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Managing strategy, strategic planning

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  • 1. Presented by: Viktoria Kachaluba Akhror Polatov
  • 2. 1. The Nature of Strategic Management 2. Using SWOT Analysis to Formulate Strategy 3. Formulating Business-Level Strategies 4. Implementing Business-Level Strategies 5. Formulating Corporate-Level Strategies 6. Implementing Corporate-Level Strategies 7. International and Global Strategies
  • 3. Strategy Is a comprehensive plan for progressing an organization’s goals. Strategic Management Involves formulating and implementing strategies to take advantage of business opportunities and meet competitive challenges. Effective Strategies Promote superior alignment between an organization, its environment, and its goals.
  • 4. Distinctive Competence Competitive Scope Resource Deployment Components of Effective Strategies 5
  • 5. Business-level strategy Functional-level strategy Operations-level strategy Corporate-level strategy Business-level strategy Functional-level strategy Operations-level strategy Market A Market B
  • 6. Business-Level Strategy  The set of strategic alternatives that an organization chooses from as it conducts business in a particular industry or a particular market. Corporate-Level Strategy  The set of strategic alternatives that an organization chooses from as it manages its operations simultaneously across several industries and several markets.
  • 7. Strategy Formulation  The set of processes involved in creating or determining the organization’s strategies; it focuses on the content of strategies. Strategy Implementation  The methods by which strategies are operationalized or executed within the organization; it focuses on the processes through which strategies are achieved. 8–7
  • 8. Deliberate Strategy A plan, chosen and implemented to support specific goals. Emergent Strategy A pattern of action that develops over time in the absence of goals or missions, or despite goals and missions.
  • 9. 8–9
  • 10. Evaluating Organizational Strengths:  Organizational strengths  Common organizational strengths  Distinctive competencies  Imitation of distinctive competencies  Sustained competitive advantage  Strategic imitation of a distinctive competence is difficult when:  it is based on unique historical circumstances.  it is difficult for competitors to understand its nature or character.  it is based on a complex phenomenon (e.g., organizational culture).
  • 11. Evaluating Organizational Weaknesses  Organizational weaknesses  Skills and capabilities that do not enable an organization to choose and implement strategies that support its mission.  Competitive disadvantage  occurs when an organization fails to implement strategies being implemented by competitors. Evaluating an Organization’s Opportunities and Threats  Organizational opportunities  are areas that may generate high performance.  Organizational threats  are areas in environment that make it difficult for the organization to achieve high performance.
  • 12. Overall cost leadership strategy Focus strategy Differentiation strategy Porter’s Generic Strategies
  • 13. Porter’s Generic Strategies Differentiation strategy  An organization seeks to distinguish itself from competitors through the quality of its products or services.
  • 14. 8–14
  • 15. Overall cost leadership strategy An organization attempts to gain competitive advantage by reducing its costs below the costs of competing firms. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 8–15
  • 16. 8–16
  • 17. Focus strategy An organization concentrates on a specific regional market, product line, or group of buyers. 8–17
  • 18. 8–18 waterman Tag Heuer
  • 19. 8–19 Prospectors Defenders Analyzers Reactors Strategic Types of Organizations
  • 20. Prospector  Encourages creativity to seek out new market opportunities and to take risks.  Develops the flexibility to meet changing market conditions by decentralizing its organizational structure. 8–20
  • 21. Defender  Focuses on defending its current markets by lowering its costs and/or improving the performance of its current products. 8–21
  • 22. Analyzer  Incorporates elements of both the prospector and the defender strategies to maintain business and to be somewhat innovative. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 8–22
  • 23. Reactor  Has no clear strategy, reacts to changes and events. 8–23
  • 24. Introduction MaturityGrowth Time Decline SalesVolume StagesHigh Low 8–24 The Product Life Cycle
  • 25.  Strategic Business Units  Each business or group of businesses within an organization is engaged in serving the same markets, customers, or products.  Diversification  The number of businesses an organization is engaged in and the extent to which these businesses are related to one another 8–25
  • 26.  Single-Product Strategy  An organization manufactures one product or service and sells it in a single geographic market.  Related Diversification  A strategy in which an organization operates in several different businesses, industries, or markets that are somehow linked.  Avoids the disadvantages and risks of a single- product strategy. 8–26
  • 27. 8–27 Similar technology:
  • 28. Common distribution and marketing skills: 8–28
  • 29. Common brand name and reputation 8–29 Common customers
  • 30. 8–30 Development of new products Vertical integration Merger with another firm Acquisition of another firm Diversification Alternatives
  • 31. Major Tools for Managing Diversification  Organization structure  Portfolio management techniques  Methods used by diversified firms to make decisions about what businesses to engage in and how to manage these businesses to maximize corporate performance.  Two important portfolio management techniques  The BCG Matrix  The GE Business Screen 8–31
  • 32. Stars(have large shares of rapidly growing markets) Question marks(have small market shares in quickly growing markets) Cash Cows (have large shares of mature markets) Relative Market Share Dogs (have small market shares and no growth prospects) MarketGrowthRate High Low High Low 8–32 8.3 The BCG Matrix
  • 33. GE Business Screen  A method of evaluating businesses in a diversified portfolio along two dimensions, each of which contains multiple factors:  Industry attractiveness.  Competitive position (strength) of each firm in the portfolio.  In general, the more attractive the industry and the more competitive a business is, the more resources an organization should invest in that business. 8–33
  • 34.  Developing International and Global Strategies  Global efficiencies  Location efficiencies—seeking lower input cost locations  Economies of scale—larger facilities result in lower costs  Economies of scope—broadening product lines  Multimarket flexibility  International businesses may respond to a change in one country by implementing a change in another country.  Worldwide learning  The diverse operating environments of multinational corporations (MNCs) contribute to organizational learning that can be transferred to other operating environments. 8–34
  • 35. 8–35 © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Home replication Multi-domestic strategy Global strategy Transnational strategy Strategic Alternatives Home replication Multi-domestic strategy Strategic Alternatives
  • 36.  Home Replication  Utilizing a core competency or a firm-specific advantage developed at home as a main competitive weapon in foreign markets.  Multi-Domestic Strategy  Managing a corporation as a collection of independent operating subsidiaries frees a firm to customize its products, its marketing campaigns, and operating techniques to meet local customer needs.  Global Strategy  Viewing the world as a single marketplace and having as a primary goal the creation of standardized goods and services that will address the needs of customers worldwide.  Transnational Strategy  Attempting to combine the benefits of scale efficiencies pursued by a global corporation, with the benefits and advantages of local responsiveness of a multi-domestic corporation. 8–36