ly attracti-e( and 8 % highly attracti-e. 9se a dash to indicate that a #ey factor does not
affect the choice $eing made.
A. Compute the Total Attracti-eness )core $y multiplying the weights $y the A) in each row. The
higher the Total Attracti-eness )core( the more attracti-e the strategic alternati-e.
B. Compute the )um Total Attracti-eness )core.
Note that the weights used for the #ey factors should $e identical to those used in the EME and 0ME
matrices for c!onalds. The options will -ary from student to student $ecause they must choose their
own strategies. 0n this example( option 1 is to introduce more healthy offerings and option * is to focus
on health food ad-ertising.
&eight
I!tro*uce ore
Hea0th; Offeri!g/
Focu/ o! Hea0th;
A*9erti/i!g

AS TAS AS TAS
Stre!gth/ @ S

7ighly successful and recogni?ed ad-ertising. +.+F +.+F
1 +.*8 8 +.1*
)trong employee training and promotion. +.+* +.+*
ZZZ ZZZ ZZZ ZZZ
)trong in-estor reputation. +.+B +.+B
ZZZ ZZZ ZZZ ZZZ
)trongest 5rand 0mage. +.+G +.+G
* +.18 1 +.+G
C! recogni?ed as a community oriented( socially
responsi$le.
+.+1 +.+1
ZZZ ZZZ ZZZ ZZZ
)trong 'lo$al /resence +.+F +.+F
ZZZ ZZZ ZZZ ZZZ
9se pure ingredients and ta#e food safety -ery seriously. +.+8 +.+8
ZZZ ZZZ ZZZ ZZZ
Consistently solid financial performance. +.+A +.+A
1 +.+A * +.1
)trong inno-ation and product de-elopment. +.+1 +.+1
1 +.+, 1 +.+1
Large real estate portfolio. +.+* +.+*
1 +.+A 1 +.+*
Economies of )cale. +.+A +.+A
* +.1 1 +.+A
&ea:!e//e/ @ &
Lowest Customer satisfaction rating in the industry "B,&( e-en
$elow 0:).
+.1 +.1
1 +.1 * +.*
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7igh employee turno-er in their restaurants. +.+8 +.+8
ZZZ ZZZ ZZZ ZZZ
Assem$ly line approach ma#es it difficult and costly to adapt
to changing trends.
+.+F +.+F
1 +.+F * +.1B
Core product line out of sync with trends toward healthier
lifestyles.
+.+G +.+G
1 +.*1 1 +.+G
)ales demonstrate seasonal effects. +.+* +.+*
ZZZ ZZZ ZZZ ZZZ
F+; of restaurants are franchise owned. +.+A +.+A
ZZZ ZZZ ZZZ ZZZ
I-erEsaturation of real estate in the 9). +.+8 +.+8
1 +.1* 1 +.+8
)truggles with fluctuations in operating and net profits. +.+1 +.+1
ZZZ ZZZ ZZZ ZZZ
Moreign currency re-enue and de$t. +.+B +.+B
ZZZ ZZZ ZZZ ZZZ
O..ortu!itie/ @ O ZZZ ZZZ ZZZ ZZZ
Anticipated growth in Juic# )er-ice :estaurant industry. +.+B +.+B
* +.1* 1 +.+B
Low fat( low calorie( healthy ham$urger +.+G +.+G
ZZZ ZZZ ZZZ ZZZ
any restaurants ha-e outdated appearance. +.+B +.+B
ZZZ ZZZ ZZZ ZZZ
)ocial change E inno-ation within healthier lifestyle foods. +.+8 +.+8
1 +.1* 1 +.+8
0ncreased $e-erage options. +.+B +.+B
1 +.1F 1 +.+B
5rea#fast not a-aila$le at *A; of locations. +.+B +.+B
ZZZ ZZZ ZZZ ZZZ
/otential for 2oint -entures with retailers. +.+1 +.+1
ZZZ ZZZ ZZZ ZZZ
Continued focus on corporate social responsi$ility(
en-ironmental sustaina$ility.
+.+* +.+*
ZZZ ZZZ ZZZ ZZZ
0nternational expansion into emerging mar#ets. +.+B +.+B
ZZZ ZZZ ZZZ ZZZ
!i-ersify portfolio. +.+1 +.+1
1 +.+, 1 +.+1
Threat/ @ T
ore health conscious customers. +.+G +.+G
1 +.*1 * +.18
Oulnera$le in older( esta$lished mar#ets to upstarts +.+8 +.+8
1 +.1* * +.+F
'lo$al economic recession causing consumers to spend
less.
+.+B +.+B
ZZZ ZZZ ZZZ ZZZ
ar#ets in 9) and E9 are mature and saturated. +.+G +.+G
1 +.*1 * +.18
)u$way and 394 5rands expanding into de-eloping
mar#ets at a higher rate.
+.+B +.+B
ZZZ ZZZ ZZZ ZZZ
LitigationD +.+1 +.+1
ZZZ ZZZ ZZZ ZZZ
5rand e>uity at ris#. +.+8 +.+8
ZZZ ZZZ ZZZ ZZZ
Contamination of the food supply could damage sales(
reputation( etc.
+.+8 +.+8
ZZZ ZZZ ZZZ ZZZ
0ntense price pressure from competitors. +.+G +.+G
1 +.+G 1 +.*1
Negati-e pu$lic opinion campaignsD +.+1 +.+1
ZZZ ZZZ ZZZ ZZZ
Tota0/:
' 1+1' ,+D4
)ourceD !ale Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE 4E: FORULATING IN%IVI%UAL
STRATEGIES
PURPOSE:
0ndi-iduals and organi?ations are ali#e in many ways. Each has competitors and each should plan for
the future. E-ery indi-idual and organi?ation faces some external opportunities and threats and has
some internal strengths and wea#nesses. 5oth indi-iduals and organi?ations esta$lish o$2ecti-es and
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Assurance of Learning Exercises With Teaching Notes
allocate resources. These and other similarities ma#e it possi$le for indi-iduals to use many strategicE
management concepts and tools. This exercise is designed to demonstrate how indi-iduals planning
their future can use the )WIT atrix. As one nears completion of a college degree and $egins
inter-iewing for 2o$s( planning can $e particularly important.
INSTRUCTIONS:
1. In a separate sheet of paper( construct a )WIT atrix. 0nclude what you consider to $e
your ma2or external opportunities( ma2or external threats( ma2or strengths and ma2or
wea#nesses. Mor example( an internal wea#ness might $e a low grade point a-erage. An
external opportunity might $e a graduate program that interests you.
*. atch #ey external and internal factors $y recording in the appropriate cell of the matrix
alternati-e strategies or actions that would allow you to capitali?e upon your strengths(
o-ercome your wea#nesses( ta#e ad-antage of your external opportunities( and minimi?e
the impact of external threats. 5e sure to use the appropriate matching notation in the
strategy cells of the matrix. 5ecause e-ery indi-idual is uni>ue( there is no one right answer
to this exercise.
TEACHING NOTES:
This is a worthwhile homewor# assignment. )elfEassessment prior to ma2or career decisions is
$eneficial for students. An example is pro-ided $elow.
