Paper
Chapter 6
2. What effects on company strategy have you observed as a result of the global economic downturn which began in 2008?
As a result of the global economic downturn many companies intensified cost-cutting across their firm, a strategy to balance the net cash flow of the company. Many shifted their commodity sales expectations and reduced their sales forecast. As a result they reduced their output to match demand and reduced their workforce as well to reduce idle workers and payroll. Some firms increased the output and used contractors to fill the gap in operations to maintain a low level of payroll. Many firms looked in new ways to improve efficiency of their operations managing inventory and account receivables. Other companies with sufficient cash invested in research and development during the economic downturn expecting to catch the recovery wave and get a bigger piece of the market. The focus on marketing was adjusted as well, as companies looked closer to wisely use their marketing budget.
3. Discuss the ways in which managers arrive at new strategic directions-formal and informal. Which is the best?
The first phase of a strategic formulation process is the planning phase. A statement of missions and objectives is developed which charts the direction of the company and provides the groundwork for subsequent strategic processes. The objectives of a company evolve from the stated mission. After the mission and objectives are completed, a company must develop an environmental assessment, which will entail collecting and compiling necessary geographic data as well as forecasting trends and actions by the competition. The next step involves an internal analysis, which determines the strengths and weaknesses of the firm's financial and managerial expertise compared to that of its competitors. This analysis focuses on the company's resources and operations. Next, company managers must ascertain the relative and potential competitive position of
2. What effects on company strategy have you observed as a result of the global economic downturn which began in 2008?
As a result of the global economic downturn many companies intensified cost-cutting across their firm, a strategy to balance the net cash flow of the company. Many shifted their commodity sales expectations and reduced their sales forecast. As a result they reduced their output to match demand and reduced their workforce as well to reduce idle workers and payroll. Some firms increased the output and used contractors to fill the gap in operations to maintain a low level of payroll. Many firms looked in new ways to improve efficiency of their operations managing inventory and account receivables. Other companies with sufficient cash invested in research and development during the economic downturn expecting to catch the recovery wave and get a bigger piece of the market. The focus on marketing was adjusted as well, as companies looked closer to wisely use their marketing budget.
3. Discuss the ways in which managers arrive at new strategic directions-formal and informal. Which is the best?
The first phase of a strategic formulation process is the planning phase. A statement of missions and objectives is developed which charts the direction of the company and provides the groundwork for subsequent strategic processes. The objectives of a company evolve from the stated mission. After the mission and objectives are completed, a company must develop an environmental assessment, which will entail collecting and compiling necessary geographic data as well as forecasting trends and actions by the competition. The next step involves an internal analysis, which determines the strengths and weaknesses of the firm's financial and managerial expertise compared to that of its competitors. This analysis focuses on the company's resources and operations. Next, company managers must ascertain the relative and potential competitive position of