Strategy Formulation and Implementation D: Chapter 8 Strategy Formulation and Implementation

Chapter Outline Thinking strategically What is strategic management? Grand strategies Global strategies Levels of strategy

ORGANIZATIONAL LEVELS OF STRATEGIES TM 7-3 ORGANIZATIONAL LEVELS OF STRATEGIES CORPORATE STRATEGIES Type of business Competitive position Resource development BUSINESS STRATEGIES How to compete in a particular market How to achieve competitive advantage FUNCTIONAL STRATEGIES Action plans for each functional area Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 2 2 2 3

Chapter Outline The strategic management process SWOT analysis

STRATEGY FORMULATION STRATEGY IMPLEMENTATION assess environmental TM 7-2 STRATEGY FORMULATION STRATEGY IMPLEMENTATION assess environmental factors Conduct Competitive Analysis: * Strengths * Weaknesses * Opportunities * Threats Identify Current Mission and Strategic Goals Develop Specific Strategies: * Corporate * Business * Functional Carry Out Strategic Plans Maintain Strategic Control assess organizational factors Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998

COMPETITIVE ADVANTAGE TM 7-4 SWOT ANALYSIS Strengths Opportunities Weaknesses Threats COMPETITIVE ADVANTAGE Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 3 3 3 4

Chapter Outline The strategic management process SWOT analysis Formulating corporate level strategy Portfolio strategy

Relative Competitive Position TM 7-8 BCG GROWTH - SHARE MATRIX Relative Competitive Position (market share) High Low (net users of resources) Remainder divested High QUESTION MARKS STARS Market Growth Rate CASH COWS Low DOGS Harvested, divested, or liquidated (net suppliers of resources) Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 5 5 8 5

Chapter Outline The strategic management process SWOT analysis Formulating corporate level strategy Portfolio strategy Formulating business level strategy Five competitive forces Competitive strategy

PORTERS FIVE COMPETITIVE TM 7-5 PORTERS FIVE COMPETITIVE FORCES MODEL Rivalry Company Customer Bargaining Power Customer Company Supplier Bargaining Power Supplier Threat of New Entrants Threat of Substitutes Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 6 6 6 5

Porter’s Competitive Strategies Cost leadership Differentiation Focus

Chapter Outline The strategic management process SWOT analysis Formulating corporate level strategy Portfolio strategy Formulating business level strategy Five competitive forces Competitive strategy Formulating functional level strategy Putting strategy into action

Putting Strategy into Action Leadership Structural design Information and control Human resources