Business Strategies Management by Objectives: Grand Strategies

SWOTAnalysis ThreatsOpportunities Weaknesses Strengths

SWOT Analysis The company’s purpose of a SWOT analysis is to align strengths with the opportunities to find a niche in which to be successful The organization will then focus its energies where an overlap between resources and external factors exists It will be at this step that the organization re- evaluates its missions and objectives, and makes the necessary changes

Identifying Opportunities Opportunities in the Environment Organization’sResources Organization’sOpportunities

Grand Strategies Once the organization has identified its opportunities and re-confirmed or re-aligned its mission, management must set strategies for all organizational levels Chosen are those that best allow the company to capitalize on its resources and opportunities available in the environment

RetrenchmentCombination The Grand Strategies StabilityGrowth

Growth Strategy A direct expansion strategy involves increasing a company’s size, revenues, operation, or workforce A merger occurs when two companies combine resources to form a new company An acquisition occurs when a larger company “buys” a smaller one and absorbs its operations Organizations can grow through direct expansion, merger, and acquisition

Stability Strategy There is no significant change when a company adopts a stability strategy The organization continues to serve the same market and customers with little change occurring in the external environment While it may seem that not many companies pursue this strategy, there are some such as Kellogg’s

Retrenchment Strategy Technological advancements, global competition, mergers and acquisitions, and other environmental factors limit options for some companies This strategy is used in an environment of decline and began to surface about 30 years ago Characteristic of an organization that is downsizing--either reducing its workforce or selling off less profitable product lines such as when Molson sold the Montreal Canadiens

Combination Strategy This strategy is the simultaneous pursuit of two or more strategies For example, one part of the organization could be in a retrenchment while another part is growing

Determining A Competitive Strategy DifferentiationCostLeadership Focus

Competitive Strategy Competitive strategy is to position an organization in such a way that that it will have a distinct advantage over its competition When an organization sets out to be the low cost producer in its industry by gaining a cost advantage such as low-cost labour Cost Leadership Strategy When a firm seeks to be unique in its industry in ways that are widely valued by buyers such as extraordinary service or innovative design Differentiation Strategy When an organization aims at cost advantage or differentiation advantage in a very narrow market selling products to very specific types of consumer demand Focus Strategy

Implement the Plan Evaluate the Results What Happens After Strategies Are Formulated?