David PPT Exp Ch04

8/19/2019 David PPT Exp Ch04

1/89

Copyright 2007 Prentice Hall Ch 4 -1

Chapter 4

The Internal Assessment

Strategic Management:Concepts & Cases

11th Edition

Fred David


2/89


Chapter Otline

The Nature of an Internal Audit

The Resource-Based View (RBV)

Integrating Strategy & Culture


3/89


Chapter Otline !cont"d#

anage!ent

ar"eting

#$$ortunity Analysis


4/89



%inanceAccounting

'roduction#$erations

Research & eelo$!ent


5/89



anage!ent Infor!ation Syste!s

The Internal %actor *aluation (I%*) atri+


6/89


The biggest levers you’ve got to change acompany are strategy, structure, and culture.If I could pick two, I’d pick strategy andculture. –

,ayne eonard. C*#. *ntergy

Internal Assessment

Weak leadership can wreck the soundest

strategy. –Sun /i


7/89


$atre o% an Internal Adit

-- Strengths

-- ,ea"nesses

%unctional Areas of Business


8/89


Internal strengths'ea(nesses

E)ternal opportnitiesthreats

Clear statement o% mission

$atre o% an Internal Adit

Basis for #01ecties & Strategies


9/89


*e+ Internal Forces

Fnctional ,siness Areas:

Vary 0y organi2ationiisions hae differing strengths &

wea"nesses


10/89


*e+ Internal Forces

Distinctive Competencies:

%ir!3s strengths that cannot 0e easily!atched or i!itated 0y co!$etitors


11/89


*e+ Internal Forces


Building co!$etitie adantage inolesta"ing adantage of distinctie

co!$etencies


12/89


*e+ Internal Forces


Strategies designed to i!$roe on afir!3s wea"nesses and turn to strengths


13/89


Internal Adit

4Infor!ation fro!5

4Management4Mar(eting

4Financeacconting

4-rodctionoperations

4.esearch & Development

4Management in%ormation S+stems

'arallels $rocess of e+ternal audit


14/89


Internal Adit

Inole!ent in $erfor!ing an internal

strategic-!anage!ent audit $roides

ehicle for understanding nature andeffect of decisions in other functional

0usiness areas of the fir!


15/89


Internal Adit

Coordination & understanding a!ong!anagers fro! all functional areas

6ey to #rgani2ational Success


16/89


Internal Adit

Nu!0er and co!$le+ity increasesrelatie to organi2ation si2e

%unctional Relationshi$s


17/89


18/89


.esorce ,ased /ie' !.,/#

A$$roach to Co!$etitie Adantage

Internal resources are !ore i!$ortantthan e+ternal factors


19/89



7 All *nco!$assing Categories

89 'hysical resources:9 ;u!an resources

79 #rgani2ational resources


20/89



*!$irical Indicators

Rare ;ard to i!itate

Not easily su0stituta0le


21/89


Integrating Strateg+ & Cltre

Pattern of behavior developed by an

organiation as it learns to cope with its

problem of e!ternal adaptation and

internal integration"is considered valid

and taught to new members

#rgani2ational Culture


22/89



#rgani2ational Culture

Resistant to change ay re$resent5

Strength

,ea"ness


23/89


Cltral-rodcts

/ales

0egends ,elie%s

eroes .ites

S+m2ols .italsM+ths



24/89



#rgani2ational Culture Can Inhi0it

Strategic anage!ent

iss e+ternal changes due to stronglyheld 0eliefs

Natural tendency to


25/89


>9S9 Versus %oreign Cultures

To successfully compete in world markets, #.$.

managers must obtain a better knowledge of

historical, cultural, and religious forces that

motivate and drive people in other countries.


