Description
For this assignment, you will develop an EFE matrix for the Coca Cola Company.
Steps
1. Complete the assigned readings for this unit: David and David, Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 17 Edition: Chapters 1, 2, and 3. Please use the exact book as its shown on the pptx.
2. Research Coca Cola using the Cohesion Case in David and David, Strategic Management: A Competitive Advantage Approach, Concepts and Cases, as well as using outside readings. Consider the following in your research:
Make sure the factors you include are both specific and actionable.
Use the information in the S&P Industry Surveys that you can copy from Chapter 1: Assurance of Learning.
Do NOT include strategies as opportunities, but DO include as many monetary amounts, percentages, numbers, and ratios as possible.
3. Create a weighted EFE Matrix with total weighted scores on the chart.
4. Also, write a one page paper in which you discuss your total score and provide your rationale for the weights. Submit the paper, including the EFE Matrix, below.
Unformatted Attachment Preview
Strategic Management Concepts: A
Competitive Advantage Approach,
Concepts and Cases
Seventeenth Edition
Chapter 1
The Nature of Strategic
Management
Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved
Learning Objectives (1 of 2)
1.1 Describe the strategic-management process.
1.2 Discuss the three stages of strategy formulation,
implementation, and evaluation activities.
1.3 Explain the need for integrating analysis and intuition in
strategic management.
1.4 Define and give examples of key terms in strategic
management.
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Learning Objectives (2 of 2)
1.5 Describe the benefits of engaging in strategic
management.
1.6 Explain why some firms do not engage in strategic
planning.
1.7 Describe the pitfalls in doing strategic planning.
1.8 Discuss the connection between business and military
strategy.
1.9 Explain how this course can enhance a student’s
employability.
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Defining Strategic Management (1 of 3)
Strategic Management
• The art and science of formulating, implementing, and
evaluating cross-functional decisions that enable an
organization to achieve its objectives
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Defining Strategic Management (2 of 3)
• Strategic management is used synonymously with the
term strategic planning in this course.
• Sometimes the term strategic management is used to refer
to strategy formulation, implementation, and evaluation,
with strategic planning referring only to strategy
formulation.
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Defining Strategic Management (3 of 3)
• A strategic plan is a company’s game plan.
• A strategic plan results from tough managerial choices
among numerous good alternatives, and it signals
commitment to specific markets, policies, procedures, and
operations.
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Figure 1.1 The Strategic Management
Model
Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 1 (February
1989): 91. See also Anik Ratnaningsih, Nadjadji Anwar, Patdono Suwignjo, and Putu Artama Wiguna, “Balance
Scorecard of David’s Strategic Modeling at Industrial Business for National Construction Contractor of
Indonesia,” Journal of Mathematics and Technology, no. 4 (October 2010): 20.
Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved
The Strategic-Management Model
• Where are we now?
• Where do we want to go?
• How are we going to get there?
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Stages of Strategic Management
(1 of 4)
• Strategy formulation
• Strategy implementation
• Strategy evaluation
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Stages of Strategic Management
(2 of 4)
• Strategy Formulation
– developing a vision and mission
– identifying an organization’s external opportunities and
threats
– determining internal strengths and weaknesses
– establishing long-term objectives
– generating alternative strategies
– choosing particular strategies to pursue
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Strategy Formulation Decisions
• What new businesses to enter
• What businesses to abandon
• Whether to expand operations or diversify
• Whether to enter international markets
• Whether to merge or form a joint venture
• How to avoid a hostile takeover
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Stages of Strategic Management
(3 of 4)
• Strategy Implementation
– requires a firm to establish annual objectives, devise
policies, motivate employees, and allocate resources
so that formulated strategies can be executed
– often called the action stage
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Stages of Strategic Management
(4 of 4)
• Strategy Evaluation
– Determining which strategies are not working well
– Three fundamental activities:
▪ reviewing external and internal factors that are the
bases for current strategies
▪ measuring performance
▪ taking corrective actions
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Key Terms in Strategic Management
(1 of 6)
Competitive Advantage
– any activity a firm does especially well compared to
activities done by rival firms, or
– any resource a firm possesses that rival firms desire.
