The Strategic Management Process

The importance of strategy and why it matters to organizations The key roles of vision, mission, and goals in shaping an organization’s future The four stages of the strategic management process The concept of a SWOT analysis The concepts of corporate and business strategies The central role of ethics in strategy The different stakeholders of an organization
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The Strategic Management Process The Strategic Management ProcessCHAPTER OUTLINECASE: The Restaurant IndustryIntroductionThe Strategy Concept The Basis of Strategy Charting a Direction: Determining WHAT YOU WILL LEARN and Setting Strategic Goals The Strategic Management Process • The importance of strategy and why Business and Corporate Strategies it matters to organizations Strategic ImperativesResponsibility for Strategic Management • The key roles of vision, mission, and Characteristics of Strategic Decisions goals in shaping an organization’sWho Are Strategic Managers? futureWhat Decision Criteria Are Used? Key Stakeholders • The four stages of the strategic Difficulties in Accommodating management process StakeholdersWhy Study? • The concept of a SWOT analysis Candidate Seeking Employment Employee or Manager • The concepts of corporate andSummary business strategies • The central role of ethics in strategy • The different stakeholders of an organization 34 PART 1 Building Competitive Advantage(Case) The Restaurant Industry1Ever since Ray Kroc purchased the rights to use the McDon- The second major trend defining this industry is that theald brothers’ idea of serving fast-cooked, low-cost hamburg- average American family eats about half of its meals outsideers, french fries, and chocolate shakes to customers in 1955, of home. Although this trend would seem to suggest that thethe restaurant industry has never been the same. Since that restaurant industry can continue to grow at a rapid pace,time, the McDonald’s restaurant chain has grown to become a Americans are becoming much more selective about what$11.5 billion business (1997 revenues). Its famous golden they want. Not only are people becoming more health con-arches are a familiar sight across the United States and scious, but they are seeking value from their meals as well. Inincreasingly much of the world. More broadly speaking, the response to these broader changes in population demograph-fast-food restaurant has become a high-growth industry in its ics and economic spending patterns, the more traditional fast-own right. Companies such as McDonald’s, Burger King, food chains are continuing to devise new formulas for “value-Wendy’s, KFC (Kentucky Fried Chicken), Taco Bell, and based meals,” or “value pricing,” that seek to bundle differentDomino’s Pizza are well-known American and global brand food offerings under one lower price. Many existing andnames. All of these restaurant firms typically target customers newly entering restaurant chains find these changes in demandwilling to pay for a low-cost meal with a minimum of service and tastes an opportunity, since it means that more health- andand maximum convenience. value-conscious customers are willing to try new types of leaner food, such as rotisserie-cooked chicken as opposed toThe Fast-Food Restaurant Environment fried chicken. Thus, the numerous changes in the way peopleDespite its continued high growth, competition in the fast- choose their meals are having a significant impact on howfood restaurant industry is increasingly fierce; newer rivals these restaurant chains formulate their strategies and competeenter the picture to serve both existing tastes and the rise of with new rivals.new segments. For example, restaurant chains such as Benni-gan’s, Chili’s, and TGI Friday’s are trying to capture cus- Sample Competitorstomers who want larger and more “deluxe,” gourmet ham- Let us now look at three different competitors in the fast-foodburgers with table service and a more diversified menu. Other restaurant industry and see how they deal with both theirfirms, such as Boston Market, KFC, Pizza Hut, Domino’s competitors and the larger changes taking place among theirPizza, La Madeleine, Au Bon Pain, Little Caesar’s, Sbarro, customers.and Taco Bueno are attempting to stake out positions in thenonhamburger segment of the industry, where they do not McDonald’s ...