1. Shad Valley Entrepreneurship Business Strategy This presentation contains material adapted from Hill, C. & Jones, G. (2004). Strategic Management Theory: An Integrated Approach (6 th ed.). Boston, MA: Houghton.

2. Vision Statements Your organization’s purpose, articulated “why are you doing business?” “what problem are you trying to solve?” “what overarching goal do you want to achieve?” “is what you are doing important?” “should people have confidence in what you do?

3. Strategic Management Process An action a company takes to attain superior performance. A pattern or plan that integrates an organizations major goals, policies, and action sequences into a cohesive whole. A well formed strategy helps to marshal and allocate an organization’s resources into a unique and viable posture based on its relative internal competencies and shortcomings. If the vision is “why”, then the strategy is “how” What is Strategy???

4. Strategic Management Process Approaches to Strategy …. Planning: a procedure to produce an articulated result, through a system of decisions. Pattern: views strategy as consistency, regardless of the intentions of an action. Ploy: a ploy is essentially a “specific maneuver” that is intended to outwit a competitor. Perspective: an integrated way of perceiving the world. Position: locating a company within its environment to achieve a competitive advantage. Objective of Strategy is to achieve a competitive advantage!!! What is Strategy???

5. Strategic Management Process Five Steps of the Strategic Planning Model… 1. Selection of the Corporate Mission and Major goals 2. Analysis of the Organization’s external competitive environment to identify Opportunities and Threats 3. Analysis of organization’s internal operating environment to identify the organizations Strengths and Weaknesses. A Basic Planning Model SWOT ANALYSIS

6. Strategic Management Process Five Steps of the Strategic Planning Model… 4. Selection of strategies that build on the organizations strengths and correct its weaknesses in order to take advantage of external opportunities and counter external threats. Evaluate against mission and goals Which strategy best meets the goal? 5. Implementation & Control A Basic Planning Model

7. Strategic Management Process Five Steps of the Strategic Planning Model… A Basic Planning Model Vision and Goal Implementation Internal Analysis S & W SWOT Strategic Choice External Analysis O & T Control/ Feedback

8. Strategic Management Process SWOT ANALYSIS A Basic Planning Model Strengths Threats Opportunities Weaknesses INTERNAL EXTERNAL

9. Strategic Management Process External Analysis – Industry Structure Bargaining Power Of Suppliers Risk of Entry By Potential Competitors Bargaining Power Of Buyers Threat of Substitutes Rivalry Amongst Established Firms

10. Porter’s Five Forces Risk of Entry Brand Loyalty Economies of Scale Absolute Cost Advantages Customer Switching Cost Govt Regulation Rivalry among Established Companies Industry Competitive Structure (fragmented, consolidated) Industry Demand Exit Barriers Bargaining Power of Buyers Buyers are fewer Buyers purchase in large quantities Companies depend solely on buyers Buyers can switch easily Buyers can buy from multiple companies Buyers can enter the industry easily Etc Bargaining Power of Suppliers Supplier provides specialized product Switching costs Companies cannot enter the supplier industry Etc Substitute Products Other Considerations Strategic Groups within Industry Complementary Products

11. Strategic Management Process External Analysis – Macroenvironment Bargaining Power Of Suppliers Risk of Entry By Potential Competitors Bargaining Power Of Buyers Threat of Substitutes Rivalry Amongst Established Firms Political & Legal Technological DemographicMacroeconomic

12. Strategic Management Process Industry Structure Bargaining Power of Buyers Bargaining Power of Suppliers Industry Rivalry Risk of Entry Threat of Substitutes Macroenvironment Political/Legal Technological Macroeconomic Demographic External Analysis - Summary Rate each of these “Favourable”, “not favourable”

13. Strategic Management Process Core Competencies are the Resources and Capabilities that allow your firm to gain competitive advantage They are unique to you, and not easily imitatable Resources – equipment, land, trademark, reputation Capabilities – rules, routines, procedures with embedded knowledge Internal Analysis - Core Competencies

14. Strategic Management Process Competitive Advantage: Advantage gained over competitors by offering consumers greater perceived value, either through lower prices or greater benefits. Leads to higher rates of profit than the industry. Two factors determine CA: 1. Differentiation 2. Low Cost Internal Analysis - Competitive Advantage Source for image: Hill & Jones (2004) Strategic Management Theory. 6 th ed. Boston, USA: Houghton Mifflin

15. Developing Strategies Business-Level Strategies 1. Low Cost 2. Differentiation 3. Focus – serving a limited customer group – niche Examples of each? Developing Strategies

16. Strategic Management Process Internal Analysis – Competitive Advantage Building Blocks Core Competencies Resources Capabilities Superior Efficiency Quality Innovation Customer Responsive ness Value Creation Differentiation Low Cost Superior Performance

17. Strategic Management Process Core Competencies What do you do really well? Dynamic Capabilities Can you change in a way that is appropriate for your environment? Competitive Advantage (pick ONLY one) Low Cost? Differentiation? Building Blocks Superior Efficiency Superior Quality Superior Innovation Superior Customer Responsiveness Internal Analysis - Summary What do you do well, what will allow you to change, what do you need to be in order to be the cheapest/differentiated

18. Developing Strategies Business-Level Strategies 1. Customer Needs (What is to be satisfied?) Product Differentiation 2. Customer Groups (Who is to be satisfied?) Customer Segment 3. Distinctive Competencies (How will they be satisfied?) Developing Strategies

19. Business-Level Strategies Developing Strategies

21. Strategic Management Process Develop AT LEAST TWO options that will accomplish your goals Low Cost Differentiation http://www.businessmodelgeneration.com/canvas Developing a Business Model