LEVELS OF STRATEGY

CORPORATE

BUSINESS (SBU)

FUNCTIONAL (OPERATIONAL)

GENERIC STRATEGIES

CostLeadership

Differentiation

DifferentiationFocus

CostFocus

COMPETITIVE ADVANTAGE

Low Cost Differentiation

BroadTarget

NarrowTarget

MARKETSCOPE

Michael E. Porter, Competitive Advantage

CORPORATE STRATEGY

OVERALL, GRAND STRATEGY

PORTFOLIO STRATEGY BCG MATRIX

GE BUSINESS SCREEN

BCG MATRIX

Market growth

High

STAR

?

rate Low

CASH GENERATOR

“DOG”

High

Low

Market

share

GE BUSINESS SCREEN

High

Industry attractive-ness

Med.

Low

High

Med.

Low

Competitive position

BENCHMARKING

COMPARE TO “BEST IN CLASS”

BASED ON KEY SUCCESS FACTORS

Multi-national Strategy

Need for local responsivenessHighLow

Nee

d fo

r gl

oba l

inte

g ra t

i on

Low

High

Multi-domesticStrategy

TransnationalStrategy

GlobalStrategy

TYPES OF PLANS

STRATEGIC OPERATIONAL TACTICAL GOALS/OBJECTIVES POLICY PROCEDURE RULE

GOAL SETTING

SINGLE, SPECIFIC TOPIC

Not a vague abstractionWe will maximize profits.We will be the best.Better: We will increase profits by 10%.

FOCUS ON RESULT,Not on Activity

Activity will not result in goal Example: Goal is to increase advertising

expenditure by 15% in 2000.

Goal is result of activity Better: Advertising will be increased by

15% in 2000 in order to increase market share from 8% to 10%.

MEASURE WHEN FEASIBLE

Must at least be verifiable

HAVE A DEADLINE

GOALS

SETTING GOALS

NETWORK OF GOALS MULTIPLE GOALS

SET PRIORITIES

GOALS

STATED GOALS

REAL GOALS

MBO

A PLANNING TOOL

MOTIVATIONAL TOOL

CONTROL TOOL

POLICY

GUIDELINE TO AUTHORITY

USE TO DELEGATE AUTHORITY

PROCEDURE

GUIDE TO ACTION

SERIES OF STEPS

NO AUTHORITY

USUALLY A STANDING PLAN

RULE

A REQUIREMENT

“COMMAND” TO DO/NOT DO SOMETHING

NO AUTHORITY, NO DECISION TO MAKE

TYPES OF BUDGETS

CASH

EXPENSE

SALES

CAPITAL EXPENDITURE

BASE OF BUDGET

INCREMENTAL

ZERO BASE

FORECASTING

QUANTITATAIVE METHODS TIME SERIES REGRESSION...

QUALITATIVE METHODS JURY OF OPINION SALES FORCE COMPOSITION CUSTOMER

OTHER TYPES OF PLANS

SINGLE USE STANDING CONTINGENCY (ALTERNATIVE) FLEXIBLE DIRECTIONAL SPECIFIC

SCHEDULING

GANTT CHART

LOAD CHART

PERT

OTHER TOOLS

BREAK EVEN ANALYSIS

LINEAR PROGRAMMING

QUEUING THEORY

PROBABILITY THEORY

SIMULATION

LENGTH OF PLAN

SHORT TERM USUALLY ONE YEAR OR LESS

LONG TERM USUALLY FIVE YEARS COMMITMENT CONCEPT SUNK COSTS

IMPLEMENTATION PLANS

WHO WHAT WHEN WHERE HOW SUPPLIERS COORDINATION WHAT TO MEASURE/CONTROL

“PLAN OF ACTION” OUTLINE

State Goal Way(s) to accomplish it

Accomplishment interfere with another?

Date(s) to be finished Problems I may encounter/create? Suppliers, sources of help Coordinate with??? Things to monitor, measure

IMPLEMENT THE PLAN

ACTION PLANS

TIME MANAGEMENT IMPORTANT TASKS URGENT TASKS

LEVEL IN ORGANIZATION

HIGHER LEVEL IN ORGANIZATION STRATEGIC LONGER TERM MORE DIRECTIONAL

LOWER LEVEL IN ORGANIZATION OPERATIONAL, TACTICAL SHORTER TERM MORE SPECIFIC

ENVIRONMENTAL UNCERTAINTY

MORE UNCERTAIN DIRECTIONAL SHORTER TERM

MORE CERTAIN SPECIFIC LONGER TERM

COMPANY LIFE CYCLE

FORMATION MORE DIRECTIONAL

GROWTH SHORTER TERM MORE SPECIFIC

MATURITY SPECIFIC LONGER TERM

DECLINE SHORTER TERM MORE DIRECTIONAL