1. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2.  Every company is concerned with strategy  It determines which organizations succeed and which ones struggle  Strategic blunders can hurt a company  Strategic management is a specific type of planning 2

3. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  The long-term view of the organization and competition  Thinking strategically impacts performance and financial success  Today’s environment requires everyone to think strategically 3

4. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 Decisions and actions used to formulate and execute strategies that will provide competitively superior fit between the organization and its environment to achieve organizational goals

5. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Explicit strategy is the plan of action  Competitive advantage is the organization’s distinctive edge for meeting customer needs Strategies should :  Exploit Core Competencies  Achieve Synergy  Create Value  Target Customers 5

6. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6

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9. 9 Formulation: Assessing the external environment and internal problems to create goals and strategy Execution: the use of managerial and organizational tools to direct resources toward accomplishing strategic results

10. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Formulating strategy often begins with an audit of internal and external factors  Internal S trengths and W eaknesses  External O pportunities and T hreats  Information is acquired from reports, surveys, discussions, and meetings 10

11. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11

12. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Strategic Business Units (SBUs) have a unique mission, products, and competitors  Portfolio strategy pertains to the mix of SBUs and product lines to provide synergy and competitive advantage  Organizations should not become too dependent on one business 12

13. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Organizes business along two dimensions  Business growth rate  Market share  Four categories for corporate portfolio  The combination of high/low market share and high/low business growth 13

14. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14

15. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Related diversification : expansion into new business related to existing business activities  Unrelated diversification : expansion into new lines of business  Vertical integration : expansion into businesses that supply to the business or are distributors 15

16. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Strategy within the business units: How do we compete?  Business-level strategies are developed by Porter’s Five Forces  Web technology is impacting all industries in positive and negative ways 16

17. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17

18. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Differentiation  Distinguishing products and services  Cost Leadership  Cost reductions, cost controls  Focus Strategy  Concentration on a specific region or buyer  Either differentiation or cost leadership approach 18

19. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19

20. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Action plans used by major departments  Marketing  Production  Finance  Human Resources  Research and Development 20

21. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21

22. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The final step!  “ Strategy is easy, but execution is hard”  Most important but most difficult part  Strategy must be skillfully executed  Alignment requires all aspects of the organization to focus on strategy goals  Everyone is moving in the same direction 22

23. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23

24. © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24