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Strategic mgmt & bus policy by thomas l. wheelen (10th edition)

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Strategic mgmt & bus policy by thomas l. wheelen (10th edition)

  1. 1. CHAPTER 1 Basic Concepts of Strategic Management STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-1
  2. 2. Basic Concepts of Strategic Management Globalization Internationalization of markets and corporations Global (worldwide) markets rather than national markets Electronic Commerce Use of the Internet to conduct business transactions Basis for competition on a more strategic level rather than traditional focus on product features and costs 1-2
  3. 3. Basic Concepts of Strategic Management Electronic Commerce -- Trends • Forcing company transformation • Market access & branding changing – disintermediation of traditional distribution channels • Balance of power shift to consumer • Competition changing 1-3
  4. 4. Basic Concepts of Strategic Management Electronic Commerce -- Trends • Pace of business increasing • Internet purchasing beyond traditional boundaries • Knowledge key asset – source of competitive advantage 1-4
  5. 5. Strategic Management Defined Set of managerial decisions and actions that determines the long-run performance of a firm. 1-5
  6. 6. Basic Concepts of Strategic Management 4 Phases of Strategic Management 1. Basic financial planning 2. Forecast-based planning 3. Externally-oriented planning 4. Strategic management 1-6
  7. 7. Basic Concepts of Strategic Management Highly Rated Benefits • Clearer sense of strategic vision • Sharper focus on strategic importance • Improved understanding of changing environment 1-7
  8. 8. Basic Concepts of Strategic Management Not Always a Formal Process • Where is the organization now? (not where do we hope it is) • If no changes are made, where will the organization be in 1,2,5 or 10 years? • What specific actions should management undertake? • What are the risks and payoffs? 1-8
  9. 9. Basic Concepts of Strategic Management Basic Elements of the Strategic Management Process 1-9
  10. 10. Environmental Scanning Defined Monitoring, evaluation, and disseminating information from external and internal environments –to key people in the firm 1-10
  11. 11. Basic Concepts of Strategic Management Environmental Variables 1-11
  12. 12. Environmental Scanning SWOT Analysis • Strengths – Weaknesses • Opportunities - Threats 1-12
  13. 13. Strategy Formulation Development of long-range plans for effective management of opportunities and threats in light of corporate strengths and weaknesses 1-13
  14. 14. Strategy Formulation Mission Statement • Purpose/reason for organization • Promotes shared expectations • Communicates public image • Who we are; what we do; what we aspire to 1-14
  15. 15. Organizational Adaptation Organization “fit” with environment • Theory of population ecology • Institution theory • Strategic choice perspective • Organizational learning theory 1-15
  16. 16. Organizational Adaptation Strategic flexibility • Demands long-term commitment to development of critical resources • Demands firm become a learning organization 1-16
  17. 17. Learning Organizations An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights 1-17
  18. 18. Learning Organizations 4 Chief Activities • Systematic problem solving • New approach experimentation • Learning from experiences • Intra-organization knowledge transfer 1-18
  19. 19. Basic Concepts of Strategic Management Hierarchy of Strategy 1-19
  20. 20. Goals & Objectives Corporate Goals/Objectives –Profitability (net profit) –Growth –Resource utilization (ROE, ROI) –Market leadership 1-20
  21. 21. Basic Concepts of Strategic Management 3 Types of Strategy –Corporate strategy –Business strategy –Functional strategy 1-21
  22. 22. Basic Concepts of Strategic Management Corporate Strategy –Stability –Growth –Retrenchment 1-22
  23. 23. Basic Concepts of Strategic Management Business Strategy –Competitive strategies –Cooperative strategies 1-23
  24. 24. Basic Concepts of Strategic Management Functional Strategy –Technological leadership –Technological followership 1-24
  25. 25. Basic Concepts of Strategic Management Strategic Decision-Making Process 1-25
  26. 26. Strategic Decision Making Strategic Decisions –Rare –Consequential –Directive 1-26
  27. 27. Strategic Decision Making Mintzberg’s Modes –Entrepreneurial mode –Adaptive mode –Planning mode –Logical incrementalism 1-27
