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Copyright © 2002 by South-Western, a division of Thompson Learning. All rights reserved.
Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

2. 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

3. 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? 2

4. Grand Strategy
General plan of major action to achieve long-term goals.
Fall in to three general categories:
1. Growth
2. Stability
3. Retrenchment 3

5. Global Corporate Strategies
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
Need for Global Integration
Multi-domestic Strategy
Handles markets independently for each country
Adapts product/advertising to local tastes and needs
Low
Low
Need for National Responsiveness
High

6. 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 7

7. Purpose of Strategy
Kinko’s Copy Center
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 8

8. Three Levels of Strategy in Organizations
Corporate-Level Strategy: What business are we in?
Corporation
Business-Level Strategy: How do we compete?
Textiles Unit
Chemicals Unit
Auto Parts Unit
Functional-Level Strategy:
How do we support the business-level strategy?
Finance
R&D
Manufacturing
Marketing

9. Checklist for Analyzing Organizational Strengths and Weaknesses
Management and Organization
Marketing
Human Resources
Management quality
Distribution channels
Market share
Advertising efficiency
Customer satisfaction
Product quality
Service reputation
Employee experience, education
Degree of centralization
Organization charts
Union status
Planning, information, control systems
Turnover, absenteeism
Work satisfaction
Grievances
Sales force turnover
Finance
Production
Research and Development
Profit margin
Plant location
Basic applied research
Debt-equity ratio
Machinery obsolescence
Laboratory capabilities
Inventory ratio
Purchasing system
Research programs
Return on investment
New-product innovations
Quality control
Technology innovations
Credit rating
Productivity/efficiency
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).

10. Portfolio Strategy
BGG Matrix
Mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage

11. The Five Forces Affecting Industry Competition
Internet reduces barriers to entry
Threats of new entrants
Internet blurs differences among competitors in an industry
Internet expands market size, but creates new substitution threats
Internet shifts greater power to end consumers
Threat of substitute products
Bargaining power of buyers
Bargaining power of suppliers
Internet tends to increase the bargaining power of suppliers
Source: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980).

12. 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.

13. Continuum of Partnership Strategies
Organizational Combination
Acquisitions
Mergers
Joint Ventures
Strategic Alliances
Strategic Business Partnering
Preferred Supplier Arrangements
Low
High
Degree of Collaboration

14. Implementing Strategy Tools
Leadership
Structural design
Information and control systems
Human resources

15. Tools for Putting Strategy into Action
Environment
Organization
Leadership  Persuasion  Motivation  Culture/values
Structural Design  Organization Chart  Teams  Centralization/decentralization  Facilities, task design
Performance
Human Resources  Recruitment/selection  Transfers/promotions/training  Layoffs/recalls
Strategy
Information and Control Systems  Pay, reward system  Budget allocations  Information systems  Rules/procedures
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.