Strategic Managment

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The last piece that was brought up that I really liked was role model management. Mr. Welch talked about how important this is to the development of a company. If you want to have certain behaviors in your company, you have to praise and reward people when they demonstrate those behaviors. This means that if someone goes out on a limb and ultimately fails, you need to praise that person and build them up for having the willingness to make that move and be willing to fail. We do this all the time as basketball coaches. When we see something in practice that we like, we make sure that we point out that someone did well. The same thing happens when we watch film and have talks with our team. We let them the positive things that we want to see and what can help them to improve as a player.

1. Read in the Gamble book chapter 1, What is a strategy and why is it important?. Then answer, in writing, the following:

a. What is a company’s strategy?

A company’s strategy is a series of competitive moves and business approaches for moving the company in the intended direction, staking out a market position, attracting customers, and achieving targeted financial and market performance.

b. Do you think that a rational, step-by-step strategic planning process can inhibit strategic

thinking? Why or why not?

I do not think that creating a rational step-by-step strategic plan inhibits strategic thinking in the workplace. I actually think it works to achieve the opposite effect. When a business sits down and thinks through their business step-by-step it makes it possible for the company to come up with nearly any possible situation that could arise and provide a challenge for the company. By critically thinking about the company’s future and working to foresee any challenges, this actually puts the company in a better position moving forward to succeed. Undoubtedly there are going to be times when something outside of the plan occurs, but the managers in that company will have experience thinking strategically and will be able to come up with an effective plan to solve the problem.

c. What are the three tests of a winning strategy?

There are three tests that can be used to distinguish a winning strategy from a flawed strategy:

- How well does the strategy fit the company’s situation? In order to pass this first test, a strategy must be well matched to the company’s external and internal situations. The strategy must also fit competitive conditions in the industry and other aspects of the enterprise’s external environment. The company’s strategy should be tailored to the company’s collection of competitively important resources and capabilities. If a company’s strategy does not exhibit a tight fit with both the external and internal aspects of a company’s overall situation, it is unlikely to produce positive business results.

- Is the strategy helping the company achieve a sustainable competitive advantage? If a company’s strategy dos not provide a durable competitive advantage over rivals, it is unlikely to produce superior performance for an extended period of time. Winning strategies provide companies with a competitive advantage over key rivals that is long lasting.

- Is the strategy producing good company performance? The mark of a winning strategy is strong company performance. There are two kinds of improvements that tell the most about the caliber of a company’s strategy: (1) gains in profitability and financial strength and (2) advances in the company’s competitive strength and market standing.

d. "Well managed organizations utilize the strategic management process at all times."

Comment on this statement.

I think this answer goes back to some of the thoughts I mentioned in part b above. I believe it is essential that companies are continually working on their strategic management plans. It is imperative that companies in any industry are observing market tendencies and keeping up to date on new technology that is coming out. If a company falls behind in these areas they are giving competitors the chance to find an advantage over them. A company that utilizing strategic management process at all times will be able to tackle any situation that arises and will be able to makes moves that position the company to grow and succeed.

e. Describe what you think effective General Managers do.

I think that effective General Managers are able to come to work every single day and get their employees excited and motivated to work. As Mr. Welch said in his talk, when you can get people excited about their jobs you are going to win as a company and those employees will in turn have better lives. Effective General Managers must also be able to communicate effectively with employees. When things are going poorly, they must be able to tell their employees what needs to be done, why things need to be done, and what things will be like after those changes are made and the situation has improved. It is important for GMs to be able to effectively tell employees why change is necessary, rather than simply telling them to change. An effective GM must also have passion for their job. If a GM, or anyone in a leadership is passionate, that passion will be seen by employees and will help create an exciting atmosphere.

f. What are the three elements of a company’s business model?

A company’s business model is management’s blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit.

According to the textbook (p. 7-8) there are only two elements of a company’s business model:

- Customer value proposition: this element lays out the company’s approach to satisfying buyer wants and needs at a price customers will consider a good value. The greater the value provided and the lower the price, the more attractive the value proposition is to customers.

- Profit formula: this element describes the company’s approach to determining a cost structure that will allow for acceptable profits given the pricing tied to its customer value proposition. The lower the costs given the customer value proposition, the greater the ability of the business model to be a moneymaker.

- Resources that enable it to create