Business 475 - INTEGRATED BUSINESS TOPICS Class 3: STRATEGY DEVELOPMENT

1. Welcome

3. Agenda

4. Agenda
SWOT Presentations

5. Agenda
SWOT Presentations
Review of class 1I

6. Agenda
SWOT Presentations
Review of class 1I
External analysis (Porter 5 forces)

7. Agenda
SWOT Presentations
Review of class 1I
External analysis (Porter 5 forces)
Walmart case study / video

8. Agenda
SWOT Presentations
Review of class 1I
External analysis (Porter 5 forces)
Walmart case study / video
Exercise: using the 5 forces

9. Agenda
SWOT Presentations
Review of class 1I
External analysis (Porter 5 forces)
Walmart case study / video
Exercise: using the 5 forces
Generic strategies

10. Agenda
SWOT Presentations
Review of class 1I
External analysis (Porter 5 forces)
Walmart case study / video
Exercise: using the 5 forces
Generic strategies
Balanced scorecards

11. Agenda
SWOT Presentations
Review of class 1I
External analysis (Porter 5 forces)
Walmart case study / video
Exercise: using the 5 forces
Generic strategies
Balanced scorecards
Mergers & acquisitions

12. Agenda
SWOT Presentations
Review of class 1I
External analysis (Porter 5 forces)
Walmart case study / video
Exercise: using the 5 forces
Generic strategies
Balanced scorecards
Mergers & acquisitions
Comcast / NBC case study

13. Agenda
SWOT Presentations
Review of class 1I
External analysis (Porter 5 forces)
Walmart case study / video
Exercise: using the 5 forces
Generic strategies
Balanced scorecards
Mergers & acquisitions
Comcast / NBC case study
Next week

14. Questions before we begin?

15. Concept Review

16. 1
Introduction to Strategic Management

17. 2
Internal and External Environment

18. Internal Analyses

19. Resource based view of the firm

20. Firms differ in fundamental ways because each
firm possesses a unique “bundle” of resources –
tangible and intangible assets and organizational
capabilities to make use of those assets

21. Tangible Assets Intangible Assets Organizational
Capabilities
Hampton Inn’s Budweiser’s brand Dell Computer’s
reservation system name customer service
Ford Motor’s cash Dell Computer’s Wal-mart’s purchasing
reserves reputation and inbound logistics
3M’s patents Nike’s advertising with Sony’s product
LeBron James development process
Georgia Pacific’s land Katie Couric as NBC’s Coke’s global
holdings “Today” host distribution
coordination

22. Value Chain Analysis

24. SWOT(T) Analysis

25. SWOT
Strengths Weaknesses
Opportunities Threats

26. SWOT Analysis Numerous environmental opportunities
Cell 3: Cell 1:
Supports a Supports an
turnaround-oriented aggressive
Critical strategy strategy
Substantial Internal
Internal
Strengths
Weaknesses Cell 4: Cell 2:
Supports a defensive Supports a
strategy diversification
strategy
Major environmental threats

27. External environment

29. 5 Forces framewor k

30. What are entry barriers?

31. 5 Forces framewor k
capital requirements
patents & trademarks
branding
distribution
long term contracts
switching costs

32. example: Univer sity of Phoenix
Take 10 minutes
Analyze 5 forces
Select spokesman

34. Social Economic Technology Ecological Political

37. TECHNOLOGICAL OBSOLESCENCE

38. TECHNOLOGICAL OBSOLESCENCE

39. RE GU LATORY FORCES

40. RE GU LATORY FORCES

41. RE GU LATORY FORCES

42. Social Economic Technology Ecological Political

43. 3
Strategy development

44. Long term objectives

46. Profitability

47. Profitability
Productivity

48. Profitability
Productivity
Competitive position

49. Profitability
Productivity
Competitive position
Employee development

50. Profitability
Productivity
Competitive position
Employee development
Employee relations

51. Profitability
Productivity
Competitive position
Employee development
Employee relations
Technological leadership

52. Profitability
Productivity
Competitive position
Employee development
Employee relations
Technological leadership
Public responsibility

53. Qualities of Long-Term Objectives
Acceptable
Achievable
Profitability
Productivity
Competitive position
Employee development Flexible
Understandable
Employee relations
Technological leadership
Public responsibility
Measurable
Suitable
Motivating

54. The Balanced Scorecard

55. The Balanced Scorecard
Tangible goals linked to long term objectives

56. The Balanced Scorecard
Tangible goals linked to long term objectives

57. Generic Strategies

58. michael porter

59. michael porter

60. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus

61. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus

62. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus

63. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus
FOOD

64. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus
FOOD

65. So how do we decide?
Differentiation
Cost Advantage Overall ROI
Advantage
High High 35%
Low High 26%
High Low 22%
Low Low 9.5%

66. michael treacy

67. michael treacy

68. michael treacy

69. Another view: value disciplines
Operational
Customer intimacy Product leadership
excellence

70. Another view: value disciplines
Operational
Customer intimacy Product leadership
excellence

71. Another view: value disciplines
Operational
Customer intimacy Product leadership
excellence

72. Another view: value disciplines
Operational
Customer intimacy Product leadership
excellence

73. Source of Competitive Advantage
Cost Differentiation
Operational intimacy
Broad
Cost Customer
Leadership Product leadership
Differentiation
excellence
Scope
Narrow
Differentiation
Cost Focus
Focus

74. “Our mission is to develop the most innovative
products at the lowest cost through operational
excellence and intimate knowledge of our customers”

75. “Our mission is to develop the most innovative
products at the lowest cost through operational
excellence and intimate knowledge of our customers”
You can’t
do it all

76. Walmart, Part I

77. Questions
• How could rubbermaid have reacted faster?
• Could they survive in the U.S.?
• Which stakeholders love Walmart, which hate it?

78. Grand strategies

79. A
B
Concentrated growth
Liquidation
Market development
Bankruptcy
Product development
Joint ventures
Innovation
Strategic alliances
Horizontal integration
Consortia
Vertical integration
C
Concentric diversification
Conglomerate diversification
Turnaround
Divestiture

80. Core competencies, mergers &
the synergy myth

83. Why do companies merge?

84. Control Costs Increase Revenue

85. What is synergy?

86. What is synergy?

87. Costs savings work, revenue synergy doesn’t

88. +

90. 5 Forces framewor k

91. 5 Forces framewor k

92. Business school 101:
If you don’t know the answer, guess

93. Business school 101:
If you don’t know the answer, guess

94. Walmart, Part II - Globalization

95. Questions
• What drove Walmart’s globalization?
• “Walmart and China are a joint venture”
• good, bad or indifferent?

96. Walmart, Part III

97. Assignments

98. Discuss scorecard ideas with learning team (5
threads, 5 responses, 5 summaries)
Develop balanced scorecard and 300-word
discussion of what you learned
Start work on week 5 strategic plan presentation

99. Week 4
Individual Assignment: Balanced Scorecard 10
Discuss scorecard ideas with learning team (5
threads, 5 responses, 5 summaries)
Develop balanced scorecard and 300-word
discussion of what you learned
Start work on week 5 strategic plan presentation

100. Week 4
Individual Assignment: Balanced Scorecard 10
Learning Team Assignment: Strategic Direction Evaluation 2
Discuss scorecard ideas with learning team (5
threads, 5 responses, 5 summaries)
Develop balanced scorecard and 300-word
discussion of what you learned
Start work on week 5 strategic plan presentation

101. Next Week

102. Implementation strategies
Exam prep