Read the pages and make a BRIEF summary of them with your own words, please. Mention important parts.
Read the pages and make a BRIEF summary of them with your own words, please. Mention important parts.
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Question
Read the pages and make a BRIEF summary of them with your own words, please. Mention important parts. Also, you will put your comments and ideas about the topic. please don't write item by item. Please do not write long
Transcribed Image Text:session
statement that would encompass their dreams for DMC. The
both commercial and military markets (one of DMC's po-
tential competitors in the commercial marketplace had just
been purchased by a larger company and its entire marketing
team had been eliminated as part of the buyout).
4. Quality. DMC is committed to delivering the highest
quality products possible on time, every time.
vision statement developed reads as follows:
Delcron Manufacturing Company will be an internation-
al leader in the production of low-voltage power supplies
for aircraft.
5. Employee empowerment. DMC is
to seeking, valuing, and using employee input and
feedback.
committed
Threats Participants identified and reached consensus on
the following threats: DMC's pending loss of its 8A status,
potential cutbacks in the development of new military air-
craft in the United States, a tight labor market that could in-
flate labor costs, and the potential for ever-increasing levels
of competition from foreign and domestic sources.
The SWOT Analysis
6. Partners. DMC is committed to treating its custom-
ers, suppliers, and employees as partners.
Prior to beginning the SWOT analysis, the authors placed
four large flipcharts in the room. The flipcharts were labeled
strengths, weaknesses, opportunities, and threats. Beginning
with strengths, the authors led participants through a brain-
storming session. Each time a strength, weakness, opportu-
nity,
by the group, the authors recorded it on the
flipchart. Every time a flipchart page would fill up, the au-
thors tore it off and
a visible record of their work.
Developing Broad Strategic Goals
The final component of the first strategic planning session
involved developing broad strategic goals. These goals had
to represent actions that, if accomplished, would move the
company ever closer to the full realization of its corporate
vision. Before beginning development of the goals, the au-
thors gave participants typed copies of the
SWOT analysis. They explained to the executives that the
Developing the Mission
threat was identified by a participant and agreed on
The executives at DMC found that developing a vision an-
swers many important questions. With the vision in place,
developing a mission statement was not overly difficult; it
was just a matter of following the criteria set forth by the
authors for well-written mission statements. Most of the
discussion focused on wording as opposed to concepts. The
mission statement the participants finally decided on reads
as follows:
corresponding
she results of
taped
it to the wall so that participants
had a
broad
goals developed should all satisfy one or more of the
Discussion was
intense at times, and there were dis-
agreements among participants. One executive would iden-
tify a weakness in another executive's area of
and arguments would ensue. It took the authors a while to
convince the executives to drop their defenses and to be
open and frank without getting their feelings hurt or
territorial. Another dynamic was that what one executive
saw as a strength was perceived by another as a weakness.
Once the authors worked through these and other issues that
inevitably occur during strategic planning sessions, a cohe-
sive group emerged and began to cooperate well as a team.
The results of the SWOT analysis follow.
following criteria: (1) exploit one or more of the organiza-
tion's strengths, (2) correct one or more of the organization's
weaknesses, (3) take advantage of one or more of the op-
portunities available to the organization, or (4) respond to
one or more of the threats facing the organization. With this
guidance given, participants developed the following broad
strategic goals for DMC:
responsibility,
of one on
Delcron Manufacturing Company (DMC) is a design and
manufacturing firm dedicated to providing high-quality
products for the aircraft industry. To this end, DMC de-
signs and manufactures low-voltage power supplies for
military and commercial aircraft in the United States and
abroad.
1. Expand the company's business base to include both
military and commercial markets in the United States
and abroad.
Developing Guiding Principles
2. Strengthen all functional units in the company in the
area of commercial products and markets,
Strengths Participants identified and reached consensus
on the following strengths: strong manufacturing capabil-
ity, solid business contacts in the Department of Defense
industry, a proven track record of excellent performance in
completing contracts on time, low turnover rate with regard
to critical employees, comparatively low labor rates (most
employees of DMC are retired military personnel who view
their salary as a second income), and an up-to-date facility
equipped with modern technology.
