Comstrat

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Robert Javier

Business Technology

Aggressive Construction of
Efficient Scale Facilities
Vigorous Pursuit of cost
reductions from experience
Tight cost and
overhead cost
It requires...

TECHNOLOGY
TECHNOLOGY
TECHNOLOGY
TECHNOLOGY
TECHNOLOGY

CREATES A DEFENSIVE
POSITION AGAINST
COMPETITIVE 5
FORCES!

DIFFERENTIATION
PROBLEMS
•  Low-cost competitors become
too great to counter.
•  The need for differentiation
falls.
•  Imitation products
progressively narrows
perceived differentiation.

Other
requirements of
the generic
Strategies

•  To
answer
a
ques,on,
raise
your
hand
with
a

hangloose
hand
sign

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Pengantar ilmu manajeman, khususnya dalam bab strategi manajemen Grant, R. M. (2016). Contemporary Strategy Analysis: Text and Cases. 9th Edition. UK: John Wiley & Sons. Hitt, Michael A., Ireland, R. Duane, and Hoskisson, Robert E. (2017). Strategic Management: Concepts and Cases: Competitiveness and Globalization, 12th Edition. Boston, USA: Cengage Learning. Robbins, Stephen P. and Coulter, Mary. 2016. Management 13th Edition. Pearson Education. 3 key influences: The value of the product to customers The intensity of competition Relative bargaining power at different stages of the value chain. OBJECTIVES What are competitor’s current goals? Is performance meeting there goals? How are its goals likely to change? ADOPTING BEST PRACTICES AND EMPLOYING PROCESS MANAGEMENT TOOLS

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Strategy Development Week 3 Objectives Week 3Develop strategic objectives. Create organizational objectives and goals. Articulate value proposition, key activities, resources, and channels to market. Quote…… “Successful business strategy is about actively shaping the game you play, not just playing the game you find.” Adam M. Brandenburger and Barry J. Nalebuff Quote…… “The essence of strategy lies in creating tomorrow’s competitive advantage faster than competitors mimic the ones you posses today” Gary Hamel and C.K. Prahalad Quote…… “Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value”. —Michael E. Porter Quote…… “Winners in business play rough and don’t apologize for it. The nicest part of playing hardball is watching your competitors squirm” —George Stalk, Jr., and Rob Lachenauer” Long-Term ObjectivesStrategic managers recognize that short-run profit maximization is rarely the best approach to achieving sustained corporate growth and profitability.Strategic decision makers confronts: Should they eat the seeds to improve the near-term profit picture and make large dividend payments through cost-saving measures such as laying off workers during periods of slack demand, selling off inventories, or cutting back on research and development? Or should they sow the seeds in the effort to reap long-term rewards by reinvesting profits in growth opportunities, committing resources to employee training, or increasing advertising expenditures? Long-Term ObjectivesTo achieve long-term prosperity, strategic planners commonly establish long-term objectives in seven areas: Profitability Competitive PositionEmployee RelationsTechnological Leadership Productivity – In-OutEmployee DevelopmentPublic Responsibility Qualities of Long-Term ObjectivesWhat distinguishes a good objective from a bad one? What qualities of an objective improve its chances of being attained?There are five criteria that should be used in preparing long-term objectives: Flexible Measurable Motivating Suitable Understandable The Balanced ScorecardThe balanced scorecard is a set of measures that are directly linked to the company’s strategy Developed by Robert S. Kaplan and David P. Norton, it directs a company to link its own long-term strategy with tangible goals and actions. The scorecard allows managers to evaluate the company from four perspectives: financial performance customer knowledge internal business processes learning and growth The Balance Scorecard The Balance Scorecard The Balance ScorecardPerspectiveObjectiveKPIGoal for 2014FinanceBecome industry Cost Leader% Reduction in Cost per Unit20%Utilization of AssetsUtilization Rate7%Increase Market ShareMarket Share30%CustomerCustomer Retention% Retention 75%On Time Delivery% of On Time Delivery90%Zero Defects% of Good Quality.

