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Lecture 2
Management and decision-making (1)
Introduction to business strategy
Consequences for management decision-making
Part 2
SWOT analysis

Involves “a detailed and exhaustive assessment of the

strengths and weaknesses of the business

and the opportunities and threats

presented by its product markets and other environments such as suppliers and technology developers”

(Pearson, 1999)

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 SWOT analysis

Opportunities A B

External
factors
Threats C D

Strengths Weaknesses

Internal factors

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BCG matrix

The Boston Consulting Group analysis technique models the relationship between the current and future potential of a product or
service and how management wants to deal with it.

It is therefore a marketing analysis…

analysis and it shows the products that are cash generators and cash consumers.
consumers

Each of these will need to be managed differently and supported by different kinds of systems

(Cadle and Yeates, 2001)

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BCG matrix

High Wild Cats

(or problem Stars
children)
Market
growth
Dogs Cash Cows
Low
Low High

Market Share

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Customer relationships

Customer relationship management

Marketing has traditionally been about finding new customers

CRM is about maximising the profit from relationships with

existing customers through targeting your best customers,
repeat-selling, cross-selling, etc.

“Putting the customer at the of your business”

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Customer relationships

High Happy Satisfied

satisfaction
Customer

wanderers stayers Source:

Piercy (1997),
from Needle
Low Dealers Hostages (2004)

Low High

Customer loyalty

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What is strategy (1) ?

“Even from the crudest SWOT model, [strategy]

frameworks have been concerned largely with the

nature of the organisation

and its
environment
and how the two might be
advantageously related to each other”

(Pearson, 1999)
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What is strategy (2) ?

“The strategic process refers to the way in which

management strategy is formed.

In most organisations this involves a

mixture of scientific and rational analysis
together with more
subjective and political considerations.”

(Needle, 2004)

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 What is strategy (3) ?
Mintzberg (1987) considers 5 definitions,
not necessarily mutually exclusive:

 Strategy as plan

 Strategy as ploy

 Strategy as pattern

 Strategy as position

 Strategy as perspective
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What is strategy (4) ?

 Strategy as plan:

a deliberate, intentional approach to achieving

(long-term) results

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What is strategy (5) ?

 Strategy as ploy:

competitive manoeuvres aimed at generating

some positive effect on the basis of competition

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What is strategy (6) ?

 Strategy as pattern:

strategy emerges or is inferred from consistent

natural (i.e. unplanned) behaviour

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What is strategy (7) ?

 Strategy as position:

how the organisation positions itself in its

various environments, particularly its market
and competitive environments

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What is strategy (8) ?

 Strategy as perspective:

distinctive characteristics of an organisation as

perceived both internally and externally

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 What is strategy (summary) ?

Mintzberg (1987) considers 5 definitions, not necessarily mutually exclusive:

 Strategy as plan: a deliberate, intentional approach to achieving (long-

term) results

 Strategy as ploy: competitive manoeuvres aimed at generating some

positive effect on the basis of competition

 Strategy as pattern: strategy emerges or is inferred from consistent

natural (i.e. unplanned) behaviour

 Strategy as position: how the organisation positions itself in its

various environments, particularly its market and competitive
environments
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 Strategy as perspective: distinctive characteristics of an
organisation as perceived both internally and externally
 Strategic planning overview
B u s in e ss S tra te g y O rg a n isa tio n B u sin e ss e n viro n m en t

S trate g ic p la n n in g a n d
m an ag e m e n t
“S tra te g y a s p a tte rn ”

A na lys in g the S W O T a n a lys is

e n viro n m en t
B C G m a trix
P orte r’s five
forc es
V isio n P la n n in g the
d irectio n P orte r’s g en e ric stra te g ie s
M ission

P la n n in g the O rg an isatio n stru ctu re

O bje ctive s s trateg y a n d c u lture

T arg ets 17
Im ple m e nting M o n ito r a nd co n tro l
th e stra te g y
Vision, mission, objectives, targets

Every business will have some sort of

Vision vision or core ideology made up of:
 core values
Mission  core purpose
statement  visionary goals

Objective Objective

KPI KPI KPI 18

Vision, mission, objectives, targets
The vision is often captured in a
mission statement
Vision
often not more than 50 words

Mission
statement

Objective Objective

KPI KPI KPI 19

Vision, mission, objectives, targets
The vision is often captured in a
mission statement
Vision
often not more than 50 words

Mission
statement

The mission can be highlighted in a

strapline
using only a few words
Objective Objective
London Metropolitan University’s
strapline is:
transforming lives
KPI KPI KPI 20
meeting needs
building careers
Vision, mission, objectives, targets

Vision
The mission statement may be
expanded into key goals or
Mission
statement
which should be SMART:
Specific and written down
Measurable
Agreed, Aligned, Achievable
Objective Objective
Realistic, Relevant
Time-framed

KPI KPI KPI 21

Vision, mission, objectives, targets

Vision

Mission
statement
Objectives will be supported by
Critical Success Factors (CSFs)
and measurable targets, or
Objective Objective Key Performance Indicators (KPIs)

KPI KPI KPI 22

Vision, mission, objectives, targets (summary)

Vision Every business will have some sort of vision

Mission The vision is captured in a mission statement

statement
The mission can be highlighted in a strapline

The mission may be expanded

Objective Objective into SMART objectives

Objectives will be supported by CSFs

KPI KPI KPI 23
and measurable targets as KPIs
 Performance measurement

 Why measure performance?

