Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by

Developed by Cool Pictures & MultiMedia Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia Presentations Copyright © 2002 by South-Western, a division of Thompson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Developed by Cool Pictures & MultiMedia Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Strategic Management

• Set of decisions and actions used to implement strategies

• Questions to ask:What changes and trends are occurringWho are our customersWhat products or services should we offerHow can we offer these products or services most

efficiently


Thinking Strategically

• Answers to the following define an overall direction for the organization's grand strategy

Where is the organization now? Where does the organization want to be? What changes are among competitors? What courses of action will help us achieve our goals?


Grand Strategy

• General plan of major action to achieve long-term goals.

• Fall in to three general categories:1. Growth2. Stability3. Retrenchment


Global Corporate Strategies

Need for National Responsiveness HighLow

Low

High Transnational Strategy• Seeks to balance global

efficiencies and local responsiveness

• Combines standardization and customization for product/advertising strategies

Globalization Strategy

• Treats world as a single global market

• Standardizes global products/advertising strategies

Multi-domestic Strategy• Handles markets

independently for each country

• Adapts product/advertising to local tastes and needs

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Global Strategy

• Globalization: product design and advertising strategies are standardized around the world

• Multi-domestic: adapt product and promotion for each country

• Transnational: combine global coordination with flexibility to meet specific needs in various countries


Purpose of Strategy

• The plan of action that prescribes resource allocation and other activities that help the organization attain its goals

Strategies focus on: Core competencies Develop synergy Create value for customers

Kinko’s Copy Center

http://www.kinkos.com/


Three Levels of Strategyin Organizations

Corporate-Level Strategy: What business are we in?

Corporation

Business-Level Strategy: How do we compete?

Textiles Unit Chemicals Unit Auto Parts Unit

Functional-Level Strategy: How do we support the business-level strategy?

Finance R&D Manufacturing Marketing


Checklist for AnalyzingOrganizational Strengths and Weaknesses

Sources: Based on Howard H. Stevenson, “ Defining Corporate Strengths and Weaknesses,” Sloan Management Review 17 (spring 1976), 51-68; and M.L.Kastens, Long-Range Planning for Your Business (New York: American Management Association, 1976).

Management and OrganizationManagement qualityDegree of centralizationOrganization chartsPlanning, information, control systems

FinanceProfit marginDebt-equity ratioInventory ratioReturn on investmentCredit rating

Marketing Distribution channelsMarket shareAdvertising efficiencyCustomer satisfactionProduct quality Service reputation Sales force turnover ProductionPlant location Machinery obsolescencePurchasing systemQuality controlProductivity/efficiency

Human ResourcesEmployee experience, education Union statusTurnover, absenteeismWork satisfaction Grievances

Research and DevelopmentBasic applied researchLaboratory capabilitiesResearch programsNew-product innovationsTechnology innovations


Portfolio Strategy

• Mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage

BGG Matrix


The Five Forces Affecting Industry Competition

Source: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980).

•Internet reduces barriers to entry

•Internet expands market size, but creates new substitution threats

•Internet tends to increase the bargaining power of suppliers

•Internet shifts greater power to end consumers

Internet blurs differences

among competitors in

an industry

Threats of new entrants

Bargaining power of buyers

Bargaining power of suppliers

Threat of substitute products


Competitive Edge ThroughCompetitive Strategies

• Differentiation…involves an attempt to distinguish a firms products or services.

• Cost leadership…aggressively seeks efficient facilities, pursues cost reductions, and uses tight cost controls in an attempt to be more efficient than competitors.

• Focus…concentrates on a specific regional market or buyer.


Continuum of Partnership Strategies

Organizational Combination

Strategic Alliances

Preferred Supplier Arrangements

Strategic Business Partnering

Mergers

Acquisitions

Low High

Joint Ventures

Degree of Collaboration


Implementing Strategy Tools

• Leadership• Structural design• Information and control systems• Human resources


Tools for Putting Strategy into Action

Environment

Organization

StrategyPerformance

Leadership Persuasion Motivation Culture/values

Structural Design Organization Chart Teams Centralization/decentralization Facilities, task design

Human Resources Recruitment/selection Transfers/promotions/training Layoffs/recalls

Source: Adapted from Jay R. Galbraith and Robert K. Kazanjian, strategy Implementation: Structure, Systems and Process, 2d ed. (St. Paul, Minn.: West, 1986), 115, Used with permission.

Information and Control Systems Pay, reward system Budget allocations Information systems Rules/procedures

Documents

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by