Lea-e 5lan# )trengths H )
1. 'ood grades
*. Minancial resources a-aila$le
for education
1. )trong communication s#ills
8. oti-ated
A. 'ood team player
Wea#nesses H W
1. No wor# experience
*. No foreign language s#ills
1. !egree from regional
uni-ersity with little $rand
recognition
Ipportunities H I
1. /otential to ad-ance
education with 5A
*. any industries and
locations with 2o$ growth
"especially health care and
$iotechnology&
)I )trategies
1. Apply to graduate school
")1( )*( I1&
*. Enter industries with strong
potential for growth ")1( )1(
)8( )A( I*&
WI )trategies
1. )ee# out an internship "W1(
I*&
*. inimi?e importance of
foreign language $y
impro-ing other aspects of
education "W*( I1&
Threats H T
1. any students graduate each
year with same degree
*. /otential for recession or
slow economic growth "fewer
)T )trategies
1. Emphasi?e good grades to
potential employers ")1( T1&
*. Consider pursuing 5A if
2o$ mar#et is wea# ")*( T*(
WT )trategies
1. /ursue foreign language
training and other s#ills that
can differentiate from others
"W*( T1&
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Assurance of Learning Exercises With Teaching Notes
2o$s a-aila$le( salaries lower&
1. Lo$s outsourced o-erseas
T1& *. )ee# out internship in
growing industry "W1( T*(
T1&

ASSURANCE OF LEARNING EXERCISE 4F: THE ACH TEST
PURPOSE:
The purpose of this exercise is to enhance your understanding and awareness of the impact that
$eha-ioral and political factors can ha-e on strategy analysis and choice.
INSTRUCTIONS:
1. In a separate sheet of paper( num$er from 1 to 1+. Mor each of the 1+ statements gi-en
$elow( record a 1( *( 1( 8( or A to indicate your attitude where
1 % 0 disagree a lot.
* % 0 disagree a little.
1 % y attitude is neutral.
8 % 0 agree a little.
A % 0 agree a lot.
1. The $est way to handle people is to tell them what they want to hear.
*. When you as# someone to do something for you( it is $est to gi-e the real reason for
wanting it( rather than a reason that might carry more weight.
1. Anyone who completely trusts anyone else is as#ing for trou$le.
8. 0t is hard to get ahead without cutting corners here and there.
A. 0t is safest to assume that all people ha-e a -icious strea# and it will come out when
they are gi-en a chance.
B. Ine should ta#e action only when it is morally right.
G. ost people are $asically good and #ind.
F. There is no excuse for lying to someone else.
,. ost people forget more easily the death of their father than the loss of their property.
1+. 'enerally spea#ing( people wont wor# hard unless theyre forced to do so.
*. Add up the num$ers you recorded $eside statements 1( 1( 8( A( ,( and 1+. This sum is
)u$total Ine. Mor the other four statements( re-erse the num$ers you recorded so a A
$ecomes a 1( 8 $ecomes a *( * $ecomes a 8( 1 $ecomes a A( and 1 remains a 1. Then
add those four num$ers to get )u$total Two. Minally( add )u$total Ine and )u$total
Two to get your Minal )core.
TEACHING NOTES:
This is an especially fun exercise that ta#es only a$out 1+ minutes. )coring is pro-ided in the text and is
repeated here for con-enience.
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Assurance of Learning Exercises With Teaching Notes
5elow 1BD Ne-er uses manipulation as a tool.
1B to *+D :arely uses manipulation as a tool.
*1 to *AD )ometimes uses manipulation as a tool.
*B to 1+D Iften uses manipulation as a tool.
I-er 1+D Always uses manipulation as a tool.
A National Ipinion :esearch Center poll found that the a-erage score for Americans is *A.
When discussing the ach Test in class( consider using the following >uestions to guide the class
discussion.
1. 7ow is a persons ach score rele-ant to their a$ility to plan strategicallyN Explain.
*. What type of person would you want leading a company H a high or low achN WhyN
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Assurance of Learning Exercises With Teaching Notes
ASSURANCE OF LEARNING EXERCISE 4G: %EVELOPING A $CG ATRIX FOR #
UNIVERSIT#
PURPOSE:
A 5C' atrix is useful to de-elop for many nonprofit organi?ations( including colleges and
uni-ersities. If course( there are no profits for each di-ision or department and in some cases no
re-enue. The purpose of this exercise is to ha-e students pro-ide a complete 5C' atrix. 7owe-er(
you can $e creati-e in performing a 5C' atrix. Mor example( the pie slice in the circles can represent
the num$er of ma2ors recei-ing 2o$s upon graduation or the num$er of faculty teaching in that area or
some other -aria$le that you $elie-e is important to consider. The si?e of the circles can represent the
num$er of students ma2oring in particular departments or areas.
INSTRUCTIONS:
1. In a separate sheet of paper( de-elop a 5C' atrix for your uni-ersity. 0nclude all
academic schools( departments( or colleges.
*. !iagram your 5C' atrix on the $lac#$oard.
1. !iscuss differences among the 5C' atrices on the $oard.
TEACHING NOTES:
Let the circles stand for schoolsCcolleges at your institution. The mar#et share is $ased on the
percentage of students enrolled in each school. The growth rate is $ased on the growth in num$er of
ma2ors. As# the students what implications arise for disciplines at the uni-ersity in the different
>uadrantsHhow should the uni-ersity address dogs( >uestion mar#s( stars( and cash cowsN 0f the
uni-ersity chose to address these disciplines using this perspecti-e( what implications would exist for
the role and mission of the uni-ersityN
; of students enrolled ar#et )hare
/osition
; 'rowth
:ate
)chool of 5usiness 8+; 1 medium
)chool of Education 1+; * low
)chool of Arts 1+; 8 low
)chool of )cience and 7umanities *+; 1 medium
According to the 5C' atrix( the )chool of 5usiness is a star $ut could $e mo-ing towards a position
of cash cow. The )chool of Education in this example is a >uestion mar#. The )chool of Arts is a dog
and the )chool of )cience and 7umanities is a >uestion mar#.
Relative Market Share
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Assurance of Learning Exercises With Teaching Notes
Stars Question Marks
Cash Cows Dogs
ASSURANCE OF LEARNING EXERCISE 4H: THE ROLE OF THE $OAR%S OF
%IRECTORS
PURPOSE:
The purpose of this exercise is to gi-e students a $etter understanding of the role of $oards of directors
in formulating( implementing( and e-aluating strategies.
INSTRUCTIONS:
0dentify a person in your community who ser-es on a $oard of directors. a#e an
appointment to inter-iew that person and see# answers to the >uestions gi-en $elow.
)ummari?e your findings in a fi-eEminute oral report to the class.
In what $oard are you a mem$erN
7ow often does the $oard meetN
7ow long ha-e you ser-ed on the $oardN
What role does the $oard play in this companyN
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*G1
Low 0.0 Medium .50 High 1.0
High +20
Medium 0
Low -20
Industry Sales
Growth Rate
Assurance of Learning Exercises With Teaching Notes
7ow has the role of the $oard changed in recent yearsN
What changes would you li#e to see in the role of the $oardN
To what extent do you prepare for the $oard meetingsN
To what extent are you in-ol-ed in strategic management of the firmN
TEACHING NOTES:
This is a great exercise for homewor#( especially if you can allow some class time for the oral report.
ASSURANCE OF LEARNING EXERCISE 4I: LOCATING COPANIES IN A GRAN%
STRATEG# ATRIX
PURPOSE:
The 'rand )trategy atrix is a popular tool for formulating alternati-e strategies. All organi?ations can
$e positioned in one of the 'rand )trategy atrixs four strategy >uadrants. The di-isions of a firm
li#ewise could $e positioned. The 'rand )trategy atrix is $ased on two e-aluati-e dimensionsD
competiti-e position and mar#et growth. Appropriate strategies for an organi?ation to consider are
listed in se>uential order of attracti-eness in each >uadrant of the matrix. This exercise gi-es you
experience using a 'rand )trategy atrix.
