1.American International University- Bangladesh Strategic Management [MBA] Course Code: MBA6215 Assignment on Issues for Review and Discussion (Chapter- 03) Date: 09th February, 2014 Prepared for: Professor Dr. M. Mahmodul Hasan Assistant Professor Faculty of Business Administration American International University-Bangladesh Prepared by: SK.MD.TAHA ID: 13-96562-1 MBA- [B] Spring, 13-14 American International University-Bangladesh

2. Date: 09th February, 2014 Professor Dr. M. Mahmodul Hasan Assistant Professor, Faculty of Business Administration. American International University-Bangladesh. Subject: Submission of Assignment on Issues for review and discussion (Chapter-03). Dear Sir, I am pleased to say that I have completed my assignment on Strategic Management, Issues for review and discussion (Chapter-03). It has been a great experience working on this very efficient topic of assignment of Strategic Management and Ive learned a lot. I am looking forward to answering any query that you may have. Sincerely Yours, _______________ SK. MD. TAHA ID # 13-96562-1 MBA-[B] Spring, 13-14 American International University-Bangladesh. 3. Chapter 3 ISSUES FOR REVIEW AND DISCUSSION ========================================================== 1. Explain how to conduct an external strategic-management audit. Answer: An effective approach for conducting an external strategic-management audit consists of four basic steps: (1) Select key variables, (2) Select key sources of information, (3) Use forecasting tools and techniques, and (4) Construct an EFE Matrix. 2. Identify a recent economic, social, political, or technological trend that significantly affects financial institutions. Answer: Economic, social, political, or technological trend that significantly affects financial institutions are- Economic: Interest rates remain low. Social: Many states are passing no smoking ordinances. Political: Eastern European countries are experiencing political instability. Technological: Use of the Internet is doubling every 100 days. 3. Discuss the following statement: Major opportunities and threats usually result from an interaction among key environmental trends rather than from a single external event or factor. Answer: This statement is accurate. It reveals how complex the external audit part of strategy formulation can be. There are an infinite number of interactions among key external factors. Companies that can perceive the needs of the changing environment, react more quickly to the opportunities and threats. That is the basis of the statement. A single external event usually will affect all business within that sector equally. But if company ABC reacts to these changes by perceiving the needs of an external event which changes environment, then they will beat other competitors. Therefore, it isn't just the external event that created the opportunity or threat; it is the interaction of those other players in the environment and that external event. 4. 4. Identify two industries experiencing rapid technological changes and three industries that are experiencing little technological change. How does the need for technological forecasting differ in these industries? Why? Answer: The computer industry, communications industry, and aerospace industry are experiencing rapid technological change. Three industries that are experiencing little technological change are the forest products industry, the shipping industry, and the dairy industry. 5. Use Porters five-force model to evaluate competitiveness within the U.S. banking industry. Answer: Porter identifies five competitive forces that determine the intensity of competition in an industry and the total value of profits created in a particular industry. The five forces are- 1) New entrants, 2) substitute products or services, 3) Bargaining power of suppliers, 4) Bargaining power of buyers, and 5) Rivalry among existing firms. A key to selecting appropriate generic strategies is to analyze these competitive forces in terms of trends, opportunities, and threats facing the firm. 6. What major forecasting techniques would you use to identify (1) economic opportunities and threats and (2) demographic opportunities and threats? Why these techniques are most appropriate? Answer: With the advent of sophisticated computers, simultaneous systems of regression equations have become the most widely used approach for forecasting economic variables. Scenario development is the most popular of all techniques for social and demographic forecasting, although surveys and market research are also widely used. 5. 7. How does the external audit affect other components of the strategic-management process? Answer: The external audit is part of the strategic management process. It is important because it allows an organization to see how it is viewed from the outside and based on those views, might make internal changes. An external audit supplies information on the risks and advantageous chance in the business environment that could give strength to your strategic assessment on issues. It affects on issues such as new product development, mergers and acquisitions, market entry or exit, and resource allocation. In countless ways, external audit results can and often do affect all other components of the strategic-management model. 