Session2MGT 490C Strategic Management1 First things Any questions? Introductions

Session2MGT 490C Strategic Management2 Strategies Netflix, Blockbuster, Redbox "Getting Movies from a store or a mailbox, or just a box" (NYTimes, August 5, 2006) reading--available through Vista course site for MGT 490C (BA490C) ( Path is "Course Content/Readings/Netflix" How do the strategies of Netflix, Blockbuster, and Redbox differ? Can you identify any of the areas for objectives listed on p. 7 of H&W that their objectives differ? Distinguish each level of the hierarchy of strategy for each company, e.g., give an example of each level of strategy.

Session2MGT 490C Strategic Management3 Strategy Current Situation Objectives Environment Goals

Session2MGT 490C Strategic Management4 Are these objective important to all three? Profitability Efficiency Growth Shareholder wealth Utilization of resources Reputation Contributions to employees Contributions to society Market leadership Survival Personal needs of top management Netflix, Blockbuster, Redbox

In what areas do their goals differ? AreaNetflixBlockbusterRedbox Profitability Efficiency Growth Stockholder wealth Utilization of resources Reputation Contributions to employees Contributions to society Market leadership Survival

Session2MGT 490C Strategic Management6 Strategy…a plan for interacting with the competitive environment to achieve organizational objectives and goals Strategy is a means to goals and objectives. Without objectives and goals strategies lack direction. Therefore, goals and objectives must be defined, or reexamined and redefined when formulating strategy. (adapted from Daft, 2001) Strategy—what is it?

Session2MGT 490C Strategic Management7 Major elements of strategy Strategy formulation—defining long-term objectives & goals, developing long-range plans for the effective management of environmental opportunities and threats, taking into account strengths and weaknesses Strategy implementation--Process by which strategies and policies are put into action through the development of programs, budgets, and procedures to achieve objectives

Session2MGT 490C Strategic Management8 Long-term Encompasses entire organization External—to determine What the firm seeks to be What it seeks to accomplish (overall goals and objectives) Opportunities and threats in the environment The path it will take to succeed within the environment Internal—to determine Capabilities, i.e., strengths and weaknesses The design of the organization Supporting functional (organizational) objectives strategies plans Strategy—where is its focus?

Session2MGT 490C Strategic Management9 Strategic management process Reference Fig. 1.1 & 1.3 Environmental scanning Strategy formulation Strategy implementation Evaluation and control

Session2MGT 490C Strategic Management10 Distinguish the three elements of the hierarchy of strategy for each company. Corporate Business Functional Marketing Finance Operations

Session2MGT 490C Strategic Management11 Margin The Generic Value Chain Primary Activities Support Activities Procurement Serv- ice Technology Development Human resource management Firm infrastructure Inbound Logistics Opera- tions Out- bound Logistics Market- ing and sales

Session2MGT 490C Strategic Management12 Session 2 Strategic Management Any questions? Strategic management concepts Strategy: meaning, perspective, & value Strategic management process Levels of strategy Application of concepts to Netflix, Blockbuster, & Redbox

Session2MGT 490C Strategic Management13 Strategy Exercise QuestionResponse Eval. (A to F) What is their strategy? Who or what do they seek to be? What do they seek to accomplish? How will they pursue their goals & objectives? Give an example of each level of strategy Corporate Business Functional What functional strategies are key to success? What supporting functional objectives can you discern or suggest?

Session2MGT 490C Strategic Management14 How do their strategies differ? Netflix, Blockbuster, Redbox

Session2MGT 490C Strategic Management15 Review questions 1. What is strategic management & why does it matter? 2. What are the major steps in the strategic management process. 3. Identify the 3 levels of strategy in the hierarchy of strategy. 4. What distinguishes each level of strategy?