INSTRUCTIONS:
9sing the yearEend *++F financial information gi-en in the text( prepare a 'rand )trategy atrix on a
separate sheet of paper. Write the respecti-e company names in the appropriate >uadrant of the
matrix. 5ased on this analysis( what strategies are recommended for each companyN
TEACHING NOTES:
The first matrix illustrates the appropriate strategies for each >uadrant. The second matrix illustrates the
>uadrant in which each company is located.
Juadrant 00D
ar#et de-elopment
ar#et penetration
/roduct de-elopment
7ori?ontal integration
!i-estiture
Li>uidation
Juadrant 0D
ar#et de-elopment
ar#et penetration
/roduct de-elopment
Morward integration
5ac#ward integration
7ori?ontal integration
Juadrant 000D
:etrenchment
Concentric di-ersification
7ori?ontal di-ersification
Conglomerate di-ersification
Juadrant 0OD
Concentric di-ersification
7ori?ontal di-ersification
Conglomerate di-ersification
Loint -entures
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:apid ar#et 'rowth
Wea#
Competiti-e
/osition
)trong Competiti-e
/osition
Assurance of Learning Exercises With Teaching Notes
!i-estiture
Li>uidation
Juadrant 00D
arriott 0nternational
Juadrant 0D
7erman iller
' irage
Juadrant 000D
Mord otor
0nternational /aper
Weyerhaeuser
Juadrant 0OD
Ish#osh Truc#
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*GA
)low ar#et 'rowth
:apid ar#et 'rowth
Wea#
Competiti-e
/osition
)trong Competiti-e
/osition
)low ar#et 'rowth
Assurance of Learning Exercises With Teaching Notes
CHAPTER D: I".0e"e!ti!g Strategie/: a!age"e!t a!* O.eratio!/ I//ue/
ASSURANCE OF LEARNING EXERCISE DA: REVISING C%ONAL%(S
ORGANIEATIONAL CHART
PURPOSE:
!e-eloping and altering organi?ational charts is an important s#ill for strategists to possess. This
exercise can impro-e your s#ill in altering an organi?ations hierarchical structure in response to new
strategies $eing formed.
INSTRUCTIONS:
1. Turn $ac# to the c!onalds Cohesion Case "p. *,&. In a separate sheet of paper(
answer the following >uestionsD
What type of organi?ational chart is illustrated for c!onaldsN
What impro-ements could you recommend for the c!onalds organi?ational
chartN 'i-e your reasoning for each suggestion.
What aspects of c!onalds chart do you especially li#eN
What type of organi?ational chart do you $elie-e would $est suit c!onaldsN
WhyN
TEACHING NOTES:
What type of organi?ational chart is illustrated for c!onaldsN
The chart $elow illustrates eight )59 di-isions in c!onalds current organi?ational structure.
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Assurance of Learning Exercises With Teaching Notes
)ourceD Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
What impro-ements could you recommend for the c!onalds organi?ational chartN
The chart $elow illustrates a proposed organi?ational structure for the future of c!onalds
corporation.
Copyright @ *+11 /earson Education( 0nc. /u$lishing as /rentice 7all
5oard of
!irectors
Oice Chairman .
CEI
/resident .
CII
Exec. O./.
. CMI
Exec. O./.
. C7:I
Exec. O./.
. C:I
Exec. O./.
. CI
Exec. O./.
. 'eneral
Council
)r. O./.
. Corporate
Controller
Chief
!i-ersity
Ifficer
Chief
Creati-e
Ifficer
/resident(
9)A
/resident(
Europe
/resident(
Canada . Latin
America
O./. .
Assoc.
'eneral
Council
/resident(
A/EA
CEI Exec.
O./.
. C:I
/resident
. CII
Exec.
O./.
. CI
Exec.
O./.
. C7:I
Chief
!i-ersity
Ifficer
Chief
Creati-e
Ifficer
)r. O./.
.
Corporat
e
Controlle
r
O./. .
Assoc.
'eneral
Council
/resident(
9)A
Exec.
O./. .
CII
9)A
/resident(
Eastern
/resident(
Central
/resident(
Western
/resident(
Europe
/resident(
Northern
/resident(
)outhern
/resident(
Eastern
/resident(
Western
/resident(
A/EA
CEI
China
Northern
/resident(
Central
/resident(
Eastern
/resident(
Western
/resident(
Northern
/resident(
)outhern
/resident(
Eastern
/resident(
Western
Exec. O./. .
CII 9)A
/resident(
'reater Asia .
.E.
.!.
Australia
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Assurance of Learning Exercises With Teaching Notes

5oard of
!irectors
Chief Executi-e
Ifficer

Chief
Iperating
Ifficer
Chief
Minancial
Ifficer
Chief
7. :.
Ifficer
Chief
:estaurant
Ifficer
Chief
ar#eting
Ifficer
Chief
Legal
Ifficer
Corporate
Controller
Chief
!i-ersity
Ifficer
Chief
Creati-e
Ifficer
/resident(
9)A
/resident(
Europe
/resident(
Canada .
Latin America
Assoc.
'eneral
Council
O./.
Central
O./.
Eastern
O./.
Western
O./.
Western
O./.
/lan To
Win
/resident(
China
O./.
)outhern
O./.
Northern
O./.
Eastern
O./.
/lan To
Win
O./.
Australia
O./.
.E..A
O./.
'reater
Asia
/resident(
A/EA
O./.
/lan To
Win
O./.
)outhern
O./.
Northern
O./.
/lan To
Win
O./.
)outh
America
O./.
Canada(
exico
O./.
/lan To
Win
)ourceD Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
What aspects of c!onalds chart do you especially li#eN
)tudent responses will -ary.
What type of organi?ational chart do you $elie-e would $est suit c!onaldsN WhyN
An )59 or atrix chart would suit c!onalds $est $ecause of its large si?e and complexity.
EXPERIENTIAL EXERCISE D$: %O ORGANIEATIONS REALL# ESTA$LISH
O$FECTIVES>
PURPOSE:
I$2ecti-es pro-ide direction( allow synergy( aid in e-aluation( esta$lish priorities( reduce uncertainty(
minimi?e conflicts( stimulate exertion( and aid in $oth the allocation of resources and the design of 2o$s.
This exercise will enhance your understanding of how organi?ations use or misuse o$2ecti-es.
INSTRUCTIONS:
1. Loin with one other person in class to form a twoEperson team.
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CEI Exec.
O./.
. C:I
/resident
. CII
Exec.
O./.
. CI
Exec.
O./.
. C7:I
Chief
!i-ersity
Ifficer
Chief
Creati-e
Ifficer
)r. O./.
.
Corporat
e
Controlle
r
O./. .
Assoc.
'eneral
Council
/resident(
9)A
Exec.
O./. .
CII
9)A
/resident(
Eastern
/resident(
Central
/resident(
Western
/resident(
Europe
/resident(
Northern
/resident(
)outhern
/resident(
Eastern
/resident(
Western
/resident(
A/EA
CEI
China
Northern
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*. Contact $y telephone the owner or manager of an organi?ation in your city or town.
:e>uest a thirtyEminute personal inter-iew or meeting with that person for the purpose of
discussing P$usiness o$2ecti-es.Q !uring your meeting( see# answers to the following
>uestionsD
!o you $elie-e it is important for a $usiness to esta$lish and clearly communicate longE
term and annual o$2ecti-esN Why or why notN
!oes your organi?ation esta$lish o$2ecti-esN 0f yes( what type and how manyN 7ow are
the o$2ecti-es communicated to indi-idualsN Are your firms o$2ecti-es in written form
or simply communicated orallyN
To what extent are managers and employees in-ol-ed in the process of esta$lishing
o$2ecti-esN
7ow often are your $usiness o$2ecti-es re-ised and $y what processN
1. Ta#e good notes during the inter-iew. Let one person $e the note ta#er and one person do
most of the tal#ing. 7a-e your notes typed up and ready to turn in to your professor.
