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Group 1 will be held harmless for the material covered in this presentation. The material in Chapter 2 must be covered even though some of you may have already heard the terms SWOT or Porter’s 5-Forces before this class, maybe once or twice?
Please do not boo or hiss or throw things at the group.
Chapter 2 is an excellent review to help us remember what core requirements are required for a successful and strategic business plan. The author built the concepts that will follow this chapter on these basics principles.
Corporate Strategy - The focus is on “where” a business should invest its resources. It also focuses on “what” businesses are chosen for competition. What level of resources should be invested across the business portfolio. The product market may be undefined.
Business Strategy - By contrast the focus is on “how” the company should compete in a defined product market. How will the company differentiate their products?
Corporate Strategy vs. Business Strategy Corporate Strategy Business Strategy A Business Strategy B Business Strategy C Business Strategy D Products & Services to Create Value in Product Mkt A Products & Services to Create Value in Product Mkt B Products & Services to Create Value in Product Mkt C Products & Services to Create Value in Product Mkt D Allocation of Corporate Resources
Hierarchy of Business Strategy Competitive Market Dynamics SWOT Firm-Specific Resources and Capabilities Corporate Goal - Mission Actions Business Strategy Performance Goals/ Measures
Managers must use feedback mechanisms to either maintain or realign strategy.
Challenging Subordinates to Share Ideas
Strategy that emerges spontaneously as employees respond to unpredictable threats and opportunities through trial and error
Hierarchy of Business Strategy & the 4 Ps Competitive Market Dynamics SWOT Firm-Specific Resources and Capabilities Corporate Goal - Mission Actions Business Strategy Performance Goals/ Measures Perspective Position Plan Patterns
“ With Food Sales Flat, Nestle´Stakes Future on Healthier Fare” WSJ 3/18/04
- The article depicts how Nestle ´ is rethinking their strategic plan in order to sustain profitability in a changing market. The food industry is facing stagnant growth, Nestle ´ is attempting to mingle science with food to serve a niche market for health conscious consumers. The products are known as “phood”. These products help lower cholesterol, aid in digestion, and provide other health benefits. Nestle ´ has been mixing food with science since the 1800’s when one of their scientists invented baby formula to fight infant mortality.
- They are serious about this leap into this product extension, since they have invested 1/5 of its food budget ($600M), and 3500 people for R&D
Re-evaluate communication and education strategies
Contribute to the scientific understanding of weight management
PubMed publications, 1970-2005 www.Nestle.com 0 5000 10000 15000 20000 25000 1970-1974 1975-1979 1980-1984 1985 - 1989 1990-1994 1995 -1999 2000-2004* Year Number of publications Starvation Obesity * 2000-2002 data
Increasing awareness of obesity issue by laypeople 0 200 400 600 800 1000 Oct- Dec 1999 Jan- Mar Apr- Jun 2000 Jul- Sept Oct- Dec Jan- Ma r 2001 Apr- Jun Jul - Sep Oct- Dec Jan- Mar 2002 Apr- Jun Jul- Sep Number of media stories www.Nestle.com
Nestlé Energy Management Research Ensure optimal energy metabolism for health & well-being From basic knowledge to product concepts Weight Management Insulin Resistance & Type II Diabetes Energy for Performance Basic Knowedge Observations Concept Validation Product concept Subcutaneous fat www.Nestle.com