  28. 28. Hambrick and Fredrickson – Good Strategy 5 Elements of Good Strategy 1. Arenas 2. Vehicles 3. Differentiators 4. Staging 5. Economic logic 1-28
  29. 29. CHAPTER 2 Corporate Governance 1-29
  30. 30. CHAPTER 2 Corporate Governance STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-30
  31. 31. Corporate Governance 1-31
  32. 32. Corporate Governance The relationship among the board of directors, top management, and shareholders – determining the direction and performance of the corporation 1-32
  33. 33. Corporate Governance Role of Board –Monitor –Evaluate and influence –Initiate and determine 1-33
  34. 34. Board of Directors Continuum 1-34
  35. 35. Board of Directors Members -- –Inside directors •“management directors” •Officers or execs employed by the firm –Outside directors •“non-management directors” •Execs of other firms not employed by the board’s corporation 1-35
  36. 36. Agency Theory Agency Problem – –Objectives of owners & agents in conflict –Difficult for owners to verify agent performance Risk Sharing Problem – –Owners & agents risk assessment in conflict 1-36
  37. 37. Stewardship Theory Executives more motivated to act in best interest of the corporation than their own self-interests. Theory that over time, senior executives tend to view corporation as extension of selves. 1-37
  38. 38. Board of Directors When Outsiders can be considered Insiders –Affiliated Directors –Retired Directors –Family Directors 1-38
  39. 39. Board of Directors Codetermination –The inclusion of a corporation’s employees on its board of directors 1-39
  40. 40. Board of Directors Interlocking Directorates –Direct Interlocking –Indirect Interlocking 1-40
  41. 41. Board of Directors Nominations & Elections –Traditional Approach •CEO invitation to membership •Shareholders approval in annual proxy statement •All nominees usually elected 1-41
  42. 42. Board of Directors Nominations & Elections –Staggered Board Approach •Staggered terms of service/election 1-42
  43. 43. Board of Directors Sarbanes-Oxley –Code of Ethics –Audit, Nominating, and Compensation Committees all outside directors 1-43
  44. 44. Board of Directors Organization of the Board –Size •Charter & Bylaws Determination 1-44
  45. 45. Board of Directors Corporate Governance –Review & shaping of strategy –Pressure for corporate performance –Demand for executive stock ownership –Outside directors increasing –Impact of Sarbanes-Oxley 1-45
  46. 46. Board of Directors Transformational leaders –Change agents through vision for change 1-46
  47. 47. Board of Directors Successful CEO’s –Strategic vision –Passion for the company –Strong communication –charisma 1-47
  48. 48. Board of Directors Executive Leadership –Strategic vision –Role model 1-48
  49. 49. Board of Directors Executive Leadership –Communication of performance standards –Demonstrates confidence in abilities of followers 1-49
  50. 50. Strategic Management Process Strategic Planning Staff –Supports top management & business units in the strategic planning process 1-50
  51. 51. Strategic Management Process Strategic Planning Staff –Identify & analyze company-wide strategic issues –Generate strategic alternatives 1-51
  52. 52. Strategic Management Process Strategic Planning Staff –Facilitate business units in coordinating activities related to strategic planning process 1-52
  53. 53. CHAPTER 3 Ethics & Social Responsibility 1-53
  54. 54. CHAPTER 3 Ethics & Social Responsibility STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-54
  55. 55. Ethics & Social Responsibility 1-55
  56. 56. Corporate Governance Broader responsibility -- Private corporations have responsibility to society that extend beyond making a profit 1-56
  57. 57. Social Responsibility Milton Friedman There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. 1-57
  58. 58. Corporate Governance Carroll’s 4 Responsibilities –Economic –Legal –Ethical –Discretionary 1-58
  59. 59. Carroll’s 4 Responsibilities 1-59
  60. 60. Corporate Stakeholders Affect or are affected by the achievement of the corporation’s objectives 1-60
  61. 61. Corporate Stakeholders Stakeholder Analysis – –Primary stakeholder •Sufficient bargaining power to affect outcomes –Secondary stakeholder •Indirect stake but are affected by corporation’s actions –Stakeholder Input •Determine whether input is necessary 1-61
  62. 62. Ethical Behavior “business ethics” –Argument that there is no such thing … it is an oxymoron 1-62