The authors described "guiding principles" to participants
as written statements that convey DMC's corporate values.
They encouraged the company's executives to mentally put
the following sentence before the guiding principles in order
to better understand what they represent: "While
our vision and mission, we will
principles in everyday operations and in all decisions made.
The authors asked participants to brainstorm important
corporate values without concern, for the moment, about
wording. Participants were encouraged to simply offer up
value-laden terms (e.g., ethics, quality, customer satisfaction)
that the authors recorded on flipcharts. Once the terms had
3. Expand the company's core capabilities to include both
design and manufacturing.
4. Fully achieve a Six Sigma quality level in manufacturing
low-voltage power supplies.
5. Develop and implement a supplier certification pro-
gram to create a reliable group of dependable, high-
quality supplier partners.
6. Establish a comprehensive training program to mavi-
mize the capahilities of all employes at all levels in the
apply
pursuing
the following guiding
Weaknesses Participants identified and reached consen-
sus on the following weaknesses: no experience outside of
the Department of Detense market, no marketing compo-
nent, no experience being the lead contractor on a major
project (all of DMC's work up to
tracted to it by larger Department of Defense contractors,
such as Boeing and Lockheed-Martin), no experience in the
international marketplace, no design component (DMC had
been a build-to-print operation up to this point), and no re-
search and development component.
company.
With the broad strategic objectives established, the
all been listed, the authors asked participants to select the
six to ten that were most critical. With the most important
corporate values identified, participants worked with the
authors to develop more explicit wording for each one. The
guiding principles developed are as follows:
"strategic" portion of the plan was completed. Developing
an action plan tor carrying out the strategic portion ot
the plan would be scheduled later, after DMC's executive
management team had communicated the vision, mission,
guiding principles, and broad strategic goals to all employ-
ces. The
this
spoint
bad been subcon-
All of DMC's employees and management
1. Ethics.
personnel are expected to exemplify the highest ethical
standards in doing their jobs.
took place two months
action planning
later, and DMC began implementation of the new strate-
gic plan
graduated from the 8A program, it had expanded from
immediately thereafter. Just two
years
after DMC
Opportunities Participants identified and reached
consensus on the following opportunities: expansion into
commercial aircraft markets, expansion into international
commercial markets, expansion into foreign military mar-
kets (military aircraft of America's allies), and availability
2. Customer delight. In dealing with customers, DMC
will go beyond customer satisfaction to achieve cus-
tomer delight.
under 500 employees to almost 700, and its business base
3. Continual improvement. Continually improving its
products, processes, and people is a high priority for
DMC.
was growing steadily. The company now is well established
in both commercial and military markets in the United
States and abroad. The plan developed during a three-day,
off-site session is working.
of a strong international marketing team that can work in
Transcribed Image Text:the company was classified as an "8A" firm, it became eli-
gible for government set-asides. Set-asides under the gov-
ernment's 8A program are contracts awarded outside of the
bidding process
give such firms an opportunity to gain a foothold in busi-
ness while learning how to compete without the set-asides.
DMC entered this
QUALITY TIP
Importance of Executing Strategic Plans
Good strategic planning is essential if an organization is going to
outperform the competition. But just having a good strategic plan
is not enough. The plan must be effectively executed. Execution
is what separates the winners from the also-rans in the global
arena. The work is really just starting once the plan has been
developed. Effective execution is the key to outperforming the
competition.
to minority-owned firms. The idea is to
arena
sa manufacturer
of low-voltage
power supplies for military aircraft. Its 8A status lasted for
five years. During this time, DMC grew from a small shop
in a garage to a company that employed almost 500 people.