• A firm must strive to achieve sustained competitive
advantage
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Key Terms in Strategic Management
(2 of 6)
• Strategists
– Individuals most responsible for the success or failure
of an organization
– Help an organization gather, analyze, and organize
information
• Vision and Mission Statements
– A vision statement answers the question “What do we
want to become?”
– A mission statement answers the question “What is our
business?”
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Key Terms in Strategic Management
(3 of 6)
• External Opportunities and Threats
– economic, social, cultural, demographic,
environmental, political, legal, governmental,
technological, and competitive trends and events that
could significantly benefit or harm an organization
• Internal Strengths and Internal Weaknesses
– an organization’s controllable activities that are
performed especially well or poorly
– determined relative to competitors
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Some Opportunities and Threats
• Consumers’ expectation for green operations and products
is rising 8 percent annually in Western Europe.
• Internet marketing is growing 11 percent annually in the
United States.
• Commodity food prices rose 6 percent the prior year.
• Oil and gas prices declined 18 percent in the last twelve
months.
• Computer hacker problems are increasing 14 percent
annually.
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Key Terms in Strategic Management
(4 of 6)
• Long-Term Objectives
– specific results that an organization seeks to achieve in
pursuing its basic mission
– long-term means more than one year
– should be challenging, measurable, consistent,
reasonable, and clear
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Key Terms in Strategic Management
(5 of 6)
• Strategies
– the means by which long-term objectives will be
achieved
– may include geographic expansion, diversification,
acquisition, product development, market penetration,
retrenchment, divestiture, liquidation, and joint ventures
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Figure 1.2 The Basic SWOT Matrix Format
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Key Terms in Strategic Management
(6 of 6)
• Annual objectives
– short-term milestones that organizations must achieve
to reach long-term objectives
– should be measurable, quantitative, challenging,
realistic, consistent, and prioritized
– should be established at the corporate, divisional, and
functional levels in a large organization
• Policies
– the means by which annual objectives will be achieved
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Benefits of Strategic Management
• Strategic management allows an organization to be more
proactive than reactive in shaping its own future;
• It allows an organization to initiate and influence (rather
than just respond to) activities-and thus to exert control
over its own destiny.
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Figure 1.3 Benefits to a Firm That
Does Strategic Planning
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Financial Benefits
• Organizations using strategic-management concepts show
significant improvement in sales, profitability, and
productivity compared to firms without systematic planning
activities
• High-performing firms tend to do systematic planning to
prepare for future fluctuations in their external and internal
environments
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Nonfinancial Benefits
• Enhanced awareness of external threats
• Improved understanding of competitors’ strategies
• Increased employee productivity
• Reduced resistance to change
• Clearer understanding of performance-reward
relationships
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Why Some Firms Do No Strategic
Planning (1 of 2)
• No formal training in strategic management
• No understanding of or appreciation for the benefits of
planning
• No monetary rewards for doing planning
• No punishment for not planning
• Too busy “firefighting” (resolving internal crises) to plan
ahead
• View planning as a waste of time, since no product/service
is made
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Why Some Firms Do No Strategic
Planning (2 of 2)
• Laziness; effective planning takes time and effort; time is
money
• Content with current success; failure to realize that
success today is no guarantee for success tomorrow
• Overconfidence
• Prior bad experience with strategic planning done
sometime/somewhere
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Pitfalls in Strategic Planning (1 of 2)
• Using strategic planning to gain control over decisions and resources
• Doing strategic planning only to satisfy accreditation or regulatory
requirements
• Too hastily moving from mission development to strategy formulation
• Not communicating the plan to employees, who continue working in
the dark
• Top managers making many intuitive decisions that conflict with the
formal plan
• Top managers not actively supporting the strategic-planning process
• Not using plans as a standard for measuring performance
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Pitfalls in Strategic Planning (2 of 2)
• Delegating planning to a “planner” rather than involving all
managers
• Not involving key employees in all phases of planning
• Not creating a collaborative climate supportive of change
