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2. Based on the results, what are the company’s strengths and weaknesses
when it comes to execution?
These responses will differ based on the organization. Strengths and
3. What advice would you give to senior management about improving the
company’s ability to execute based on the results? Be specific.
Some advice that should be provided includes having clear expectations,
Additional Activities:
You can also consult the Connect Instructors Manual for the post-assessment activity
and corresponding PowerPoint slides used for this Self-Assessment in Connect. In
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6.1 What is strategic positioning, and what are the three principles that underlie
it?
Strategic positioning attempts to achieve sustainable competitive advantage by
6.2 What’s the five-step recipe for the strategic management process?
The strategic-management process has five steps: 1) Establish the mission and
6.3 What are the characteristics of good mission and vision statements?
6.4 What tools can help me describe where the organization stands from a
competitive point of view?
Among the tools for assessing the current reality are competitive intelligence,
SWOT analysis, forecasting, benchmarking, and Porter’s model for industry
6.5 How can three techniques—Porter’s four competitive strategies,
diversification and synergy, and the BCG matrix—help me formulate
strategy?
Porter’s four competitive strategies (also called four generic strategies) are (1)
The first two strategies focus on wide markets, the last two on narrow markets.
CHALLENGE: MAJOR QUESTIONS
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6.6 How does effective execution help managers during the strategic-
management process?
Execution is not simply tactics; it is a central part of any company’s strategy. It
consists of using questioning, analysis, and follow-through to mesh strategy with
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1. Using no more than two sentences, describe Auto–Zone’s strategy.
2. Based on Michael Porter’s discussion of the characteristics of an effective
strategy, does AutoZone have a good strategy for growth? Explain.
AutoZone is creating a unique and valuable position by keeping costs low while
3. To what extent is AutoZone following the five steps of the strategic-management
process?
AutoZone is assessing the current reality, formulating a grand strategy and
4. Conduct an environmental scan or SWOT analysis of AutoZone’s current reality
and recommend whether the company’s current strategy is poised to succeed.
Strengths – low prices, good service, attractive locations, many locations
threats as addressed in the analysis.
5. Which of Michael Porter’s four competitive strategies is AutoZone trying to
follow? Discuss.
AutoZone is following both a cost-leadership and differentiation strategy. It is
6. What is the greatest takeaway from this case in terms of strategic management?
MANAGEMENT IN ACTION: Putting AutoZone into Drive
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Strategy should include a focus on the big things. Though we always hear that
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.
Should Companies Be Pressured to Recruit Females for Boards of Directors?
A company’s board of directors plays a role in the strategic-management process. Not
only can a board provide input into the planning process, but it ultimately signs off on
the intended strategies. Interestingly, a 2011 study by Catalyst, a nonprofit organization,
SOLVING THE CHALLENGE
Where do you stand on this issue?
1. It is a great idea to pressure companies to include more females on boards of
directors. After all, the Catalyst study showed that female representation was
associated with higher financial performance.
The European Union may be going this way. In 2011, the EU’s justice
2. Companies should be allowed to select people for boards based on their
experience, networks, and performance. Gender should not be considered as a
relevant criterion for selecting board members. I am not in favor of this type of
social pressure because it does not ensure that the most qualified people are
placed on boards of directors.
Mark Zuckerberg of Facebook fame seems to hold this position. In April, 2012,
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3. I’m middle of the road on this issue. Part of me feels that organizations should be
left alone to put whomever they want on a board. At the same time, sometimes
organizational leaders need to be nudged to do the right thing, such as putting
females on the board. I thus think that social pressure from groups like “2020
Women on Boards” is okay, but organizations should not feel forced to do
anything they do not want to do.
People may feel this way about affirmative action as well. Affirmative action is
4. Invent other options. Discuss.
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Objectives1
• To help you understand the complexity of the strategic-planning process.
• To more completely familiarize yourself with strategic planning.
Introduction
Social psychologist Kurt Lewin argued that there is nothing as useful as a good theory.
The important word here is good since bad theories can cause a great deal of trouble.
An example of a bad theory was the introduction of the New Coke in 1985 by Coca–
Instructions
Students should be divided into groups of five each. First complete the five steps of the
strategic planning process shown below. Next, go online and determine if your
university has published a strategic plan. If it has, compare your plan with the one
created by your university.
Five Steps of Strategic Planning
1. Establish the mission and vision of your university.
2. Conduct a SWOT analysis.
• What are your university’s strengths?
• What are your university’s weaknesses?
GROUP EXERCISE: Strategizing for Real
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5. Establish processes and procedures your university should put in place to monitor
goal achievement.
Questions for Discussion
1. Why is it important for an organization— whether private, public, or not-for-profit
to have a strategic plan? Explain your rationale.
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State Farm Bank
Teaching Objective: To emphasize the importance of planning and understand the
value of diversity and differentiation strategy.
Summary: State Farm Bank resulted from the insurance company’s plan to diversify
into the financial services sector. With more than 16,000 agents selling insurance
Questions:
1. Why is planning important for organizations like State Farm?
Answer: Planning is important to set a company’s goals and the future direction.
2. What kind of diversification took place when State Farm entered the banking
field?
Answer: Since State Farm sold insurance products, the company diversified into
3. How does State Farm differentiate its banking services from those of its
competitors?
Answer: State Farm does not sell its financial services via the traditional banking
Additional videos directly related to the textbook can be found in the Connect
Instructor’s Manual.
VIDEO CASE
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There are no Manager’s Hot Seat exercises for this chapter.
MANAGER’S HOT SEAT