MGM MIRAGE

MGM Mirage (NYSE: MGM), one of the world's leading and most respected companies with significant holdings in gaming, hospitality and entertainment, owns and operates 16 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau. City Center, an unprecedented urban metropolis on the Las Vegas Strip scheduled to open in late 2009, is a joint venture between MGM MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World. MGM MIRAGE Hospitality has entered into management agreements for future casino and non-casino resorts in the People's Republic of China, Abu Dhabi, U.A.E. and Vietnam. MGM MIRAGE supports responsible gaming and has implemented the American Gaming Association's Code of Conduct for Responsible Gaming at its properties. MGM MIRAGE has received numerous awards and recognitions for its industry-leading Diversity Initiative and its community philanthropy programs.

MGM MIRAGE
MGM Mirage Type Founded Headquarters Public (NYSE: MGM) 2000 Las Vegas, Nevada James Murren(Chairman/CEO) Key people Kirk Kerkorian (Member of the Board of Directors) Industry Products Revenue Operating income Net income Total assets Casinos and hotels Hotels US$D7,691.64 million (2007) $2,863.93 million (2007) $1,584.42 million (2007) $22,727.69 million (2007)

Total equity
Employees

$6,060.70 million (2007)

54,700

Step 1: Identify the firms existing vision, mission, objectives and strategies.

The resorts and casinos of MGM MIRAGE are some of the most
famous in the world, widely credited for establishing a new generation of excitement in Las Vegas! Our 24 destinations are renowned for their winning combination of quality entertainment, luxurious facilities and exceptional customer service. Our dedicated staffs of over 70,000 employees are committed to providing an unsurpassed experience for every one of our guests. We are actively expanding our presence globally, with potential developments in a number of domestic and international markets. At MGM MIRAGE, we are all striving together to deliver our enticing blend of entertainment to every corner of the world.

Components of Mission Statement

Components Custome of Mission / Company r

Employee Public Selfimage Concept

Philosophy Survival, Growth, Profits

Technolog y

Marke t

Produc t & Service

MGM

Yes

No

Yes

No

No

No

No

Yes

Yes

Components of Mission Statement

Customers Committed to providing an unsurpassed experience for every one of our guests. Public Image The resorts and casinos of MGM MIRAGE are some of the most famous in the world. Markets - We are actively expanding our presence globally, with potential developments in a number of domestic and international markets. Product and Services - Our 24 destinations are renowned for their winning combination of quality entertainment, luxurious facilities and exceptional customer service.

Step 2: Develop a vision and mission statement for the organization.

MGM MIRAGE seems already established ourselves as pioneer into entertainment segment in the market regarding their high capabilities in maintaining their brand. The competitive advantage over our rival as a leader in social responsibilities, not only through monetary support of worthy agencies in our communities, but also through multi-dimensional efforts. Delivering a promise of excitement is our philosophy. With the first class hotel and casinos we can assure that our customers will have an unforgettable moment of their life. We also are gaining profits to maximize our shareholders position in our company. With the mass increase in internet usage globally the company, the company have to cope with the changing pattern in the market today by introducing their online casinos and the usage of the hitech technology in maintaining the operation in monitoring the cash flow in the cyber space. The technology usage in the internet market segment is crucial as the company looking to tackle this market segment.

Step 3: Identify the organizations external opportunities and threats.

Opportunities The theme hotel/casino resort concept had become firmly entrenched in Las Vegas as well in much of the remaining gaming industry. Data monitor predicts that by 2010 the U.S casinos and gaming sectors value will be approximately $109.2 billion, an increase of almost 40% Twenty million U.S citizens wagered some $4 billion by the end of 2005 By 2009, projections are that online gambling revenues will exceed $20 billion worldwide, with a smaller percentage coming from U.S. citizens 77 million American baby boomers are now at their highest earnings levels, can afford expensive vacations and, as retirees, they can be expected to travel extensively and spend more during travel. The global casino gaming market reached a value of $298.7 billion in total revenues in 2005 and by 2010 revenues are expected to increase to $387.5 billion.

