Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2002 by South-Western, a division of Thompson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Strategic Management Set of decisions and actions used to implement strategies Questions to ask:  What changes and trends are occurring  Who are our customers  What products or services should we offer  How can we offer these products or services most efficiently

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Thinking Strategically Answers to the following define an overall direction for the organization's grand strategy  Where is the organization now?  Where does the organization want to be?  What changes are among competitors?  What courses of action will help us achieve our goals?

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Grand Strategy General plan of major action to achieve long- term goals. Fall in to three general categories: 1. Growth 2. Stability 3. Retrenchment

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Global Corporate Strategies Need for National Responsiveness High Low High Transnational Strategy Seeks to balance global efficiencies and local responsiveness Combines standardization and customization for product/advertising strategies Globalization Strategy Treats world as a single global market Standardizes global products/advertising strategies Multi-domestic Strategy Handles markets independently for each country Adapts product/advertising to local tastes and needs Need for Global Integration

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Global Strategy Globalization: product design and advertising strategies are standardized around the world Multi-domestic: adapt product and promotion for each country Transnational: combine global coordination with flexibility to meet specific needs in various countries

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Purpose of Strategy The plan of action that prescribes resource allocation and other activities that help the organization attain its goals Strategies focus on: *Core competencies *Develop synergy *Create value for customers Kinko’s Copy Center

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Three Levels of Strategy in Organizations Corporate-Level Strategy: What business are we in? Corporation Business-Level Strategy: How do we compete? Textiles UnitChemicals UnitAuto Parts Unit Functional-Level Strategy: How do we support the business-level strategy? Finance R&D ManufacturingMarketing

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Checklist for Analyzing Organizational Strengths and Weaknesses Sources: Based on Howard H. Stevenson, “ Defining Corporate Strengths and Weaknesses,” Sloan Management Review 17 (spring 1976), 51-68; and M.L.Kastens, Long-Range Planning for Your Business (New York: American Management Association, 1976). Management and Organization Management quality Degree of centralization Organization charts Planning, information, control systems Finance Profit margin Debt-equity ratio Inventory ratio Return on investment Credit rating Marketing Distribution channels Market share Advertising efficiency Customer satisfaction Product quality Service reputation Sales force turnover Production Plant location Machinery obsolescence Purchasing system Quality control Productivity/efficiency Human Resources Employee experience, education Union status Turnover, absenteeism Work satisfaction Grievances Research and Development Basic applied research Laboratory capabilities Research programs New-product innovations Technology innovations

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Portfolio Strategy Mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage BGG Matrix

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. The Five Forces Affecting Industry Competition Source: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980). Internet reduces barriers to entry Internet expands market size, but creates new substitution threats Internet tends to increase the bargaining power of suppliers Internet shifts greater power to end consumers Internet blurs differences among competitors in an industry Threats of new entrants Bargaining power of buyers Bargaining power of suppliers Threat of substitute products

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Competitive Edge Through Competitive Strategies Differentiation…involves an attempt to distinguish a firms products or services. Cost leadership…aggressively seeks efficient facilities, pursues cost reductions, and uses tight cost controls in an attempt to be more efficient than competitors. Focus…concentrates on a specific regional market or buyer.

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Continuum of Partnership Strategies Organizational Combination Strategic Alliances Preferred Supplier Arrangements Strategic Business Partnering Mergers Acquisitions Low High Joint Ventures Degree of Collaboration

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Implementing Strategy Tools Leadership Structural design Information and control systems Human resources

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. Tools for Putting Strategy into Action Environment Organization Strategy Performance Leadership Persuasion Motivation Culture/values Structural Design Organization Chart Teams Centralization/decentralization Facilities, task design Human Resources Recruitment/selection Transfers/promotions/training Layoffs/recalls Source: Adapted from Jay R. Galbraith and Robert K. Kazanjian, strategy Implementation: Structure, Systems and Process, 2d ed. (St. Paul, Minn.: West, 1986), 115, Used with permission. Information and Control Systems Pay, reward system Budget allocations Information systems Rules/procedures