• Viewing planning as unnecessary or unimportant
• Viewing planning activities as silos comprised of independent
parts
• Becoming so engrossed in current problems that insufficient or
no planning is done
• Being so formal in planning that flexibility and creativity are
stifled
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Comparing Business and Military
Strategy
• A fundamental difference between military and business
strategy is that business strategy is formulated,
implemented, and evaluated with an assumption of
competition, whereas military strategy is based on an
assumption of conflict
• Both business and military organizations must adapt to
change and constantly improve to be successful
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Excerpts from Sun Tzu’s The Art of
War Writings
• Strategic planning is a matter of vital importance to the
state: a matter of life or death, the road either to survival or
ruin. Hence, it is imperative that it be studied thoroughly
• Know your enemy and know yourself, and in a hundred
battles you will never be defeated
• Skillful leaders do not let a strategy inhibit creative countermovement
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Examples of Employability Skills
From Using Text
• Critical thinking
• Collaboration
• Knowledge application and analysis
• Business ethics and social responsibility
• Information technology
• Data literacy
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Figure 1.4 How to Gain and Sustain
Competitive Advantage
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Copyright
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Strategic Management Concepts: A
Competitive Advantage Approach,
Concepts and Cases
Seventeenth Edition
Chapter 2
Business Vision and
Mission
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Learning Objectives (1 of 2)
2.1 Explain the need for core values statements in strategic
management.
2.2 Describe the nature and role of vision statements in
strategic management.
2.3 Identify the characteristics of a vision statement.
2.4 Describe the nature and role of mission statements in
strategic management.
2.5 Identify and discuss the characteristics of an effective
mission statement.
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Learning Objectives (2 of 2)
2.6 Identify the components of mission statements.
2.7 Discuss the benefits for a firm of having clear vision and
mission statements.
2.8 Evaluate and write mission statements for different
organizations.
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Figure 2.1 A Comprehensive StrategicManagement Model
Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 1 (February 1989): 91. See
also Anik Ratnaningsih, Nadjadji Anwar, Patdono Suwignjo, and Putu Artama Wiguna, “Balance Scorecard of David’s
Strategic Modeling at Industrial Business for National Construction Contractor of Indonesia,” Journal of Mathematics and
Technology, no. 4 (October 2010): 20.
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Core Values Statement
A core values statement specifies a firm’s commitment to
integrity, fairness, discipline, equal employment opportunity,
teamwork, accountability, continuous improvement, or other
such exemplary attributes.
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Vision Statement
A vision statement should answer the basic question:
“What do we want to become?”
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What Do We Want to Become?
• The vision statement should be short, preferably one
sentence, and as many managers as possible should have
input into developing the statement.
• The vision statement should reveal the type of business
the firm engages.
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Vision Statement Examples
• Dr Pepper Snapple: to be the best beverage business
globally; our brands are synonymous with refreshment,
fun, and flavor today and tomorrow.
• Starbucks: to be the premier purveyor of the finest coffee
in the world while maintaining uncompromising principles
as we steadily grow.
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Mission Statement (1 of 2)
• A declaration of an organization’s “reason for being.”
• It answers the pivotal question “What is our business?”
• It is essential for effectively establishing objectives and
formulating strategies.
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Mission Statement (2 of 2)
• It reveals what an organization wants to be and whom it
wants to serve
• It is also called a creed statement, a statement of purpose,
a statement of philosophy, a statement of beliefs, and a
statement of business principles
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Characteristics of a Mission
Statement (1 of 4)
• A good mission statement allows for the generation and
consideration of a range of feasible alternative objectives
and strategies without unduly stifling management
creativity.
• A mission statement needs to be broad to reconcile
differences effectively among, and appeal to, an
organization’s diverse stakeholders
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Characteristics of a Mission
Statement (2 of 4)
• Stakeholders
– include employees, managers, stockholders, boards of
directors, customers, suppliers, distributors, creditors,
governments (local, state, federal, and foreign), unions,
competitors, environmental groups, and the general
public.