Step 3: Identify the organizations external opportunities and threats.

Threats Recently efforts have been aimed at slowing the growth of internet gambling by restricting the free transfer of credit card monies to gambling sites around the world. On an international basis, each local government establishes regulations controlling gambling activities within its own borders. There were approximately 300 public companies generating gaming revenues in 2005. Harrahs Entertainment Inc. is currently the largest U.S-based casino operation. Harrahs now owns or manages 36 casinos under the Harrahs, Caesars, and Horseshoe brand names, which include 19 land based casinos.

Step 4: Construct a Competitive Profile Matrix (CPM)

MGM Mirage Critical Success Factors Weight Rating Score Rating Score Rating Score Harrahs Entertainment Inc. Las Vegas Sands Corp.

Advertising

0.20

0.60

0.60

0.40

Product Quality

0.15

0.60

0.45

0.30

Price Competitiveness

0.10

0.10

0.30

0.10

Management

0.20

0.80

0.80

0.60

Financial Position

0.10

0.30

0.40

0.30

Customer loyalty

0.05

0.10

0.15

0.10

Global Expansion

0.10

0.30

0.20

0.10

Market

0.10

0.20

0.20

0.20

Total

1.00

3.00

3.10

2.1

Step 5: Construct an External Factor Evaluation Matrix (EFE Matrix)

Key External Factors Weight Rating Weighted Score Opportunities 1) The theme hotel/casino resort concept had become firmly entrenched in Las Vegas as well in much of the remaining gaming industry. 0.07 2 0.14

2) Data monitor predicts that by 2010 the U.S casinos and

gaming sectors value will be approximately $109.2 billion, an increase of almost 40% 3) Twenty million U.S citizens wagered some $4 billion by the end of 2005 4) By 2009, projections are that online gambling revenues will exceed $20 billion worldwide, with a smaller percentage coming from U.S. citizens. 0.10 3 0.30 0.09 2 0.18 0.12 3 0.36

5) 77 million American baby boomers are now at their highest earnings levels, can afford expensive vacations and, as retirees, they can be expected to travel extensively and spend more during travel. 6) The global casino gaming market reached a value of $298.7 billion in total revenues in 2005 and by 2010 revenues are expected to increase to $387.5 billion 0.10 3 0.30 0.12 4 0.48

Step 5: Construct an External Factor Evaluation Matrix (EFE Matrix)

Threats 1) Recently efforts have been aimed at slowing the growth of internet gambling by restricting the free transfer of credit card monies to gambling sites around the world 2) On an international basis, each local government establishes regulations controlling gambling activities within its own borders 3)There were approximately 300 public companies generating gaming revenues in 2005 4) Harrahs Entertainment Inc. is currently the largest U.S-based casino operation. 5) Harrahs now owns or manages 36 casinos under the Harrahs, Caesars, and Horseshoe brand names, which include 19 land based casinos TOTAL 1.00 3.01 0.10 4 0.40 0.09 4 0.36 0.07 3 0.21 0.06 2 0.12 0.08 2 0.16

Step 6: Identify the organizations internal strengths and weaknesses.

Strength MGM MIRAGE provides it all mega casinos, world class hotels and restaurants and some of biggest entertainment shows in the world. The other signatures resort, featuring luxurious, tropically oriented themes located on the site shared with Treasure Island at the center of the Las Vegas strip. From pirates to pyramids to castle, other MGM Mirage properties follow the same general concept of themed entertainment gaming resorts covering a wide variety of locations and catering to many different types of customers. MGM Mirage earned $635 million net on revenues of $7.1 billion with a market cap of $18.99 billion. A joint ownership with MGM Grand Paradise Limited is the MGM Grand Macau. This hotel-casinos resort in Macau features at least 345 table games and 1035 slots with room for significant expansion.

Step 6: Identify the organizations internal strengths and weaknesses.