8. As the owner of a small business, explain how you would organize a strategic-information scanning system. How would you organize such a system in a large organization? Answer: In both small and large organizations, strategists could assign specific publications to particular individuals who could then monitor their assigned source and regularly report strategic information to a coordinator. Also, both small businesspeople and chief executive officers of large businesses could effectively use on-line databases. 6. 9. Construct an EFE Matrix for an organization of your choice. Answer: EFE Matrix American International University-Bangladesh Key Factors Weight Rating Score Opportunities 1) Students .20 3 .60 2) Faculties .25 4 1.00 3) Administration .15 3 .45 4) Campus .10 2 .20 Threats 1) NSU, BRAC,EWU .10 3 .30 2) Political Impatience .10 2 .20 3) Others .10 1 .10 Rating 4- The response is Superior. 3. The response is above average. 2. The response is average. 1. The response is poor 1.00 2.85 7. 10. Make an appointment with a librarian at your university to learn how to use on-line databases. Report your findings in class. Answer: The Online Journals & Databases tool allows you to search by title for journals, newspapers, and databases. You can also use this tool to perform a subject search of these resources. The Online Journals & Databases tool is incredibly useful when performing all sorts of research. Borrowing System Students ID cards stand as library card for borrowing library resources. Members may borrow library resources for a maximum of three days and resources may be renewed. Library resources are issued only to the members in person without any exception. The members are solely and fully responsible for safe keeping of the resources borrowed and their return on time. Library resources are checked out by the designated library officer and need to be returned at the circulation desk during the working hours only. A student may borrow 3 books at a time for a maximum of 7 days. A Faculty may borrow 5 (Five) books at a time for the whole semester. The Faculty/student member may borrow reference books, reserved books, journals and periodicals to make photocopy from outside for a period of one hours only depositing valid ID Card at the circulation desk Returning Library Materials All borrowed items must be returned to the library before the end of each Semester. The material is inspected when borrowed and returned. Incase damage is noted, the user is fined by the library accordingly. Date due slips are placed in all library materials borrowed. 8. Restrictions for Checking out Library Materials: - The borrower reached the maximum number of items allowed. - The borrower reached the renewal limit for an item. - The borrower has overdue item. - The borrower ID card has expired. - The borrowers owe money to AIUB. - The borrower violates any of the conditions in the Library Circulation Policies. Others: 11. Give some advantages and disadvantages of cooperative versus competitive strategies. Answer: Cooperative strategies are generally less costly than competitive strategies. Cooperative strategies between domestic and foreign companies can facilitate entry into world markets. However, competitive strategies recognize that survival of the fittest is an underlying philosophy of business not only in the United States, but also in most of the world. Identifying competitors strengths and weaknesses is, thus, an integral and vital part of the external audit. 9. 12. as strategist for a local bank, explain when you would use qualitative versus quantitative forecasts. Answer: Qualitative forecasts are most appropriate when historical data are not available and when relationships among key variables are expected to vary greatly in the future. In addition, when conditions are exploratory in nature, qualitative data can be very useful. Quantitative forecasts require access to quantitative data. 13. What is your forecast for interest rates and the stock market in the next several months? As the stock market moves up, do interest rates always move down? Why? What are the strategic implications of these trends? Answer: As the stock market goes up, interest rates usually go down. An underlying reason for this trend is that investors find stocks more attractive than certificates of deposit as investment opportunities when stock prices rise. The primary strategic implications of these trends concern the relative attractiveness of stock versus debt as a source of capital to finance strategy implementation. As stock prices move up and interest rates move down, debt becomes more attractive as a source of capital. 14. Explain how information technology affects strategies of the organization where you have worked most recently. Answer: Information technology affects strategies of any organization or institutes. As an example- our university American International University-Bangladesh. a) Security system. b) Class projectors. c) Notice board. d) Results. e) Class schedules. f) Notes providing through mail. g) Even we are preparing and submitting this assignment through technology E-mail. 10. 15. Lets say your boss develops an EFE Matrix that includes 62 factors. How would you suggest reducing the number of factors to20? Answer: Let a group of knowledgeable individuals in the organization evaluate the relative importance of each factor by assigning a 1 = not important, 2 = somewhat important, and 3 = very important. Then add the ratings each factor receives. The 20 factors with the highest sum score should be included in the EFE Matrix. ==================== ================= =============