International Business Strategy (IBS) - b Corporate strategy Business strategy Functional strategy

1b-Strategy (18)2 Corporate strategy (CS) Overall scope of activities –Competition: geographic location of activities –currency: balance worldwide activities –country: recognise individual factors Corporate parenting head office –in head office how to manage various businesses parenting value –add parenting value - add a business to a portfolio - divest in the portfolio –different styles: planning, performance control => match to the business

1b-Strategy (18)3 Corporate value added Corporate advantage Corporate strategy Business strategy MarketsProducts Corporate scopeCorporate parenting

1b-Strategy (18)4 Strategic Planning „Orchestrator” SM styles-I: Strategic Planning „Orchestrator” Characteristics HQ: deeply involved at business level Formally planning strategies Planning lever  clear directionsPerformance Longer-term view: short term financial suffering Planning: time consuming  centre losing objectivity Business unit: may be frustrated

1b-Strategy (18)5 Strategic Control „Coach” SM styles-II: Strategic Control „Coach” Characteristics Strategic development: left to units No directions are set, no coordination Capitol projets: business initiates Business units: detailed reportsPerformances Balance long term - short term financial goals It is difficult No exploiting synergies

1b-Strategy (18)6 Financial Control „Controller” SM styles-III: Financial Control „Controller” Characteristics Strong delegation of responsibility Budget process and aggreeing budget critical Budget: contract Strong emphasis on short-term payback Financial performance monitored in detailPerformance Maximise short-term financial performance Failure: organic growth Linkages not developed Strong incentives

1b-Strategy (18)7

8 Business strategy (BS) –How a business seeks to compete in its product-market? –create competitive strategy –large range of businesses –Develope sustainable competitive advantege –emulate existing rivals: same game –inventing new ways: new game

1b-Strategy (18)9 Yamaha piano –ovearall demand started decline 10%/year –same game: fight harder, more effictively –new game –new game: fresh eye for opportunities »superb acustic piano »superb acustic piano (combination of digital amd optical technology) refitting »40 million piano => refitting with PC & disk value-creating »additional digital value-creating possibilities

1b-Strategy (18)10 Same game Delayering Divestment Deteriorating performance

1b-Strategy (18)11 New Game New strategic recipe New vision and capabilities Improving performance

1b-Strategy (18)12 SAME GAME NEW GAME Characteristics Identify market segments Positioning in a segment Serve more effectivelyCharacteristics Strategic innovation First mover advantage Avoidance head-to head competition Strategic intent Outcompeting rivals Similar strategic approach Doing the same thing better Strategic intent Strategic intent investing in new strategic recipes Innovation, vision Potential outcome Parity at the best New strategy: incremental approach Potential outcome Competitive superiority Distinct advantage ‘fundamental’ approach

1b-Strategy (18)13 Competition for industry foresight and intellectual leadership Core comptencies Competition for market position and share STRECH Competing for the Future CORE COMPETENCIES Have Have not EssentialDevelopGrowth, acquire Non-essentialHarvest/divestBuy in

1b-Strategy (18)14 BS Corporate strategy: forward integration: closer to the customer Corporate strategy: backward integration: closer to the source of inputs Corporate strategy: unrelated diversification Corporate strategy: related diversification Product developmentGeographical expansion Product expansion Market penetration

1b-Strategy (18)15 Functional strategy (FS) –How the different activity areas of a business contribute to the overall business? –Changes in BS  changes in FS –New FS  changes in BS Key requirements Key requirements: to fit and match

1b-Strategy (18)16 BUSINESS STRATEGIES FUNCTIONAL STRATEGIES Human resources Finance Logistics Operations Marketing Bi-directional

1b-Strategy (18)17

1b-Strategy (18)18 Business performance, corrective adjustments Corporate Str. Business Str. Functional Str. Business performance Corrective adjustment