strategy formulation and implementation 1224176081693703 9
TRANSCRIPT
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Thinking Strategicallyu To help managers answer questions such
as:
* Where is the organization now?
* Where does the organization want to be?
* What changes are among competi tors?
* What courses of action wil l help us achieveour goals?
u Answers define an overall direction for
the organization's grand strategy.
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Grand Strategy
General plan of action to achieve long-
term objectives
1. Growth
2. Stability
3. Retrenchment.
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Stability
Remain same size or grow steadily and
in a controlled fashion.
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Retrenchment
Forced decline by either shrinking
current business units or selling off or
liquidating entire businesses.
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Global Strategy
u Globalization: product design and
advertising strategies are standardized
around the world
u Multidomestic: adapt product and
promotion for each country
u Transnational: combine globalcoordination with flexibility to meet
specific needs in various countries.
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Purpose of Strategy
u CORE COMPETENCE: something the
organization does especially well in
comparison to its competitors* Superior research and development
* Mastery of a technology
* Superior customer service.
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Purpose of Strategy
SYNERGY: when organizational parts
interact to produce a joint effect that is
greater than the sum of its parts actingalone.
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Purpose of Strategy
Value Creation = use core competence
and synergy to provide increased
benefits received with lower costs paid.
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Levels of Strategy
u Corporate
u Business
u Functional.
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Corporate-Level Strategy
("What business are we in?")u Acquisition of new businesses
u Additions or divestment of business units,
plants, or product lines
u Joint ventures with other companies in
new areas.
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Business-Level Strategy
("How do we compete?")u Advertising
u Direction and extent of R&D
u Product changes
u New product development
u
Equipment and facilitiesu Expansion or contraction of product
lines.
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Function-Level Strategy
("How do we support
business-level strategy?")
u Production
u Distribution
u Finance.
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Strategy Formulation
u Development of the firm's goals and a
specific strategic plan
u Assessing the external environment and
the internal problems
u Integrating the results into goals and
strategy.
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Strategy Implementation
The accomplishment of the strategic plan.
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The Strategic Management
Process
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Evaluate
Current:Mission
Goals
Strategies
Scan External
Environment
Identify
Strategic
Factors:
OpportunitiesThreats
Identify
Strategic
Factors:
Strengths
Weaknesses
Scan Internal
Environment
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Situation Analysis: SWOT
u Strengths (Internal)
u Weaknesses (Internal)
u Opportunities (External)
u Threats (External)
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Evaluate
Current:Mission
Goals
Strategies
Scan External
Environment
Define New:Mission
Goals
Identify
Strategic
Factors:
OpportunitiesThreats
Identify
Strategic
Factors:
Strengths
Weaknesses
Scan Internal
Environment
FormulateStrategy:
Corporate
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Formulating Corporate-Level Strategy
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Portfolio Strategy
The organizational mix of SBUs and
product lines to provide synergy and a
competitive advantage.
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The BCG matrix evaluates
SBUs along two
dimensions:
u Business growth rate how rapidly the
entire industry is growingu Market share defines if an SBU has a
larger or smaller market share than
competitorsu Provides four categories to judge SBUs.
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Star
Cash
Cow Dog
Problem
Child
High
High
Low
Low
Business
Growth
Rate
Market Share
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Evaluate
Current:Mission
Goals
Strategies
Scan External
Environment
Define New:Mission
Goals
Identify
Strategic
Factors:
OpportunitiesThreats
Identify
Strategic
Factors:
Strengths
Weaknesses
Scan Internal
Environment
Formulate
Strategy:Corporate
Business
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Formulating Business-Level
Strategy
Porter ' s Competi tive Forces
Potential New
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Potential New
Entrants
Threat of
new
entrants
Potential New
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Potential New
Entrants
BuyersBargaining
power of
buyers
Threat of
new
entrants
Potential New
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29Suppliers
Potential New
Entrants
Buyers
Bargainingpower of
suppliers
Bargaining
power of
buyers
Threat of
new
entrants
Potential New
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Substitute
Products
from OtherIndustries
Suppliers
Potential New
Entrants
BuyersThreat ofsubstitute
products
Bargainingpower of
suppliers
Bargaining
power of
buyers
Threat of
new
entrants
Potential New
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Substitute
Products
from OtherIndustries
Suppliers
Potential New
Entrants
Buyers
The Firms
Rivalry versus
Industry
Competition
Threat ofsubstitute
products
Bargainingpower of
suppliers
Bargaining
power of
buyers
Threat of
new
entrants
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Porter's Competitive
Strategiesu Differentiation
u Cost Leadership
u Focus.
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Product Life Cycle
1. Introduction
2. Growth
3. Maturity
4. Decline.
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Evaluate
Current:Mission
Goals
Strategies
Scan External
Environment
Define New:Mission
Goals
Identify
Strategic
Factors:
OpportunitiesThreats
Identify
Strategic
Factors:
Strengths
Weaknesses
Scan Internal
Environment
Formulate
Strategy:Corporate
Business
Functional
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Formulating Functional-
Level StrategyAction plans adopted by major
departments to support thebusiness-level strategy to achieve
the organization's strategic goals.
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Putting Strategy Into Action
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Evaluate
Current:Mission
Goals
Strategies
Scan External
Environment
Define New:Mission
Goals
Identify
Strategic
Factors:
OpportunitiesThreats
Identify
Strategic
Factors:
Strengths
Weaknesses
Scan Internal
Environment
Formulate
Strategy:Corporate
Business
Functional
Implement
Strategy via
Changes in:Leadership
Culture
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Leadership
The ability to influence employees to
support strategy implementation.
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Structural Design
u Managers' responsibilities and authority
u Consolidation of facilities, departments,
and divisions
u Task design
u Production technology.
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Evaluate
Current:Mission
Goals
Strategies
Scan External
Environment
Define New:Mission
Goals
Identify
Strategic
Factors:
OpportunitiesThreats
Identify
Strategic
Factors:
Strengths
Weaknesses
Scan Internal
Environment
Formulate
Strategy:Corporate
Business
Functional
Implement
Strategy via
Changes in:
LeadershipCulture
Human
Resources
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Human Resources
u Recruitment
u Selection
u Training
u Transfers
u Promotions
u Layoff or separation.
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Evaluate
Current:Mission
Goals
Strategies
Scan External
Environment
Define New:Mission
Goals
Identify
Strategic
Factors:
OpportunitiesThreats
Identify
Strategic
Factors:
Strengths
Weaknesses
Scan Internal
Environment
Formulate
Strategy:Corporate
Business
Functional
ImplementStrategy via
Changes in:
Leadership
CultureHuman
Resources
Information
and Control
Systems
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Information and Control
Systemsu Reward systems
u Pay incentives
u Budgets
u Information systems
u Rules, policies, and procedures.
if
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Evaluate
Current:Mission
Goals
Strategies
Scan External
Environment
Define New:Mission
Goals
Identify
Strategic
Factors:
OpportunitiesThreats
Identify
Strategic
Factors:
Strengths
Weaknesses
Scan Internal
Environment
Formulate
Strategy:Corporate
Business
Functional
ImplementStrategy via
Changes in:
Leadership
CultureHuman
Resources
Information
and Control
Systems
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Implementing Global
Strategiesu Flexibility and communication are
mandatory skills in the international
arenau Structural design must merge with
foreign cultures and link operations
u Information and control systems must fitthe needs and incentives within local
cultures
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Implementing Global
Strategiesu Human resource management face
problems not confronted in North
America such as:u Labor laws
u Guaranteed jobs
u Cultural traditions of keeping
unproductive on the job.