8. /repare a fi-e minute oral presentation for the class( reporting the results of your inter-iew.
Turn in your typed report.
TEACHING NOTES:
Consider using this exercise as an extra credit assignment and then allow some class time for the results
to $e presented.
EXPERIENTIAL EXERCISE DC: UN%ERSTAN%ING # UNIVERSIT#(S CULTURE
PURPOSE:
0t is something of an art to unco-er the $asic -alues and $eliefs that are $uried deeply in an
organi?ations rich collection of stories( language( heroes( heroines( and rituals( yet culture can $e the
most important factor in implementing strategy.
INSTRUCTIONS:
1. In a separate sheet of paper( list the following termsD heroCheroine( $elief( metaphor(
language( -alue( sym$ol( story( legend( saga( fol#tale( myth( ceremonial( rite( and ritual.
*. Mor your college or uni-ersity( gi-e examples of each term. 0f necessary( spea# with faculty(
staff( alumni( administration( or fellow students of the institution to identify examples of
each term.
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Assurance of Learning Exercises With Teaching Notes
1. :eport your findings to the class. Tell the class how you feel regarding cultural products
$eing consciously used to help implement strategies.
TEACHING NOTES:
This exercise ma#es a good homewor# assignment( though the examples identified should $e discussed
in class. This will ena$le students to compare their responses and identify the unifying culture at your
institution. An example is pro-ided in the form $elow.
Cu0tura0 for" E?a".0e
7eroC7eroine 'race 7arris is a heroine at Oirginia Commonwealth 9ni-ersity. )he ser-ed as
/resident of the institution twice and also as /ro-ost. )he was instrumental in
guiding the institution and is #nown now as the example $y which all leaders
are measured.
5elief OC9 $elie-es that foot$all is detrimental to the learning en-ironment and( for
this reason( does not ha-e a foot$all team.
etaphor OC9 is li#e a friend of the community. 0t see#s to $e seen as a friend and
support system in all community affairs.
Language There are se-eral words that are hea-ily used in the OC9 language. They are
interdisciplinary( entrepreneurial( international( di-ersity( and growth.
Oalue OC9 -alues those things that are represented $y its language. These include
interdisciplinary programs( programs that generate re-enues( international
experiences( a commitment to di-ersity( and growth.
)ym$ol The sym$ol of OC9 is the ram.
)tory OC9 e-ol-ed from two other small institutions 2ust three decades ago. The
president li#es to tell this story to illustrate the youthfulness and -igor of the
institution.
Legend The wor# of !r. Lohn Menn( a No$el pri?e winning scientist is legendary at
OC9.
)aga OC9 de-elops an annual report each year that details its many
accomplishments.
Mol#tale 9pper classmen often warn freshmen a$out the PMreshmen 1AQ H the 1A
pounds that freshmen tend to gain during the first year of college.
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Assurance of Learning Exercises With Teaching Notes
yth usic students $elie-e that the $uilding which houses the )chool of usic is
haunted $y a pianist who died in the Ci-il War. The )chool is housed in an old
church.
Ceremony 'raduation is a ceremony that mar#s the end of each students formal
relationship with the institution.
:ite A rite of passage at graduation is the throwing of caps at the conclusion of the
ser-ice.
:itual )tudents ha-e a ritual of going out on Thursday nights.
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Assurance of Learning Exercises With Teaching Notes
CHAPTER 5: I".0e"e!ti!g Strategie/: ar:eti!gB Fi!a!ceGAccou!ti!gB RH%B
a!* IS I//ue/
ASSURANCE OF LEARNING EXERCISE 5A: %EVELOPING A PRO%UCT=
POSITIONING AP FOR C%ONAL%(S
PURPOSE:
Irgani?ations continually monitor how their products and ser-ices are positioned relati-e to
competitors. This information is especially useful for mar#eting managers( $ut is also used $y other
managers and strategists.
INSTRUCTIONS:
1. In a separate sheet of paper( de-elop a productEpositioning map for c!onalds(
Wendys( 5urger 6ing( and 7ardees. 0nclude in your diagram.
*. At the chal#$oard( diagram your productEpositioning map.
1. Compare your productEpositioning map with those diagrammed $y other students. !iscuss
any ma2or differences.
TEACHING NOTES:
These are the steps for de-eloping a productEpositioning map.
1. )elect #ey criteria that effecti-ely differentiate products or ser-ices in the industry.
*. !iagram a twoEdimensional productEpositioning map with specified criteria on each axis.
1. /lot ma2or competitors products or ser-ices in the resultant fourE>uadrant matrix.
8. 0dentify areas in the positioning map where the companys products or ser-ices could $e most
competiti-e in the gi-en target mar#et. Loo# for -acant areas.
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)ourceD Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE 5$: PERFORING AN EPSGE$IT ANAL#SIS
FOR C%ONAL%(S
PURPOSE:
An E/)CE50T analysis is one of the most widely used techni>ues for determining the extent that de$t
andCor stoc# should $e used to finance strategies to $e implemented. This exercise can gi-e you
practice performing E/)CE50T analysis.
INSTRUCTIONS:
Lets say c!onalds needs to raise =1 $illion to expand into Africa. !etermine whether c!onalds
should ha-e used all de$t( all stoc#( or a A+EA+ com$ination of de$t and stoc# to finance this mar#etE
de-elopment strategy. Assume a 1F; tax rate( A; interest rate( c!onalds stoc# price of =A+ per
share( and an annual di-idend of =+.1+ per share of common stoc#. The E50T range for *+1+ is
$etween =B.11* $illion and =, $illion. A total of 1 $illion shares of common stoc# are outstanding.
!e-elop an E/)CE50T chart to reflect your analysis.
TEACHING NOTES:
Amount needed to raiseD =1 $illion
0nterest rateD A;
Tax rateD 1F;
)toc# priceD =A+
Annual di-idendD =+.1+ per share
Num$er of shares outstandingD 1 $illion
*+1+ E50T rangeD =B.11* $illion to =, $illion
According to the E/)CE50T analysis( common stoc# financing should $e used in the moderate or high
earnings situation $ut all three options are -ia$le in the low earnings situation.
Co""o! Stoc: Fi!a!ci!g %eIt Fi!a!ci!g Co"Ii!atio!
:ecession Normal 5oom :ecession Normal 5oom :ecession Normal 5oom
E50T =B.11 =G.BG =, =B.11 =G.BG =, =B.11 =G.BG =,
0nterest + + + +.+A +.+A +.+A +.+*A +.+*A +.+*A
E5T =B.11 =G.BG =,.++ =B.*F =G.B* =F.,A =B.11 =G.B8 =F.,F
Taxes =*.81 =*.,1 =1.8* =*.1, =*.F, =1.8+ =*.8+ =*.,+ =1.81
EAT =1.,1 =8.GA =A.AF =1.F, =8.G* =A.AA =1.,1 =8.G8 =A.AB
< of )hares 1.*$ 1.*$ 1.*$ 1$ 1$ 1$ 1.1$ 1.1$ 1.1$
E/) 1.*G 1.,B 8.BA 1.F, 8.G* A.AA 1.AA 8.11 A.+B
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ASSURANCE OF LEARNING EXERCISE 5C: PREPARING PROFECTE% FINANCIAL
STATEENTS FOR C%ONAL%(S
PURPOSE:
This exercise is designed to gi-e you experience preparing pro2ected financial statements. /ro
forma analysis is a central strategyEimplementation techni>ue $ecause it allows managers to
anticipate and e-aluate the expected results of -arious strategyEimplementation approaches.
