Strategic Analysis Report
Paper instructions:
Hello there,
I need someone has an experience on (Glo-Bus)
We have to do SAR on the company that we have there
please see the file it has the full details
our group is H
the name of the company is HD.Co
Areas Needing Objectives. Peter Drucker, while working as a consultant for GE in the 1950s, indentified eight major areas in which businesses should set objectives. As shown in Figure 5.4, these areas are (1) market standing, (2) productivity, (3) physical and financial resources, (4) profitability, (5) innovation, (6) manager performance and development, (7) worker performance and attitudes, and (8) public and social responsibility. Newer researchers such as Kaplan and Norton call for a balanced scorecard of financial and strategic objectives to include learning and growth, internal processes, and customer satisfaction
Guidelines for Setting Effective Objectives. Objective setting in the real world is often a poorly understood and poorly implemented process. Properly done, however, it leads to more effective management. The following guidelines (a list of DOs and DO NOTs) apply to all management levels and should help you become more effective in setting and attaining objectives.
DO:
1. Be specific. If you cannot count, measure, or describe an objective in some specific way, forget about it until you can. Vague objectives not only are subject to misinterpretation by personnel but do not provide tangible satisfaction when they are achieved. Consider, for instance, this objective: “Division X’s objective is to show good profitability in 2011.” This statement is vague for several reasons: (1) what is ‘good’ profitability? , (2) what measure of profitability – net income, return on assets, return on equity, and so forth – will be used to determine profitability?, (3) will profitability be determined before or after taxes? A better, more specific statement would be: “Division X’s objective for 1997 is to earn a 20 percent return on average assets after taxes.”
2. Set challenging but realistic objectives. Objectives must be attainable by subordinates, but they should not be set so low that they can be met by ‘average’ effort nor should objectives be set unrealistically high. For instance, it is unrealistic to for Ford to set an objective of gaining 50 percent of the U.S. auto market by 2013. This would not only serve no useful purpose, it could actually demoralize personnel who know there is no reasonable hope of achieving it.
3. Establish results-oriented objectives. Because objectives are end results (they are achieved or not achieved as a result of some combination of inputs), they should be desirable levels of achievement within themselves and should mean something to the organization and employees when they are achieved. In other words, if you achieved the objective, ask yourself if it would help achieve higher level objectives and further the overall vision and mission? If not, then perhaps this objective is taking employees away from doing tasks that would. It is better to have fewer objectives that, when achieved, actually mean something than have so many objectives that you cannot tell the difference between attaining one but not another. For instance, a server at a restaurant may have objectives for how quickly to touch base with customers at a new table, how soon to take an order, how quickly to send that order to the kitchen, how quickly to make sure that the order when it is ready, is brought to the table, et cetera. However, very few of these might actually impact the quality of the service in customers’ eyes and thus have no impact on future patronage by these customers. It might be more important to customers that the order is read back to them and subsequently sent back to the kitchen properly, not quickly – improving overall service. It might also be important for the customers to feel taken care of but not hovered over. Setting objectives that matter to the organization’s future and long-term success can be difficult, but rewarding when done properly.
4. Set a realistic deadline. Objectives, properly set, should establish time frames for completion. This holds individuals accountable over a period of time and allows for periodic assessment of their performance.
5. Keep objectives in balance. Key performance areas tend to be interrelated, so managers much consider the impact objectives have on one another. For example, quality of work influences quantity of output; profitability and cost control may not always be consistent with customer service or maintenance of physical assets.
6. Follow up. Do not wait until the end of the performance period to determine whether objectives are being met. You should check your progress every year whether the objective is to be met that year or not.
DO NOT:
1. Move the goalposts. Sometimes managers will set what they believe to be meaningful, challenging objectives, and it will soon become apparent that these objectives will be achieved – ahead of schedule. Depending on the incentive package, it becomes tempting to then ‘up the ante’ of the objectives and revise them before they are actually due. Avoid doing this. Setting objectives involves a contract with employees – and if the specifics of the objectives are changed (either up or down) it calls into question how much employees can trust management.
