LEVELS OF STRATEGY CORPORATE BUSINESS (SBU) FUNCTIONAL (OPERATIONAL)

GENERIC STRATEGIES COMPETITIVE ADVANTAGE Low Cost Differentiation Cost Leadership Differentiation Broad Target MARKET SCOPE Cost Focus Differentiation Focus Narrow Target Michael E. Porter, Competitive Advantage

CORPORATE STRATEGY OVERALL, GRAND STRATEGY PORTFOLIO STRATEGY BCG MATRIX GE BUSINESS SCREEN

BENCHMARKING COMPARE TO “BEST IN CLASS” BASED ON KEY SUCCESS FACTORS

Multi-national Strategy Global Strategy Transnational Strategy High Need for global integration Multi-domestic Strategy Low Low High Need for local responsiveness

TYPES OF PLANS STRATEGIC OPERATIONAL TACTICAL GOALS/OBJECTIVES POLICY PROCEDURE RULE

GOAL SETTING

Not a vague abstraction SINGLE, SPECIFIC TOPIC Not a vague abstraction We will maximize profits. We will be the best. Better: We will increase profits by 10%.

FOCUS ON RESULT, Not on Activity Activity will not result in goal Example: Goal is to increase advertising expenditure by 15% in 2000. Goal is result of activity Better: Advertising will be increased by 15% in 2000 in order to increase market share from 8% to 10%.

MEASURE WHEN FEASIBLE Must at least be verifiable

HAVE A DEADLINE

GOALS SETTING GOALS NETWORK OF GOALS MULTIPLE GOALS SET PRIORITIES

GOALS STATED GOALS REAL GOALS

MBO A PLANNING TOOL MOTIVATIONAL TOOL CONTROL TOOL

POLICY GUIDELINE TO AUTHORITY USE TO DELEGATE AUTHORITY

PROCEDURE GUIDE TO ACTION SERIES OF STEPS NO AUTHORITY USUALLY A STANDING PLAN

RULE A REQUIREMENT “COMMAND” TO DO/NOT DO SOMETHING NO AUTHORITY, NO DECISION TO MAKE

TYPES OF BUDGETS CASH EXPENSE SALES CAPITAL EXPENDITURE

BASE OF BUDGET INCREMENTAL ZERO BASE

FORECASTING QUANTITATAIVE METHODS QUALITATIVE METHODS TIME SERIES REGRESSION... QUALITATIVE METHODS JURY OF OPINION SALES FORCE COMPOSITION CUSTOMER

OTHER TYPES OF PLANS SINGLE USE STANDING CONTINGENCY (ALTERNATIVE) FLEXIBLE DIRECTIONAL SPECIFIC

SCHEDULING GANTT CHART LOAD CHART PERT

OTHER TOOLS BREAK EVEN ANALYSIS LINEAR PROGRAMMING QUEUING THEORY PROBABILITY THEORY SIMULATION

LENGTH OF PLAN SHORT TERM LONG TERM USUALLY ONE YEAR OR LESS USUALLY FIVE YEARS COMMITMENT CONCEPT SUNK COSTS

IMPLEMENTATION PLANS WHO WHAT WHEN WHERE HOW SUPPLIERS COORDINATION WHAT TO MEASURE/CONTROL

“PLAN OF ACTION” OUTLINE State Goal Way(s) to accomplish it Accomplishment interfere with another? Date(s) to be finished Problems I may encounter/create? Suppliers, sources of help Coordinate with??? Things to monitor, measure

IMPLEMENT THE PLAN ACTION PLANS TIME MANAGEMENT IMPORTANT TASKS URGENT TASKS

LEVEL IN ORGANIZATION HIGHER LEVEL IN ORGANIZATION STRATEGIC LONGER TERM MORE DIRECTIONAL LOWER LEVEL IN ORGANIZATION OPERATIONAL, TACTICAL SHORTER TERM MORE SPECIFIC

ENVIRONMENTAL UNCERTAINTY MORE UNCERTAIN DIRECTIONAL SHORTER TERM MORE CERTAIN SPECIFIC LONGER TERM

COMPANY LIFE CYCLE FORMATION GROWTH MATURITY DECLINE MORE DIRECTIONAL SHORTER TERM MORE SPECIFIC MATURITY SPECIFIC LONGER TERM DECLINE