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Characteristics of a Mission
Statement (3 of 4)
1. Broad in scope; does not include monetary amounts,
numbers, percentages, ratios, or objectives
2. Fewer than 150 words in length
3. Inspiring
4. Identifies the utility of a firm’s products
5. Reveals that the firm is socially responsible
6. Reveals that the firm is environmentally responsible
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Characteristics of a Mission
Statement (4 of 4)
7. Includes nine components: customers, products or
services, markets, technology, concern for
survival/growth/profits, philosophy, self-concept, concern
for public image, concern for employees
8. Reconciliatory
9. Enduring
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Insight on Scope of Mission
Statement
Mission statements are not designed to express concrete
ends, but rather to provide motivation, general direction, an
image, a tone, and a philosophy to guide the enterprise. An
excess of detail could prove counterproductive since
concrete specification could be the base for rallying
opposition; all in the firm need to be onboard with the firm’s
mission.
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Considerations (1 of 2)
• Do not offer me things.
• Do not offer me clothes. Offer me attractive looks.
• Do not offer me shoes. Offer me comfort for my feet and
the pleasure of walking.
• Do not offer me a house. Offer me security, comfort, and a
place that is clean and happy.
• Do not offer me books. Offer me hours of pleasure and the
benefit of knowledge.
• Do not offer me CDs. Offer me leisure and the sound of
music.
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Considerations (2 of 2)
• Do not offer me tools. Offer me the benefits and the
pleasure that come from making beautiful things.
• Do not offer me furniture. Offer me comfort and the
quietness of a cozy place.
• Do not offer me things. Offer me ideas, emotions,
ambience, feelings, and benefits.
• Please, do not offer me things.
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Mission Statement Components
(1 of 2)
1. Customers-Who are the firm’s customers?
2. Products or services-What are the firm’s major products
or services?
3. Markets-Geographically, where does the firm compete?
4. Technology-Is the firm technologically current?
5. Survival, growth, and profitability-Is the firm committed
to growth and financial soundness?
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Mission Statement Components
(2 of 2)
6. Philosophy-What are the basic beliefs, values,
aspirations, and ethical priorities of the firm?
7. Distinctive competence-What is the firm’s major
competitive advantage?
8. Public image-Is the firm responsive to social,
community, and environmental concerns?
9. Employees-Are employees a valuable asset of the firm?
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Importance of Vision and Mission
Statements
• To make sure all employees/managers understand the
firm’s purpose or reason for being.
• To provide a basis for prioritization of key internal and
external factors utilized to formulate feasible strategies.
• To provide a basis for the allocation of resources.
• To provide a basis for organizing work, departments,
activities, and segments around a common purpose.
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Table 2.5 Ten Benefits of Having a
Clear Mission and Vision
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Achieve clarity of purpose among all managers and employees.
Provide a basis for all other strategic planning activities, including internal
and external assessment, establishing objectives, developing strategies,
choosing among alternative strategies, devising policies, establishing
organizational structure, allocating resources, and evaluating performance.
Provide direction.
Provide a focal point for all stakeholders of the firm.
Resolve divergent views among managers.
Promote a sense of shared expectations among all managers and
employees.
Project a sense of worth and intent to all stakeholders.
Project an organized, motivated organization worthy of support.
Achieve higher organizational performance.
Achieve synergy among all managers and employees.
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Developing Vision and Mission
Statements
A widely used approach includes:
• Select several articles about these statements and ask all
managers to read these as background information.
• Ask managers themselves to prepare a vision and mission
statement for the organization.
• A facilitator or committee of top managers should then
merge these statements into a single document and
distribute the draft statements to all managers.
• A request for modifications, additions, and deletions is
needed next, along with a meeting to revise the document.
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Example Mission Statements (1 of 2)
Hershey
• We bring sweet moments (2) of Hershey happiness (6) to
the world (3) every day.