INSTRUCTIONS:
1. Wor# with a classmate. !e-elop a *+1+ pro2ected income statement and $alance sheet for c!onalds.
Assume that !isney plans to raise =,++ million in *+1+ to $egin ser-ing Africa and plans to o$tain
A+ percent financing from a $an# and A+ percent financing from a stoc# issuance. a#e other
assumptions as needed( and state them clearly in written form.
*. Compute c!onalds current ratio( de$tEtoEe>uity ratio( and return on in-estment for *++F and
*++,. 7ow do your *+1+ pro2ected ratios compare to the *++F and *++, ratiosN Why is it
important to ma#e this comparisonN 9se httpDCCfinance.yahoo.com to o$tain *++, financial
statements.
1. 5ring your pro2ected statements to class and discus any pro$lems or >uestions you encountered.
8. Compare your pro2ected statements to the statements of other students. What ma2or differences
exist $etween your analysis and the wor# of other studentsN
TEACHING NOTES:
c%o!a0*(/ ProJecte* I!co"e State"e!t 7actua0 figure/ for ',,58
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2008 2009 2010 2011
Total Revenue $23,22!" $23,9#3!8 $2",9#!$ $2$,10!
Cost of Goods Sold $14,88.2 $15,1!8.8 $15,802." $1!,"".8
Gross %ro&it $8,$39!2 $8,80!0 $9,1#2!9 $9,#3$!#
Selli#g, Ge#e$%l & 'dmi#. ()*. $2,55.5 $2,400." $2,501.0 $2,!54."
+e*$e,i%tio# $!.0 $--.5 $14".! $18.
.the$ ()*e#ses /$1!5.20 $40.0 $!5.0 $"5.0
'(eratin) In*o+e $$,""2!9 $,9$"!8 $$,19!3 $$,23!$
1#te$est ()*e#se $522.! $!2.! $5"".! $4-!.2
G%i# o# S%le of 'ssets /$2"."0 /$200.00 /$2,400.00 /$,500.00
In*o+e ,e&ore Ta-es $$,18!0 $,32!2 $#,981!# $9,2#!"
1#,ome 2%)es $1,844.8 $1,!5". $2,-1.1 $2,854.2
.et In*o+e $",313!2 $3,8#"!9 $,90!$ $$,$#3!2
(%$#i#gs *e$ Sh%$e $.82- $.4- $4.-!2 $5.-2
+i3ide#ds 4%id $1,80." $1,-"1.! $2,54.- $,"-.8
+i3ide#ds *e$ Sh%$e $1.!25 $1."50 $2.250 $.000
Retained /arnin)s $2,"82! $1,903!3 $3,0!# $3,293!"
Sh%$es .utst%#di#g 1,12!.! 1,12!.!0 1,12!.!0 1,12!.!0
c%o!a0*(/ ProJecte* $a0a!ce Sheet 7actua0 figure/ for ',,58
2008 2009 2010 2011
C%sh $2,0!.4 $2,"15.2 $,222.4 $2,58.2
2ot%l 5e,ei3%6les $-1.2 $1,024. $1,042.- $1,0"0.-
2ot%l 1#3e#to$7 $111.5 $122." $124.- $128.2
4$e*%id ()*e#ses & .the$ Cu$$e#t 'ssets $411.5 $41-.4 $4!.- $4!.8
Total 0urrent 1ssets $3,1#!$ $",281!$ $",82#!2 $",2"$!1
1#t%#gi6le 'ssets $4,!8-.4 $4,52. $,8-4.! $,15.2
4$o*e$t7, 4l%#t, (8ui*me#t $1,152.4 $4,8-2.4 $",05".2 $8,482.2
',,umul%ted +e*$e,i%tio# & 'mo$ti9%tio# /$10,8-".-0 /$10,--".40 /$11,145.00 /$11,18.50
.et %ro(erty 2 /3ui(+ent $20,2"! $23,89!0 $2,912!2 $2#,1$3!#
Total 1ssets $28,"$1! $32,#08!9 $3",$3"!0 $3",#2!0
',,ou#ts 4%7%6le $!20.4 $!82.4 $!-4.8 $"1.5
.the$ Cu$$e#t Li%6ilities $1,-1".5 $1,-54. $2,0!.0 $2,1!1.2
Total 0urrent 4ia5ilities $2,3#!9 $2,$3$!8 $2,#30!8 $2,8#"!#
Lo#g 2e$m +e6t $10,18!.0 $12,8!.0 $11,28!.0 $8,08!.0
.the$ Lo#g-te$m Li%6ilities $1,410.1 $1,4".2 $1,4-".2 $1,58-.
+efe$$ed 1#,ome 2%)es $-44.- $-!.0 $1,00. $1,0!5.0
Total 4ia5ilities $1,0#8!9 $1#,"23!0 $1$,1#!" $13,$1!0
Commo# Sto,: /$0.01 4%$0 $1!.! $1!.! $1!.! $1!.!
'dditio#%l 4%id-1# C%*it%l $4,!00.2 $4,!00.2 $4,!00.2 $4,!00.2
2$e%su$7 Sto,: /$20,28-.40 /$20,28-.40 /$20,28-.40 /$20,28-.40
5et%i#ed (%$#i#gs $2-,055.2 $0,-58.5 $,"8-.2 $!,"82.!
Total /3uity $13,382!$ $1,28!9 $18,11$!$ $21,110!0
Total 4ia5ility 2 Shareholders /3uity $28,"$1! $32,#08!9 $3",$3"!0 $3",#2!0
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c%o!a0*(/ ProJecte* Ratio/ 9/+ ',,5
2008 2009 2010 2011
Growth Ratios
S%les G$owth .2; 1.-; 4.2; !.1;
%ro&ita5ility Ratios
<et 4$ofit M%$gi# 18.; 1!.2; 22.4; 25.2;
5etu$# o# 'ssets 15.2; 11.8; 1!.1; 1-.2;
5etu$# o# (8uit7 2.2; 25.; 0.-; 1.!;
(%$#i#gs *e$ Sh%$e $.8 $.44 $4.-! $5.-2
+i3ide#ds *e$ Sh%$e $1.! $1."5 $2.25 $.00
4evera)e Ratios
+e6t to (8uit7 1.1 1.14 0.-1 0.!4
Lo#g 2e$m +e6t to (8uit7 0."! 0.81 0.!2 0.8
2imes 1#te$est (%$#ed 12."8 -."5 14.82 20.20
/&&i*ien*y Ratios
2ot%l 'sset 2u$#o3e$ 0.8 0." 0."2 0."!
)ourceD Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
ASSURANCE OF LEARNING EXERCISE 5%: %ETERINING THE CASH VALUE OF
C%ONAL%(S
PURPOSE:
0t is simply good $usiness practice to periodically determine the financial worth or cash -alue of your
company. This exercise gi-es you practice determining the total worth of a company using se-eral
methods. 9se yearEend *++F data as gi-en in the Cohesion Case on pp. 11E1*.
INSTRUCTIONS:
1. Calculate the financial worth of c!onalds $ased on four methodsD 1& the net worth or
stoc#holders e>uity( *& the future -alue of c!onalds earnings( 1& the priceEearnings ratio(
and 8& the outstanding shares method. 0n a dollar amount( how much is c!onalds worthN
*. Compare your analyses and conclusions with those of other students.