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CHAPTER 5 Business-Level Strategy: Creating and Sustaining Competitive Advantages Copyright Anatoli Styf/Shutterstock 1 Sustaining a Competitive Advantage Business-level strategies require a choice. How to overcome the five forces and achieve competitive advantage? Suggestion – Use Porter’s three generic strategies. Overall cost leadership Differentiation Focus ©McGraw-Hill Education. Business-level strategy is a strategy designed for a firm or a division of the firm that competes within a single business. Generic strategies = basic types of business level strategies based on breadth of target market (industrywide versus narrow market segment) and type of competitive advantage (low-cost versus uniqueness). 2 Three Generic Strategies (1 of 3) Exhibit 5.1 Three Generic Strategies Source: Adapted from Competitive Strategy: Techniques for Analyzing Industries and Competitors. Michael E Porter, 1980, 1998, Free Press. Jump to Appendix 1 for long image description. ©McGraw-Hill Education. The overall cost leadership and differentiation strategies strive to attain advantages industrywide, while focusers have a narrow target market in mind. Generic strategies are plotted on two dimensions: competitive advantage and market served. 3 Three Generic Strategies (2 of 3) Overall cost leadership is based on: Creating a low-cost position relative to a firm’s peers Managing relationships throughout the entire value chain to lower costs Differentiation implies: Products and/or services that are unique & valued Emphasis on nonprice attributes for which customers will gladly pay a premium A focus strategy requires: Narrow product lines, buyer segments, or targeted geographic markets Advantages obtained either through differentiation or cost leadership ©McGraw-Hill Education. Overall cost leadership = a firm’s generic strategy based on appeal to the industrywide market using a competitive advantage based on low-cost. Differentiation = a firm’s generic strategy based on creating differences in the firm’s product or service offering by creating something that is perceived industrywide as unique and valued by customers. Focus = a firm’s generic strategy based on appeal to a narrow market segment within an industry. 4 Three Generic Strategies (3 of 3) Exhibit 5.2 Competitive Advantage and Business Performance ParticularsDifferentiation and CostDifferentiationCostDifferentiation and FocusCost and FocusStuck in the MiddleReturn on Investment (%)35.532.930.217.023.717.8Sales growth (%)15.113.513.516.417.512.2Gain in market share (%)5.35.35.56.16.34.4Sample Size12316010014186105 ©McGraw-Hill Education. Both casual observation and research supports the notion that firms that identify with one or more of the forms of competitive advantage outperform those that do not. According to the above study, businesses combining multiple forms of competitive advantage (differentiation and overall cost leadership) outperformed businesses that u ...

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Comstrat

1. Generic Competitive strategies Group1

2. INTR ODUC TION

3. Overall Cost Leadership

4. Aggressive Construction of Efficient Scale Facilities Vigorous Pursuit of cost reductions from experience Tight cost and overhead cost It requires...

5. So basically... Cost Reduction

6. DIFFERE NTATION

7. DESIGN DESIGN

8. TECHNOLOGY TECHNOLOGY TECHNOLOGY TECHNOLOGY TECHNOLOGY

9. CUSTOMER Service

10. SUPPLIER OR DEALER

11. CREATES A DEFENSIVE POSITION AGAINST COMPETITIVE 5 FORCES!

12. Brand LOYALTY

13. Increases Profit Margins

14. DIFFERENTIATION PROBLEMS •  Low-cost competitors become too great to counter. •  The need for differentiation falls. •  Imitation products progressively narrows perceived differentiation.

15.

16. Other requirements of the generic Strategies

17. Overall Cost Leadership

18. DIFFERE NTATION

19.

20. SUMMARY TABLE

21. STUCK IN THE MIDDLE

22. Conclusion Conclusion Conclusion

23. Strategies THREE GENERIC

24. Overall Cost Leadership

25. DIFFERE NTATION

26. Focus