2018_FlipBook_Thompson_Crafting & Executing Strategy_22e

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120 PART 1 Concepts and Techniques for Crafting and Executing Strategy EXERCISE FOR SIMULATION PARTICIPANTS 1. Using the formulas in Table 4.1 and the data in your company's latest financial statements, calculate the following measures of financial performance for your company: a. Operating profit margin b. Total return on total assets c. Current ratio d. Working capital e. Long-term debt-to-capital ratio f. Price-to-earnings ratio 2. On the basis of your company's latest financial statements and all the other avail- able data regarding your company's performance that appear in the industry report, list the three measures of financial performance on which your company did best and the three measures on which your company's financial performance was worst. 3. What hard evidence can you cite that indicates your company's strategy is working fairly well (or perhaps not working so well, if your company's performance is lag- ging that of rival companies)? 4. What internal strengths and weaknesses does your company have? What external market opportunities for growth and increased profitability exist for your company? What external threats to your company's future well-being and profitability do you and your co-managers see? What does the preceding SWOT analysis indicate about your company's present situation and future prospects—where on the scale from "exceptionally strong" to "alarmingly weak" does the attractiveness of your com- pany's situation rank? 5. Does your company have any core competencies? If so, what are they? 6. What are the key elements of your company's value chain? Refer to Figure 4.3 in developing your answer. 7. Using the methodology presented in Table 4.4, do a weighted competitive strength assessment for your company and two other companies that you and your co-managers consider to be very close competitors. LO 4-1 LO 4-1 LO 4-1 LO 4-2, LO 4-3 LO 4-2, LO 4-3 LO 4-4 LO 4-5 ENDNOTES pp. 34–41; Danny Miller, Russell Eisenstat, and Nathaniel Foote, "Strategy from the Inside Out: Building Capability-Creating Organizations," California Management Review 44, no. 3 (Spring 2002), pp. 37–54. 4 M. Peteraf and J. Barney, "Unraveling the Resource-Based Tangle," Managerial and Decision Economics 24, no. 4 (June–July 2003), pp. 309–323. 5 Margaret A. Peteraf and Mark E. Bergen, "Scanning Dynamic Competitive Landscapes: A Market-Based and Resource-Based Framework," Strategic Management Journal 24 (2003), pp. 1027–1042. 6 C. Montgomery, "Of Diamonds and Rust: A New Look at Resources," in C. Montgomery 1 Birger Wernerfelt, "A Resource-Based View of the Firm," Strategic Management Journal 5, no. 5 (September–October 1984), pp. 171–180; Jay Barney, "Firm Resources and Sustained Competitive Advantage," Journal of Management 17, no. 1 (1991), pp. 99–120. 2 R. Amit and P. Schoemaker, "Strategic Assets and Organizational Rent," Strategic Management Journal 14 (1993). 3 Jay B. Barney, "Looking Inside for Competitive Advantage," Academy of Management Executive 9, no. 4 (November 1995), pp. 49–61; Christopher A. Bartlett and Sumantra Ghoshal, "Building Competitive Advantage through People," MIT Sloan Management Review 43, no. 2 (Winter 2002), (ed.), Resource-Based and Evolutionary Theories of the Firm (Boston: Kluwer Academic, 1995), pp. 251–268. 7 Constance E. Helfat and Margaret A. Peteraf, "The Dynamic Resource-Based View: Capability Lifecycles," Strategic Management Journal 24, no. 10 (2003). 8 D. Teece, G. Pisano, and A. Shuen, "Dynamic Capabilities and Strategic Management," Strategic Management Journal 18, no. 7 (1997), pp. 509–533; K. Eisenhardt and J. Martin, "Dynamic Capabilities: What Are They?" Strategic Management Journal 21, no. 10–11 (2000), pp. 1105–1121; M. Zollo and S. Winter, "Deliberate Learning and the Evolution of Dynamic Capabilities," Organization

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