26/89



27/89


28/89


Management

-lanning

Stage 3hen Most

ImportantFnction

Strategy %or!ulation

Organiing Strategy I!$le!entation

Motivating Strategy I!$le!entation

Sta%%ing

Controlling

Strategy I!$le!entation

Strategy *aluation


29/89


Management

'lanning

Beginning of !anage!ent $rocess

Bridge 0etween $resent & future

I!$roes li"elihood of attaining

desired results


30/89


-lanning

%orecasting

*sta0lishing o01ecties

eising strategies

eelo$ing $olicies

Setting goals

Management


31/89


Management

#rgani2ing

Achiees coordinated effort

efines tas" & authority relationshi$s

e$art!entali2ation

elegation of authority


32/89


Organiing

#rgani2ational design

o0 s$eciali2ation

o0 descri$tions

o0 s$ecificationsS$an of control

>nity of co!!and

Coordination

o0 design

o0 analysis

Management


33/89


Management

otiating

Influencing to acco!$lish s$ecific

o01ecties

Co!!unication !a1or co!$onent


34/89


Motivating

eadershi$

Co!!unication

,or" grou$s

o0 enrich!ent

o0 satisfaction

Needs fulfill!ent

#rgani2ational change

orale

Management


35/89


Management

Staffing

'ersonnel !anage!ent

;u!an resources !anage!ent


36/89


Sta%%ing

,age & salary ad!in9

*!$loyee 0enefits

Interiewing

;iring

ischarging

Training

anage!ent deelo$!ent

Affir!atie Action

**#a0or relations

Management


37/89


Management

Controlling

*sta0lishing $erfor!ance standards

*nsure actual o$erations confor! to

$lanned o$erations

Ta"ing correctie actions


38/89


Controlling

uality

%inancial

Sales

Inentory

*+$ense

Analysis of ariance

Rewards

Sanctions

Management


39/89


Management Adit Chec(list

4oes the fir! use strategic !anage!ent

conce$tsD4 Are o01ectiesgoals !easura0leD ,ell

co!!unicatedD4o !anagers at all leels $lan

effectielyD

4oes the fir! use strategic !anage!ent

conce$tsD4 Are o01ectiesgoals !easura0leD ,ell

co!!unicatedD4o !anagers at all leels $lan

effectielyD


40/89



4o !anagers delegate wellD4Is the organi2ation3s structure

a$$ro$riateD

4 Are 1o0 descri$tions clearD4 Are 1o0 s$ecifications clearD4Is e!$loyee !orale highD

4o !anagers delegate wellD4Is the organi2ation3s structure

a$$ro$riateD

4 Are 1o0 descri$tions clearD4 Are 1o0 s$ecifications clearD4Is e!$loyee !orale highD


41/89



4Is e!$loyee a0senteeis! lowD4Is e!$loyee turnoer lowD4 Are the reward !echanis!s effectieD

4 Are the organi2ation3s control!echanis!s effectieD

4Is e!$loyee a0senteeis! lowD4Is e!$loyee turnoer lowD4 Are the reward !echanis!s effectieD

4 Are the organi2ation3s control!echanis!s effectieD


42/89


Mar(eting

Custo!er Needs,ants for 'roductsSerices

89 efining

:9 Antici$ating

79 Creating

?9 %ulfilling


43/89


Mar(eting

ar"eting %unctions15 Cstomer anal+sis

65 Selling prodctsservices

75 -rodct & service planning

45 -ricing

85 Distri2tion

95 Mar(eting research

5 Opportnit+ anal+sis


44/89


Cstomer

Anal+sis

Custo!er sureys

Consu!er infor!ation

ar"et $ositioningstrategies

Custo!er $rofiles

ar"et seg!entation

strategies

Mar(eting


45/89


Adertising

Sales

'ro!otion'u0licity

Sales force !anage!ent

Custo!er relations

ealer relations

Mar(eting

Selling

-rodctsServices


46/89


Test !ar"eting

Brand $ositioning

eising warrantees'ac"aging

'roduct featureso$tions

'roduct style

uality

Mar(eting

-lanning

-rodctService


47/89


%orward integration

iscounts

Credit ter!sCondition of sale

ar"u$s

Costs

>nit $ricing

Mar(eting

-ricing


48/89


,arehousing

Channels

CoerageRetail site locations

Sales territories

Inentory leels

Trans$ortation

Mar(eting

Distri2tion


49/89


ata collection

ata in$utata analysis

Su$$ort 0usiness functions

Mar(eting

Mar(eting .esearch


50/89


Assessing costs

Assessing 0enefits

Assessing ris"s

Cost0enefitris" analysis

Mar(eting

Opportnit+

Anal+sis


51/89


Mar(eting


15 Are mar(ets segmented e%%ectivel+;

65 Is the organiation positioned 'ell among

competitors;75 as the %irm"s mar(et share 2een

increasing;

