1.

The Macro Environment-----------------PESTEL

a. Political----elections & changes of gov b. Economic----interest rates, tax rates, exchange rates, economic boom c. Social----changes in populations (birth rate, elderly people, retirees, marketing) d. Technological----no turning back, banking online e. Ecological----carbon emission restrictions, global warming f. Legal----safety legislation, equality, regulation

2. The competition position (Nations) -----------------Porters Diamond

How countries can achieve such international reputations a. Factor conditions: i. ii. Natural advantages (wine, climate) Advanced factors (transport infrastructure, telecommunications, educational system)

b. Demand conditions: Home conditions c. Firms strategy, structure and rivalry: i. Concentrate on rivalry: good at home-->world beating

d. Related and supporting industries:

i. ii.

Benefits from vendors and supporting firms (efficient) Products become differentiated and uniquely good

3.

The competition position (Industry) -------Porters Five Forces

To analyze industry attractiveness a. Rivalry: Competition i. ii. Perfect competition----market price only Monopoly----price alter demand 1. Governments tend to be wary of monopoly

b. Buyer pressure: i. ii. Powerful buyer may press on prices, quality and delivery times To decrease buyer power: 1. 2. Build in switching costs Long-term contracts

c. Supplier pressure: i. ii. May raise prices To multi-source

d. New entrants: i. Barrier to entry: 1. 2. Legal monopoly License

3. 4. 5. e. Substitute i. ii.

Need for high capital expenditure Necessary skills Unique processes, patents

Usually arise by advance of technology Old industries have to join the new ones to maintain their market share

4. Portfolio of Product------BCG Matrix

a. Question mark: (high growth rate & low market share) i. ii. Should we get out or grab a large market share If go for large market share---->heavily negative cash flow 1. 2. 3. Require investment R&D Reduce selling price

b. Star: (high growth rate & high market share) i. ii. We will be target for competitors Cash flow is usually soon to be roughly zero

c. Cash cows: (low growth rate & high market share) i. ii. iii. A decline market High cash flows Without promotion, R&D, defending

d. Dog: (low growth rate & low market share) i. ii. Close down the production Unless it supports other units

Criticisms in BCG: a. Focus on importance of high market share---->small specialist makes good profits as well

b. The interpretation must not be too black and white. c. Inadequate measures, ignore market attractiveness d. A well-balanced portfolio has some cash cows and some question marks

5. Product Life Cycle PLC

To show how the sales revenue and net cash flows of a product change as it moves by time. Introductory (sales) -->Growth (competitors coming) -->Mature (price pressure) -->Decline (extend product life, strategic decision needs to be made)

6. Outsourcing------------------Process-Strategy Matrix

a. High complexity and low importance: Outsourcing (e.g. tax calculation) b. Low complexity and low importance(stable & simple process): Automate/outsource (receivable ledger) c. High complexity and high importance: i. ii. cant outsourcing or automating improvement, redesign and reengineer

d. low complexity and high importance: Automate (to gain efficiency)

7. Stakeholders -----------------------Mendelows Matrix

a. Key players: Management needs to keep those people happy b. Keep satisfied: some stakeholders have power but unlikely to take action i. Dont have to be quite careful

c. Keep informed: e.g. employee d. Minimal effort: almost ignore

8. Changing Management --------------------Type of Changes 9. ---------------------Balogun & Hope Hailey 8 context

10.

----------------------Lewin Forces Field

To weaken resistance to change a. Communication: include explaining reasons why change is needed b. Participation c. 3 steps: i. ii. iii. Unfreeze the current situation (explain, get people ready) Put through the changes Refreeze the situation (settle down, a period of calm)

d. Change agent (an outside consultant) a) b) c) d) They are skilled Experienced Independent and fair For management to transfer risk to

11. Making Profit --------------------------Value Chain

Understand whats the add value and how functions are linked

--------------------------Porters 3 Generic Strategies

a. Cost leader (easy for large company) i. ii. iii. Supply basic G/S Strong financially, have cash on marketing, R&D Focus on cost control

b. Differentiation (Apple) i. Better G/S

ii. c. Focus i.

Interested in innovation and higher customer service

Concentrate on a small sector of market

ii.

Still has to decide to be cost leader/differentiator

---------------------------------------Strategy Clock

---------------------------------------Benchmarking
To judge performance, comparing performance or KPI to a target, 4 types: a. Internal benchmarking i. ii. iii. Easy to generate the target, but Target may be too easy or too hard Some external reference is needed

b. External benchmarking i. ii. Better reference point, but Other organizations will be secretive about performance

c. Best practice i. ii. Choose the best organization to compare with The best one may not cooperate with measurement data

d. Comparability benchmarking i. Compare with other business, not only same type

ii.

Generic types (days of absentees, sickness)

12. Use of IT ---------------------------------------Value Chain (Based on IT)

-----------------------------------------------6Is (E-marketing)
a. Intelligence (what customer interests in)

b. Individualization (different visit pages) c. Interactivity (shopping cart) d. Integration (reserve hotel or airline seat) e. Independence (worldwide presence) f. Industry (less need for travel agents)

13. Culture -----------------------Culture Web

Power culture Role culture (bureaucracies, title is important) Task culture (get task done, flexible) Person culture (pursue own particular ambitions)

14. Marketing and Product Strategies(detail) ----------------------Ansoffs Matrix

15. Marketing --------------------------------------------4P/7P

Product (quality, design, brand, packaging) Price (discounts, payment terms, price skimming, penetration pricing, related product pricing) Promotion [Advertising (pull promotion), sales promotion, personal selling (push promotion), public relations] Place (distribution) People, Process, Physical evidence

16. Type of Organization-------------------Mintzbergs Structural Configurations

a. Functional structure

b. Divisional structure

c. Matrix structure

d. Wide flat/tall narrow

e. Centralization/decentralization

17. Strategies-----------------------------------Strategy Lenses

a. Strategy as ideas (high level, long-term, as plan) b. Strategy as design (day-to-day, top-down process, as steps)

c. Strategy as experience (backward looking, past skills) d. Dont focus only on one of them