2. Have so many objectives that they become meaningless. Similar to the waiter example above, you want to limit the number of objectives that employees and managers are responsible for. Further, the more objectives you have, the more likely these objectives will interfere with each other and employees will be left wondering which one to achieve.
3. Set as objectives things that you have complete control over. You want to make sure that you set your objectives based upon outputs from something, not inputs. For example, the objective “to increase advertising by 10 percent in 2014” measures the amount spent on advertising (an input), not the end result that the advertising is designed to achieve. A better objective would be to focus on the number of new customers, the size of customer orders, or increased sales attributable to advertising (a decrease in the advertising-to-sales revenue ratio), rather than the level of advertising.
4. Use words that end in IZE. When setting objectives, do not use words that end in ‘ize’ such as normalize, optimize, maximize, minimize, or forms of these words such as minimum. These words are relatively meaningless as they mean different things to different people. They are not specific, nor measureable, and thus at the end of the time period, the attainment of your objective will be subjectively determined.
Common mistakes for the SAR
• Referencing anything to do with the artificial nature of the game (winning, name of industry)
o You do want to reference the years as Year 6, Year 7, not 2006 and 2007, however.
• When you first write the Original Strategic Approach – you are writing it before you execute it. However, when you update it for the SAR after year 14, you need to put all of this in the past tense.
• Don’t end a section with a chart. Add a summary paragraph instead.
• Make sure that you read what is asked for each section. What happens is that a team misses a section because it combines two sections into one.
• Make sure to eliminate all of the references to ‘we,’ ‘our,’ or anything referencing the playing as a game. This can sometimes be quite innocuous – Team x moved up to be in the top three in the industry as a result of Y. Well, top three in what??? If you mean standings, then that is like a game. If that means ROE, then tell me that so I know what you are referring to.
•
Business Policy in a Global Economy: MGT 485 – Summer, 2014
GUIDELINES FOR THE STRATEGIC ANALYSIS REPORT (SAR)
The strategic analysis report will be written at the conclusion of the Glo-Bus business strategy game. This report is basically a long running case and assessment of your team’s performance in the Glo-Bus game as well as your thoughts on where the team is going. The report should be from the perspective that you are writing to your company’s board of directors. The report must contain a cover page (to include team name, individual names, class, and date), a table of contents and the following sections: (Some sections will contain sub-sections or sub-headings)
1. Executive summary (An executive summary summarizes the key points of the report. It is not an introduction to the report.)
2. Describe your team’s original strategic approach (low-cost, best-cost, or differentiation –focused or broad). Include your vision statement (from Glo-Bus). Include key elements of your approach. [handed in before the game goes live – may be improved upon after]
3. Describe your company’s business model. Include your company’s mission statement. You need to create this based upon the handout (business model section). [[handed in before the game goes live – may be improved upon after]
4. Identify the financial and strategic objectives from your team’s original strategic plan. These will include and/or be modifications of the Investor Expectations and YOUR team’s strategic objectives[handed in before the game goes live – may be improved upon after]
5. Explain the specific decisions and actions (product design, marketing, production operations (to include labor & comp), corporate citizenship, and finance) your team took to implement your strategy and accomplish your objectives.
6. Describe the extent to which your team reached each financial and strategic objective from your team’s original strategic plan. (Do not just provide percentage increases and decreases, but provide beginning and ending values, in addition to percentage changes.)
7. Compare your team’s performance on the same indicators to your competitors’ performance. (Note that charts and graphs are very helpful in comparing your performance against your objectives and to compare your team’s performance against competitors.)
8. Explain how the actions/strategies of your competitors affected your team’s performance.
9. Explain how and to what degree your team changed or adjusted your company’s strategy and the results.
10. Analyze your team’s financial performance. In the appendix provide for all years – balance sheet, income statement, and cash flow statement (available at Glo-Bus).
