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  • Low-cost leadership Appealing to a broad spectrum of customers, based on being the overall low-cost provider Broad differentiation Differentiated product, appealing to a broad spectrum of customers Best-cost provider More value for the money Focused or market niche / cost Narrow customer segment, low cost Focused or market niche / differentiation Narrow customer segment, differentiated product
  • 337_Strategic_Manage..

    1. 1. Strategic Management
    2. 2. Strategic Management <ul><li>The larger vision that guides the activities of managers and other employees in an organization </li></ul><ul><li>The set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals </li></ul><ul><li>The process of establishing and sustaining competitive advantage </li></ul>
    3. 3. Competitive Advantage <ul><li>What is it? </li></ul><ul><ul><li>An edge over your rivals </li></ul></ul><ul><li>Traditional sources </li></ul><ul><ul><li>Product and process technology </li></ul></ul><ul><ul><li>Protected and regulated markets </li></ul></ul><ul><ul><li>Access to financial resources </li></ul></ul><ul><ul><li>Economies of scale </li></ul></ul><ul><li>New source </li></ul><ul><ul><li>People !!! </li></ul></ul>
    4. 4. Levels of Strategy <ul><li>Grand strategy </li></ul><ul><ul><li>Where are we going? </li></ul></ul><ul><li>Corporate </li></ul><ul><ul><li>What business are we in? </li></ul></ul><ul><li>Business-level </li></ul><ul><ul><li>How do we compete? </li></ul></ul>
    5. 5. The Strategic Management Process Implement strategies Identify mission and strategies Analyze environment Analyze organization Identify OT Identify SW Formulate strategies Feedback
    6. 6. SWOT Analysis Strength Weaknes s Opportunity Threat Where are we going?
    7. 7. Grand Strategies <ul><li>Growth </li></ul><ul><li>Stability </li></ul><ul><li>Retrenchment </li></ul>
    8. 8. WalMart…Growth (Number of Stores) 24 6,141
    9. 9. Paths to Growth: WalMart <ul><li>Direction of growth </li></ul><ul><ul><li>New stores in existing markets </li></ul></ul><ul><ul><li>Enter new markets </li></ul></ul><ul><ul><li>New product lines </li></ul></ul><ul><li>Means of growth </li></ul><ul><ul><li>Greenfield </li></ul></ul><ul><ul><li>Acquisition </li></ul></ul>
    10. 10. WalMart…International Expansion and Acquisitions *Bailed out ** Not profitable Asda 1999 (A) U.K. Seiyu (37% ownership) ** Makro, Kim’s Club * Wertkauf, Interspar * Woolco Supermercados Amigo 2002 (A) Japan 1998 (A) Korea 1997-8 (A) Germany 1995 Brazil 1996 China 1995 Argentina 1994 (A) Canada 1992 2003 (A) Puerto Rico 1991 Mexico
    11. 11. General Electric – Overall Stability Earnings Before Taxes ($M)
    12. 12. Kmart -- Decline
    13. 13. Global Strategy: Four Choices Global Strategy Transnational Strategy Multi domestic Strategy High Cost and efficiency pressures Low Low High Home Replication Strategy Pressures for local responsiveness Note that text combines global and home replication strategies
    14. 14. Corporate Level Strategy <ul><li>Strategic business units </li></ul><ul><li>Diversification </li></ul><ul><ul><li>Single business </li></ul></ul><ul><ul><li>Diversified </li></ul></ul><ul><ul><li>Vertical Integration </li></ul></ul><ul><ul><li>Conglomerate </li></ul></ul><ul><li>BCG Matrix </li></ul>
    15. 15. Dell Products <ul><li>PowerEdge servers </li></ul><ul><li>PowerVault and Dell | EMC storage products </li></ul><ul><li>Services </li></ul><ul><li>  PowerConnect switches </li></ul><ul><li>OptiPlex desktops </li></ul><ul><li>Latitude notebooks </li></ul><ul><li>Dell Precision workstations </li></ul><ul><li>Inspiron notebooks </li></ul><ul><li>Dimension desktops </li></ul><ul><li>Dell monitors </li></ul><ul><li>Dell printers </li></ul><ul><li>Axim handhelds </li></ul><ul><li>Software and Peripherals </li></ul>Single Product
    16. 16. ThyssenKrupp Diversified
    17. 17. <ul><li>Alcoa at a Glance </li></ul><ul><li>Alcoa is the world’s leading producer of primary aluminum, fabricated aluminum, and alumina and is active in all major aspects of the industry. </li></ul><ul><li>Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation, and industrial markets , bringing design, engineering, production, and other capabilities of Alcoa’s businesses as a single solution to customers. </li></ul><ul><li>In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap® aluminum foil, Alcoa® wheels, and Baco® household wraps. Among its other businesses are vinyl siding, closures, precision castings, and electrical distribution systems for cars and trucks. </li></ul>Vertical Integration
    18. 18. Sara Lee Household Products Headquarters Food and Beverage Intimates and Underwear Conglomerate
    19. 19. Another Conglomerate
    20. 20. BCG Matrix Stars Cash Cows Dogs Problem Children Market Growth Low High Market Share Low High
    21. 21. What Business Are We In? <ul><li>What are our core competencies? </li></ul><ul><li>Who are our customers? </li></ul><ul><li>Economies of scale </li></ul><ul><li>Economies of scope </li></ul>
    22. 22. Business-Level Strategy <ul><li>Porter’s Five Forces </li></ul><ul><li>Generic strategies </li></ul><ul><li>Value chain </li></ul>
    23. 23. Porter’s Five Forces <ul><li>Bargaining power of suppliers </li></ul><ul><li>Bargaining power of buyers </li></ul><ul><li>Threat of substitutes </li></ul><ul><li>Potential new entrants to the market </li></ul><ul><li>Rivalry among current competitors </li></ul>
    24. 24. Porter’s Five Generic Strategies <ul><li>Low-cost leadership </li></ul><ul><li>Broad differentiation </li></ul><ul><li>Best-cost provider </li></ul><ul><li>Focused or market niche / cost </li></ul><ul><li>Focused or market niche / differentiation </li></ul>
    25. 25. Value Chain Analysis <ul><li>How are we creating value for customers? </li></ul><ul><li>Where can costs be reduced? </li></ul>
    26. 26. The Value Chain Operations Sales and Marketing Raw Materials Distribution Customer Service Product R &D, Technology, Systems Development Human Resource Management General Administration Support Activities
    27. 27. Strategy Implementation <ul><li>Leadership </li></ul><ul><li>Structure and design </li></ul><ul><li>Information and control systems </li></ul><ul><li>Human resources </li></ul>