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.