  63. 63. Ethical Decision Making Corporate practices -- –Massive write-downs and restatements of profit –Misclassification of expenses as capital expenditures –Pirating corporate assets for personal gain 1-63
  64. 64. Ethical Decision Making Recent Survey Results -- –70% distrust business executives –Enron –WorldCom 1-64
  65. 65. Reasons for Unethical Behavior Provocative Question -- –Why are businesspeople perceived to be acting unethically? 1-65
  66. 66. Reasons for Unethical Behavior Perceptions caused by -- –Not aware of impropriety –Cultural norms and values vary –Governance systems based on rule or relationships –Differences in values between businesspeople and key stakeholders 1-66
  67. 67. Reasons for Unethical Behavior Allport-Vernon-Lindzey Study of Values -- –Aesthetic –Economic –Political –Religious –Social –Theoretical 1-67
  68. 68. Reasons for Unethical Behavior Most common reasons for bending rules -- –Organizational performance required it –Ambiguous or out of date rules –Pressure from others – everyone else does it 1-68
  69. 69. Moral Relativism Morality is relative to some personal, social, or cultural standard and there is no method for deciding whether one decision is better than another. 1-69
  70. 70. Kohlberg’s Levels of Moral Development 1. Preconventional level –Characterized by a concern for self •Personal interest •Avoidance of punishment 1-70
  71. 71. Kohlberg’s Levels of Moral Development 2. Conventional level –Characterized consideration of society’s values •External code of conduct 1-71
  72. 72. Kohlberg’s Levels of Moral Development 3. Principled level –Characterized by adherence to internal moral code •Universal values or principles 1-72
  73. 73. Encouraging Ethical Behavior Codes of Ethics –Specifies how an organization expects its employees to behave on the job. 1-73
  74. 74. Encouraging Ethical Behavior Guidelines for Ethical Behavior –Ethics –Morality –Law 1-74
  75. 75. Encouraging Ethical Behavior Approaches to Ethical Behavior –Utilitarian •Judged by consequences –Individual Rights •Fundamental rights in all decisions –Justice •Distribution in equitable fashion 1-75
  76. 76. Encouraging Ethical Behavior Approaches to Ethical Behavior –Categorical imperative •“golden rule” •Means - Ends 1-76
  77. 77. Strategy Bits 192 U.S. companies surveyed -- –92% monitored employees use of e-mail/Internet –26% monitored employees electronic activities all the time –Almost none had checks in place to protect employees privacy 1-77
  78. 78. CHAPTER 4 Environmental Scanning and Industry Analysis 1-78
  79. 79. CHAPTER 4 Environmental Scanning and Industry Analysis STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-79
  80. 80. Environmental Scanning Societal environment -- –Economic forces –Technological forces –Political-legal forces –Sociocultural forces 1-80
  81. 81. Societal Environment Economic Forces -- –Regulate exchange of materials, money, energy and information 1-81
  82. 82. Societal Environment Technological Forces -- –Generate problem-solving inventions 1-82
  83. 83. Societal Environment Political-legal Forces -- –Allocate power; provide laws and regulations 1-83
  84. 84. Societal Environment Sociocultural Forces -- –Regulate values, mores, and customs of society 1-84
  85. 85. Task Environment Task environment -- –Elements or groups that directly affect a corporation and are affected by it 1-85
  86. 86. Task Environment Industry Analysis -- –In-depth examination of key factors within a corporation’s task environment 1-86
  87. 87. Variables in Societal Environment 1-87
  88. 88. Demographic Trends 1-88
  89. 89. Transformational Sociocultural Trends 8 Current Trends – –Increasing environmental awareness –Growing health consciousness –Expanding seniors market –Impact of the Generation Y boomlet –Declining mass market –Changing pace and location of life –Changing household composition –Increasing diversity of workforce & market 1-89
  90. 90. International Societal Environments 1-90
  91. 91. Scanning the Task Environment 1-91
  92. 92. Ethical Behavior “business ethics” –Argument that there is no such thing … it is an oxymoron 1-92
  93. 93. Ethical Decision Making Corporate practices -- –Massive write-downs and restatements of profit –Misclassification of expenses as capital expenditures –Pirating corporate assets for personal gain 1-93
  94. 94. External Strategic Factors Strategic myopia -- –Willingness to reject unfamiliar as well as negative information 1-94
  95. 95. Issues Priority Matrix 1-95
  96. 96. Analyzing the Task Environment 1-96
