DHV '04 DHV 2004 Corporate Strategy Professor Larry Matteson

DHV '04 This Morning Course overview Course agenda Strategic alignment Formulating strategy Strategy and the organization

DHV '04 Objectives of the Course Introduce a framework for creating and analyzing strategy Apply leading contemporary thought on strategy analysis and formation in class discussion and case studies Practice in synthesis of developing strategic alternatives

DHV '04 Course Overview Framework for analysis Competitive Strategy Corporate Strategy Functional Strategy Implementation Organization

DHV '04 DateMorning Lecture & Discussion Topic Afternoon Lecture & Discussion Topic Assignment Mon 4/19/04 Intro Corporate organization, values and strategy Strategic alignment Formulating a strategy Frameworks for Strategic Analysis Porter’s Competitive Forces Market Focused view Resource based view Prepare for class discussion of the case Tues 4/20/04 Class discussion Marketing Strategy Operations strategy Competitive advantage Organizational learning Experience effects Change management Class discussion DHV applications prepare for class presentations Wed 4/21/04 Strategic implementation Achieving results DHV applications break out sessions Team presentations SOCIAL EVENT Thru 4/22/04 Organizational transformation and strategy implementation DHV structure for the future Strategic collaboration Alliances and acquisitions Course Summary DHV wrap-up CLOSING EVENT Agenda For The Week

DHV '04 DeliberateEmergent Pluralistic Profit-Maximizing PROCESSES OUTCOMES Generic Perspectives On Strategy

DHV '04 Getting Off The Treadmill Create And Dominate Emerging Opportunities Quest For Competitiveness –Restructuring-smaller –Reengineering -Better –Reinventing-different Organizational Transformation Required

Strategy Capabilities & Resources Landscape Internal consistency Fit among strategic choices and policies External consistency Fit between the strategy and the outside world Dynamic consistency Fit between the strategy and the firm’s capabilities and resources Three Interplays, Three Tests

DHV '04 Strategic Alignment

DHV '04 Objectives Which Are Long Term Simple and Agreed to Reflect a Profound Understanding of The Competitive Environment Objective Appraisal of Resources Characteristics of Strategy

DHV '04 Strategy: (The ship is going generally west) Current resources Required resources The Strategic Plan : adjusting the resource map to meet future requirements

DHV '04 Strategy Formulation Process Environmental Scanning Internal Assessment Strategic Alternatives Valuation and Choice Implementation

DHV '04 GOVERNMENT COMPETITORS TECHNOLOGY CUSTOMERS VALUES AND BELIEFS VISION STRATEGY POLICY STRUCTURE AND PROCEDURES Role Of Top Management

DHV '04 SUPPLIERS COMPETITORS CUSTOMERS ECONOMY TECHNOLOGY GOVERNMENT SOCIAL STRUCTURE DEMOGRAPHICS Environmental Scanning

DHV '04 Business Units and Product- Markets Core Competencies Strategic Architecture Strategic Intent Basic Values and Beliefs Governance Structure Organizational Capabilities Administrative Processes and Formal Structure Operations Strategy and Implementation Organizational Alignment

DHV '04 Stakeholders of the Firm Customers Employees Suppliers Lenders Communities Shareholders

DHV '04 If the price mechanism is an efficient means of allocating resources why do firms exist? Why aren’t all transactions arms length market transactions? If organizing within a hierarchy of a firm reduce market costs why aren’t all transactions done within the hierarchy? Why isn’t there just one large firm? Is there an optimal size of a firm? What are the controlling factors?

DHV '04 Cost Minimum Efficient Scale Size Long Run Average Cost Economies of Scale

DHV '04 Cost Size Technology economies of scale Cost of congruent goals Total cost Firm Size

DHV '04 Four Basic Strategic Choices Value of Local Responsiveness Value of Consolidation International GlobalTransnational Multidomestic

DHV '04 Characteristics of Four strategies

DHV '04 Sustaining Competitive Advantage Consumer Surplus Value Chain Surplus Firm’s portion of surplus Factor cost for the value chain Firm’s Profitability Industry long term profitability Time Profitability

DHV '04 Takeaway The course will analyze and develop strategies in a variety of contemporary business situations. –Strategies built on resources, markets and organization –Impact of technology and globalization will be covered –Mature and declining firms will be considered Frameworks and models will be introduced and used in analysis and synthesis of strategy Corporate strategic analysis will include –Competitive strategic analysis –Impact of government policy on corporate strategy –Impact of corporate governance on strategy