• Author comment: Statement lacks six components:
Customers (1), Technology (4), Survival/Growth/Profits
(5), Distinctive Competence (7), Public Image (8), and
Employees (9); 12 words
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Example Mission Statements (2 of 2)
A Proposed Mission Statement for Hershey
• We aim to serve consumers of all ages and lifestyles (1) by
providing high-quality chocolate, candy, and snack
products (2) globally (3). We intend to grow and expand
our product offerings (5) using robotics and business
analytics (4). We are dedicated to supporting all
communities where we operate (8), especially to the boys
and girls in the Milton Hershey School (6). Through our
friendly and well-trained employees (9), we provide
consumers the best chocolate anywhere and wrapped in
Hershey Happiness (7).
• 73 words
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Exemplary Proposed Mission
Statement (1 of 2)
Rite Aid
• We are on a mission to offer the best possible drugstore
experience for people of all ages (1) around the United
States (3). We have a state-of-the-art information system
(4) that provides our pharmacists (9) with warnings of any
possible drug interactions to help ensure better customer
safety (8). We are determined to improve our customers’
overall health through our wellness programs (5). We offer
an extensive line of other beauty, food, drink, cosmetic,
and vitamin products through our alliance with GNC (2).
We believe in treating our customers like family (6) and
strive to maintain our reputation as the most personable
drugstore (7). (88 words)
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Exemplary Proposed Mission
Statement (2 of 2)
United Parcel Service (UPS)
• We strive to be the most timely and dependable parcel and
freight forwarding delivery service (2) in the world (3). By
implementing the latest tracking technology (4), we are
able to profitably grow (5) by offering individuals and
businesses (1) dependable and accurate delivery times
(7). We promote from within to improve morale among all
employees (9). Our philosophy (6) is to responsibly
balance the needs of our customers, employees,
shareholders, and communities (8) in an exemplary
manner. (68 words)
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Figure 2.2 How to Gain and Sustain
Competitive Advantages
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Copyright
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Strategic Management Concepts: A
Competitive Advantage Approach,
Concepts and Cases
Seventeenth Edition
Chapter 3
The External Assessment
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Learning Objectives (1 of 2)
3.1 Describe the nature and purpose of an external
assessment in formulating strategies.
3.2 Identify and discuss 10 external forces that impact
organizations.
3.3 Explain Porter’s Five-Forces Model and its relevance in
formulating strategies.
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Learning Objectives (2 of 2)
3.4 Describe key sources of information for identifying
opportunities and threats.
3.5 Discuss forecasting tools and techniques.
3.6 Explain how to develop and use an External Factor
Evaluation (EFE) Matrix.
3.7 Explain how to develop and use a Competitive Profile
Matrix (CPM).
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Figure 3.1 A Comprehensive StrategicManagement Model
Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 1 (February
1989): 91. See also Anik Ratnaningsih, Nadjadji Anwar, Patdono Suwignjo, and Putu Artama Wiguna, “Balance
Scorecard of David’s Strategic Modeling at Industrial Business for National Construction Contractor of
Indonesia,” Journal of Mathematics and Technology, no. 4 (October 2010): 20.
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External Audit
• External audit
– focuses on identifying and evaluating trends and
events beyond the control of a single firm
– reveals key opportunities and threats confronting an
organization so that managers can formulate strategies
to take advantage of the opportunities and avoid or
reduce the impact of threats
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The Purpose of an External Audit
• The external audit is aimed at identifying key variables
that offer actionable responses
• Firms should be able to respond either offensively or
defensively to the factors by formulating strategies that
take advantage of external opportunities or that minimize
the impact of potential threats.
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Key External Forces
External forces can be divided into five broad categories:
1. economic forces
2. social, cultural, demographic, and environmental (SCDE)
forces
3. political, governmental, and legal forces
4. technological forces
5. competitive forces
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Figure 3.2 Relationships Between
Key External Forces and an
Organization
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The AQCD Test
• When identifying and prioritizing key external factors in
strategic planning, the following 4 factors are important:
– Actionable
– Quantitative
– Comparative
– Divisional
• The AQCD is a measure of the quality of an external factor.
