Ch06
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Ch06 Presentation Transcript

  • 1. Strategic Planning and Strategic ManagementMultiMedia by 2002 South-
  • 2. Strategic Management•• Top management’s responsibility. Top management’s responsibility.•• Defines the firm’s position. Defines the firm’s position.•• Formulates strategies. Formulates strategies.•• Guides the execution of long-term organizational Guides the execution of long-term organizational functions. functions.•• Helps position the organization to achieve a superior Helps position the organization to achieve a superior competitive fit. competitive fit. MultiMedia by 2002 South-
  • 3. Strategic Planning Questions What is the organization’s position in the marketplace? What does the organization want its position to be? What trends and changes are occurring in the marketplace? What are the best alternatives to help the organization achieve its goals?MultiMedia by 2002 South-
  • 4. Four Elements of Strategy Development 2. Resource 1. Scope Deployment 3. Distinctive Competitive 4. Synergy AdvantageMultiMedia by 2002 South-
  • 5. Scope of a Strategy Specifies• The position or size the firm wants to achieve.• The geographical markets it wants to compete in.• The products and services it will sell. MultiMedia by 2002 South-
  • 6. Distinctive Competitive Advantage —Four Points —1. Unique position in relationship to its competition2. A firm’s core competencies3. What the firm knows best4. What the firm does bestMultiMedia by 2002 South-
  • 7. Characteristics of Successful Strategic Managers • Well informed • Skill at focusing their time and energy • Good at building consensus • Good at creating contingency plans • Accomplished at simplifying the processMultiMedia by 2002 South-
  • 8. Strategy FormulationPlanning and decision making that goes into developingthe company’s strategic goals.Includes: – Assessing the environments. – Analyzing core competencies. – Creating goals and plans. MultiMedia by 2002 South-
  • 9. Strategy Implementation:Executing the Strategic Plan Includes Creating Teams Adapting New TechnologiesFocusing on Processes Facilitating CommunicationsRather than Functions Offering Incentives Making Structural Changes MultiMedia by 2002 South-
  • 10. The Purpose of Corporate-Level Strategy to Answer 1. What business are we in? 2. What business should we be in?MultiMedia by 2002 South-
  • 11. Business-Level Strategy Questions1. How do we compete? 2. How much will be spent on activities such as advertising and R & D? 3. What equipment and facilities will be needed? 4. Should we expand or contract existing product lines?MultiMedia by 2002 South-
  • 12. Functional-Level Strategy Major Activities Human Resource Management Research and Development Marketing Finance ProductionMultiMedia by 2002 South-
  • 13. Strategic Planners Should Consider The Following  Management Factors  Management Factors  Marketing Factors  Marketing Factors  Production Factors  Production Factors  Research Factors  Research Factors  Human Resource Factors  Human Resource Factors  Financial Factors  Financial FactorsMultiMedia by 2002 South-
  • 14. SWOT Analysis ChartMultiMedia by 2002 South-
  • 15. SWOT Analysis ChartMultiMedia by 2002 South-
  • 16. External Threats and Opportunities FactorsThe threat or opportunity:• of new competitors entering the marketplace.• of substitute products.• resulting from entering new marketplaces.• created by strategy changes of major competitors.• resulting from the potential actions and profitability of customers.• created by the actions of suppliers.• resulting from new (or abandoned) government regulations.• created by new technology.• from changes in the state of the economy. MultiMedia by 2002 South-
  • 17. Craig Weatherup’s Three Leadership Criteria• Idea leadership “the ability to find, create, borrow, steal, or reshape ideas, especially big ideas.”• People leaders “to mobilize the troops and energize the organization.”• Capability leadership refers to “a manager’s ability to build and institutionalize the capabilities of people.” MultiMedia by 2002 South-
  • 18. Five Basic Grand Strategies 1. Growth Strategy – is adopted when the organization wants to1. Growth Strategy – is adopted when the organization wants to create high levels of growth in one or more of its areas of create high levels of growth in one or more of its areas of operations. operations. 2. Integration Strategy – is adopted with the business sees a need2. Integration Strategy – is adopted with the business sees a need •• to subsidize its supply lines or reduce costs. to subsidize its supply lines or reduce costs. •• to consolidate competition. to consolidate competition. 3. Diversification Strategy – the company wants to move into new3. Diversification Strategy – the company wants to move into new products or markets. products or markets.4. Retrenchment Strategy – used to reduce the size or scope of aa 4. Retrenchment Strategy – used to reduce the size or scope of firm’s activities by cutting back or eliminating entire businesses. firm’s activities by cutting back or eliminating entire businesses. 5. Stability Strategy – the organization wants to remain the same.5. Stability Strategy – the organization wants to remain the same. MultiMedia by 2002 South-
  • 19. Integration Strategies• Vertical Integration – Gaining ownership of resources, suppliers, or distribution systems that relate to a company’s business.• Horizontal Integration – A strategy to consolidate competition by acquiring similar products or services. MultiMedia by 2002 South-
  • 20. Portfolio StrategyDetermines the mix of business units and product lines.Begins by identifying strategic business units (SBUs). MultiMedia by 2002 South-
  • 21. SBUs Autonomous businesses with their own identities. Operate within the framework of the organization. Originated at General Electric in the 1970s. Have their own product lines, markets, and competitors.MultiMedia by 2002 South-
  • 22. A BCG MatrixMultiMedia by 2002 South-
  • 23. Business-Level Strategy Strategy managers formulate for each SBU. Strategies that can be grouped as either adaptive strategies or competitive strategies. MultiMedia by 2002 South-
  • 24. The Four Adaptive Strategies 1. Prospector 2. Defender 3. Analyzer 4. ReactorMultiMedia by 2002 South-
  • 25. Marketing Strategy Involves Pricing Promotion Distribution Product or service mix of the organizationMultiMedia by 2002 South-