Weaknesses The gaming industry is heavily regulated by states and by other governments. In United States, individual states must first pass laws legalize gambling, and then they generally set up some form of regulatory commissions to oversee gambling activities. MGM Mirage ranked 2nd in the casino operator behind Harrahs Entertainment, Inc

Step 7: Construct an Internal Factor Evaluation Matrix (IFE Matrix)

Key Internal Factors Strength 1) MGM MIRAGE provides it all mega casinos, world class hotels and restaurants and some of biggest entertainment shows in the world. 2) The other signatures resort, featuring luxurious, tropically oriented themes located on the site shared with Treasure Island at the center of the Las Vegas strip. 0.13 3 0.39 0.16 3 0.48 Weight Rating Weighted Score

3) From pirates to pyramids to castle, other MGM Mirage properties follow the same general
concept of themed entertainment gaming resorts covering a wide variety of locations and 0.13 catering to many different types of customers. 4) MGM Mirage earned $635 million net on revenues of $7.1 billion with a market cap of $18.99 billion. 5) A joint ownership with MGM Grand Paradise Limited is the MGM Grand Macau. This hotelcasinos resort in Macau features at least 345 table games and 1035 slots with room for 0.16 significant expansion. Weaknesses 1) The gaming industry is heavily regulated by states and by other governments. In United States, individual states must first pass laws legalize gambling, and then they generally set up 0.10 2 0.20 4 0.64 0.20 4 0.8 3 0.39

some form of regulatory commissions to oversee gambling activities. 2) MGM Mirage ranked 2nd in the casino operator behind Harrahs Entertainment, Inc
0.12 1 0.24

Total

1.00

3.14

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
Strengths (S)
Opportunities (O) SO Strategies

Weaknesses (W)

WO Strategies
1) MGM Mirage need to acquire domestic casino operators to capture customers of the casino and to lessen the competition S6,W2

1)MGM Mirage should do some promotion packages as they know all baby boomers has the most highest earnings and they are retiring soon.S1,O5 2)By looking for the opportunities arisen that US citizen will eventually spent to the total 4billion, MGM Mirage could add more variety of new entertainment to their market S3,O2
Threats (T)

ST Strategies

WT Strategies

1)With the profit they gain on revenue, MGM Mirage should buy some of the public companies that is 1) As Harrahs Entertainment Inc. doing well in the market so that they can larger their overcome MGM Mirage as leading market share.S4,T3 company in casino industry, MGM 2)As new regulations of local government in Mirage could once again bypass gambling, MGM Mirage should concentrate to Harrahs by merging with one of the enlarge their business by buying land in the United big company or buying a sum of small States to build more casino and hotels. S4,T2 competitor that will increase their asset. W2,T5

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
Strategic Position and Action Evaluation Matrix (SPACE Matrix) X - Axis: -4 + 5 = 1 Y - Axis: 5.33 + (-4.86) = 0.47 Coordinate: (3.6, 2.2)

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
Financial Strength (FS) Return on investment Inventory turnover Working capital Earnings per share Cash Flow Liquidity FS Average Environmental sustainability (ES) Competitive Pressure Price Elasticity of Demand Barrier to entry new market Demand variability Changed in technology Risk involved in business Price range of competitive products ES Average Competitive Advantage (CA) Market Share Customer Loyalty Technological Know-how Product Quality Competition Capacity Utilization CA Average Industry Strength (IS) Growth Potential Profit Potential Financial Stability Technological Know-how Resource Utilization Productivity, Capacity Utilization IS Average -4

6 5 5 5 6 5 5.33

-6 -5 -4 -4 -4 -6 -5 -4.86

-4 -4 -3 -5 -4

3 6 6 4 5 6 5

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
After Calculate the SPACE Matrix of MGM Mirage, they are located in the aggressive quadrant (Upper Right Quadrant).MGM Mirage is now in an excellent position in the market because provides it all mega casinos, world class hotels and restaurants and some of biggest entertainment shows in the world. They now have to take their advantage to use their internal strengths to take advantage of external opportunities such as doing some promotional packages to attract all the baby boomers to spend their compensation money into a very relaxing vacation n entertaining themselves at MGM Mirage Hotels and casinos. The 2nd and 3rd thing they should do is overcome internal weaknesses and avoid external threats. Their internal weaknesses cannot be overcome easily as it is considered law of a country. They can avoid their external threats by using market penetration and market development strategy. They should be more competitive in the market by acquiring existing company or cooperate together with other company that is rising in the market so that their customer will aware of MGM Mirage products.