 Organisations use key performance indicators (KPIs) to:

◦ identify success
◦ identify whether they are meeting customer requirements
◦ help them understand their processes
◦ identify where bottlenecks, waste, etc. exist
◦ ensure decisions are based on fact
◦ show if planned improvements happened
(Parker, 2000)

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Conceptual Model for Addressing the Gaps between
Performance Measurement and Customer Satisfaction
Word of Mouth
and Customer Value Past Experience
Communications

Expected Service

Gap
5

Perceived Service
CUSTOMER

Customer
Satisfaction
Gap 1

Service Delivery
PROVIDER Contact staff Gap
(including previous
perceptions 4
and post) External
Communications
3
Alignment of CRM
p
Ga

Vision and
Service
Strategy through G
Performance ap
streamlined 6
Measurement
technology
Processes

Internal
Gap 2
Communications

Management
Actual Perception
perceptions of
Level of Customer
customer
Satisfaction 25
expectations

Gap 7

Wood, Page and Webb (2007)

Balanced Scorecard
 Traditional performance measurement based mainly
on financial measures

 Balanced scorecard designed to translate overall

mission and business strategy into specific,
quantifiable goals

 Usually divided into 4 key areas:

◦ financial
◦ customer
◦ internal business process
◦ learning and growth
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 Strategy triangle

 Successful firms have an overriding

business strategy that drives both
organisational and IS strategy Business Strategy

 IS strategy can affect and is affected

by changes in a firm’s business and
organisational strategy

 Changes in any strategy must be

accompanied by changes in the Organisational Information
others Strategy Strategy

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Source: Pearlson (2001)
Strategic Planning

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source: http://www.soroc.com/Content.aspx?ID=5
Starting the coursework assignment

Consider the following:

 Detailed requirements
◦ identify data to support chosen decision for proposed MSS

 Management Information
◦ include ERD and data dictionary
◦ describe how you dealt with any problems in the data

 Sample queries
◦ relevant to your choice of decision
◦ providing information needed by management

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Recommended reading for next week
management decision making

 Chaffey, D. (ed.), 2003, Business Information Systems, 2nd ed., FT Prentice Hall
Data and information: pages 4 - 14 + Decision-making: pages 16 - 28
 Laudon, K. & Laudon, J., 2004, Management Information Systems, 8th ed.,

Pearson Prentice Hall

Role of managers: pages 85 - 87 + Decision-making: pages 87 - 90
 Lucey, T., 1997, Management Information Systems, 8th edition, Continuum

Decision-making: pages 140 - 151

 Turban E. & Aronson J.E., 2001, Decision Support Systems and Intelligent

Systems (6th edition), Prentice Hall Business Publishing

Decision-making: (summary) pages 4 - 13 + (detail) pages 33 - 77
 Whiteley, D., 2004, Introduction to Information Systems, Palgrave

Management decision-making: pages 171 -178

… or similar
 https://dspace.lib.cranfield.ac.uk/bitstream/1826/2594/1/Creating%20and

%20Managing%20Value%20in%20Collaborative%20Netwo.pdf
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References
 Boston Consulting Group (1968), Growth and Financial Strategies, BCG
 Cadle J and Yeates, D, (2001), Project Management for Information Systems, 3rd edition, Prentice Hall
 Chaffey D (2003), Business Information Systems, 2nd edition, FT Prentice Hall
 Mintzberg H (1987), ‘The Strategy Concept I: five P’s for strategy’, California Management Review, Fall
 Needle D (2004), Business in Context, 4th edition, Thomson Learning
 Parker C (2000), ‘Performance Measurement’, Work Study, MCB University Press
 Pearlson K (2001), Managing and Using Information Systems, Wiley
 Pearlson K & Saunders C (2003), Managing and Using Information Systems: A Strategic Approach,
Wiley
 Pearson G (1999), Strategy in Action, Prentice Hall
 Porter M E (1979), ‘How competitive forces shape strategy’, Harvard Business Review, March/April
 Porter M E (1980), Competitive Strategy: Techniques for analyzing industries and competitors, Free
Press
 Robson W (1997), Strategic Management and Information Systems, Prentice Hall
 Wood S, Page S, Webb P (2007) Measurement of Customer Satisfaction & Performance
Measurement within a Local Government Framework (available at:
http://chesterrep.openrepository.com/cdr/handle/10034/37773)

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Any questions?

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