11_Making Strategic Decisions

8/2/2019 11_Making Strategic Decisions

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Making strategic decisions


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Syllabus aims

the significance of

information management

the value of differentapproaches to decision

making

assessing influences oncorporate decision-

making.

Influences on corporate

decision-making include

ethical position (real or

perceived),

Resources available and

relative power of

stakeholders.

The range of management

approaches to decisionmaking from scientific to

intuition.


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Strategic Decisions

Strategy = a plan for meeting your

objectives

Strategic is far more than this!

Strategic thinking Strategic decisions


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Strategic v Tactical

Strategic decisions

Long term view

Visualising what you wantto achieve

SWOT analysis

Carried out on a range ofsenior & junior staff

Tactical decisions

Short term issues,

Concerns day to dayissues taken by amanager.


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Your go

Whiteboard

Write on one side

Strategic decision

On the other

Tactical decision


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To seize the opportunity to

open the first chain of luxury

ice cream outlets in China

Strategic:

Part of a long-term goal, difficultto reverse and requiring

substantial resources


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To tackle sales weakness in theNorth with a major sales

promotion based on Buy One

Get One Free.

Tactical:This is a short-term fix towhat may or may not be a

long-term problem


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To address a potential salesthreat from an Italian firm by

launching a complete range of

Italian products.

Tacticallaunch until the Italian firm gives up,

then perhaps withdraw your own productfrom the market

Strategicthough not necessarily sensible!


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To cut back on our training

budget during this recession

Tactical

no reason to suppose that itspart of a long-term plan toreduce training spending


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To focus the energies andresources of the business upon its

strengths (not correcting

weaknesses).

Strategic:

would affect the long-termplans of all managers working

for the business


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Different approaches to

strategic decisions


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Hunch/ Intuition Scientific method

If you were to put

1000 on a horse

What is the difference?


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Hunch/ Intuition

Colour Name Number

Scientific method

Look at the horses form Check the going ground,

weather Check the jockeys form Watch the horse in training

a few days before!

If you were to put 1000 on a horsewould you study the form or go for

one you liked the sound of?


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Real business example

Of intuition!


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Richard Branson & Northern Rock

In 2007 with the

collapse of Northern

Rock

Branson put himself

forward as a saviour

Based on a hunch!
http://uk.wrs.yahoo.com/_ylt=A0WTf2s82qdLYUcA30hNBQx.;_ylu=X3oDMTBpZTByOGFiBHBvcwMyBHNlYwNzcgR2dGlkAw--/SIG=1lbi0e88s/EXP=1269377980/**http%3A//uk.images.search.yahoo.com/images/view%3Fback=http%253A%252F%252Fuk.images.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dnorthern%252Brock%2526ei%253DUTF-8%2526rd%253Dr1%2526fr%253Dyfp-t-702%2526fr2%253Dtab-web%26w=520%26h=370%26imgurl=www.channel4.com%252Fnews%252Fmedia%252F2009%252F03%252Fday03%252F03_northern_rock_r_k.jpg%26rurl=http%253A%252F%252Fwww.channel4.com%252Fnews%252Farticles%252Fbusiness_money%252F15%252Bthings%252Bto%252Bknow%252Babout%252Byour%252Bbank%252F3010357%26size=38k%26name=03%2Bnorthern%2Brock...%26p=northern%2Brock%26oid=fedced44cc1a644e%26fr2=tab-web%26no=2%26tt=282871%26sigr=12u29i7ht%26sigi=122u32m1o%26sigb=137471258


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Of business tactics

Do youknowthe

business storyhere?


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Well, we werewrong...

the storm in a Dcup is over!


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The central issues

M&S have introduced a policy of price discrimination inthe lingerie department; they charge an extra 2 for brassized over a DD cup.

a pressure group Busts 4 Justice has been set up onFacebook and now has over 16,000 members who werecampaigning for this surcharge to be removed.

The groups founder, Beckie Williams, has bought a 3.40

share in the company to allow her to confront chairmanSir Stuart Rose at the next annual meeting in July.

On Friday, M&S apologised & Saturday started apromotional campaign!


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On Friday M&S backed down, saying "we boobed".

Miss Williams, 26, met chairman Sir Stuart Rose, who

revealed the company's response of cutting the chargehas cost 3million.
http://www.thisislondon.co.uk/standard-home/related-11281-articles-reviews/Stuart+Rose/related.dohttp://www.thisislondon.co.uk/standard-home/related-11281-articles-reviews/Stuart+Rose/related.dohttp://www.thisislondon.co.uk/standard-home/related-11281-articles-reviews/Stuart+Rose/related.do


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M&S comment

"We've heard what our customers are telling us - that theyare unhappy with the pricing on our DD-plus bras and thatbasically we've boobed.

So from Saturday May 9 no matter what size you buy, theprice is going to be the same. We're not going to cut thequality though - they'll still be made to the same highstandards so you get the best support on the high street.

From Saturday, the chain is also offering 25% off the priceof any bra in any size. The promotion will last until May25.


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Discuss the alternative strategiesthat M&S might adopt to protect

itself from sharply worsening

economic circumstance in thefuture.


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Scientific decision making

Logical & rational


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Scientific methods

SWOT PEST-G CPA

Investment appraisal

Ratio analysis

Break even analysis

Boston Matrix

ANSOFF Matrix

Porters Matrix

Scientific decision making

Marketing research

IT analysis


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Influences on corporate decision-Influences on corporate decision-

makingmaking Ethical position (real or perceived)

How will the decision be viewed by key stakeholders Will moving production abroad match the business ethical

standards?

Where are materials sourced from?

Resources available Financial constraints

Workforce Scarcity of materials

Relative power of stakeholders How might pressure groups respond? Will TUs become involved?


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Which method did they use?


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Wanted to expand intoEurope

Looked at a range of

possible mergers.

How did they raise the

money 30m?


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Issues with joint ownership

Positive Negatives

Ethics

Environmental

Different culture

Target market


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Article on Innocent


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Decision-makingDecision-making There are many techniques to aid decision-making

SWOT Cost Benefit Analysis

Six Thinking Hats look at

decisions from different angles

Pareto Analysis what isthe most important problem

to solve? Starbursting - analysing

decisions by asking questions

Well look at these in more detail

next lesson
http://images.google.co.uk/imgres?imgurl=http://www.consulteam.be/images/images/tab3.jpg&imgrefurl=http://www.consulteam.be/en/services/concept-serious-creativity/6hatsandLateralthinking.php&usg=__G3V92ndP4XWPHFym2LFoGS3ZwGE=&h=150&w=218&sz=13&hl=en&start=34&um=1&itbs=1&tbnid=qRa7a4f_VxvDmM:&tbnh=74&tbnw=107&prev=/images%3Fq%3D6%2Bthinking%2Bhats%26start%3D18%26um%3D1%26hl%3Den%26sa%3DN%26ndsp%3D18%26tbs%3Disch:1http://www.mindtools.com/pages/article/newCT_91.htmhttp://www.mindtools.com/pages/article/newTED_01.htmhttp://www.mindtools.com/pages/article/newTED_07.htm


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Homework

Complete innocent exam style qs

Due in next week (Monday)

Date post:	06-Apr-2018
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11_Making Strategic Decisions

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