  97. 97. Porter’s Approach to Industry Analysis Threat of New Entrants – –Economies of scale –Product differentiation –Capital requirements –Switching costs –Access to distribution channels –Cost disadvantages –Government policy 1-97
  98. 98. Porter’s Approach to Industry Analysis Rivalry Among Existing Firms – –Number of competitors –Rate of industry growth –Product or service characteristics –Amount of fixed costs –Capacity –Height of exit barriers –Diversity of rivals 1-98
  99. 99. Porter’s Approach to Industry Analysis •Threat of Substitute Products or Services •Bargaining Power of Buyers •Bargaining Power of Suppliers •Relative Power of Other Stakeholders 1-99
  100. 100. Industry Evolution Fragmented Industry – –No dominant industry 1-100
  101. 101. Industry Evolution Consolidated Industry – –Dominated by a few large firms 1-101
  102. 102. International Risk Assessment Continuum of International Industries 1-102
  103. 103. Strategic Groups 1-103
  104. 104. Strategic Types General Types – •Defenders •Prospectors •Analyzers •Reactors 1-104
  105. 105. Competitive Intelligence Called business intelligence Gathering information on a company’s competitors 1-105
  106. 106. Forecasting Forecasting Techniques -- –Extrapolation –Brainstorming –Expert opinion –Delphi technique –Statistical modeling –Scenario writing 1-106
  107. 107. Synthesis of External Factors -- EFAS 1-107
  108. 108. CHAPTER 5 Internal Scanning: Organizational Analysis 1-108
  109. 109. CHAPTER 5 Internal Scanning: Organizational Analysis STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-109
  110. 110. Resource-Based Approach to Organizational Analysis Internal strategic factors -- –Critical strengths and weaknesses that are likely to determine if the firm will be able to take advantage of opportunities while avoiding threats 1-110
  111. 111. Resource-Based Approach to Organizational Analysis •Resources •Capabilities •Competency •Core competency •Distinctive competency 1-111
  112. 112. Core and Distinctive Competencies VRIO Framework -- –Value –Rareness –Imitability –Organization 1-112
  113. 113. Resource-Based Approach to Organizational Analysis 5-Step Approach Strategy Analysis -- 1. Identify and classify resources 2. Combine strengths into capabilities 3. Appraise profit potential of capabilities 4. Select strategy that best exploits 5. Identify resource gaps invest in weaknesses 1-113
  114. 114. Continuum of Sustainability 1-114
  115. 115. Sustainability of Advantage Durability -- –Rate at which a firm’s underlying resources and capabilities depreciate or become obsolete 1-115
  116. 116. Sustainability of Advantage Imitability -- –Rate at which a firm’s underlying resources and capabilities can be duplicated by others 1-116
  117. 117. Sustainability of Advantage Core Competency can be imitated -- –Transparency –Transferability –Replicability 1-117
  118. 118. Business Models Company’s method for making money in the current business environment. 1-118
  119. 119. Business Models Types of Models -- –Customer Solutions Model –Profit Pyramid Model –Multi-Component System/Installed Base Model –Advertising Model –Switchboard Model 1-119
  120. 120. Business Models Types of Models -- –Time Model –Efficiency Model –Blockbuster Model –Profit Multiplier Model –Entrepreneurial Model –De Facto Standard Model 1-120
  121. 121. Value-Chain Analysis Linked set of value-creating activities beginning with basic raw material and ending with distributors getting final goods into hands of customers 1-121
  122. 122. Value-Chain Analysis Typical Value Chain for a Manufactured Product 1-122
  123. 123. Corporate Value-Chain Analysis •Primary activities •Support activities 1-123
  124. 124. Corporation’s Value Chain 1-124
  125. 125. Scanning Functional Resources & Capabilities Basic Organizational Structures -- –Simple structure –Functional structure –Divisional structure –Strategic business units (SBU’s) –Conglomerate structure 1-125
  126. 126. Basic Organizational Structures 1-126
  127. 127. Corporate Culture Collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted from one generation of employees to another 1-127
  128. 128. Strategic Marketing Issues –Market Position & Segmentation –Marketing Mix –Product Life Cycle –Brand & Corporate Reputation 1-128
  129. 129. Product Life Cycle 1-129
  130. 130. Strategic Financial Issues –Financial leverage –Capital budgeting 1-130
  131. 131. Strategic Research & Development Issues –R&D Intensity –Technological Competence –Technology Transfer 1-131
