1. PART 5 : Strategies in Action

2. Main Learning Objectives: Identify various types of business strategies. Describe strategic management in non-profit, government and small organizations. Compare and contrast financial with strategic objectives.

3. Long-Term Objectives
Long-Term Objectives represents results expected from pursuing certain strategies
Strategies represent actions to accomplish long-term objectives

4. Long-Term Objectives Objectives – should be Quantifiable Measurable
Realistic
Understandable
Challenging

5. Long-Term Objectives Objectives – should be Hierarchical Obtainable
Congruent (suitable)
Time-line
Congruent ملائم , متطابق

6. Long-Term Objectives Long-term objectives are needed at the:
corporate,
divisional, and
functional levels in an organization.
They are an important measure of managerial
performance.
Extrapolation تقدير أستقرائي
Subjective ذاتي , شخصي

7. Varying Performance Measures by Organizational Level

8. Financial vs. Strategic Objectives
Financial Objectives - include ones associated with:
Growth in revenues
Growth in earnings
Higher dividends
Higher profit margins
Higher earnings per share
Improved cash flow

9. Financial vs. Strategic Objectives
Strategic Objectives -include ones such as:
Larger market share
Quicker on-time delivery than rivals
Quicker design-to-market times than rivals
Lower costs than rivals
Higher product quality than rivals
Wider geographic coverage than rivals

10. Financial vs. Strategic Objectives
Trade-Offs….. between financial and strategic objectives.
Maximize short-term financial objectives – harm long-
term strategic objectives.
Pursue increased market share at the expense of
short-term profitability.
Trade-offs related to risk of actions; concern for
business ethics; need to preserve natural
environment; social responsibility issues.

11. Strategists should avoid the following alternative ways of “Not Managing by Objectives”
Managing by extrapolation (Estimation)
Managing by crisis
Managing by subjective
Managing by hope

12. The Balanced Scorecard - BSC
Robert Kaplan & David Norton --
BSC is :
Strategy evaluation & control technique
Balance financial measures with non-financial measures
Balance shareholder objectives with customer & operational objectives

13. Levels of Strategies A Large Company Corp. Level Division Level
Functional Level
Operational Level

14. Levels of Strategies A Small Company Company Level Functional Level
Operational Level

15. Horizontal Integration
Types of Strategies
Forward Integration
Vertical Integration Strategies
Backward Integration
Horizontal Integration

16. Vertical Integration Strategies
Gain Control Over --
Distributors
Suppliers
Competitors

17. Forward Integration Strategies
Gain Control Over --
Distributors
Retailers

18. Forward Integration Strategies
Guidelines --
Current distributors – expensive or unreliable
Availability of quality distributors – limited
Firm competing in industry expected to grow markedly
Firm has both capital & HR to manage new business of distribution
Current distributors have high profit margins

19. Backward Integration Strategies
Ownership or Control --
Firm’s suppliers

20. Backward Integration Strategies
Guidelines --
Current suppliers – expensive or unreliable
N0. of suppliers is small; No. of competitors is large
High growth in industry sector
Firm has both capital & HR to manage new business
Stable prices are important
Current suppliers have high profit margins

21. Horizontal Integration Strategies
Ownership or Control --
Firm’s competitors

22. Horizontal Integration Strategies
Guidelines --
Gain monopolistic characteristics without federal government challenge
Competes in growing industry
Increased economies of scale – major competitive advantages
Faltering due to lack of managerial expertise or need for particular resource
Faltering يترنح , يتلغثم

23. Means for Achieving Strategies
Joint Venture/Partnering -
Two or more companies form a temporary partnership or consortium for purpose of capitalizing on some opportunity
Consortium اتحاد مالي

24. Reasons why Mergers and Acquisitions Fail
Integration difficulties
Inadequate evaluation of target
Large or extraordinary debt
Inability to achieve synergy
Acquisitions اشياء مكتسبة

25. Means for Achieving Strategies
Cooperative Arrangements -
R&D partnerships
Cross-distribution agreements
Cross-licensing agreements
Cross-manufacturing agreements
Joint-bidding consortia
Bidding عطاءات , مزايدات
Consortia اتفاق

26. Means for Achieving Strategies
Why Joint Ventures Fail -
Managers who must collaborate daily; not involved in developing the venture
Benefits the company not the customers
Not supported equally by both partners
May begin to compete with one of the partners

27. Joint Ventures Guidelines --
Synergies between private and publicly held
Domestic with foreign firm, local management can reduce risk
Complementary distinctive competencies
Resources & risks where project is highly
profitable (e.g. Alaska Pipeline)
Two or more smaller firms competing with
larger firm
Need to introduce new technology quickly

28. First Mover Advantages
Benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms

29. First Mover Advantages
Potential Advantages
Securing access to rare resources
Gaining new knowledge of key factors & issues
Carving out market share
Easy to defend position & costly for rival firms to overtake

30. Outsourcing Business-Process Outsourcing (BPO)
Companies taking over the functional operations of other firms

31. Outsourcing Benefits Less expensive
Allows firm to focus on core business
Enables firm to provide better services

32. Strategic Management in Nonprofit and Governmental Organizations
Strategic Management is a vital issue in Nonprofit and Governmental Organizations. Organizations like Educational Institutions, Medical Organizations, and Governmental Agencies and Departments all are striving to:

33. Strategic Management in Nonprofit and Governmental Organizations
Increase Revenues
Recruit More Volunteers
Attract in Kind Contributions
Do More Good work
Improve Productivity

34. Strategic Management in Nonprofit and Governmental Organizations
Strategic Planning issues discussed earlier shall provide Nonprofit Organizations with:
A detailed map for where you want your organization to go and how it’s going to get there.
Tools to measure your progress and success.
A vehicle to communicate your value.

35. Strategic Management in Nonprofit and Governmental Organizations
Below is a brief explanation about some Nonprofit and Governmental Organizations:
a. Educational Institutions
Educational institutions are using strategic-management techniques and concepts more frequently.
For a list of college strategic plans, click on strategic-planning links found at the { Web site and scroll down through the academic sites.

36. Strategic Management in Nonprofit and Governmental Organizations
b. Medical Organizations
• Hospitals—originally intended to be warehouses for people dying of tuberculosis, smallpox, cancer, pneumonia, and infectious diseases—are creating new strategies today as advances in the diagnosis and treatment of chronic diseases are undercutting that earlier mission.

37. Strategic Management in Nonprofit and Governmental Organizations
• A successful hospital strategy for the future will require renewed and deepened collaboration with physicians, who are central to hospitals’ well-being and a reallocation of resources from acute to chronic care in home and community settings.
• Current strategies being pursued by many hospitals include creating home health services, establishing nursing homes, and forming rehabilitation centers.

38. Strategic Management in Nonprofit and Governmental Organizations
c. Governmental Agencies and Departments
• Federal, state, county, and municipal agencies and departments, such as police departments, chambers of commerce, forestry associations, and health departments are responsible for formulating, implementing, and evaluating strategies that use taxpayers’ money in the most cost-effective way to provide services and programs.

39. Strategic Management in Nonprofit and Governmental Organizations
• Strategic-management concepts are increasingly being used to enable governmental organizations to be more effective and efficient.