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Write-Up a) Recommendation b) Support – highlights of the analysis c) High Level implementation 1) Performance Assessment

Conclusion: What is the time horizon? In which direction are they heading?

2) Direction (Mission/Vision) Mission: Clear, compelling, activating; can be visualized - ex. HP’s mission: “to make technical contributions for the advancement and welfare of humanity” Vision: Clearly communicate purpose of the business - reinforce the day-to-day actions - provide direction for the strategy formulation

Vision Test: - desirable and feasible destination - flexibility for management to get there Values: Basic beliefs that guide behaviour Core beliefs: reason for being; long term - ex. Ford’s vision: democratize the automobile

3) Strategic Triangle

i) Goals

ii) Product/Market Focus

- what is provided and to whom? New Product Development Diversification

Existing New

Existing Market Penetration Market Development

iii) Core Activities- activities within the firm that add value - contributes directly to the value proposition - need to distinguish between necessary activities and those that add value iv) Value Proposition - valued by the customers in the target market - a differentiator; sets a product/service apart from competition within the target market Competitive Advantage: - a value proposition that is important to targeted customers, and difficult for competition to copy Conclusion: - Are the elements in the strategic triangle aligned? Do they complement and reinforce each other? - Clarity, logical, coherence - Does the value proposition resonate in the target market?

4) Value Chain/System

Value Chain – the primary activities from the industry value chain that have been integrated into the structure of an organization - looks at the primary and support activities in each step - looks at the areas where value is created - profitability at each stage indicates power/importance of that stage Conclusion: - where does the economic profit lie in the value chain - which activities do not contribute to the value creation

Value System – all the activities from raw materials to the consumer - focus on the parts of the industry that return the most profit - a firm performs a limited number of activities in the value system Conclusion: - is the firm doing things that could return no value - can the firm forward or backward integrate?

5) Strategy (Path, positioning) Companies can obtain strategic position in three ways (not mutually exclusive):

i) Variety-based positioning - based on the choice of product or service varieties rather than customer segments - can serve a wide array of customers but it will meet only a subset of their needs - Example: Jiffy Lube – only do oil changes – faster and cheaper than other auto shops ii) Needs-based positioning - based on targeting a segment of customers iii) Access-based positioning - based on the importance of accessing the product/service Generic Strategy: - differentiation/focused differentiation - low cost leadership/focused low cost leadership 6) Industry Analysis - these factors do not have equal importance; some are more important than others in determining industry attractiveness

7) PEST Analysis - look at changes and trends in the political, economic, social and technological areas of the industry

Conclusion: - are they able to take advantage of any opportunities or reduce threats?

8) Resources (VRIO) - examples of resources include culture, reputation and location

Conclusion: - If a resource has been identified as a CA, is cost leadership, differentiation, or focus generic strategy the most suitable strategic path? - What specific activities need to be supported to achieve a sustainable advantage? - What opportunities exist for economizing on the use of resources? - What are the possibilities for using existing assets more intensely and in more profitable ways?

9) Management Preferences

a) Basic Needs - each...
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