11. Briefly describe what the main issue is for your company going forward; what strategy or tactical changes you foresee for the next couple of years of the game (if the game were to continue); and what the expected outcomes of those decisions would be. (a mini-case)
12. Explain what your team would do differently if you had the opportunity to play again.
You can either bind it in a spiral or place it in a three-ring binder. If binding, it is appropriate to use divider tabs between the report’s sections. If in a three ring binder, tabs or separate pages for each section would be appropriate. The margins should be 1” all around. Please double space the entire report. The final report is due on Monday, Jul. 21st. Graphs and charts should be embedded throughout the document rather than placed at the end of the text. Figures and charts should be labeled consistently and referenced. Keep consistent with references to years in the simulation (i.e. Year 6, Year 9). Ensure that the project is written with one voice, assume that the game is real (don’t refer to a score or anything like that), and refer to your team as ‘management,’ i.e. try to keep your writing using management, company, et cetera – a singular voice.
Broader explanations for each section of the Strategic Analysis Report
Overall, broad thoughts: Do NOT mention the game, your score, or Glo-Bus anywhere in this report. Your target audience is the Board of Directors of a real camera company. You did not win, lose, or draw. As far as this report is concerned, you did not play a game – you were a digital camera company based in Taiwan and you sold entry level and multi-featured cameras in four geographic markets.
Keep the entire report double-spaced. I will remind you in class – but there are a few things to keep in mind as you write the report. First, the idea of one voice (see above) is difficult because you have multiple authors, no one who is necessarily in charge, and limited time. Designate one person to put the whole project together. This involves standardizing charts (labeling, number of years covered, competitors included), standardizing word choice (year 6, entry level, multi-featured camera), and standardizing the story. What overarching thematic story are you trying to convey in this project? Did you start out great and have slipped – so you need to find a way to return to the top? Did you start out poorly but have scraped and clawed your way to the middle? While I do not want you to use words like “scrape and claw” the idea that you have a story to tell is essential.
Cover Page
Make sure that your names, the company name, and the date are on it. I have actually read reports turned in by graduating seniors without a single name anywhere on the report.
Table of Contents
Each section and subsection should be identified, labeled, and a page number should be annotated. You can do this in Microsoft Word (with automatic updates).
Executive Summary
This 1 to 2 page section should summarize the entire report (with the exception of the “what would you do differently” section). Remember your target audience – the members of the Board of Directors. To your audience, this is not a game you are playing and so references to “the game” or “the score” or anything similar would be inappropriate (both here and everywhere else in the document – except for the “what would you do differently” section). Also, this should be written last – after each section has been written and mostly finalized.
Original Strategic Approach
This is a 1-2 page section that outlines your generic strategic approach, your vision (and vision statement), and the key elements of your strategy – the one that you started to implement in Year 6. If you subsequently changed strategies, you do not need to mention it here (it would already be in the executive summary).
Business Model
This is a 1-2 page section that outlines how you are going to generate the revenues to cover your costs in order to make a profit. Thus, two important parts are revenue generation (what customers and markets are you targeting?; what is your marketing approach?) and cost control (how are you going to keep your costs in check?). This section (and the previous section) are both high level approaches – do not get down into the weeds and discuss prices, actual costs, or any numbers. You will do that in another section.
However, you do need to address the customer value proposition and the key resources and processes that you will need to execute in order to deliver that customer value and make a profit. So, this section is a little more nuts and bolts than the vision/strategy section but not so detailed as the next couple of sections (especially the decisions and actions section).
Financial and Strategic Objectives
Here is where you lay out the objectives (usually accompanied by a chart or two – one for financial and one for strategic objectives) that you set at the beginning of the (live) game. Also, if you made any adjustments, you could mention that as well. As a MINIMUM (i.e. something that would earn you a low B on your grade for this section), you would want to identify the five areas that investors track – ROE, EPS, Stock Price, Credit Rating, and Image Rating. However, be specific: you want to attain an 80 for image rating by year 9, 90 by year 12, and a 95 by year 14 – think SMART: Specific, Measurable, Attainable (achievable), Results-oriented, and Timely – and follow the Objectives Handout. You might want to have an ROE that is at least 30 % above investor expectations by Year 9, and in the top three of all companies in the industry. But what does that mean? Does 30% above investor expectations on ROE mean 45 % or 19.5 %? Also, stay away from words that end in IZE – minimize, maximize, optimize. These are generic words that mean too many things to too many people.
