Upload
mohd-faiz
View
235
Download
0
Embed Size (px)
Citation preview
7/27/2019 CHAPTER 5 STRATEGY.pdf
1/14
CHAPTER 5: STRATEGY
7/27/2019 CHAPTER 5 STRATEGY.pdf
2/14
DEFINE ORGANISATION STRATEGY Strategy- adoption of courses of action and the allocation of
resources necessary to achieve the organization's goal.
FORMULATING STRATEGY Strategic Formulation
- Managers work to develop the set of strategies (corporate,
business, and functional) that will allow an organization to
accomplish its mission and achieve its goals.
7/27/2019 CHAPTER 5 STRATEGY.pdf
3/14
FORMULATING STRATEGYA plan that indicates in which industries
and national markets an organization
intends to compete.
CORPORATE-
LEVEL STRATEGY
BUSINESS- LEVEL
STRATEGY
FUNCTIONAL-
LEVEL STRATEGY
A plan that indicates how a division
intends to compete against its rivals in
an industry.
7/27/2019 CHAPTER 5 STRATEGY.pdf
4/14
FORMULATING CORPORATE- LEVELSTRATEGIES
CONCENTRATION IN SINGLE BUSINESS
- Can become a strong competitor but can be risky
- Develop new kinds of products or expand its location
- Logical strategyif downsizing organization to increase
performance
- Eg: Mc Donald- focuses in fast food business
7/27/2019 CHAPTER 5 STRATEGY.pdf
5/14
FORMULATING CORPORATE- LEVELSTRATEGIES
VERTICAL INTEGRATION Backward vertical integration: the firm produces its own inputs. Forward vertical integration: the firm distributes its outputs or
products.
Intermediate
Manufacturing
RawMaterials
Assembly
DistributionCustomer
Backward Forward
7/27/2019 CHAPTER 5 STRATEGY.pdf
6/14
FORMULATING CORPORATE- LEVELSTRATEGIES
DIVERSIFICATION
-Organization moves into new businesses and services.
Related diversification: firm diversifies in similar areas to build uponexisting divisions.
Synergy: obtain two divisions working together to perform better than the
sum of their individual performance (2+2=5).
Eg: Media Prima Berhad
Unrelated diversification:buy business in new areas.
Build aportfolio of unrelated firms to reduce risk or trouble in one industry.
Very hard to manage.
Eg: Sime Darby Berhad
7/27/2019 CHAPTER 5 STRATEGY.pdf
7/14
FORMULATING CORPORATE- LEVELSTRATEGIES
INTERNATIONAL EXPANSION- Global StrategySelling the same standard product andusing the same basic marketing approachin all countries.
-Lowers production cost.-But ignores national differences-Eg: Nestle, Kelloggs
- Multi-Domestic Strategy
Customize products and marketing
strategies to specific national conditions.
-Helps gain local market share.
-Raises production costs.
-Eg: KFC
Exporting
Importing
Licencing
Franchising
Strategic Alliance
Joint Venture
7/27/2019 CHAPTER 5 STRATEGY.pdf
8/14
FORMULATING BUSINESS- LEVELSTRATEGIES
THE FIVE FORCES
Bargaining
Power of
Suppliers
Bargaining
Power of
Buyers
Threat of
Substitutes
Threats of
New Entrants
7/27/2019 CHAPTER 5 STRATEGY.pdf
9/14
FORMULATING BUSINESS- LEVELSTRATEGIES
Low-Cost Differentiation
Focused
Low-Cost
Focused
Differentiated
Strategy
Many
Few
Low Cost Differentiation
N
umberof
mark
etsegme
nts
POSITIONING STRATEGY
7/27/2019 CHAPTER 5 STRATEGY.pdf
10/14
FORMULATING BUSINESS- LEVELSTRATEGIES
Low-cost: Driving the organizations total costs down below thetotal costs of rivals.
Managers manufacture at lower cost, reduce waste.
Lower costs than competition mean lower prices and still be profitable.
Differentiation: gain a competitive advantage by making yourproducts different from competitors.
Differentiation must be valued by the customer.
Successful differentiation allows you to charge more for a product.
Stuck in the middle: It is difficult to simultaneously becomedifferentiated and low cost.
But Toyota does, using savings to feed diffrentiation- lexus, Scion,Hybrid,etc
7/27/2019 CHAPTER 5 STRATEGY.pdf
11/14
FORMULATING BUSINESS- LEVELSTRATEGIES
Firms also choose to serve the entire market or focus ona few segments.
Focused low-cost: try to serve one segment of the market but be
the lowest cost in that segment.
Focused differentiated: Firm again seeks to focus on one market
segment but is the most differentiated in that segment.
7/27/2019 CHAPTER 5 STRATEGY.pdf
12/14
7/27/2019 CHAPTER 5 STRATEGY.pdf
13/14
A plan that indicates how an organizational function intends toachieve its goals.
-Seeks to have each department add value to a good or service.
-Marketing, service, and production functions can all add value to
a good or service through:
Lowering the costs of providing the value in products.
Adding new value to the product by differentiating.
-Functional strategies must fit with business level strategies.
FORMULATING FUNCTIONAL- LEVELSTRATEGIES
7/27/2019 CHAPTER 5 STRATEGY.pdf
14/14
THANK YOU