45 Are the distri2tion channels relia2le &

cost e%%ective;

85 Is the sales %orce e%%ective;


52/89


Mar(eting


95 Does the %irm condct mar(et research;

5 Are prodct


53/89


Mar(eting


1@5Are the mar(eting planning & 2dgetinge%%ective;

115Do the %irm"s mar(eting managers haveade


54/89


FinanceAcconting

eter!ining financial strengths &

wea"nesses "ey to strategy

for!ation


55/89


FinanceAcconting

%inanceAccounting %unctions

15 Investment decision !Capital 2dgeting#

65 Financing decision

75 Dividend decision


56/89


Firm’s ability to meet its

short-term obligations

.atios

Current ratio

uic" (or acid test) ratio

,asic Financial .atios

0i


57/89


Extent of debt financing

.atios

e0t-to-total assets

e0t-to-eEuity

ong-ter! de0t-to-eEuity

Ti!es-interest earned


0everage .atios


58/89


Effective use of firm’s

resources

.atios

Inentory-turnoer

%i+ed assets turnoer

Total assets turnoer

Accounts receia0le turnoer Aerage collection $eriod


Activit+ .atios


59/89


Effectiveness shown by

returns on sales &

investment

.atios

Fross $rofit !argin

#$erating $rofit !argin

Net $rofit !arginReturn on total assets (R#A)


-ro%ita2ilit+ .atios


60/89


Effectiveness shown by

returns on sales &

investment

.atios

Return on stoc"holders eEuity

(R#*)

*arnings $er share'rice-earnings ratio


-ro%ita2ilit+ .atios

!cont"d#


61/89


Firm’s ability to maintain

economic position

.atios

Sales

Net inco!e

*arnings $er shareiidends $er share


ro'th .atios


62/89


FinanceAcconting Adit

4,here is the fir! strongwea" as

indicated 0y financial ratio analysisD4Can the fir! raise short-ter! ca$ital as

neededD4Can the fir! raise long-ter! ca$ital as

needed through de0t andor eEuityD

4,here is the fir! strongwea" as

indicated 0y financial ratio analysisD4Can the fir! raise short-ter! ca$ital as

neededD4Can the fir! raise long-ter! ca$ital as

needed through de0t andor eEuityD


63/89



4oes the fir! hae sufficient wor"ing

ca$italD4 Are ca$ital 0udgeting $rocedures

effectieD4 Are diidend $ayout $olicies reasona0leD4 Are the fir!3s financial !anagers

e+$erienced & well trainedD

4oes the fir! hae sufficient wor"ing

ca$italD4 Are ca$ital 0udgeting $rocedures

effectieD4 Are diidend $ayout $olicies reasona0leD4 Are the fir!3s financial !anagers

