1. Strategy
Prof Karen Hanen
Mgt 360

2. Strategic Management Strategy
a comprehensive plan guiding resource allocation to achieve long-term organization goals
Strategic Intent
focusing all organizational energies on a unifying and compelling goal – all resources, policies/practices, org structure and culture are in service to achieving Strategic Intent (Simon Senek Video)
Copyright ©2015 John Wiley & Sons, Inc.

3. Strategic Management Basic concepts of strategy:
Competitive advantage — ability to do something so well that one outperforms competitors
Sustainable competitive advantage — one that is difficult or costly for competitors to imitate
Copyright ©2015 John Wiley & Sons, Inc.

4. Strategic Management Sources of competitive advantage Technology
Cost and quality
Knowledge and speed
Barriers to entry
Financial resources
Copyright ©2015 John Wiley & Sons, Inc.

5. Figure 10.1 Three levels of strategy in organizations- corporate, business, functional strategies
Copyright ©2015 John Wiley & Sons, Inc.

6. Figure 10.2 Strategy formulation and implementation in the strategic management process
Copyright ©2015 John Wiley & Sons, Inc.

7. Essentials of Strategic Analysis
What is our business mission?
Who are our customers?
What do our customers value?
What have been our results?
What is our plan?
Strategic Questions
Copyright ©2015 John Wiley & Sons, Inc.

8. Figure 10.3 How external stakeholders can be valued as strategic constituencies in an organization’s mission statement
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9. Essentials of Strategic Analysis
Profitability
Sustainability
Social responsibility
Financial health
Cost efficiency
Product quality
Market share
Human talent
Innovation
Typical operating objectives of a business include:
Copyright ©2015 John Wiley & Sons, Inc.

10. Essentials of Strategic Analysis
Special knowledge or expertise
Superior technology
Efficient supply chains
Unique product distribution systems
Potential core competencies:
Copyright ©2015 John Wiley & Sons, Inc.

11. Figure 10.4 SWOT analysis of strengths, weaknesses, opportunities, and threats
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12. Figure 10.5 Porter’s model of five strategic forces affecting industry competition
Copyright ©2015 John Wiley & Sons, Inc.

13. Essentials of Strategic Analysis
Porter’s Model of Five Strategic Forces Affecting Competition:
Industry competition
Intensity of rivalry among firms and their competitive behavior
New entrants
Threat of new competitors entering the market
Substitute products or services
Threat of substitute products or services
Bargaining power of suppliers
Ability of resource suppliers to influence the cost of products or services
Bargaining power of customers
Ability of customers to influence the price they will pay for products or services
Copyright ©2015 John Wiley & Sons, Inc.

14. Figure 10.6 The BCG matrix approach to corporate strategy formulation
Copyright ©2015 John Wiley & Sons, Inc.

15. Corporate-Level Strategy Formulation
Global strategies:
Globalization strategy
World is one large market; standardize products and advertising as much as possible
Multidomestic strategy
Customize products and advertising to local markets as much as possible
Transnational strategy
Balance efficiencies in global operations and responsiveness to local markets
Copyright ©2015 John Wiley & Sons, Inc.

16. Business-Level Strategy Formulation
Good strategies help achieve above average returns
Key question is “How can we best compete for customers in our market and with our products or services?”
Porter’s competitive strategies model
Business-level strategic decisions are driven by:
Market scope
Source of competitive advantage
Market scope and source of competitive advantage combine to generate three generic strategies
Copyright ©2015 John Wiley & Sons, Inc.

17. Business-Level Strategy Formulation
Porter’s generic strategies for gaining competitive advantage:
Differentiation strategy
Cost leadership strategy
Focus strategy:
Focused cost leadership
Focused differentiation
Copyright ©2015 John Wiley & Sons, Inc.

18. Figure 10.7 Porter’s competitive strategies framework: soft-drink industry examples
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19. Strategy Implementation
Strategic control
Makes sure strategies are well implemented and that poor strategies are scrapped or modified
Corporate governance
Control and monitoring of top management
Copyright ©2015 John Wiley & Sons, Inc.

20. Strategy Implementation
Implementation must be supported in every aspect of management
Planning
Controlling
Organizing
Leading
Copyright ©2015 John Wiley & Sons, Inc.

21. Strategy Implementation
Strategic planning failures that hinder strategy implementation:
Failures of substance
Inadequate attention to major strategic planning elements
Failures of process
Poor handling of strategy implementation
Lack of participation error
Goal displacement error
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22. Strategy Implementation
Critical tasks of strategic leadership
Maintain strategic control
Be the guardian of trade-offs
Create a sense of urgency
Ensure that everyone understands the strategy
Be a teacher
Copyright ©2015 John Wiley & Sons, Inc.

23. Next Class – Mid-term #2, May 9th
Congratulations you are done with all your online activities (OA’s) and online quizzes (OQ’s), as well as paper. For Mid-term #2, Bring a scantron form 882-E, #2 pencil, and photo ID – you cannot submit your test without a photo ID (CSUN Student ID or Driver’s Lic)