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
GRAND STRATEGY MATRIX

Rapid Market Growth

Quadrant II Quadrant I

Weak

Competitive
Position Quadrant III Quadrant IV

Strong Competitive Position

Slow Market Growth

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
From the Grand Strategy Matrix, it has been identified that The MGM Mirage belongs to the Quadrant 1 that needed either the forward, backward, or horizontal integrations if there is an excess in the resources, or by just concentrating on the market positions or the market development in order to sustain. Therefore, as the Grand Strategy Matrix is being constructed, the company falls into the first quadrant of the graph for having a strong competitive position with a rapid market growth. Under the market development and market penetration shows that MGM Mirage should counter the market by buying others company to strengthen their position. Under the product development the MGM Mirage should always come out with different and new product to eliminate thereat from their competitor. The integration and also diversification process should be implemented and MGM need to construct to keep the company competing in their market segment. This company falls under the excellent strategic position and therefore they are able to take risks aggressively when necessary or afford to take any advantages cause by any of the external opportunities

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
BCG MATRIX FOR 3M

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
From the image above, it is clearly identified that The MGM Mirage falls under the

second quadrant which is the Stars that represent the organization best long run opportunity for growth and profitability. This company reflects a high position in relative market and also the industry sales growth that should be injected through an investment to maintain or strengthen their dominant positions and also to expand their market internationally as the market they enter have high possibility in terms of profits and opportunities. At this stage, The MGM Mirage needs is the consideration of the most appropriate strategies to be applied such as either through the forward, backward, horizontal integrations, market positions or the market development; which is more suitable to strengthen their position. By doing market development

and also product development MGM Mirage have the opportunities to overcome their competitor
in their market segment, and also will counter possible threats that could affected their business, they also will manage to capture new batch of customer by offering product development as well as retain the old ones.

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
INTERNAL-EXTERNAL (IE) MATRIX

The IFE Total Weighted Score

Strong 3.0 to 4.0 High 3.0 3.99 to I

Average 2.0 to 2.99 II

Weak 1.0 to 1.99 III

MGM Mirage

Medium IV The EFE 2.0 Total 2.99 Weighted Score to

VI

Low 1.0 1.99 to

VII

VIII

IX

Grow and Build

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
EFE Total Weighted Score = 3.01

IFE Total Weighted Score

= 3.14

Segment

Casino Rooms Food & Beverages Entertainment Retail Others Total

$ Revenue % Revenue 2006 2006 (in thousands) 3,130,438 40.15 1,991,477 25.54 1,483,914 19.03 459,540 5.89 278,695 3.57 452,669 5.81 7,796,733 100

By using the Internal-External Matrix, it is clearly identified that MGM Mirage falls under the first quadrant by relating the total weighted score from the IFE and EFE Matrix.

Step 8: Prepare a Strengths-Weaknesses-Opportunities-Threat (SWOT), Strategic Position and Action Evaluation Matrix (SPACE) and Boston Consulting Group Matrix (BCG)
Strategic Alternatives Key Internal Factors Opportunities 1) The theme hotel/casino resort concept had become firmly entrenched in Las Vegas as well in much of the remaining gaming industry. 2) Data monitor predicts that by 2010 the U.S casinos and gaming sectors value will be approximately $109.2 billion, an increase of almost 40% 3) Twenty million U.S citizens wagered some $4 billion by the end of 2005 0.09 4 0.36 0.12 3 0.36 0.07 4 0.28 Weight AS Buy other small competitor company TAS Implement new promotional package AS TAS

4) By 2009, projections are that online gambling revenues will exceed

$20 billion worldwide, with a smaller percentage coming from U.S. citizens. 0.10 -

