Company Structure and Strategy

Company Structure
Pyramidal structure (hierarchical or line structure):
Top-down system Small organisation

Functional structure
Divided into departments Specialized set of tasks

Company Structure
Matrix structure:
arranged according to project and group employees by both function and product. both vertical and horizontal employee works as a team member and reports to two bosses
employees who advise and assist the responsibility of providing information and advice to personnel in the line position combines the flow of information from the line structure with the staff departments that service, advise and support them

Staff position:

Company Structure
Organization by function: Different departments Organization by product: Different products Organization by customer type: Different sectors Organization by geographical area: Different regions

Strategic Management
Strategy is the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carry out these goals.

Strategic Management
Strategic management is the set of managerial decisions and action that determines the long-run performance of a corporation. The process of strategic management includes:
Strategic planning Strategic implementation

Strategic Management Process

2
Analyze the environment

3
Identify the opportunities & threats

1
Identify the organizations current mission, objectives & strategies

7
Formulate strategies Implement strategies

8
Evaluate results

SWOT Analysis
4
Analyze the organizations resources & capabilities

5
Identify the strengths & weaknesses

Strategic Management Process

Mission
The organisations purpose or fundamental reason for existence. Scanning General & specific environment Addressing all possible influences on the organisation Opportunities are positive trends in external environmental factors Threats are negative trends in external environmental factors

Analysing external environment

Opportunities and Threats

Strategic Management Process

Analysing the internal situation
Provides information about an organisations resources and capabilities

Strengths and Weaknesses

Strengths: any activities the organisation does well or any unique resources that it has Weaknesses: any activities the organisation does not do well or any unique resources that it does not possess.

Corporate Strategies
Corporate strategy deals with three key issue facing the corporation as a whole:
1. The firms overall orientation toward growth, stability or retrenchment (directional strategy)

2. The industries or markets (Portfolio strategy)

3. The manner in which management coordinates activities and transfers resources and cultivates capabilities among product lines and business units (Business strategy)

Directional Strategy
Growth Strategies Stability Strategies Retrenchment Strategies

Portfolio Analysis
High Industry growth rate (%)
Stars Question Marks

10 Cash cows

Dogs

Low

0 10x 1.5x 1x 0.1x

High

Relative Competitive Position (Relative market share)

Low

Business Strategy
Business strategy focuses on improving the competitive position of product/service within specific industry or market segment.
Business strategy can be:
Competitive strategy

Cooperative strategy

Competitive strategies
Competitive strategies address questions: Should the firm compete on the basis of lower cost (and thus price), or should it differentiate its products/services on some basis other than cost? (Types of competitive advantage) Should the firm compete head to head with its major competitors or should it focus on a niche? (Competitive scope)

Types of Competitive Advantage and strategies

Differentiation (Non-Price Value) Differentiation The ability of a firm or strategy: business unit to provide unique and superior value to the buyer in terms of product quality, special features, or

after-sales service

Competitive Advantage

Lower Cost

Lower cost strategy:

The ability of a firm or business unit to design, produce and market a comparable product more efficiently than its competitors

Focus strategies
Cost leadership and Differentiation strategies aim at the broad market. Focus on a particular buyer group or geographic market. Cost-based focus strategy. Differentiation-based focus strategy.

Strategic Positioning: Basic Concepts

Low-Cost Broad target Differentiation

Competitive Scope

Cost Leadership

Differentiation

Narrow target

Costbased Focus

Differentiationbased Focus

References
Emmerson, P. (2007) Business English handbook Advanced, Macmillan. Mackenzie, I. (1997) Management & Marketing, Heinle Cengage Learning. Mr. Ngo Quy Nham Lecture series on Management Faculty of Business Administration - FTU.