Corporate Strategy Rebecca Whitnah BusM 361 Section 1 November 29, 2005

Agenda Definition of corporate strategy How corporate strategy can be used in your organization Benefits of corporate strategy Critical factors in corporate strategy Importance and implementation of corporate strategy

Definition of corporate strategy

How corporate strategy can be used in your organization

Benefits of corporate strategy

Critical factors in corporate strategy

Importance and implementation of corporate strategy

Alice: Which way should I go? Cat: That depends on where you are going. Alice: I don’t know where I’m going! Cat: Then it doesn’t matter which way you go!! Lewis Carroll, Through the Looking Glass, 1872 To be a successful company, a planning process should be initiated for making day-to-day decisions and ultimately deciding which direction the company should go

Alice: Which way should I go?

Cat: That depends on where you are going.

Alice: I don’t know where I’m going!

Cat: Then it doesn’t matter which way you go!!

Lewis Carroll, Through the Looking Glass, 1872

To be a successful company, a planning process should be initiated for making day-to-day decisions and ultimately deciding which direction the company should go

What is Corporate Strategy? Process by which members of an organization envision its future and develop the necessary procedures and operations to achieve that future (Goodstein, 3)

Process by which members of an organization envision its future and develop the necessary procedures and operations to achieve that future (Goodstein, 3)

How can corporate strategy be used in your organization? 1. Provides a plan 2. Establishes a pattern of actions

1. Provides a plan

2. Establishes a pattern of actions

How can corporate strategy be used in your organization? 3. Establishes position 4. Incorporates perspective (Henry Mintzberg)

3. Establishes position

4. Incorporates perspective

(Henry Mintzberg)

What are the benefits of strategic planning? Provides framework for action Mind-sets of employees and organization Enables organization to share a vision and a belief that the vision can be fulfilled Energy comes to employees

Provides framework for action

Mind-sets of employees and organization

Enables organization to share a vision and a belief that the vision can be fulfilled

Energy comes to employees

What are the benefits of strategic planning, part II? Evaluate your competitors & adjust to current events Annual evaluations Motivate & encourage managers

Evaluate your competitors & adjust to current events

Annual evaluations

Motivate & encourage managers

Six Critical Strategic Factors STRATEGY IS…. A coherent, unifying, and integrative pattern of decisions An establishment of an organization’s long-term objectives, plans, and allocation of resources A definition of an organization’s competitive domain

STRATEGY IS….

A coherent, unifying, and integrative pattern of decisions

An establishment of an organization’s long-term objectives, plans, and allocation of resources

A definition of an organization’s competitive domain

Six Critical Strategic Factors, Part II STRATEGY IS… 4. A response to internal strengths & weaknesses and external threats & opportunities 5. Developing differentiating tasks and roles at all functional levels 6. Identifying the economic factors the organization will contribute to stakeholders (Goodstein, Nolan, Pfeiffer 3)

STRATEGY IS…

4. A response to internal strengths & weaknesses and external threats & opportunities

5. Developing differentiating tasks and roles at all functional levels

6. Identifying the economic factors the organization will contribute to stakeholders

(Goodstein, Nolan, Pfeiffer 3)

Importance of Senior Management Two decisions for organizations: Strategic decisions Strategically driven decisions Senior management needs to be involved in both Must be committed to implement strategy

Two decisions for organizations:

Strategic decisions

Strategically driven decisions

Senior management needs to be involved in both

Must be committed to implement strategy

How can you implement strategy? Focus on a single “driving force” Products offered Market needs Technology Production Capability Method of Sale Method of Distribution

Focus on a single “driving force”

Products offered

Market needs

Technology

Production Capability

Method of Sale

Method of Distribution

Additional types of driving forces… Natural resources Size/growth Return/profit (Kepner & Tregoe)

Natural resources

Size/growth

Return/profit

(Kepner & Tregoe)

Questions to consider for your company’s corporate strategy Is the current strategy implicit or explicit? What is happening in the larger, social, and educational environments? What are our growth, size, and profitability goals? In which markets will we compete? In which businesses & geographic areas?

Is the current strategy implicit or explicit?

What is happening in the larger, social, and educational environments?

What are our growth, size, and profitability goals?

In which markets will we compete?

In which businesses & geographic areas?

To strategically succeed your company needs to know… Where you are going -mission statement, specific goals What is the environment How do you get there

Where you are going

-mission statement, specific goals

What is the environment

How do you get there

CASE STUDY: FedEx What should your company bring to the table? Focus on company Consider core competencies Don’t limit to just core competencies

What should your company bring to the table?

Focus on company

Consider core competencies

Don’t limit to just core competencies

CASE STUDY: FedEx Core competencies: package routing & delivery Grew out of technology & skills - bar-codes - wireless communication

Core competencies: package routing & delivery

Grew out of technology & skills

- bar-codes

- wireless communication

CASE STUDY: FedEx Conclusion “Whole package” – those things that can’t be reproduced Patented products Strong brands & reputations Relationships w/suppliers & customers Position in industry

“Whole package” – those things that can’t be reproduced

Patented products

Strong brands & reputations

Relationships w/suppliers & customers

Position in industry

Exercise Break into groups of 4 -5 List 4 strengths of your company & 4 weaknesses Applying those strengths & weaknesses you listed, answer the following questions: Where is your company going? Who are your competitors & your environment? How are you going fortify your weaknesses?

Break into groups of 4 -5

List 4 strengths of your company & 4 weaknesses

Applying those strengths & weaknesses you listed, answer the following questions:

Where is your company going?

Who are your competitors & your environment?

How are you going fortify your weaknesses?

Summary Corporate strategy is a process where members envision long-term goals for an organization Corporate strategy should include all members of the organization In order for strategic success, each individual needs to be committed to the objectives…this is a direct result from a committed senior management team

Corporate strategy is a process where members envision long-term goals for an organization

Corporate strategy should include all members of the organization

In order for strategic success, each individual needs to be committed to the objectives…this is a direct result from a committed senior management team

Summary continued A main benefit for implementing corporate strategy is an increased competitive advantage in all functional levels of business Strategic planning should consider where the company is going, the company’s environment, and how the company is going to attain its goals

A main benefit for implementing corporate strategy is an increased competitive advantage in all functional levels of business

Strategic planning should consider where the company is going, the company’s environment, and how the company is going to attain its goals

Suggested Reading Harvard Management Update, Vol. 5, #1, January 2000 Applied Strategic Planning, Leonard Goodstein, Timothy Nolan, and J. William Pfeiffer, 1993, pp. 1, 3-5 Strategy: Definitions and Meanings, Fred Nickols, http://home.att.net/~nickols/strategy_definition.htm , 2000 Top Management Strategy, Benjamin Tregoe & John Zimmerman, pp. 7 The Rise and Fall of Strategic Planning, Henry Mintzberg, 1997, pp. 3

Harvard Management Update, Vol. 5, #1, January 2000

Applied Strategic Planning, Leonard Goodstein, Timothy Nolan, and J. William Pfeiffer, 1993, pp. 1, 3-5

Strategy: Definitions and Meanings, Fred Nickols, http://home.att.net/~nickols/strategy_definition.htm , 2000

Top Management Strategy, Benjamin Tregoe & John Zimmerman, pp. 7

The Rise and Fall of Strategic Planning, Henry Mintzberg, 1997, pp. 3