What is important is (1) that you have objectives set and laid out before the game really begins – and (2) very succinctly, explain why these objectives were important FOR YOUR TEAM (i.e. how will achieving these objective attain better results?) (Much of the reason for your objectives should come from the previous two sections and your objectives should naturally follow from those sections.) Also, DO NOT make the mistake of actually listing the accomplishment (or non-accomplishment) of these objectives in this section. In other words, if you have created a chart, leave the accomplishment column blank. Whether you accomplish these objectives belongs in another section – after the Decisions and Actions section.
Decisions and Actions
This is typically one of the longer sections of the paper – simply because it has so many subheadings (subsections) and you are covering and condensing nine years’ worth of decisions and changes in each subsection. In this section, do NOT separate each subsection with a tab or start each sub-section on a new page (as you do with each section – noted above). After an introductory paragraph, the specific subheadings or subsections will be titled: Product Design, Marketing, Assembly, Labor and Compensation, Corporate Social Responsibility, and Finance.
In a general sense, you are transitioning from the previous three sections which were all about planning to the next section (Accomplishment of Financial and Strategic Objectives) which it all happened in the past. So, in this section, you are giving the BOD the specifics of what you did over the past nine years to achieve the objectives that you set in the previous section. If you made significant changes along the way, the why of those changes will be covered in a couple of changes but the ‘what’ of those changes needs to be covered here.
I do not want to limit your approach here so I will avoid specifics of how to tackle this section. Charts (year by year summaries for product design or marketing) in some of the subheadings can be helpful – just be sure to summarize what happened in those charts. Suffice it to say that there are many good examples in the reports from previous semesters. You want to give enough information here so that I understand what guided your thinking, and how this thinking translated into specific actions. Finally, how did these specific actions support your strategic vision and how did they basically fit into accomplishing your strategic and financial objectives (covered in the next section)?
Accomplishment of Financial and Strategic Objectives
This section should mirror the section “Financial and Strategic Objectives.” If you had a chart or graph in that section, put it here as well – with the results included (as to whether each objective was accomplished or not). The best way to do this is to copy your original chart and then add extra columns for each year – an actual column next to the projected column for comparison. I am not so much grading you on whether you accomplished all of your objectives but whether you set them and then can articulate whether you accomplished them or not.
The next sections fill in the rest of the story – what you did, what your competitors did, how you changed your strategy or tactics (and why)? and then what are you going to do about it now?
Comparison to Competitors
For this section, you want to only compare your team to those that were in the same strategic group. How many teams is that? – 2-4 are usually enough. If you compare your team to all teams, the chart comes out looking like spaghetti (in a not-so-good way). This section can be built (or anchored) upon the creation and explanation of charts/graphs. Create the charts/graphs (comparing your performance versus other teams) and then explain them – tell the brief story of how you compare to your rivals. Now, what do you want to compare your team with your competitors? How about all the financial/strategic items you just mentioned in the previous section (at least the ones that you can obtain)? You could create DuPont formulas for your competitors. You could create industry averages for all the measures of the DuPont formula, as well as GPM, OPM, CR, et cetera. Some of these industry averages are given and some would need to be created.
Do not worry if your team is not the best on every measure (or any measure, for that matter). What is important (in this scenario) is if you can adequately explain why your competitors did so well (not your own inadequacies – save them for your own financial analysis section).
If you were to create a Weighted Competitive Strength Assessment, it would go here – a nice way to incorporate Key Success Factors for Glo-Bus into an analysis of how you and your team stacked up with competitors. (So, you would start out by noting that the Key Success Factors for the industry were X, Y, Z, A, B, and C. Then put these KSFs in a WCSA and compare your team to your rivals. Finally, what does the chart tell you about possible offensive or defensive strategies going forward)?
Up through this section, the report is pretty much nuts and bolts (straightforward presentation of what happened in the game). Now, you get to show me your analysis of what happened and of current situation and then what you can do about it?
Actions/Strategies of Competitors
This is a shorter section (by shorter I mean 2 pages or so) – but the point of this section is to recognize that not only were you and your teammates responding to your competition, but your competition was responding to you and to other teams. Thus, what actions did your competition take and how did it affect your team.