When the company was just over a year from having
to make the transition from 8A status to the competitive
marketplace,
company needed a strategic plan. For several years, these
executives had been so
helping it grow that they had given little thought to what
would happen to DMC once it graduated from
gram. Would the company be able to compete successfully
in the open marketplace? Should it attempt to diversify into
other markets? Should the executives simply sell the com-
STRATEGIC PLANNING IN
ACTION: A "REAL-WORLD" CASE
its
executive management team decided the
This section guides the reader through the strategic planning
process undertaken by a company that contracted with the
authors to facilitate it. The process involved the company's
exccutive management team and took place over a three-
day period at an off-site location away from the company's
facility. The strategic planning process always varies from
organization to organization in specific details. However,
this particular company was selected as an example because
the process it underwent is representative of what most com-
panies go through in developing a comprehensive strategic
plan. This case should help the reader see how the various
Developing the Vision
busy establishing
the
company and
Before developing a vision for DMC, the company's ex-
ecutive management team had to decide if there would
even be a DMC after graduation from the 8A program.
Going ahead with the company would mean risking the
investment of both their time and their money in DMC.
On the other hand, these executives could probably sell
their shares in the company, walk away with a handsome
profit, and find high-level positions with other firms in
the
8A pro-
open
pany and move on to other endeavors? These questions had
begun to weigh heavily on the minds of the DMC execu-
tives when the CEO suggested they hire a strategic planning
consultant, go through the process, and see what transpires.
The DMC executives hired the authors and went through
the strategic planning process. The remainder of this section
documents the process and its outcomes.
their respective fields or even help start another 8A com-
pany. After a lively discussion, the executives decided
they had invested too much of their money and them-
selves in DMC to walk away from the company now.
Consequently, they turned to the task of developing a
post-8A vision for DMC.
The authors led participants through a lengthy discus-
sion that revolved around the following questions (which
came from the SWOT analysis): Should DMC stick with
just domestic military markets or expand into the com-
mercial marketplace, too? Should DMC consider pursu-
components of the strategic plan fit together as well as how
cach respective component is actually developed.
Overview of the Process
Developing a Strategic Plan: Delcron
Manufacturing Company
The authors set up the strategic planning process in the
conference center of a resort about 75 miles from DMC's
Delcron Manufacturing Company (DMC) started as a small,
minority-owned Department of Defense contractor. When
facility The idea, as they explained it to the company's ex-
ecutives, was to conduct the strategic planning process at a
location that would guarantee both privacy and focus. No
ing contracts with foreign militaries? Should DMC parsne
cellular telephones or visits to the office or home were al
lowed. In addition, family members were not included. The
authors explained that in order to come away with an accept-
able draft of a strategic plan, the executives would need three
entire days of uninterrupted, fully focused work. The group
would be given a morning and afternoon break each day to
international commercial contracts? Should DMC stick
with low-voltage power supplies as its principal product or
diversify into other product lines? Should DMC add a de-
sign function or continue as just a build-to-print company?
Should DMC add a research and development function to
develop new product lines?
Answering these questions was the most difficult part
of the
telephone calls
that, their administrative assistants and family members
knew how to reach them in the event of an
The first hour of the first day was devoted to learn-
ing the process and how it works. The authors explained
all of the various components of the strategic plan (vision,
the SWOT
strategic goals). This first three-day session would conclude
with the development of broad strategic goals. Another ses-
sion would he scheduled during which the executives would
develop the action plan component. The action plan session
would involve a broader group that, in addition to the execu-
tive management team, would include other management
and supervisory personnel. The session would be conducted
by the authors after each member of the company's executive
management team had solicited input from all these employ-
ees directly reporting to him or her
Hew product
and check e-mail messages. Beyond
strategic planning process for DMC's executives How
they answered these questions would determine everything
else about the future of the
emergency
hese
company
and, correspondingly.
about their professional futures. After an intense discussion,
participants decided that DMC would need to expand into
both commercial and foreign markets, while retaining its
Department of Defense base. They also agreed that the com-
pany's expertise is in the production of low-voltage power
supplies. Consequently, they ruled out adding a research and
development function, but they did decide to expand into
design. The rationale of DMC's executives was that the com-
pany would always be at the mercy of other, larger contrac-
tors unless it could design power supplies in addition to just
manufacturing them.
With these questions answered, the authors were able to
lead participants through the process of developing a vision
analysis, mission, guiding principles, and broad
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