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

A) Why is it important to evaluate corporate strategies and what are 4 ways to evaluate corporate strategies?

Strategic evaluations, provide an objective method for testing the efficiency and effectiveness of business strategies. A way to determine whether the strategy being implemented is moving the business toward its intended strategic objectives. Evaluations also can help identify when and what corrective actions are necessary to bring performance back in line with business objectives.  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.

There are 4 ways to evaluate corporate strategies as below:

1) Analyze the company's industry and competitors. Describe the properties of the industry in terms of its maturity, growth rate and fragmentation (whether there are a few major players or hundreds of tiny competitors). List each of the major competitors and what role they plan in the industry; for example, the low-cost leader, aspiration brand or up-and-coming startup. Describe the customers available in the industry, such as small businesses, government branches, middle-class consumers and so on.

2) Evaluate the capabilities of the business or its founders. Perform a SWOT (strengths, weaknesses, opportunities, threats) analysis that lists the organization's internal strengths and weaknesses, and its external opportunities and threats. Prioritize a list of the company's strengths in order from strongest to weakest, and its weaknesses in order of most to least crippling.

3)Assess the business's current strategic approach and how well it is implementing that approach. If the business has positioned itself as the low-cost leader, examine whether it has achieved that position. Some businesses may have not defined a strategy yet; in that case, determine what role it has been playing in the industry and how well it is performing financially in comparison to its competitors.

4) Perform a gap analysis between the company's competencies and opportunities within the marketplace or industry. Make a list of each market need that has not been completely fulfilled, such as underserved customers, operational approaches that haven't been tried or a lack of competition in one of the traditional roles, such as aspiration brand. Then compare that list to the business's strengths and weaknesses. If the business has not performed as well as its competitors nor reached its targets, the company may be trying to compete in an area that is crowded or be relying on skills in which it is weak. 

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

BCG (Boston Consulting Group) identifies high-growth prospects by categorizing the company's products according to growth rate and market share. By optimizing positive cash flows in high-potential products, a company can capitalize on market-share growth opportunities. The matrix assesses products on two dimensions. The first dimension looks at the products general level of growth within its market. The second dimension then measures the product's market share relative to the largest competitor in the industry. Products are classified into four distinct groups, Stars, Cash Cows, Problem Child and Dog as follows:

Stars (high share and high growth)

Star products all have rapid growth and dominant market share. This means that star products can be seen as market leading products. These products will need a lot of investment to retain their position, to support further growth as well as to maintain its lead over competing products.

Cash Cows (high share, low growth)

Cash cows generate larger revenues in lesser effort in comparison to other matrices. This is due to less competitive pressures with a low growth market and they usually enjoy a dominant position that has been generated from economies of scale.

Dogs (low share, low growth)

Product classified as dogs always have a weak market share in a low growth market. These products are very likely making a loss or a very low profit at best. These products can be a big drain on management time and resources.

Problem Child (low share, high growth)

The products that are categorized into problem child are in larger market share, but is likely to have a very low share of the market. It may be so low that a it could become difficult to sustain in big pond. The reason could be the new product to the market.

Pros:

·It is helpful for managers to evaluate balance in the companies' current portfolio of Stars, Cash Cows, Question Marks and Dogs.

·It is applicable to large companies that seek volume and experience effects.

·The model is simple and easy to understand.

·It provides a base for management to decide and prepare for future actions.

·If a company is able to use the experience curve to its advantage, it should be able to manufacture and sell new products at a price that is low enough to get early market share leadership. Once it becomes a star, it is destined to be profitable.

Cons:

·It neglects the effects of synergies between business units.

·High market share is not the only success factor.

·Market growth is not the only indicator for attractiveness of a market.

·Sometimes Dogs can earn even more cash as Cash Cows.

·The problems of getting data on the market share and market growth.

C) Why might an organization's' corporate strategy need to be changed? How might it be changed?

There are four actions to determine how you will govern your change:

1) Identify clear change leadership roles.

2) Create a recognizable change governance structure to oversee the effort.

3) Clarify how change-related decisions will be made.

4) Clarify how the change structure will interface with your ongoing operations.

These four actions are key elements of your overall change infrastructure. When communicated, they demonstrate to your organization the importance of the change and that you are leading it with clear roles and authority. As you proceed through your change, add to your change infrastructure as needed. Include any temporary teams, systems, course correction vehicles, or technology you will use to support your initiative. 

D) After readings "Strategic Managers 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, expanding into other industries such as producing navigation on handheld devices will help Navteq Corporation survive the anticipated decrease of navigation equipped vehicles to 70% of its sales. The statement made by CEO Judson C. Green demonstrates his decisions leaning towards vertical integration in which an organization is likely to grow by obtaining power to influence in its inputs (backward) and outputs (forward) integration. Yes other way could be by horizontal integration where company expands it business processes and organizational operations by combining with other stronger organizations in same industry producing similar products. Horizontal integration is appropriate growth strategy when organization demands for the need of the growth and obtain larger market share. It signifies the company to meet the growth goals. When a company lacks market share that is required to gain sustainable development, it can be strategically addressed to attain sustainable competitive advantage.