TEACHING NOTES:
Va0uatio! etho* 7K,,,8 ',,5
E>uity ethod =11(*+G(,++
Net 0ncome ethod =*1(ABB(+++
/riceCEarning x Net 0ncome =8A(88A(8G,
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)hares x /rice ethod =B1(,B1(+++
A-erage total -alue =8+(+8A(A,A
1. E>uity ethodD Common stoc# K :etained Earnings K 'oodwill "0ntangi$les&
=1B(B++ K *F(,A1(,++ K *(*1G(8++ % =11(*+G(,++
*. Net 0ncome ethodD Net 0ncome x A
=8(111(*++ U A % =*1(ABB(+++
1. /CE ethodD )hare /rice C E/) x a-g. net income "1 years&
"=AAC .F1& U "8(111(*++ K *(1,A(1++ K 1(A88(*++ C 1 % =1(81G(A++&
11 U =1(81G(A++ % =8A(88A(8G,
8. )hares x /rice ethodD Num$er of shares outstanding x share price
1(1*B(B++ X =AA.++ % =B1(,B1(+++
ASSURANCE OF LEARNING EXERCISE 5E: %EVELOPING A PRO%UCT=
POSITIONING AP FOR # UNIVERSIT#
PURPOSE:
The purpose of this exercise is to gi-e you practice de-eloping productEpositioning maps. Nonprofit
organi?ations( such as uni-ersities( are increasingly using productEpositioning maps to determine
effecti-e ways to implement strategies.
INSTRUCTIONS:
1. Loin with two other persons in class to form a group of three.
*. Lointly prepare a productEpositioning map that includes your institution and four other
colleges or uni-ersities in your state.
1. At the chal#$oard( diagram your productEpositioning map.
8. !iscuss differences among the maps diagrammed on the $oard.
TEACHING NOTES:
5e sure to focus on the implications of each map illustrated on the $oard. )teps for de-eloping a
productEpositioning map includeD
1. )elect #ey criteria that effecti-ely differentiate institutions of higher education.
*. !iagram a twoEdimensional productEpositioning map with specified criteria on each axis.
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1. /lot ma2or competitors in the resultant fourE>uadrant matrix.
8. 0dentify areas in the positioning map where the uni-ersity could $e most competiti-e in the gi-en
target mar#et.
ASSURANCE OF LEARNING EXERCISE 5F: %O $AN3S RECUIRE PROFECTE%
FINANCIAL STATEENTS>
PURPOSE:
The purpose of this exercise is to explore the practical importance and use of pro2ected financial
statements in the $an#ing $usiness.
INSTRUCTIONS:
Contact two local $an#ers $y phone and see# answers to the >uestions listed $elow. :ecord the
answers you recei-e and report your findings to the class.
1. !oes your $an# re>uire pro2ected financial statements when they are part of a $usiness loan
applicationN
*. 7ow does your $an# use pro2ected financial statements when they are part of a $usiness loan
applicationN
1. What special ad-ice do you gi-e potential $usiness $orrowers in preparing pro2ected financial
statementsN
TEACHING NOTES:
This is another good homewor# assignment that gi-es students experience interacting with local
$usiness leaders. 5an#s( of course( do re>uire pro forma financial statements from $usinesses $efore
ma#ing a commercial loan.
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7igh /ercei-ed
Juality
Low /ercei-ed
Juality
7igh Cost
Low Cost
7igh prestige( pri-ate
institutions li#e 7ar-ard
Inline programs li#e
9ni-ersity of /hoenix
7igh prestige( pu$lic
institutions li#e 9ni-ersity
of Oirginia
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CHAPTER -: Strateg; Re9ieLB E9a0uatio!B a!* Co!tro0
ASSURANCE OF LEARNING EXERCISE -A: PREPARING A STRATEG#=
EVALUATION REPORT FOR C%ONAL%(S CORP+
PURPOSE:
This exercise can gi-e you experience locating strategyEe-aluation information. 9se of the 0nternet
coupled with pu$lished sources of information can significantly enhance the strategyEe-aluation
process. /erformance information on competitors( for example( can help put into perspecti-e a firms
own performance.
INSTRUCTIONS:
1. Oisit httpDCCmar#etwatch.multexin-estor.com( httpDCCmoneycentral.msn.com(
httpDCCfinance.yahoo.com( www.clearstation.com to locate strategyEe-aluation information
on competitors. :ead some recent articles that discuss the fastEfood restaurant $usiness.
*. )ummari?e your research findings $y preparing a strategyEe-aluation report for your
instructor. 0nclude in your report a summary of c!onalds strategies and performance in
*+1+ and a summary of your conclusions regarding the effecti-eness of c!onalds
strategies.
1. 5ased on your analysis( do you feel that c!onalds is pursuing effecti-e strategiesN What
recommendations would you offer to c!onalds chief executi-e officerN
TEACHING NOTES:
This is a good 0nternet or li$rary exercise for homewor#. Example strategies may include any of the
following( as well as othersD
/lan to Win $y de-eloping a dualEtier mar#et strategy in 9.). And European mar#ets.
5uy $ac#( remodel( reE$adge( reEimage( reEsell 1+++ restaurants per year in 9.). and Europe.
Expand more rapidly in China( 0ndia( 5ra?il $y adding *+++ new restaurants per year.
Continue cCafe $e-erage rollout in 9.). "FA++& and Europe "*1++& through *+11.
Continue to expand operating hours to include $rea#fast( late night in 9.). "**++& and Europe
"F++& through *+11.
!e-elop and rollout of PgreenP product pac#aging in *+1+.
:estructure to support /lan To Win strategy.
)ourceD Wiersema. *++,. c!onalds Corporation )trategic anagement /lan.
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ASSURANCE OF LEARNING EXERCISE -$: EVALUATING # UNIVERSIT#(S
STRATEGIES
PURPOSE:
An important part of e-aluating strategies is determining the nature and extent of changes in an
organi?ations external opportunitiesCthreats and internal strengthsCwea#nesses. Changes in these
underlying critical success factors can indicate a need to change or modify the firms strategies.
INSTRUCTIONS:
1. As a class( discuss positi-e and negati-e changes in your uni-ersitys external and internal
factors during your college career. 5egin $y listing on the $oard new or emerging
opportunities and threats.
*. Then identify strengths and wea#nesses that ha-e changed significantly during your college
career.
1. 0n light of the external and internal changes identified( discuss whether your uni-ersitys
strategies need modifying. Are there any new strategies that you would recommendN
8. a#e a list to recommend to your department chair( dean( or chancellor.
TEACHING NOTES:
This is largely a reflection exercise that will $uild upon the earlier )WIT analysis students conducted
for their institution. While the specific changes students recall will -ary from institution to institution
and semester to semester( some of the following examples may $e rele-ant.
0n recent years( institutions of higher education ha-e faced rising costs in terms of salaries and
$enefits( technology( $uilding maintenance( and more. Tuitions ha-e $een on the rise too( $ut
the pu$lic may feel that tuition is rising too fast and that students are not getting added -alue
for those increased prices. At the same time( state funding has $ecome less dependa$le.
5ecause many schools are adding re-enue $y adding students( classrooms and dorms may $e
crowded and lead to decreases in satisfaction as students struggle to get the classes they need
to graduate.
There are an increasing num$er of forEprofit institutions competing for the same set of students.
)chools li#e 9ni-ersity of /hoenix and Capella 9ni-ersity ha-e $een -ery successful thus far.
5usiness degrees are not as popular as they were in the 1,F+s and 1,,+s.
