Importance of Strategic Planning and Management in Business

Importance of Specific and Factual Terms in Case Analysis

The Edward Deming quote mentioned in Chapter 1 (In God We Trust, All Others Bring the Data) is vitally important in this course, because students tend to use vague terms throughout their case analysis.  Vagueness is detrimental to development of any strategic plan.  Therefore, highlight and emphasize the relevance and importance of the Deming quote and tell students that vagueness is disastrous in this course.  Strategies must be formulated to the extent possible on factual, specific, underlying key internal and external factors, rather than trying to formulate strategies based on general statements, opinion, or intuition.

2. A mission statement is broad in scope for three reasons.  First, it allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity.  Excess specificity would limit the potential of creative growth for the organization.  Second, a mission statement needs to be broad to reconcile differences among, and appeal to, an organization’s diverse stakeholders.  Thus, a mission statement should be reconciliatory.  Third, it is simply premature in the mission statement to reveal goals and objectives, which should be determined after the internal and external assessment, as illustrated in the comprehensive strategic planning model.

A good mission statement reflects the anticipations of customers. Organizations should identify customers’ needs and then provide a product or service to fulfill those needs.  For example, AT&T’s mission statement focuses on communication rather than on telephones; Exxon-Mobil’s mission statement focuses on energy rather than on oil or gas; Union Pacific’s mission statement focuses on transportation rather than on railroads; and Universal Studio’s mission statement focuses on entertainment rather than on movies. 

3. Technological forces represent major opportunities and threats that must be considered in formulating strategies.  Social networking sites such as Facebook, Twitter, and Instagram provide opportunities for many companies in terms of broadening exposure to a wider market, but overlooking these technological trends or waiting too long to act on them may represent a threat to a company’s survival.  Bad news can spread very fast on social network sites, representing a major threat to firms.  Good news can also spread very fast, representing a major opportunity to firms. To expand more on this off on this answer the question below!

 Explain how Facebook, Twitter, and Instagram can represent a major threat or opportunity for a company.

4. Market Development Strategy is a growth strategy put in place by companies or organizations to introduce their product or solution to target audiences they have not yet reached or are not yet currently serving.  A market development strategy involvesintroducing present products or services into new geographic areas, whereas a product development strategy seeks increased sales by improving or modifying present products or services. Thinking about this strategy answer the question below.

If a company has $1 million to spend on a new strategy and is considering market development versus product development, what determining factors would be most important to consider?

5. There’s little doubt that the Internet has greatly contributed to workplace efficiency and productivity over the last couple decades. E-mail has made real-time, written communication far easier than ever before, and new technologies have provided the ability to share computer screens and hold virtual face-to-face meetings—not to mention the ability to conduct research without sifting through dozens of books.

But employees can also waste a lot of time on the Internet. Salary.com reported on a survey it conducted of 3,200 people to see what the biggest time-wasters at work were. The survey found that 64% of respondents said they visit non-work-related websites every day during work hours. So how much time are we talking about?
Salary.com found that 39% of respondents said they spend an hour or less per week on non-work-related items, 29% spent up to 2 hours per week, 21% up to 5 hours, and just 3% 10 or more hours.

Employers might be surprised to find out who is doing most of the time wasting. Salary.com reports that “even though many assume that younger workers spend more time on websites that aren’t work-related, that’s not the case. Workers between the ages of 26-35 topped the list with 75 percent wasting time at work on a daily basis, compared to the 72 percent of 18- to 25-year-olds.”

Many employers try to limit employees’ spending time doing personal activities at work by blocking personal websites like Facebook and Twitter on the company Internet.
The survey found that 30% of respondents say their employers do this; however, that same survey found that the majority of those surveyed said that if their company had such a policy, they would simply use their own smartphone, tablet, or laptop to circumvent the policy.

What policy do you recommend for companies regarding employees spending time on their personal Facebook and other social media accounts?  Could your policy be enforced?  How?  Why?

6. Cultural factors are an integral part of everyday life in organizations.  An organization’s unique culture represents the heart of work.  Employees and managers get emotionally attached to cultural factors.  Thus, in choosing among alternative strategies for an organization, consideration should be given to the different levels of support that proposed strategies would receive from existing cultural products.  Consideration should also be given to whether cultural changes could be achieved readily.  Cultural factors should not dictate the choice of various strategies, but they should absolutely be considered in the discussion and analysis. 

Explain why cultural factors should be an important consideration in analyzing and choosing among alternative strategies.

7. Strategy evaluation should be performed on a continuous basis, rather than at the end of specified periods of time or after problems occur.  An advantage of evaluating strategies on a continuous rather than on a periodic basis is that it allows benchmarks of progress to be established and more effectively monitored, and corrective actions to be taken in a timely manner.  An advantage of evaluating strategies on a periodic basis is that it is easier and less expensive to evaluate strategies annually or only after problems occur.

 Strategy evaluation is critically important today because internal and external factors often change quickly and dramatically.  Key factors need to be monitored during strategy-evaluation activities.  For example, technology is shortening the product life cycle in nearly all industries.  Smartphones are rapidly connecting the world, creating available consumers/customers in countries the firm never previously even considered.  Another reason strategy evaluation is so important today is that corrective actions to re-steer a strategy or strategic plan must be made in a timely manner, before it is too late for the firm to recover.

8. Americans tend to emphasize time while other cultures tend to place more value on relationships. Americans also tend to have larger areas of personal space than many other cultures. Material wealth is important to Americans. In some other countries, men are valued more than females, and in many countries, females are restricted from being business owners and managers. Quality of life and family time may be more important in other countries, while Americans tend to focus on personal achievement.  Americans value competitiveness and individualism, while other cultures often value modesty, team spirit, collectivity, and patience more.  Regardless of where someone is doing business and with whom, it is important to study cultural differences and adapt, be cognizant, and be respectful of cultural differences.  Regarding culture across countries, go to http://www.worldbusinessculture.com/and spend some time here viewing business culture in various countries. Language, cultural, and value systems differ among countries, as do the number and nature of competitors.  There are also different currencies, tariffs, laws, taxes, regulations, suppliers, distributors, monetary policies, and   Therefore, the external audit part of strategic management is much more complicated if the firm does substantial business outside the USA.

The following are trends that are contributing to the globalization of industries around the world:

• Markets are converging in terms of tastes, trends, and prices.
• More and more countries are welcoming foreign investment and capital.
• Advancements in telecommunications and smartphones are drawing countries, cultures, and organizations worldwide closer together.
• Growth in demand for goods and services outside the USA is higher than inside.
• 95% of the world’s population live outside the USA, and firms can gain economies of scale by selling to those people. 

Why is globalization of industries a common factor today?  Compare and contrast U.S. versus foreign cultures in terms of doing business.