1. 8-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice

2. 8-2 Functional Strategy The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity

3. 8-3 Functional Strategy Marketing Strategy – –Pricing –Selling –Distribution

4. 8-4 Functional Strategy Marketing Strategy – –Product development Line extension

5. 8-5 Functional Strategy Marketing Strategy – –Advertising and promotion Push strategy Pull strategy

6. 8-6 Functional Strategy Marketing Strategy – –Pricing Skim pricing Penetration pricing Dynamic pricing

7. 8-7 Functional Strategy Financial Strategy – –Leveraged buyout –Reversed stock split –Tracking stock

8. 8-8 Functional Strategy R&D Strategy – –Technological leader –Technological follower –Open innovation

9. 8-9 Functional Strategy Operations Strategy – –Job shop –Connected line batch flow –Flexible manufacturing systems –Dedicated transfer lines –Mass production –Continuous improvement system –Modular manufacturing

10. 8-10 Functional Strategy Purchasing Strategy – –Multiple sourcing –Sole sourcing –Just-in-time (JIT) –Parallel sourcing

11. 8-11 Functional Strategy Logistics Strategy – –Centralization –Outsourcing –Internet

12. 8-12 Functional Strategy HRM Strategy – –360 degree appraisal

13. 8-13 Proposed Outsourcing Matrix

14. 8-14 Functional Strategy Strategies to Avoid – – Follow the leader –Hit another home run –Arms race –Do everything –Losing hand

15. 8-15 Constructing Corporate Scenarios

16. 8-16 Functional Strategy Subjective Factors Affecting Decisions -- –Management’s attitude toward risk –Pressures from stakeholders –Pressures from corporate culture –Needs and desires of key managers

17. 8-17 Stakeholder Priority Matrix

18. 8-18 Strategic Choice Avoiding the Consensus Trap -- –Devil’s Advocate –Dialectical Inquiry