5) 77 million American baby boomers are now at their highest earnings levels, can afford expensive vacations and, as retirees, they can be expected to travel extensively and spend more during travel. 6) The global casino gaming market reached a value of $298.7 billion 0.12 2 0.24

in total revenues in 2005 and by 2010 revenues are expected to

increase to $387.5 billion

0.10

0.20

0.30

Threats 1) Recently efforts have been aimed at slowing the growth of internet gambling by restricting the free transfer of credit card monies to gambling sites around the world 2) On an international basis, each local government establishes regulations controlling gambling activities within its own borders 0.06 2 0.12 0.08 2 0.16

3)There were approximately 300 public companies generating gaming revenues in 2005 4) Harrahs Entertainment Inc. is currently the largest U.S-based casino operation. 5) Harrahs now owns or manages 36 casinos under the Harrahs, Caesars, and Horseshoe brand names, which include 19 land based casinos Total 1.00 3.66 3.71 0.10 2 0.20 3 0.30 0.09 4 0.36 3 0.27 0.07 4 0.28 -

Step 9: Recommend specific strategies

After two alternative strategies being consider which is to buy other small competitor and the other one is to implemented new promotional package. After the sum total attractiveness being done note that the scores of 3.66 and 3.71 and from that analysis indicates that the MGM Mirage Company should implement new promotional package. The
QSPM strategies will help to recommended to the MGM Mirage that the implement new promotional package as their main objective in order to improve their business in the entertainment industry. The advantages for using this strategy is that sets of strategies can be examined sequentially or simultaneously and no limitation of the number of strategies that can be evaluated and examine. In order to assure that the strategies will affected the company as a whole MGM Mirage could enlarge their promotional tools by using the internet access as their customer already being worldwide, the using of the technology is crucial to assures that the company use every resources that they can use to eliminate the possible threat by their competitor. They also could introduce new attraction to their existing product as one way to attract new customer as well as retain the existing one. The MGM Mirage could strengthen their branding by advertising and also sponsorship. The main objective by implementing new promotional package is to overcome Harrahs Entertainment Inc. to make MGM Mirage leading brand in this market segment. As MGM Mirage financial showing that the company doing very well in terms of profit gain, so it is being encourages that MGM Mirage need to investing large sum of money in order to make the new promotional package will be great investment. As a strong company in MGM Mirage, they need to focus to be leading company and set their branding worldwide to make the company overpass Harrahs Entertainment Inc.

Step 9: Recommend specific strategies

Implementation

The MGM Mirage can implement these recommendations by focusing their objectives on creating new promotional packages. It can also be implemented by fully utilizing the use of proper tools such as the internet as a way of promotion to their customers who are already worldwide. This can be done by advertising their new promotional packages via internet where they are placed on online gambling websites. This in turn will attract potential customers who
are already regular gamblers who frequently visit these web pages. These advertisements may include new attractions which can help attract new customers as well as existing customers who long for something new from MGM Mirage. The MGM Mirage should consider newer themes beside the already existing castles, pirates and pyramid themes. The MGM Mirage should also consider the existence of other competitors besides the domestic competitors in the United States. International competitors especially new and rising casinos in the asian region (ie.Singapore) should be recognized and addressed. The MGM Mirage must find ways to attract customers from asia to come to the United States rather than visit the casinos in Asia. Advertising through sponsorship should also be implemented as a way to attract customers. This can be done by establishing sponsorship in several worldwide industries including entertainment and sports. As we are aware, football has become somewhat of a household sport around the world. As a saying goes when a football match is being played, all eyes in the world will be upon it. The MGM Mirage should take advantage of this factor by advertising their name by sponsoring top football teams in the world with a strong fan base worldwide.

Step 9: Recommend specific strategies

Expected Result

From the planned recommendation and implementation of the new promotional package, it can be expected that success can be achieved. The expected rise of new customers could be estimated to be in the region of 15%. This is a result of the new promotional package including new attractions. The implementation of worldwide advertising via the internet is also expected to attract international customers especially from asian countries. Advertising through sponsorship is also expected to introduce
MGM Mirages name even wider around the world. By 2009, projections are that online gambling revenues will exceed $20 billion worldwide, with a smaller percentage coming from U.S. citizens. Data monitor predicts that by 2010 the U.S casinos and gaming sectors value will be approximately $109.2 billion, an increase of almost 40%.

