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MGT603 - Strategic Management - Lecture Handout 43

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REVIEWING BASES OF STRATEGY

Reviewing the underlying bases of an organization's strategy could be approached by developing a revised EFE Matrix and IFE Matrix. A revised IFE Matrix should focus on changes in the organization's management, marketing, finance/accounting, production/operations, R&D, and computer information systems strengths and weaknesses. A revised EFE Matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats. This analysis could also address such questions as the following:

  1. How have competitors reacted to our strategies?
  2. How have competitors' strategies changed?
  3. Have major competitors' strengths and weaknesses changed?
  4. Why are competitors making certain strategic changes?
  5. Why are some competitors' strategies more successful than others?
  6. How satisfied are our competitors with their present market positions and profitability?
  7. How far can our major competitors be pushed before retaliating?
  8. How could we more effectively cooperate with our competitors?

Numerous external and internal factors can prohibit firms from achieving long-term and annual objectives. Externally, actions by competitors, changes in demand, changes in technology, economic changes, demographic shifts, and governmental actions may prohibit objectives from being accomplished. Internally, ineffective strategies may have been chosen or implementation activities may have been poor. Objectives may have been too optimistic. Thus, failure to achieve objectives may not be the result of unsatisfactory work by managers and employees. All organizational members need to know this to encourage their support for strategy-evaluation activities. Organizations desperately need to know as soon as possible when their strategies are not effective. Sometimes managers and employees on the front line discover this well before strategists.
External opportunities and threats and internal strengths and weaknesses that represent the bases of current strategies should continually be monitored for change. It is not really a question of whether these factors will change, but rather when they will change and in what ways. Some key questions to address in evaluating strategies are given here.

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MGT603 - Strategic Management - Lecture Handout 39

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RESEARCH AND DEVELOPMENT ISSUES

Learning objectives

The main objective of this chapter to enable to students about research and development issue relating to strategy implementation.
Going public means selling off a specific percentage of the business to others in order to raise capital; consequently, it shifts the owners' control of the firm. Going public is not recommended for companies that initial costs can be too high for the firm to generate sufficient amount of cash inflows to make going public worthwhile. The firm must have sufficient amount of capital to bear out lawyer, underwriter and other documentation cost in order to form the business. In addition to initial costs involved with a stock offering, there are costs and obligations associated with reporting and management in a publicly held firm. For firms with more than $10 million in sales, going public can provide major advantages:

  1. It can allow the firm to raise capital to develop new products,
  2. To build plants,
  3. Expand, grow, and market products and services more effectively.

Before going public, a firm must have quality management with a proven track record for achieving quality earnings and positive cash flow. The company also should enjoy growing demand for its products. Sales growth of about 5 or 6 percent a year is good for a private firm, but shareholders expect public companies to grow around 10 to 15 percent per year.

Research and Development (R&D) Issues

Research and development (R&D) management can plays part in strategy implementation.
“New products and improvement of existing products that allow for effective strategy implementation”

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