CHAPTER 8: STRATEGY FORMULATION AND IMPLEMENTATION

Taylor Minter, Marco Pasquinelli, and Sarah Stanley

Objectives

Define and elaborate on strategic management

Understand four basic options for international strategies for MNCs

Explain how to formulate strategy Discuss how to implement strategy

Agenda

Define strategic management Explain the three basic steps to form a

strategy Examine the four approaches to strategy Explore the implementation process Discuss the case study

Strategic Management (SM)

What is your definition? Process of determining an organization’s

basic mission and long-term objectives, then implementing a plan of action for attaining these goals.

Why is SM important in organizations? Dilbert

Strategic Management

Why do we need SM? Keep track of increasingly diversified

operations in an international environment

Coordinate and integrate these operations with a unified and agreed-on focus

Examples

The Strategic Management Process

Objectives

ExternalAnalysis

InternalAnalysis

StrategicChoice

StrategyImplementation

CompetitiveAdvantage

Environmental Scanning

Organization

Regulatory

Social

Economic

Industry/ Market

Technological Political

Internal Resource Analysis

Evaluates current managerial, technical, material, and financial resources and capabilities to better assess its internal strengths and weaknesses.

Key success factor (KSF) – is a factor that is necessary for a firm to compete effectively in a market niche

Goal Setting For Strategy Formulation

Profitability Marketing Operations Finance Human Resources

Formulating and Implementing Strategy

Economic - worldwide strategy based on cost leadership, differentiation, and segmentation

Political- utilizing strategies that are country-responsive and designed to protect local market niches

¥ € $

Discussion

COCA COLA DELL

Released Sprite Tea in China

A combo of China’s 2 most popular beverages

Breathe new life in China beverage market

Way to gain more of Chinese market

Switched to a just in time processing system to cut down on costs and inventories

Computers are now build to order

Formulating and Implementing Strategy

Administrative Coordination- the MNC makes strategic decisions based on the merits of the individual situation rather than using a predetermined economically or politically driven strategy

Formulating and Implementing Strategy

Quality- utilizes strategies of total quality management to meet or exceed customers’ expectations and continuously improve products or services

Tate’s Chicken Show us your pizza Man hungry

Global vs. Regional Strategies

Globalization vs. national responsiveness

Matrix Global strategy International strategy Transnational strategy Multi-domestic strategy

McDonalds

Global vs. Regional

Some international management experts contend that globalization and national responsiveness are diametrically opposed forces, and that to accommodate one, a multinational must relax its efforts in the other. In what way is this an accurate statement? In what way is it incomplete or inaccurate?

Strategy Implementation

It provides goods and services in accord with the plan of action

When is a time in your life or job that you have implemented a strategy?

Implementation

The first stages of strategy implementation are choosing your location

Consider which country Then choose the specific location in the

country

Implementation

To implement the strategy three areas must be used Marketing Production Finance

Special Circumstances

When a MNC is dealing with an emerging market, which is in an unstable country and a riskier investment so strategies need to be adjusted

First-Mover Strategies “Base of the Pyramid” Strategy What are the benefits of the two Iand is one better than the other?

Special Circumstances

International Entrepreneurship- a combination of innovative, proactive, and risk-seeking behavior that crosses national boundaries and is intended to create value for organizations

New Ventures/born global- firms that engage in significant international activities shortly after being established

Case Study

What type of entry and ownership approach would you recommend? Defend your choice.

How could the partners use the four Ps of marketing to help implement strategy?

If production must be globally coordinated, will visions have a major problem? Why or why not?