)tudents are increasingly see#ing out li$eral arts degrees rather than professional degrees. An
institution might deal with these changes $y finding other sources of re-enue such as alumni
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donations. 0t might wor# with local de-elopers to identify offEcampus housing. 0t might see# to
offer unusual class schedules that could lighten the demand for classes and increase the
li#elihood for students to get the classes they need. 0t may redefine itself and de-elop a
differential ad-antage that $etter competes with forEprofit institutions. Minally( the institution
may esta$lish a dual ma2or that com$ines $usiness and li$eral arts.
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CHAPTER 1,: $u/i!e// Ethic/B Socia0 Re/.o!/iIi0it;B E!9iro!"e!ta0
Su/tai!aIi0it;
ASSURANCE OF LEARNING EXERCISE 1,A: %OES C%ONAL%(S HAVE A CO%E OF
$USINESS ETHICS>
PURPOSE:
This exercise aims to familiari?e you with corporate codes of $usiness ethics. 'o to )tar$uc#s
)tandards of 5usiness Conduct found at their www.star$uc#s.com We$ site and more particularly
at the httpDCCwww.star$uc#s.comCa$outusC)o5C[M3+,[eng.pdf We$ page. Then see the Code of
5usiness Ethics for c!onalds Corporation or lac# of one thereof. "At the time of this writing(
the author could only find a social responsi$ility statement for c!onalds( and it was at the
httpDCCwww.mcdonalds.comCusaCwor#Csocialresp.html We$ page&.
INSTRUCTIONS:
1. 'o to these sites and print the )tandards of 5usiness Conduct for "1& )tar$uc#s Corp.
and "*& c!onalds Corp. :ead the two statements.
*. In a separate sheet of paper( list three aspects that you li#e most and three aspects
that you li#e least a$out "1& the )tar$uc#s statement and "*& the c!onalds
statement. 0n other words( compare the two statements. Conclude $y indicating which
statement of conduct you li#e $est. Why do you thin# it is $estN
1. Explain why ha-ing a code of $usiness ethics is not sufficient for ensuring ethical
$eha-ior in an organi?ation. What other means are necessary to help ensure ethical
$eha-iorN 'i-e the class an example of a $reach of ethical conduct that you recall in
your wor# experi ence.
TEACHING NOTES:
)tar$uc#s statement on $usiness conduct is extremely thorough with multiple pages $eyond those
encouraged for student analysis. In the other hand( c!onalds statement on social responsi$ility is
limited to one We$ page( with an added lin# for :onald c!onald 7ouse Charities.
)tudents are as#ed to indicate the three aspects that they li#e most and least so responses will -ary
from student to student. )ome things students may mention a$out c!onalds code include its
emphasis on the community focus with :onald c!onald 7ouse Charities. This lin# is external to
c!onalds "httpDCCrmhc.orgC&. 0t pro-ides detailed information on the company mission and -ision(
goals( news and e-ents( and opportunities to help. )tar$uc#s code( in contrast( is $ased on what its
employees should NIT do. 0t is a set of rules rather than a statement of commitment on the part of the
company. 0t details legal disputes( confidentiality policies( conflict of interest policies( and other issues
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li#e position on insider trading. While c!onalds code is written from a perspecti-e of trust(
)tar$uc#s is written from a position of distrust.
)tep 1 of the exercise as#s why ha-ing a code of ethics is not sufficient for assuring ethical $eha-ior in
an organi?ation. The text points out that an ethical culture needs to permeate the organi?ation. This is
simply a mindEset among managers and employees that good ethics is not only good $usiness $ut it is
also expected and rewarded $y the organi?ation. Oarious methods for achie-ing an ethical culture are
listed $elowD
1. !e-elop a code of $usiness ethics.
*. :eward ethical decisions and practices.
1. )et a good example.
8. Conduct ethics wor#shops.
A. 7a-e e-eryone sign the code of ethics during preEemployment acti-ities.
B. Encourage performance regarding ethical issues.
G. onitor performance regarding ethical issues.
F. 0nstitute se-ere penalties and policies for unethical $eha-ior.
EXPERIENTIAL EXERCISE 1,$: THE ETHICS OF SP#ING ON COPETITORS
PURPOSE:
This exercise gi-es you the opportunity to discuss in class ethical and legal issues in class as related to
methods $eing used $y many companies to spy on competing firms. 'athering and using information
a$out competitors is an area of strategic management that Lapanese firms do more proficiently than
American firms.
INSTRUCTIONS:
In a separate sheet of paper( num$er from 1 to 1F. Mor the 1F spying acti-ities listed as follows(
indicate whether or not you $elie-e the acti-ity is ethical or unethical and legal or illegal. /lace
either an ' for ethical or a 0 for unethical( and either an L for legal or an . for illegal for each
acti-ity. Compare your answers to those of your classmates and discuss any differences.
1. 5uying competitors gar$age
*. !issecting competitors products
1. Ta#ing competitors plant tours anonymously
8. Counting tractorEtrailer truc#s lea-ing competitors loading $ays
A. )tudying aerial photographs of competitors facilities
B. Analy?ing competitors la$or contracts
G. Analy?ing competitors helpEwanted ads
F. Jui??ing customers and $uyers a$out the sales of competitors products
,. 0nfiltrating customers and competitors $usiness operations
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1+. Jui??ing suppliers a$out competitors le-el of manufacturing
11. 9sing customers to $uy out phony $ids
1*. Encouraging #ey customers to re-eal competiti-e information
11. Jui??ing competitors former employees
18. 0nter-iewing consultants who may ha-e wor#ed with competitors
1A. 7iring #ey managers away from competitors
1B. Conducting phony 2o$ inter-iews to get competitors employees to re-eal information
1G. )ending engineers to trade meetings to >ui? competitors technical employees
1F. Jui??ing potential employees who wor#ed for or with competitors
TEACHING NOTES:
This exercise is actually a >ui? that addresses the different opinions indi-iduals may ha-e a$out what
actually constitutes unethical $eha-ior and how ones $eliefs might change with the situation. Answers
to this exercise will -ary for each person or group ta#ing the test $ut the critical portion of the exercise
is to use the answers as a $asis for inEclass discussion.
Mor instance( try to find commonalities in what the students identified as ethical or unethical. /erhaps
many students found analy?ing information that is readily a-aila$le "li#e reading competitors want ads&
ethical $ut gathering information that is not pu$licly a-aila$le unethical "li#e conducting phony 2o$
inter-iews&. Encourage the students to thin# a$out what they would do under different circumstances.
Would their -iews change if they wor#ed for a company that was struggling to sur-i-eN What if they
learned that the competitor had used unethical tactics to gather information on their companyN 7ow
would they resol-e their feelings on the ethics of spying if their manager as#ed them to gather
competiti-e intelligenceN 9sing these >uestions as a $asis for discussion will enhance the learning
experience for students.
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ASSURANCE OF LEARNING EXERCISE 1,C: &HO PREPARES A SUSTAINA$ILIT#
REPORT>
PURPOSE:
The purpose of this acti-ity is to determine the nature and pre-alence of )ustaina$ility :eports among
companies in your state.
INSTRUCTIONS:
Contact $y phone at least fi-e different plant managers or owners of large $usinesses in your area. )ee#
answers to the >uestions listed $elow. /resent your findings in a written report to your instructor.
1. !oes your company prepare a )ustaina$ility :eportN 0f yes( please descri$e the nature and
scope of the report.
*. Are en-ironmental criteria included in the performance e-aluation of managersN 0f yes(
please specify the criteria.
1. Are en-ironmental affairs more of a technical or a management function in your companyN
8. !oes your firm offer any en-ironmental wor#shops for employeesN 0f yes( please descri$e
them.
