The Art, Science, and Craft of Decision-Making
Consider this high-level introduction to Strategic Management and its applications. Outline or take notes as you read, and pay attention to the key points identified in each section. Consider the three-legged stool explanation 5 minutes into the Kryscynski video you just viewed, especially the summary. How do the three legs compare with this book's three main processes of strategic business management?
Business Plans
Risk analysis
Risk Evaluation
- Market risks - lack of surgeons; large geographical area so that we don't compete against our own clients;
- New entrants to market
- Ease of entry
- Potential threat to market share- advertising companies
- Slower than expected adoption
- New entrants to market
- Operational risks
- Staffing risks- embedding the right candidate for the right surgeon
- Availability of skilled workforce- x-pharma reps, x-equipment reps
- Union issues
- Financing risks
- Liabilities
- Poorly worded investor contracts at risk for litigation
- Investor pull-out
- Lack of follow-on funding to complete project
- Managerial risks
- Poor board or investor dynamics
- Agency risk particular to the venture
Risk Management Plan
Detailed plans are more often found as part of internal plans. Plans written for funders may need to include a high level of description if there are significant controllable risks.
- Methods and procedures to limit liabilities
- Reserve funds
- Continuity of operations plan
Decision Making Criteria
- Break even analysis
- NPV
- IRR
- Balanced Scorecard