Change in strategy
This section will be longer if you changed from a low cost to a best cost or differentiator to best cost. However, if you changed elements of your strategy (or tactical changes), this is where the explanation (and analysis/results) would go. If you executed your strategy from the first year and made no real changes, say so. However, all strategies evolve over time (see chapter 1 of the text). This is your section to tell how your strategy has evolved.
Financial Performance
This section should go deeply into how and why your team achieved its financial goals/objectives. Some teams will create a DuPont formula for Year 6-14. This is a good starting point. Augment this with GPM, OPM, and other financial ratios to figure out how and why you did as well (or poorly) as you did. You can then delve into the specific numbers (from the Production Cost Report) that helped establish the net profit margin. You can also easily compute Dupont formulas for key competitors (if you have not already done so in a previous section on competitors) and find out why they (or you) had better asset management (or perhaps the fact that they –or you – were more leveraged is the reason for a higher return on equity).
Thus, you should analyze your team from a margin standpoint (to include marketing costs, COGS control, et cetera), asset management, financial management, and growth management. Then, where necessary, compare yourself to your direct competition.
Avoid rehashing your comparisons above but try to get to an explanation of how well your team did – and why did it do well (or poorly). Part of that analysis will involve comparisons to other teams, but here it is done from primarily a financial standpoint – whereas above (Comparison to Competitors) it was done from an overall standpoint to include Brand Image.
Please include a copy of your Financial Sheets (IS, BS, CF) for each year of the game. However, just put these sheets at the back (as an appendix for reference). Do not retype these numbers back into a spreadsheet (you can, but it is a waste of your valuable time). Just put the Glo-Bus financial sheets in the back. That way, if I have any questions, I can easily reference them.
Strategy/Tactical Changes (in the coming years)
Based upon everything going on, what is the front burner issue that is facing your company heading into Year 15 and beyond? Thus, you have an issue (or issues) facing the company (based upon all of the analysis above). Succinctly state the two issues your company faces – one financial and one other issue. Indentify which is more prominent and then give me your proposed solution to address this main issue. I do NOT need a detailed action plan but I do need enough information that I can understand your problems/challenges and I can understand your solution. So, I am requesting that you outline what it is that you intend to do to so that I can follow your logic and thought processes. In order to do that, I need some level of specificity but not as great as I would expect in your individual written cases.
Do NOT say that you are going to keep doing what you are doing. That is an outcome. Think about product design changes, marketing changes, assembly changes, financial changes, CSR changes. Also, assume that the growth rate (and other industry parameters) will stay constant unless I give you different instructions as we near that time.
What would you do differently?
This is the only section that addresses the game as a game. Please do not reference this section in your executive summary. It should be no longer than a page. Knowing what you know now, how would you play the game? I am interested in this from the standpoint of what you would tell a new 485 student. Some of the best guidance that I am able to give you at the beginning of the semester comes from previous students’ comments in this section.
Tips and Tricks for writing your group project (really, for any group project).
1. Write with a common theme. Make sure that your group sits down and goes over your strategy, your business model, and how you saw your progression through the game. If you just break up the project and let everyone be responsible for their part without that basic understanding, you will have several disparate parts of the paper that have no underlying theme. Thus, ensure that everyone on the team knows your overarching story for Glo-Bus.
2. Write with a common voice. Even though you have multiple authors for one paper, make sure that you task one person –usually your best writer (or best copy editor) – to read through the paper slowly after it is written. This person’s job is twofold. First, from a purely technical standpoint, he/she ensures that all abbreviations are standardized. For instance, if you write ‘Yr 6’ in one section do not write ‘year six’ in another. Do you go with multi-feature cameras or multi featured cameras or M/F cameras? Whatever you choose – be consistent. Second, this person ensures that the common theme identified above becomes a common story. Every written paper should tell a story. Now, to keep that story consistent, do not tell me about your low cost approach in one section and your best cost approach in another. This makes it very confusing for the reader.
a. Common types of words that need to be standardized and possible choices:
i. Multi featured vs. M/L cameras vs. multi-feature cameras. (Same for entry level)
ii. Year 6 vs. Yr. 6 vs. year 6 vs. year six.
iii. ROE vs. spelling it out as return on equity (notice the lower case).
