BU111 - Lecture 4 (0921)

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School
Wilfrid Laurier University **We aren't endorsed by this school
Course
BU 111
Subject
Management
Date
Oct 25, 2023
Pages
4
Uploaded by KidIbisMaster842 on coursehero.com
External Analysis (4) Why key success factors ? - Guide strategic and daily actions - Ensure success over time - Ensure holistic thinking What to look for in external analysis Present (understand) - current situations Trends (watch) - evolutionary changes, anticipate Quick Change (anticipate) - participle or surprising, anticipate and plan contingency strategies *don't base it on the conditions present today, cater the strategy towards future changes - Ex. conflict b/w india/Canada, what happens to the employees - Are there any factors that a business should be worried about (do we have any connection with an Indian company that may impact our future investments) - What impact does this have - what opportunities, threats does it create **In the business environment - must use the proper terminology and vocabulary** PEST Political - understand the political and legal environment lets us know how our future conditions Laws, regulations, international trade laws and trade agreements Expansion, barriers, competition Economic - different businesses are affected differently based on the economic conditions GDP, inflation, employment, exchange, interest costs,demand , function, competitive pricing Social - understanding people's preferences, lifestyle, trends etc. Values/attitudes, customs, habits, demographics Customers, employees CSR Megatrend: Overpopulation (leading to food shortages, disease) Elon Musk: Due to the overpopulation - in order for the human race to survive we must move to another planet In order to get to Mars - we need transportation (SpaceX), we need renewable batteries (Tesla), solar panels (Solar City) All of these companies weren't just randomly made, they are all part of a plan that will lead to moving the human race to Mars. Thought of future conditions in order to plan out strategies to work on in the present. Technology - Since always changing (must reevaluate things more frequently)
Information Technology, internet, materials & equipment Barriers, innovation, strategy, R&D Questions to answer from PEST - Are social factors changin how I hire or what customers want? How are customers different in foreign markets? - Can I use technology to improve my product quality, meet customer needs to increase profitability? - Will changes in laws, regulations or technology reduce barriers to entry? - What legal protection do I have or laws do I have to comply with? - What DO future economic conditions look like and how will they affect my demand? Generic Strategies Competitive Scope/Advantage Cost leadership (Broad Target+Low Cost) - Mcdonalds is famous cuz its cheap not because it tastes good (walmart is also an example, appeals to larger market palace since it fulfills a lot of needs at a low cost - groceries, pharmaceuticals) Differentiation(uniqueness+broad target) - Apple (has different features not everyone has) Cost Focus (low cost + narrow target) - Freedom (people chose it bc its cheaper, only appeals to a limited group of people who are willing to take less service and quality to save money, only fulfills one need - cell phone service) Differentiation focus (uniqueness+narrow target) - Ferrari (fulfills a psychological want/need, it's about ego/status, people are willing to pay a premium for the product)
Analytical Thinking and Case Analysis (1) - When you read the cases don't jump to conclusions - you won't know what a good solution will be - do research and analysis first and then think about the potential solutions that can help the company - Routine decisions - automatic decisions you make without thinking too much about - Rational decision (parallels the case analysis model) Purpose is to identify a GOOD solution: Feasible - firm has or can get the resources to implement it Complete - outlines all the key activities that must be executed Effective - achieves the immediate and overarching objectives
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