TEACHING NOTES:
This ma#es an interesting homewor# assignment. 3ou may as# se-eral students to gi-e an oral report
of their findings in class. /oint out to students that )ustaina$ility :eports may $e proacti-e or reacti-e.
Companies may proacti-ely prepare such reports to ensure compliance with state and federal
regulations and to protect shareholder interests. Companies may $e forced to reacti-ely prepare reports
to illustrate that they are compliant with regulations. )hareholders may want )ustaina$ility reports
$ecause it will allow them $etter information on potential lia$ilities.
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CHAPTER 11: G0oIa0GI!ter!atio!a0 I//ue/
ASSURANCE OF LEARNING EXERCISE 11A: C%ONAL%(S &ANTS TO ENTER
AFRICA+ HELP THE+
PURPOSE:
ore and more companies e-ery day decide to $egin doing $usiness in the forgotten continent H
Africa. :esearch is necessary to determine the $est strategy for $eing the first mo-er in many
African countries "i.e.( $eing the first competitor doing $usiness in -arious countries&.
INSTRUCTIONS:
1. /rint off a map of Africa.
*. /rint off demographic data on 1+ African countries.
1. 'ather competiti-e information regarding the presence of fastEfood firms doing $usiness in
Africa.
8. List in prioriti?ed order eight countries that you would recommend for c!onalds entry.
Country 1 is your $est( and country * is your next $est. 5ased on your research( indicate how
many c!onalds restaurants you would recommend $uilding o-er the next three years in
each country. List in prioriti?ed order three cities in each of your eight African countries
where you $elie-e c!onalds should $uild most of its restaurants.
TEACHING NOTES:
c!onalds already does limited $usiness in )outh Africa( and a few countries in Northern Africa.
Today( most fastEfood companies are focusing their foreign expansion efforts on the AsiaE/acific
region due to strong mar#et growth in this region. As a result( expansion into Africa may $e a ris#y
mo-e( and would >ualify as a Pfirst mo-erQ strategy. c!onalds chief competitor( 3um4 5rands( is
pursuing aggressi-e international expansion( though most of it is focused in Asia. 3um4 owns
restaurant chains such as 6entuc#y Mried Chic#en( /i??a 7ut( Taco 5ell( Long Lohn )il-ers( and
A.W.
ASSURANCE OF LEARNING EXERCISE 11$: %OES # UNIVERSIT# RECRUIT IN
FOREIGN COUNTRIES>
PURPOSE:
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A competiti-e climate is emerging among colleges and uni-ersities around the world. Colleges
and uni-ersities in Europe and Lapan are increasingly recruiting 9.). students to offset declining
enrollments. Moreign students already ma#e up more than a third of the student $ody at many 9.).
uni-ersities. The purpose of this exercise is to identify particular colleges and uni-ersities in
foreign countries that recruit 9.). students.
INSTRUCTIONS:
1. )elect a foreign country. Conduct research to determine the num$er and nature of
colleges and uni-ersities in that country. What are the ma2or educational institutions in
that countryN What programs are those institutions recogni?ed as offeringN What
percentage of undergraduate and graduate students attending those institutions are
9.). citi?ensN !o these institutions acti-ely recruit 9.). studentsN Are any of the
schools of $usiness at the -arious uni-ersities AAC)5E0nternational accreditedN
*. /repare a report that summari?es your research findings. /resent your report to the
class.
TEACHING NOTES:
This ma#es an interesting homewor# assignment( in that it as#s students to assess glo$al issues from
the perspecti-e of a foreign country that is not their own. 3ou may as# se-eral students to gi-e an oral
report of their findings in class.
ASSURANCE OF LEARNING EXERCISE 11C: ASSESSING %IFFERENCES IN
CULTURE ACROSS COUNTRIES
PURPOSE:
Americans can $e more effecti-e in dealing with $usinesspeople from other countries if they ha-e
some awareness and understanding of differences in culture across countries. This is a fun
exercise that pro-ides information for your class regarding some of these #ey differences.
INSTRUCTIONS:
1. 0dentify four indi-iduals who either grew up in a foreign country or ha-e li-ed in a
foreign country for more than one year. 0nter-iew those four persons. Try to ha-e
four different countries represented. !uring each inter-iew( de-elop a list of eight #ey
differences $etween American styleCcustom and that particular countrys styleCcustom
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in terms of -arious aspects of spea#ing( meetings( meals( relationships( friendships( and
communication that could impact $usiness dealings.
*. !e-elop a 1AEminute /ower/oint presentation for your class and gi-e a tal#
summari?ing your findings. 0dentify in your tal# the persons you inter-iewed as well as
the length of time those persons li-ed in the respecti-e countries. 'i-e your professor
a hard copy of your /ower/oint presentation.
TEACHING NOTES:
)tudents may find the template $elow useful in completing this exercise.
1
/t
I!ter9ieLee '
!*
I!ter9ieLee )
r*
I!ter9ieLee 6
th
I!ter9ieLee
0nter-iewee Name
Moreign Country
Time spent in
country
!ifferences in
spea#ing customs
!ifferences in
meeting customs
!ifferences in
meal customs
!ifferences in
relationship customs
!ifferences in
friendship customs
!ifferences in
communication
ASSURANCE OF LEARNING EXERCISE 11%: HO& &ELL TRAVELE% ARE $USINESS
STU%ENTS AT #OUR UNIVERSIT#>
PURPOSE:
0t would $e interesting to #now how tra-eled are students at your uni-ersity and also how those
students consider their tra-els to $e helpful in $ecoming an effecti-e $usinessperson. 'enerally
spea#ing( the more one has tra-eled( especially outside the 9nited )tates( the more tolerant(
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Assurance of Learning Exercises With Teaching Notes
understanding( and appreciati-e one is for di-ersity. any students e-en state on their r\sum\ the
extent to which they ha-e tra-eled( $oth across the 9nited )tates and perhaps around the world.
INSTRUCTIONS:
Administer the following sur-ey to at least 1+ $usiness students( including your classmates in the
strategic management course. Analy?e the results. 'i-e a 1AEminute presentation to your class
regarding your findings. Turn in a written report of your findings to your professor.
1. 7ow many states in the 9nited )tates ha-e you -isitedN
*. 7ow many states in the 9nited )tates ha-e you li-ed in for at least three monthsN
1. 7ow many countries outside the 9nited )tates ha-e you -isitedN
8. List the countries outside the 9nited )tates that you ha-e -isited.
A. 7ow many countries outside the 9nited )tates ha-e you li-ed in for at least three monthsN
B. List the countries outside the 9nited )tates that you ha-e li-ed in for at least three
months.
G. To what extent do you feel that tra-eling across the 9.). can ma#e a person a more
effecti-e $usinesspersonN 9se a 1E1+ scale( where 1 is PCannot ma#e a differenceQ and 1+
is PCan ma#e a tremendous differenceQ.
F. To what extent do you feel that -isiting countries outside the 9.). can ma#e a person a
more effecti-e $usinesspersonN 9se a 1E1+ scale( where 1 is PCannot ma#e a differenceQ
and 1+ is PCan ma#e a tremendous differenceQ.
,. To what extent do you feel that li-ing in another country can ma#e a person a more
effecti-e $usinesspersonN 9se a 1E1+ scale( where 1 is PCannot ma#e a differenceQ and 1+
is PCan ma#e a tremendous differenceQ.
1+. What three important ways do you feel that tra-eling or li-ing outside the 9nited )tates would
$e helpful to a person in $eing a more effecti-e $usinesspersonN
TEACHING NOTES:
This would $e a -alua$le inEclass exercise.
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