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Economic Forces (1 of 2)
• Shift to service economy
• Availability of credit
• Level of disposable income
• Propensity of people to spend
• Interest rates
• Inflation rates
• GDP trends
• Consumption patterns
• Unemployment trends
• Value of the dollar
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Economic Forces (2 of 2)
• Import/Export factors
• Demand shifts for different goods and services
• Income differences by region and consumer group
• Price fluctuations
• Foreign countries’ economic conditions
• Monetary and Fiscal policy
• Stock market trends
• Tax rate variation by country and state
• European Economic Community (EEC) policies
• Organization of Petroleum Exporting Countries (OPEC) policies
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Social, Cultural, Demographic, and
Environmental (SCDE) Forces
• SCDE forces impact strategic decisions on virtually all
products, services, markets, and customers.
• These forces are shaping the way people live, work,
produce, and consume.
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Key SCDE Variables (1 of 3)
• Population changes by race, age, and geographic area
• Regional changes in tastes and preferences
• Number of marriages
• Number of divorces
• Number of births
• Number of deaths
• Immigration and emigration rates
• Social Security programs
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Key SCDE Variables (2 of 3)
• Life expectancy rates
• Per capita income
• Social media pervasiveness
• Attitudes toward retirement
• Energy conservation
• Attitudes toward product quality
• Attitudes toward customer service
• Pollution control
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Key SCDE Variables (3 of 3)
• Attitudes toward foreign peoples
• Energy conservation
• Social programs
• Number of churches
• Number of church members
• Social responsibility issues
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Political, Governmental, and Legal
Forces
• Local, state, and federal laws, as well as regulatory
agencies and special-interest groups, can have a major
impact on the strategies of small, large, for-profit, and
nonprofit organizations.
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Political, Government, and Legal
Variables (1 of 2)
• Natural environmental regulations
• Protectionist actions by countries
• Changes in patent laws
• Equal employment opportunity laws
• Level of defense expenditures
• Unionization trends
• Antitrust legislation
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Political, Government, and Legal
Variables (2 of 2)
• USA versus other country relationships
• Political conditions in countries
• Global price of oil changes
• Local, state, and federal laws
• Import-export regulations
• Tariffs, particularly on steel and aluminum
• Local, state, and national elections
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Technological Forces (1 of 3)
New technologies such as:
• the Internet of Things
• 3D printing
• the cloud
• mobile devices
• biotech
• analytics
• autotech
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Technological Forces (2 of 3)
• robotics and
• artificial intelligence
are fueling innovation in many industries, and impacting
strategic-planning decisions.
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Technological Forces (3 of 3)
• Many firms now have a Chief Information Officer (CIO)
and a Chief Technology Officer (CTO) who work together
to ensure that information needed to formulate, implement,
and evaluate strategies is available where and when it is
needed
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Competitive Forces
• An important part of an external audit is identifying rival
firms and determining their strengths, weaknesses,
capabilities, opportunities, threats, objectives, and
strategies
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Obtaining Competitive Intelligence
(1 of 2)
Legal and ethical ways to obtain competitive intelligence:
1. Reverse-engineer rival firms’ products.
2. Use surveys and interviews of customers, suppliers, and
distributors of rival firms.
3. Analyze rival firm’s Form 10-K.
4. Conduct fly-over and drive-by visits to rival firm
operations.
5. Search online databases.
6. Contact government agencies for public information
about rival firms.
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Obtaining Competitive Intelligence
(2 of 2)
7. Monitor relevant trade publications, magazines, and
newspapers.
8. Purchase social-media data about customers of all firms
in the industry.
9. Hire top executives from rival firms.
Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved
Key Questions About Competitors
(1 of 3)
1. What are the strengths and weaknesses of our major
competitors?
2. What products and services do we offer that are unique in
the industry?
3. What are the objectives and strategies of our major
competitors?
4. How will our major competitors most likely respond to
current economic, SCDE, political, governmental, legal,
technological, and competitive trends affecting our
industry?
Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved
Key Questions About Competitors
(2 of 3)
5. How vulnerable are the major competitors to our new
strategies, products, and services?
6. How vulnerable is our firm to successful counterattack by
our major competitors?
7. How does our firm compare to rivals in mastering the
social-media conversation in this industry?
8. To what extent are new firms entering and old fi