  132. 132. Technological Discontinuity 1-132
  133. 133. Strategic Human Resource Management Issues HRM – –Increasing use of teams –Union relations –Temporary workers –Quality of work life –Human diversity 1-133
  134. 134. Internal Factor Analysis Summary Table 1-134
  135. 135. CHAPTER 6 Strategy Formulation: Situation Analysis & Business Strategy 1-135
  136. 136. CHAPTER 6 Strategy Formulation: Situation Analysis & Business Strategy STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-136
  137. 137. Situational Analysis Strategy formulation -- –Strategic planning or long-range planning •Develops mission, objectives, strategies, policies 1-137
  138. 138. Situational Analysis --process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses 1-138
  139. 139. IFAS – Maytag as Example 1-139
  140. 140. EFAS – Maytag as Example 1-140
  141. 141. SFAS Matrix 1-141
  142. 142. Situational Analysis Niche -- –Need in the marketplace that is currently unsatisfied 1-142
  143. 143. Situational Analysis Corporate Goal -- –Find propitious niche –Strategic window 1-143
  144. 144. Situational Analysis SWOT -- –Internal •Strengths/Weaknesses –External •Opportunities/Threats 1-144
  145. 145. TOWS Matrix 1-145
  146. 146. Business Strategy Focuses on improving competitive position of company’s products or services within the specific industry or market segment 1-146
  147. 147. Porter’s Competitive Strategies Competitive Strategy -- –Low cost –Differentiation –Direct competition –Focus on niche 1-147
  148. 148. Porter’s Competitive Strategies Generic Competitive Strategies -- –Lower Cost strategy •Greater efficiencies than competitors –Differentiation strategy •Unique/superior value, quality, features, service 1-148
  149. 149. Porter’s Competitive Strategies Competitive Advantage -- –Determined by Competitive Scope •Breadth of the target market 1-149
  150. 150. Porter’s Competitive Strategies 1-150
  151. 151. Porter’s Competitive Strategies Cost Leadership -- –Low-cost competitive strategy –Broad mass market –Efficient-scale facilities –Cost reductions –Cost minimization 1-151
  152. 152. Porter’s Competitive Strategies Differentiation – –Broad mass market –Unique product/service –Premiums charged –Less price sensitivity 1-152
  153. 153. Porter’s Competitive Strategies Cost-Focus – –Low-cost competitive strategy –Focus on market segment –Niche focused –Cost advantage in market segment 1-153
  154. 154. Porter’s Competitive Strategies Differentiation Focus – –Specific group or geographic market focus –Differentiation in target market –Special needs of narrow target market 1-154
  155. 155. Porter’s Competitive Strategies Stuck in the middle – –No competitive advantage –Below-average performance 1-155
  156. 156. Risks of Generic Strategies Risks of Cost Leadership Risks of Differentiation Risks of Focus Risks of Cost Leadership Cost leadership is not Risks of Differentiation Differentiation is not Risks of Focus The focus strategy is Cost leadership is not sustained: Differentiation is not sustained: The focus strategy is imitated: • sustained: imitate. Competitors • sustained: imitate. Competitors imitated: The target segment becomes • Competitors imitate. • Technology changes. • Competitors imitate. • Bases for differentiation The target segment becomes structurally unattractive: • • Technology changes. Other bases for cost • Bases less important to become for differentiation • structurally unattractive: Structure erodes. • Other bases for cost leadership erode. buyers. less important to become • Structure erodes. • Demand disappears. leadership erode. Proximity in differentiation is buyers. Cost proximity is lost. • Demand disappears. Broadly targeted competitors Proximity in differentiation is lost. Cost proximity is lost. Differentiation focusers Broadly targeted competitors overwhelm the segment: lost. Cost focusers achieve even Differentiation focusers achieve even greater • overwhelm the segment: The segment’s lower cost in segments. even Cost focusers achieve differentiation ingreater achieve even segments. • The segment’sother differences from lower cost in segments. differentiation in segments. segments narrow. other differences from segments narrow. • The advantages of a •broad advantages of a The line increase. Newbroad linesubsegment focusers increase. New focusers subsegment the industry. the industry. 1-156
  157. 157. 8 Dimensions of Quality 1-157
  158. 158. Competitive Strategy Industry Structure -- –Fragmented Industry –Consolidated Industry 1-158
