Boards of Directors: Governance Issues

A board of directors is a group of individuals elected by the ownership of a corporation to have oversight and guidance over management and to look out for shareholders’ interests. The act of oversight and direction is referred to as governance. The National Association of Corporate Directors defines governance as “the characteristic of ensuring

MINI-CASE ON THE STARBUCKS CORPORATION (SBUX) WHAT STARBUCKS STRATEGIES ARE BEST?

There is only so much revenue that coffee, lattes, and pastries can bring in, so Starbucks performed SWOT and QSPM analyses and decided to spend millions on three new strategies: (1) provide beer and wine, (2) provide expanded lunch and dinner menus, and (3) provide advanced mobile ordering. Several key factors that entered into

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Transitioning from Formulating to Implementing Strategies

The strategy-implementation stage of strategic management is revealed in Figure 7-1, as illus­trated with white shading. Successful strategy formulation does not guarantee successful strategy implementation. It is always more difficult to do something (strategy implementation) than to say you are going to do it (strategy formulation)! Although inextricably linked, strategy imple­mentation is fundamentally different

The Need for Clear Annual Objectives

Annual objectives are desired milestones an organization needs to achieve to ensure successful strategy implementation. annual objectives are essential for strategy implementation for five primary reasons: they represent the basis for allocating resources. they are a primary mechanism for evaluating managers. they enable effective monitoring of progress toward achieving long-term objectives. they establish organizational,

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The Need for Clear Policies

Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative prac­tices established to support and encourage work toward stated goals. Changes in a firm’s stra­tegic direction do not occur automatically. On a day-to-day basis, policies are needed to make a strategy work. Policies facilitate solving recurring problems and guide the implementation of strategy.

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Match Structure with Strategy

Changes in strategy often require changes in the way an organization is structured, for two major reasons. First, structure largely dictates how objectives and policies will be established. For example, objectives and policies established under a geographic organizational structure are couched in geographic terms. objectives and policies are stated largely in terms of products

Types of Organizational Structure

Structure matters! There are seven basic types of organizational structure: (1) functional, (2) divi­sional by geographic area, (3) divisional by product, (4) divisional by customer, (5) divisional by process, (6) strategic business unit (SBU), and (7) matrix. Companies, like people and armies, strive to be better organized/structured than rivals, because better organization can yield

Dos and Don’ts in Developing organizational Charts

Students analyzing strategic-management cases (and actual corporate executives) oftentimes revise and improve a firm’s organizational structure. This section provides some basic guidelines for this endeavor. There are some basic dos and don’ts in regard to devising or constructing organizational charts, especially for midsize to large firms. First of all, reserve the title CEO for

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Strategic Production/Operations Issues

Production/operations capabilities, limitations, and policies can significantly enhance or inhibit the attainment of objectives. production processes typically constitute more than 70 percent of a firm’s total assets. Thus, a major part of the strategy-implementation process takes place at the production site. Strategic production-related decisions on plant size, plant location, prod­uct design, choice of equipment,

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Strategic Human Resource Issues

Any organization is only as good as its people! Thus, human resource issues can make or break successful strategy implementation. Thus, seven human resource issues are discussed further in this section, as follows: (1) linking performance and pay to strategy, (2) balancing work life with home life, (3) developing a diverse work force, (4)

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MINI-CASE ON HILTON WORLDWIDE HOLDINGS (HLT): IS THE NEW HILTON POLICY WARRANTED?

Headquartered in McLean, Virginia, Hilton Worldwide (and Marriott) on January 1, 2015, implemented a new policy that requires customers to notify the hotel the day before their scheduled arrival to avoid having to pay for the room. This policy reverses a long tradition of allowing customers to cancel their reservation “up to 6pm the

Strategic Marketing Issues

Countless marketing variables affect the success or failure of strategy implementation efforts. Some strategic marketing issues or decisions are as follows: How to make advertisements more interactive to be more effective How to take advantage of Facebook and Twitter conservations about the company and industry To use exclusive dealerships or multiple channels of distribution

Social Media Marketing

Social media marketing has become an important strategic issue. Marketing has evolved to be more about building a two-way relationship with consumers than just informing consumers about a product or service. Marketers increasingly must get customers involved in the company website and solicit suggestions in terms of product development, customer service, and ideas. The

Market Segmentation

Market segmentation and product positioning rank as marketing’s most important contributions to strategic management. Market segmentation can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits. For example, eBay recently initiated a new market segmentation strategy to target consumers under 18 years old. “We’re

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Product Positioning and Perceptual Mapping

After markets have been segmented so that the firm can target particular customer groups, the next step is to find out what customers want and expect. This takes analysis and research. A severe mistake is to assume the firm knows what customers want and expect. Countless research studies reveal large differences between how customers

Strategic Finance/Accounting Issues

Several finance/accounting concepts central to strategy implementation are acquiring needed capi­tal, developing projected financial statements, preparing financial budgets, and evaluating the worth of a business. Some examples of decisions that may require finance and accounting policies are: To raise capital with short-term debt, long-term debt, preferred stock, or common stock To lease or buy

EPS/EBIT Analysis: Acquire Needed Capital

When students complete their recommendations page with expected costs summed as part of a case analysis, or in actual practice when a firm decides what strategies to pursue at what cost, it is necessary to address the following questions: Can the company obtain the needed capital via stock or debt? Would common stock, bank

Projected Financial Statements

Projected financial statement analysis is a technique that allows an organization to examine the expected results of strategies being implemented. This analysis can be used to forecast the impact of various implementation decisions (for example, to increase promotion expenditures by 50 percent to support a market-development strategy or to increase research and develop­ment expenditures

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Projected Financial Statement Analysis for D. R. Horton

Because so many strategic management students have limited experience developing projected financial statements, let us apply the steps outlined on the previous pages to the largest American homebuilder company by revenues, D. R. Horton (DRH). The projected statements, developed on January 14, 2014, considered that D.R. Horton would go forward with the following four

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Corporate Valuation

Evaluating the worth of a business is central to strategy implementation because numerous strategies are often implemented by acquiring other firms. In addition, some strategies, such as retrenchment and divestiture, may result in the sale of a division of an organization or of the firm itself. Thus, thousands of transactions occur each year in