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H:\!DOCS\MSOFFICE\WINWORD\TEMPLATE\NORMAL.DOT Case Template Charles V. Balch Charles V. Balch Company Name Charles Balch Summary Position of product life cycle: Embryonic, growing, mature, aging. Discussion of industry and target market. On what basis does the company compete Core competency/distinctive competency Mission Growth Efficiency Utilization of resources contribution to owners contribution to customers contribution to employers contribution to society Strategic Management Challenges of the 90s Accelerating Rates of Change Increasing Levels of Competition Globalization of Business Technological Change Changing Nature of the Workforce Resource Shortages Transition From an Industrial to Knowledge Society Unstable Market and Economic Conditions Increasing Demands of Constituents Complexity of the Strategic Management Environment Problem Statement Define strategic problem. A broad scope issue to resolve. Most cases focus on how to grow in a competitive market. Need to anticipate future customer needs. Sustainable competitive advantage. Alternatives must be addressed in alternatives. Related Issues Situational Analysis Internal Strengths Financial Information Intellectual assets (documented) Marketing Manufacturing/Service Personnel Corporate Distinctive competency Internal Weaknesses Financial Information Marketing Manufacturing/Service Personnel Corporate External Opportunities Market Forces Distinctive Competencies External Threats Market Forces Industry Analysis Key Factors for Success: Product life cycle: (Embryonic, Growth, Shake out, Maturity, Decline) Attractiveness of Entry: Profitability: Technology/Recent Developments: Percent Capacity (Production/Capability): Competitor Analysis Forces Driving Industry Competition: Threat of New Entrants Intensity of Rivalry Pressure From Substitute Products Bargaining Power of Suppliers Bargaining Power of Buyers Financial Analysis If the case is about a startup, there is no way to avoid break-even analysis (unit and dollar). Ratios Liquidity: Leverage: Activity: Profitability: Short Summary Delineation of Alternatives Continue conglomerate growth through strategic alliances, acquisition, backward integration and forward integration. Develop corporate Strategic Information Database. + Required for future competition - Dilutes profits. Redefine administrative structure. Arvin should develop intellectual assets for future needs. Benchmark and Management Audit. + Required for future competition - Expensive Compete on capabilities / Continue to develop core competencies across SBUs. + A distinctive competency. - None noted. Strengthen takeover defense through “poison pill” where upper management gets paid substantial bonuses on takeover. + Removes a real concern - May not be in investors interest. Reenginner processes to continue continuous improvement and growth. Eliminate duplicate activities, combine activities where possible. Reduce reviews and approvals. Eliminate or reduce filing. + Long term savings - Expensive and requires retraining. Obsess on customers and employees. To qualify for a SBA loan business must not dominate its industry, have less than 10 million in annual sales, fewer than 1,000 employees Strategic Alliances Create products that meet needs that customers don’t know yet. Develop intellectual assets for future needs. Develop core competencies across SBUs. Compete on capabilities Standard cost/profit centers Define Strategic intent Benchmark Strategy is 10-15 years out. Growth Diversification Concentric (techno related); Horizontal (New product for current customers - buy customers); Conglomerate (new product for new customers). Acquisition Intensive, Integrative, diversified Geographic focus of focus Divestment - sell off single business unit Product/Marketing Change product process Change advertising and promotional activities Change channels of distribution to personal sales force Focus on market segment Cost leadership: construct efficient scale facilities; Change the product to remove frills; Automate high cost/labor activities; Find cheaper raw materials; Relocate facilities to reduce transportation costs Confrontation: Do what you do best. Provide Financing Product, price, place, promotion Penetration Market Expansion Product Differentiation Low Cost leader Changing channels to go with ones own sales force Focus on Narrow Industry Segment: Niche target a narrow industry segment and serve it best, dominate that segment Low cost leader: good way to gain market share Differentiation: quality, status, etc. carve out a market niche & defend aggressively Consider Globalization Strategic Imperatives Innovation High levels of quality Speed flexibility Continuous improvement Downsizing Rightsizing Takeover defense (poison pill) Management Audit Relocate to be closer to customers, Contingency strategy Total Quality Management Backward integration: gaining control of suppliers. Forward integration gain control of distributors Preemptive strategies Retrenchment - major effort across the board effort to reduce cash outflows Stabilization satisfied not to grow or to grow very little Product development Sustainable Competitive Advantage Personnel: Participative Management, Employee Empowerment Stagnant Industry Identify, create and exploit growth areas Emphasize product quality and improvement Improve efficiency of production and distribution Dominant Firm Keep the offensive Use fortification (introduce new brands to “compete” against yourself) Use confrontation (compete in advertising and price) Declining Industry Early Exit Milk the investment Shrinking selectivity - choose available markets Hold your own Increase Investments Low Market Share Market segmentation Efficient R&D Think Small Watch executives Strategic Recommendation Continue conglomerate growth through consolidation of product line and sales force, strategic alliances, acquisition, backward integration and forward integration. Develop corporate Strategic Information Database. Implementation Information Systems need to be expanded to allow integration Management style and corporate culture need to be maintained. Define and acquire new businesses through strategic alliances, acquisition, backward integration and forward integration. Develop corporate Strategic Information Database. Concentrate first on processes with the largest financial impact Assess the market attractiveness and the strength of each program. Study changes in our market and in demographics to plan for future Strategic Control Explain Why Short term (in 4 weeks) globalize products and descriptions across company. Define degree of acceptable failure is acceptable. Intermediate (in 4 months) continue new product development. Poll sales force for success and problems Long term (in 48 months) create new products to reflect sales force findings. Watch financing. Strategy: A coherent set of actions aimed at gaining sustainable advantage are defined. Structure: Remove baggage from the organizational chart. Before efforts begin check to make sure that plan is appropriate to mission. Systems: Improve processes and flows that gets things done. Style: Management should focus on quality and sales. Staff: Continue organic rightsizing. Shared Values: Culture/Values are part of goal statements.. Skills: Appropriate skills as discussed above need to be developed.. Functional Area Roles in Implementation Control Marketing: Start new trade up market testing. Finance: Make a revenue forecast and compare results. Watch ROI but don’t get short sighted. Operational: Standards performance measurement. Benchmark. Improve planning and control systems. Management: Develop standards for job effort. Note if people are working within their job descriptions, state acceptable tolerances. Make sure that problems will not reoccur. Production: Measure actual performance, only act when performance is out of line. Continuous control should focus on outputs. Strategic Control Questions Is strategy internally consistent, consistent with organizational mission? Yes. Consistent with the environment? Yes. Consistent with internal resources? Yes. Appropriate amount of risk? Yes. Proper time horizon? Yes. Is strategy identifiable? Yes. Is it socially responsible? Yes. Clear stimulus to organizational behavior? Yes. Adequate contingency plans? Yes. Exploit major opportunities? Yes. Are milestones clearly defined? Yes. PAGE PAGE Normal Heading 1 Heading 2 Heading 3 Heading 4 Heading 5 Heading 6 Default Paragraph Font Header Footnote Text List Table Footnote Reference Bibliography Example Quote Question Answer Footer Page Number Heading UVZc0 Telecom_Out Telecom_In Page_Heading Title_Heading Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOC Charles V. Balch H:\!DOCS\BUS\CASETMPL.DOCÿ@HP LaserJet 4 Plus/4M Plus LPT2: HPPCL5E HP LaserJet 4 Plus/4M Plus HP LaserJet 4 Plus/4M Plus Symbol Palatino Book Antiqua Courier Courier New Case Template Charles V. Balch Charles V. Balch