  159. 159. Competitive Tactics Timing Tactics -- –First mover –Late movers 1-159
  160. 160. Competitive Tactics Market Location Tactics -- –Frontal Assault –Flanking Maneuver –Bypass Attack –Encirclement –Guerrilla Warfare 1-160
  161. 161. Competitive Tactics Defensive Tactics -- –Raise structural barriers –Increase expected retaliation –Lower the inducement for attack 1-161
  162. 162. Cooperative Strategies •Collusion •Strategic Alliances •Mutual service consortia •Joint ventures •Licensing arrangements •Value-chain partnerships 1-162
  163. 163. CHAPTER 7 Strategy Formulation: Corporate Strategy 1-163
  164. 164. CHAPTER 7 Strategy Formulation: Corporate Strategy STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-164
  165. 165. Corporate Strategy 3 Key Issues – –Firm’s directional strategy –Firm’s portfolio strategy –Firm’s parenting strategy 1-165
  166. 166. Corporate Directional Strategies 1-166
  167. 167. Corporate Strategy Directional Strategy – –Orientation toward growth •Expansion, contraction, status quo •Concentration or diversification •Internal development or acquisitions, mergers, or alliances 1-167
  168. 168. Corporate Strategy Directional Strategy – –3 Grand Strategies •Growth strategies •Stability strategies •Retrenchment strategies 1-168
  169. 169. Corporate Strategy Growth Strategies -- –External mechanisms •Mergers •Acquisitions •Strategic alliances 1-169
  170. 170. Corporate Strategy Growth Strategies -- –2 Basic forms •Concentration •Diversification 1-170
  171. 171. Corporate Strategy Basic Concentration Strategies -- –Vertical growth –Horizontal growth 1-171
  172. 172. Corporate Strategy Vertical Growth -- –Vertical integration •Full integration •Taper integration •Quasi-integration •Long-term contract 1-172
  173. 173. Corporate Strategy Vertical Growth -- –Backward integration –Forward integration 1-173
  174. 174. Corporate Strategy Concentration -- –Horizontal Growth •Horizontal integration 1-174
  175. 175. Corporate Strategy Basic Diversification Strategies -- –Concentric Diversification –Conglomerate Diversification 1-175
  176. 176. Corporate Strategy Concentric Diversification -- –Growth into related industry –Search for synergies 1-176
  177. 177. Corporate Strategy Conglomerate diversification -- –Growth into unrelated industry –Concern with financial considerations 1-177
  178. 178. Corporate Strategy International Entry Options -- –Exporting –Licensing –Franchising –Joint Ventures –Acquisitions –Green-Field Development 1-178
  179. 179. Corporate Strategy International Entry Options -- –Production Sharing –Turnkey Operation –BOT Concept (Build, Operate, Transfer) –Management Contracts 1-179
  180. 180. Corporate Strategy Stability Strategies -- –Pause/proceed with caution –No change –Profit strategies 1-180
  181. 181. Corporate Strategy Retrenchment Strategies -- –Turnaround –Captive Company Strategy –Selling out –Bankruptcy –Liquidation 1-181
  182. 182. Corporate Strategy Portfolio Analysis -- –Resource commitment on best products to ensure continued success –Resource commitment on new costly products high risk 1-182
  183. 183. BCG Matrix (Portfolio Analysis) 1-183
  184. 184. GE Business Screen (Portfolio Analysis) C Winners Winners A Question High B Marks D Industry Attractiveness Winners E Average Businesses Medium F Losers H Losers G Low Profit Producers Losers Strong Average Weak Business Strength/Competitive Position 1-184
  185. 185. Corporate Strategy Corporate Parenting Strategy -- –Strategic factors –performance improvement –Analyze fit 1-185
  186. 186. CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice 1-186
  187. 187. CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-187
  188. 188. Functional Strategy The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity 1-188
  189. 189. Functional Strategy Marketing Strategy – –Pricing –Selling –Distribution 1-189
  190. 190. Functional Strategy Marketing Strategy – –Product development •Line extension 1-190
  191. 191. Functional Strategy Marketing Strategy – –Advertising and promotion •Push strategy •Pull strategy 1-191
  192. 192. Functional Strategy Marketing Strategy – –Pricing •Skim pricing •Penetration pricing •Dynamic pricing 1-192
  193. 193. Functional Strategy Financial Strategy – –Leveraged buyout –Reversed stock split –Tracking stock 1-193
  194. 194. Functional Strategy R&D Strategy – –Technological leader –Technological follower –Open innovation 1-194
