8-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice

8-2 Functional Strategy The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity

8-3 Functional Strategy Marketing Strategy – –Pricing –Selling –Distribution

8-4 Functional Strategy Marketing Strategy – –Product development Line extension

8-5 Functional Strategy Marketing Strategy – –Advertising and promotion Push strategy Pull strategy

8-6 Functional Strategy Marketing Strategy – –Pricing Skim pricing Penetration pricing Dynamic pricing

8-7 Functional Strategy Financial Strategy – –Leveraged buyout –Reversed stock split –Tracking stock

8-8 Functional Strategy R&D Strategy – –Technological leader –Technological follower –Open innovation

8-9 Functional Strategy Operations Strategy – –Job shop –Connected line batch flow –Flexible manufacturing systems –Dedicated transfer lines –Mass production –Continuous improvement system –Modular manufacturing

8-10 Functional Strategy Purchasing Strategy – –Multiple sourcing –Sole sourcing –Just-in-time (JIT) –Parallel sourcing

8-11 Functional Strategy Logistics Strategy – –Centralization –Outsourcing –Internet

8-12 Functional Strategy HRM Strategy – –360 degree appraisal

8-13 Proposed Outsourcing Matrix

8-14 Functional Strategy Strategies to Avoid – – Follow the leader –Hit another home run –Arms race –Do everything –Losing hand

8-15 Constructing Corporate Scenarios

8-16 Functional Strategy Subjective Factors Affecting Decisions -- –Management’s attitude toward risk –Pressures from stakeholders –Pressures from corporate culture –Needs and desires of key managers

8-17 Stakeholder Priority Matrix

8-18 Strategic Choice Avoiding the Consensus Trap -- –Devil’s Advocate –Dialectical Inquiry