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Organizational strategy
- 1. Organizational Strategy Tyler N. Johnson Principles of Management Chapter Six
- 2. Learning Outcomes Specify the components of sustainable competitive advantage, and explain why it is important Describe the steps involved in the strategy-making process Explain the different kinds of corporate-level strategies Describe the different kinds of industry-level strategies Explain the components and kinds of firm-level strategies
- 3. Sustainable Competitive Advantage Resources-the assets, capabilities, processes, employee time, information, and knowledge that an organization controls Competitive Advantage-providing greater value for customers than competitors can Sustainable Competitive Advantage-a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate
- 4. Requirements for Sustainable Competitive Advantage Imperfectly Imitable Resources Sustainable Competitive Advantage Valuable Resources Rare Resources Non- Substitutable Resources
- 5. Strategy Making Process Assess need for strategic change AVOID COMPETETIVE INERTIA LOOK FOR STRATEGIC DISSONANCE Conduct a situational analysis Choose strategic alternatives
- 6. Assessing the Need for Strategic Change •This is step one of the strategic process Assessment Avoid competitive inertia • a discrepancy between a • a reluctance to change strategies or competitive practices that have been successful in the past company’s intended strategy and the strategic actions managers take when implementing that strategy Look for strategic dissonance
- 9. Strategic Groups Core Firms-central companies in a strategic group Secondary Firms-firms that follow related, but somewhat different strategies than core firms Transient Firms-companies whose strategies change from one strategic position to the other Shadow-Strategy Task Force-seeks out its own company’s weaknesses and determine how other companies could exploit them
- 10. Choosing strategic alternatives Risk Avoiding Strategy • Protect an existing competitive advantage Risk Seeking Strategy • Extended or create a sustainable competitive advantage Strategic Reference Points • Targets used by managers to determine if the firm has developed the core competencies it needs to achieve a sustainable competitive advantage
- 12. Corporate-level strategies The overall organizational strategy that addresses the question: What business (es) are we in or should we be in? Two Distinctly Different types Portfolio Strategies Grand Strategies
- 13. Portfolio Strategy Acquisitions, unrelated diversification, related diversification, single businesses BCG Matrix • Stars • Question Marks • Cash Cows • Dogs
- 15. Grand Strategies Growth Strategy- focuses on increasing profits, revenues, market share, or number of places doing business Stability Strategy- focuses on improving the way in which the company sells the same products or services to the same customers Retrenchment Strategy- focuses on turning around very poor company performances by shrinking the size or scope of the business
- 16. Industry-level Strategies Five Industry Forces Positioning Strategies Adaptive Strategies
- 18. Positioning Strategies Cost Leadership Differentiation Focus Strategy
- 19. Adaptive Strategies Defenders • seek moderate growth • Retain customers Prospectors • Seek fast growth • Emphasize risk taking innovation Analyzers • Blend of defender & prospector strategies • Imitate other’s successes Reactors • Use an inconsistent strategy • Respond to change
- 21. Strategic Moves of Direct Competition Attack A competitive move designed to reduce a rival’s market share or profits Response A competitive countermove, prompted by a rival’s attack, to defend or improve a company’s market share or profit
- 22. REFERENCES Williams, Chuck. "Organizational Strategy." Principles of Management. 7th ed. Mason: South-Western, 2014. 451. Print.
Editor's Notes
- Valuable Resource-a resource that allows companies to improve efficiency and effectiveness Rare resource-a resource that is not controlled or possessed by many competing firms Imperfectly imitable resource-a resource that is impossible or extremely costly or difficult for other firms to duplicate non-substitutable resource-produces value or competitive advantage and has no equivalent substitutes or replacements
- S.A-assessment of the strengths and weaknesses in an organization’s internal environment and the opportunities and threats in its external environment. This starts with an assessment of its distinctive competencies and core capabilities. D.C-what a company can make, do, or perform better than its competitors C.C-the internal decision making routines, problem-solving processes, and organizational cultures that determine how efficently inputs can be turned into outputs Second part of S.A is to look outside the company at threats and opportunities in the external environment. This involves the use of srategic groups or
- Stars-companies with a large share of a fast-growing market Question marks-companies with a small share of a fast-growing market Cash cows-companies with a large share of a slow-growing market Dogs-companies with a small share of a slow-growing market
- Major themes within this category involve growth, stability, retrenchment/recovery