3. Create charts and graphs and tell your team’s story for each section around these charts and graphs. When you create graphs ensure that each axis is clearly labeled, that it has a title with a standardized sequence throughout the paper (sequential or by section), that I (or any reader) can understand the graph or chart, and that you reference the chart in the text.
4. If you are worried about the length of the paper – do not be. I am not grading by length. I look for content and pizzazz. (Content first, of course.) Follow the guidance given in the other handouts and check out previous examples. Other than the above examples, the most common error is to completely skip a section. Each section has its own theme – so you want to make sure that you do not overload one section with information that really belongs in another section. A simple example of how a team can violate this rule is when it gives me the outcomes of objectives alongside identifying objectives in the “setting objectives” section. Really, how well a team achieved its objectives belongs in its own section after the decisions are described for each area of the game.
5. Use your time in the lab (or any time that you get together) to:
a. Allocate who is responsible for what sections.
b. Ensure that you all know what the common theme is (what is the essence of the story that you want to tell).
c. Agree on how you are going to standardize the text, the terms, and the chart style.
d. Agree on who is going to be the last proof-reader (give this person less individual sections to write or a higher grade on the peer evaluations).
e. Make as many charts and graphs as you can (right now, in the lab).
i. Time charts (covering all years can be very helpful –don’t leave out year 14).
ii. Only compare your team to 2-3 other teams – not all 8 (looks like spaghetti).
iii. Incorporate the strategic plan with outcomes. I will show how next week.
f. Look over previous semesters’ papers for what you like/don’t like to incorporate.
Other thoughts about writing your group project
1. Keep it real. Imagine you are a real digital camera company in a real industry. Do not refer to Glo-Bus, a game, an industry number, a score, or anything that would call into question that fact that you are a real company. The only exception to this policy is the very last section entitled, “what would you do differently.” This section is to help out other companies for the next semester.
2. The whole point of this exercise (the group writing project) is to present your experiences in Glo-Bus as a longitudinal case. What I mean is that while you have been learning the case method for the written and presented cases (as outlined in the syllabus, the case analysis pdf, et cetera) you have been learning and practicing the case method through an experiential exercise – i.e. Glo-Bus. Each week (really year in Glo-Bus and either shorter or longer depending on when you take the class), you have gathered information, come up with some issues that need to be addressed, hopefully put forth alternative suggestions from different group members as you workshopped through what was the most pressing problem. Was it that you needed to change the design, market your product differently, or figure out what your competition was up to? You then came up with a solution, implemented it and could see a set of outcomes based upon a forecast from the Glo-Bus projections. Next, you had an evaluation of your solution – the next year came – and you were off to the races again with gathering information again.
3. So, two important parts to this written exercise are: can you realistically tell an audience what went right and wrong with your analysis along the way (everything up to and including the section “Financial Performance”), and then can you tell me what is the most pressing issue for the next year or two and present a plan to address it? This section, “Strategy / Tactical Changes” should be approached very similarly to what you have written for your cases, and what you presented for your presentation. The difference is that you have already given me the support – now you just need to lay out the issue(s) and come up with a detailed plan – much like what you did each week. You may tinker around a bit with the Glo-Bus decisions for year 15 to see if this would work, but this is not necessary. What is necessary is a detailed plan based upon what you know in Glo-Bus, what would work, and how it would work.
4. There tends to be a big problem with what tense to use and whether to remain consistent with it. The simple answer is that the tense should be consistent throughout each version of the paper. When you hand in your original strategic approach/business model/financial & strategic objectives – you have not done anything yet, so using the future tense (will, shall et cetera) is appropriate. However, after you have done it, you need to now correct these sections for the final draft and put this all in past tense. Now, as a company you “intended” or “focused” – not “will focus.” Everything will be past tense as you are reconstructing the past 9 years of the industry for your company – with one exception. The section on strategy and tactical changes in the upcoming years (usually 2 years in to the future). In this section, you may now include the future tense where appropriate.
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