e+$erienced & well trainedD


64/89



*ffectie %inancial Analysis ReEuires5

89 Analysis of how the ratios hae

changed oer ti!e

:9 ;ow the ratios co!$are to industrynor!s

79 ;ow the ratios co!$are with "ey

co!$etitors

*ffectie %inancial Analysis ReEuires5

89 Analysis of how the ratios hae

changed oer ti!e

:9 ;ow the ratios co!$are to industrynor!s

79 ;ow the ratios co!$are with "ey

co!$etitors


65/89


-rodctionOperations

'roduction#$erations %unctions

-rocess

Capacit+

Inventor+

3or(%orce

Balit+


66/89


%acility design

Technology selection

%acility layout'rocess flow analysis

%acility location

ine 0alancing

'rocess control

-rodctionOperations

-rocess


67/89


%orecasting

%acilities $lanning

Aggregate $lanningScheduling

Ca$acity $lanning

ueuing analysis

-rodctionOperations

Capacit+


68/89


Raw !aterials

,or" in $rocess%inished goods

aterials handling

-rodctionOperations

Inventor+


69/89


o0 design

,or" !easure!ento0 enrich!ent

,or" standards

otiation techniEues

-rodctionOperations

3or(%orce


70/89


uality control

Sa!$lingTesting

uality assurance

Cost Control

-rodctionOperations

Balit+


71/89


-rodctionOperations Adit

4 Are su$$liers of !aterials. $arts. etc9

relia0le and reasona0leD4 Are facilities. eEui$!ent & !achinery in

good conditionD4 Are inentory-control $olicies and

$rocedures effectieD

4 Are su$$liers of !aterials. $arts. etc9

relia0le and reasona0leD4 Are facilities. eEui$!ent & !achinery in

good conditionD4 Are inentory-control $olicies and

$rocedures effectieD


72/89


-rodctionOperations Adit

4 Are Euality-control $olicies & $rocedures

effectieD4 Are facilities. resources. and !ar"ets

strategically locatedD4oes the fir! hae technological

co!$etenciesD

4 Are Euality-control $olicies & $rocedures

effectieD4 Are facilities. resources. and !ar"ets

strategically locatedD4oes the fir! hae technological

co!$etenciesD


73/89


.esearch & Development

Research & eelo$!ent %unctions

Development o% ne' prodcts 2e%ore

competitors

Improving prodct


74/89


%inancing as !any$ro1ects as $ossi0le

>se $ercent-of-sales

!ethod

Budgeting relatie to

co!$etitors

;ow !any successfulnew $roducts are

needed

.esearch & Development

.&D ,dgets

. h & D l A di


75/89


.esearch & Development Adit

4 Are the R& facilities adeEuateD4If R& is outsourced. is it cost effectieD4 Are the R& $ersonnel well EualifiedD

4 Are R& resources allocated effectielyD

4 Are the R& facilities adeEuateD4If R& is outsourced. is it cost effectieD4 Are the R& $ersonnel well EualifiedD4 Are R& resources allocated effectielyD


76/89

M t I % ti


77/89


Management In%ormation

S+stems

'ur$ose

Improve per%ormance o% an enterprise 2+improving the


78/89



S+stems

Infor!ation Syste!s

CI#CT#

Security >ser-friendly

*-co!!erce

M t I % ti


79/89



S+stems Adit

4o !anagers use the infor!ation syste!

to !a"e decisionsD4Is there a CI# or irector of Infor!ation

Syste!s $osition in the fir!D4Is data u$dated regularlyD

4o !anagers use the infor!ation syste!

to !a"e decisionsD4Is there a CI# or irector of Infor!ation

Syste!s $osition in the fir!D4Is data u$dated regularlyD

M t I % ti


80/89



S+stems Adit

4o !anagers fro! all functional areas

contri0ute in$ut to the infor!ation syste!D4 Are there effectie $asswords for entry

into the fir!3s infor!ation syste!D4 Are strategists of the fir! fa!iliar with the

infor!ation syste!s of rial fir!sD

4o !anagers fro! all functional areas

contri0ute in$ut to the infor!ation syste!D4 Are there effectie $asswords for entry

into the fir!3s infor!ation syste!D4 Are strategists of the fir! fa!iliar with the

infor!ation syste!s of rial fir!sD

M t I % ti


81/89



S+stems Adit

4Is the infor!ation syste! user-friendlyD4o all users understand the co!$etitie

adantages that infor!ation can $roideD

4 Are co!$uter training wor"sho$s $roidedfor usersD4Is the fir!3s syste! 0eing i!$roedD

4Is the infor!ation syste! user-friendlyD4o all users understand the co!$etitie

adantages that infor!ation can $roideD

4 Are co!$uter training wor"sho$s $roidedfor usersD4Is the fir!3s syste! 0eing i!$roedD


82/89



83/89


For .evie' !Chapter 4#


84/89


6ey Ter!s & Conce$ts


Activit+ .atios Cost,ene%it Anal+sis

Capital ,dgeting Cltral -rodcts

Commnication Distinctive Competencies

Controlling Distri2tion



85/89




Dividend DecisionFnctions o%

FinanceAcconting

Empirical Indicators Fnctions o% Management

Financial .atio Anal+sis Fnctions o% Mar(eting

Financing DecisionFnctions o% -rodction

Operations



86/89




ro'th .atios Investment Decision

man .esorce

Management0everage .atios

Internal Adit 0i


87/89



88/89




-rodctionOperations

FnctionsSelling

-ro%ita2ilit+ .atios Sta%%ing

.esearch & Development S+nerg+

.esorce ,ased /ie'

!.,/#Test Mar(eting



89/89



/ale Chain Anal+sis

!/CA#

David PPT Exp Ch04

Documents

Transcript of David PPT Exp Ch04