  195. 195. Functional Strategy Operations Strategy – –Job shop –Connected line batch flow –Flexible manufacturing systems –Dedicated transfer lines –Mass production –Continuous improvement system –Modular manufacturing 1-195
  196. 196. Functional Strategy Purchasing Strategy – –Multiple sourcing –Sole sourcing –Just-in-time (JIT) –Parallel sourcing 1-196
  197. 197. Functional Strategy Logistics Strategy – –Centralization –Outsourcing –Internet 1-197
  198. 198. Functional Strategy HRM Strategy – –360 degree appraisal 1-198
  199. 199. Functional Strategy Outsourcing errors – –Activities that should not be outsourced –Wrong vendor selection –Writing poor contract –Overlooking personnel issues –Hidden costs of outsourcing –Failing to plan exit strategy 1-199
  200. 200. Proposed Outsourcing Matrix 1-200
  201. 201. Functional Strategy Strategies to Avoid – –3 Follow the leader –Hit another home run –Arms race –Do everything –Losing hand 1-201
  202. 202. Corporate Strategy Growth Strategies -- –External mechanisms •Mergers •Acquisitions •Strategic alliances 1-202
  203. 203. Constructing Corporate Scenarios 1-203
  204. 204. Functional Strategy Subjective Factors Affecting Decisions -- –Management’s attitude toward risk –Pressures from stakeholders –Pressures from corporate culture –Needs and desires of key managers 1-204
  205. 205. Stakeholder Priority Matrix 1-205
  206. 206. Strategic Choice Avoiding the Consensus Trap -- –Devil’s Advocate –Dialectical Inquiry 1-206
  207. 207. Strategic Choice Evaluation of Strategic Alternatives -- –Mutual exclusivity –Success –Completeness –Internal consistency 1-207
  208. 208. CHAPTER 9 Strategy Implementation: Organizing for Action 1-208
  209. 209. CHAPTER 9 Strategy Implementation: Organizing for Action STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1-209
  210. 210. Strategy Implementation --Sum total of activities & choices required for strategic plan execution --Strategy implementation through programs, budgets, and procedures 1-210
  211. 211. Strategy Implementation Key Implementation Questions – –Who carries out strategic plan? –What needs doing for alignment w/ strategy? –How is work coordinated? 1-211
  212. 212. Strategy Implementation Programs – –Action oriented –Matrix of change •Feasibility •Sequence of execution •Location •Pace & nature of change •Stakeholder evaluations 1-212
  213. 213. The Matrix of Change 1-213
  214. 214. Strategy Implementation Achieving Synergy – –Shared know-how –Coordinated strategies –Shared tangible resources 1-214
  215. 215. Strategy Implementation Achieving Synergy – –Economies of scale or scope –Pooled negotiating power –New business creation 1-215
  216. 216. Strategy Implementation Structure follows strategy – –New strategy is created –New administrative problems emerge –Economic performance declines –New appropriate structure is invented –Profit returns to previous level 1-216
  217. 217. Strategy Implementation Stages of Corporate Development – –Stage I: Simple structure –Stage II: Functional structure –Stage III: Divisional structure –Stage IV: Beyond SBU’s 1-217
  218. 218. Strategy Implementation Blocks to Changing Stages – –Loyalty to comrades –Task oriented –Single-mindedness –Working in isolation 1-218
  219. 219. Organizational Life Cycle 1-219
  220. 220. Changing Structural Characteristics of Modern Organizations 1-220
  221. 221. Strategy Implementation Advanced Types of Organizational Structures – –Matrix •Temporary cross-functional task forces •Product/brand management •Mature matrix 1-221
  222. 222. Strategy Implementation Advanced Types of Organizational Structures – –Network structure (virtual organization) –Cellular organization 1-222
  223. 223. Network Structure 1-223
  224. 224. Strategy Implementation Six Sigma – –Define –Measure –Analyze –Improve –Establish 1-224
  225. 225. Strategy Implementation Job design to implement strategy – –Job enlargement –Job rotation –Job enrichment –Job characteristics model 1-225
  226. 226. Strategy Implementation International Issues – –MNC’s –International Strategic Alliances 1-226
  227. 227. Strategy Implementation International Development Stages– –Domestic company –Domestic company w/export division –Domestic company w/int’l division –MNC w/multidomestic emphasis –MNC w/global emphasis 1-227
  228. 228. Strategy Implementation Centralization vs. Decentralization– –Product-group structure –Geographic-area structure 1-228
  229. 229. Geographic Area Structure 1-229
  230. 230. 1-230

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