Evaluate corporate strategies and what are 4 ways to evaluate corporate strategies

1. Why is it important to evaluate corporate strategies and what are 4 ways to evaluate corporate strategies?

Strategy is a plan of action developed to achieve a specific goal or objective. Strategic business planning isn't just for large companies. It's also required for small and mid-sized companies competing in markets that have become smaller due to technological advances that have increased the interconnection of markets. Strategic evaluation is the assessment process that provides executives and managers performance information about programs, projects and activities designed to meet business goals and objectives.

The four ways to evaluate corporate strategies are:

Industry analysis

It   define of products and markets, skills and competitors contained within the industry, followed by industry structural analysis, and concluded with the identification of the key success factors for the industry.

Business strategy analysis

It's implementation is then analyzed in terms of the firm's functional and operational capabilities and the resulting financial and competitive performance.

Strategic evaluation

SWOT analysis encompasses the internal and external factors that affect the company's business strategy. The business strategy is compared against the industry's key success factors and competitive resource requirements and the firm's internal capabilities and resources.

Critical Issues & Recommendations

Seek to identify the critical issues that the company needs to address. The analysis concludes with recommendations that address the critical issues and result in changes of product-market strategy or functional implementation.

2. Briefly describe each of the portfolio analysis matrices including how it is used, the cells in the matrix, and its advantages and drawbacks.

The BCG Matrix produces a framework for allocating resources among different business units and makes it possible to compare many business units at a glance. The BCG Matrix (Growth-Share Matrix) was created in the late 1960s by the founder of the Boston Consulting Group, Bruce Henderson, as a tool to help his clients with efficient allocation of resources among different business units. It has since been used as a portfolio planning and analysis tool for marketing, brand management and strategy development.

In order to ensure successful long-term operation, every business organization should have a portfolio of products/services rather than just one product or service. This portfolio should contain both high-growth and low-growth products/services. High-growth products have the potential to generate lots of cash but also require substantial amounts of investment. Low-growth products with high market share, on the other hand, generate lots of cash while needing minimal investment.

Advantages  of the BCG Model:

a. Investment in the business unit in order to build its market share

b. Sufficient investment to maintain the business unit's market share at the current level

c. Determine which business unit/product will function as a cash cow to provide necessary cash flow for the other business units/products

d. Divest a business unit

Drawback  of the BCG Model:

a. Technological competence

b. Ability to maintain low manufacturing costs

c. Financial strength of competition

d. Distribution capabilities

e. Human resources

3. Why might an organization's corporate strategy need to be changed? How might it be changed?

Competition

The entrance of a new competitor into a market can cause a business to change its marketing strategy. For example, a small electronics store that was the only game in town might have to change its image in the marketplace when a large chain store opens nearby. While the smaller store might not be able to compete in price, it can use advertising to position itself as the friendly, service-oriented local alternative.

Technology

Innovations in technology can force a business to change just to keep up. Employees who have never used computers need to be trained to operate the new computer system. A business also can benefit by implementing a technological change. According to the Hotel Online website, the airlines' introduction of email ticketing has resulted in increased efficiency and better customer service while meeting little customer resistance.

Desire for Growth

Businesses that want to attain growth might need to change their method of operations. For example, the Subway sandwich chain started as a small business under a different name in 1965 and struggled through its first several years. The company began to flourish after it changed its name to Subway in 1974 and began to sell franchises. According to the Entrepreneur website, there were 22,525 Subway franchise units in the United States as of 2009.

Need to Improve Processes

A business might need to implement new production processes to become more efficient and eliminate waste. In 2003, Cigna Healthcare implemented a leaner production process known as Six Sigma to improve service and reduce operating costs. In 2006, the company was recognized by the J.D. Power independent rating organization for its high level of service and quality.

Government Regulations

Changes in government regulations can have an impact on how a company does business. Newly mandated safety procedures can force a factory to change its production process to create a safer work environment. Businesses that make or distribute consumer goods such as food products might have to add more quality control measures to ensure consumer safety. The 2009 Food and Drug Administration Food Code included provisions such as banning the option to serve rare hamburger that is ordered by request off a children's menu and increased requirements for food allergen awareness by food workers.

It can be changed

The process of changing a corporate strategy can be broken down into four distinct steps: Planning, 

implementation, monitoring and review: In the planning stage, managers form their strategic vision into concrete, time-bound goals and objectives. Research and testing are vital in the planning stage, as managers attempt to gain as much information as possible about the viability of the change. The implementation phase sees the change put into action according to the plan. Monitoring is a less of a phase and more of a continual activity that helps managers to gain insight into how well their plans are working and pinpoint potential problems. In the review stage, managers analyze information gained from monitoring activities and decide whether the strategy needs to be altered yet again.

4. After readings "strategic Mangers in Action: Judson C. Green, Navteq Corporation ,do you agree with Green's decision? Can you suggest other ways Navteq could either backwardly or vertically integrate?

 In my opinion vertical integration can be a highly important strategy, but it is notoriously difficult to implement successfully and when it turns out to be the wrong strategy costly to fix. Management's track record on vertical integration decisions is not good.1This article is intended to help managers make better integration decisions. It discusses when to vertically integrate, when not to integrate, and when to use alternative, quasi-integration strategies. Finally, it presents a framework for making the decision.

The market is too risky and unreliable. Companies in adjacent stages of the industry chain have more market power than companies in your stage; Integration would create or exploit market power by raising barriers to entry or allowing price discrimination across customer segments

Reference

http://www.strategy-business.com/article/00318?gko=c7329

http://www.mckinsey.com/insights/strategy/when_and_when_not_to_vertically_integrate