Step
except per share amounts)

10:

Projected

Financial

Ratios

of

MGM

Mirage

MGM Mirage and Subsidiaries Consolidated Statements of Income (in thousands,

Year Ended December 31 2010 REVENUES Casino Rooms Food and beverage Entertainment Retail Other $3,130,438 1,991,477 1,483,914 459,540 278,695 452,699 7,175,956 Less: Promotional allowances (620,777.00) 7,175,95 EXPENSES Casino Rooms Sponsorship Food and beverage Entertainment Retail Other General and administrative Corporate expense Pre opening and start-up expenses Restructuring costs (credit) Property transactions, net Depreciation and amortization 1,612,992 539,442 2,987,878 902,278 333,619 179,929 245,126 1,070,942 161,507 36,362 1,035 (40,980) 629,627

Income from unconsolidated affiliates Operating income Non-operating income (expense) Interest income Interest expense, net Non-operating items from unconsolidated affiliates Other, net

254,171 1,758,248

11,192 (703,361) (16,063) (15,090) (780,322)

Income from continuing operations before income taxes Provisions for income taxes Income from continuing operations Discontinued operations Income from discontinued operations 18,473 Provisions for income taxes

977,926 (341,930) 635,996

(6,205) 12,268

NET INCOME

$648,264

Step 11: Recommend specific annual objectives and policies

ANNUAL OBJECTIVE

The MGM Mirage should introduce a new annual objective and policy which emphasizes the need to compete and overcome Harrahs Entertainment Inc. as the leading gaming operator in the United States.

This should be achieved by implementing the recommendations above

in a proper and planned regime. Overcoming Harrahs as the largest gaming operator should be the highest priority for the MGM Mirage.
The MGM Mirage should also make it an objective to take advantage of the rise of avenue in the gaming industry by 2010 which is expected to increase up to $387.5 billion. By 2009, projections are that online gambling revenues will exceed $20 billion

worldwide, with a smaller percentage coming from U.S. citizens. Improving the internet tool should also be an objective.
The MGM Mirage should adopt the policy of catering to a now worldwide based customer both through their casinos and also online gaming facilities. The policy can include ways on how to understand and tackle worldwide customers.

Step 12: Recommend procedures for strategy review and evaluation.

After the initial planning were suggested to MGM Mirage to strengthen the company in terms of financial as well as promotional to be leading company in the industry, the crucial step is to

evaluate the strategy to make sure that each of them is can reach the company long term and
annual objective because of numerous internal and external factor can effected each of the plan.

The main criteria are to make sure that external opportunity and threats and internal strengths

and weaknesses that represent the bases of current strategies should continually be monitored
for change. It is not really a question of whether these factors will change but rather when they will change in what ways, so the strategies need to be review and evaluate to provide the information to the company about its strengths, additional internal strength to support the strategies and to determine the company weaknesses.

Step 11: Recommend specific annual objectives and policies

The implementation of the strategies also crucial in terms of keep the evaluation process continuous rather than on a periodic basis to allow benchmarks progress to be established and more effective monitored. The strategies will take times to implement. The managers and employees of MGM Mirage should be continually aware of progress being made toward achieving the company objectives. As critical success factors change, organizational members should be involved in determining appropriate corrective action. Through involvement in the process of evaluating strategies, managers and employees become committed to keeping the company moving steadily toward achieving the objective.

Step 11: Recommend specific annual objectives and policies

Have Major Changes Occurred in the Firm Internal Strategic Position No Yes Yes Yes Yes No Have Major Changes Occurred in the Firm External Strategic Position Yes Yes Yes No No Yes Has the Firm progressed satisfactorily Toward Achieving Its Stated Objective Yes Yes No Yes No Yes Continue present strategic course Take corrective action Take corrective action Take corrective action Take corrective action Continue present strategic course Result

No
No

Yes
No

No
Yes

Take corrective
action Continue present strategic course