MANAGEMENT

RICHARD L. DAFT
Strategy Formulation and
Implementation
CHAPTER 7
chapter7 Learning Outcomes

• Define the components of strategic management and discuss the levels of

strategy.

• Describe the strategic management process and SWOT Analysis.

• Define corporate-level strategies and explain the portfolio and

diversification approaches.

• Describe Porter’s competitive forces and strategies.

• Discuss the organizational dimensions used for strategy execution.

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chapter7 Strategy Basics

• Finding ways to respond to competitors,

and cope with change is strategy.

4
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chapter7 Thinking Strategically

• The long-term view

• Seeing the big picture

– The organization How do
these fit
– Competition together?

• Strategy are your competitive actions in

the market

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 What is Strategic
chapter7
Management?
• Plans and actions that lead to superior
competitive standing
Who are our competitors and what are their
strengths and weaknesses?
Who are our customers?
What products or services should we offer?
What does the future hold for our industry?
How can we change the rules of the game?
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chapter7 Purpose of Strategy
• Strategy:
– Plan of action
– Resource allocation
– Activities for dealing with the environment
– Achieving competitive advantage
• Strategy should:
– Exploit Core Competence
– Build Synergy
– Deliver Value 7
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 Three Levels of Strategy in
chapter7
Organizations

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chapter7 Levels of Strategy

What business are

we in? Corporate-level strategy

How do we
compete? Business-level strategy

How do we support Functional-level strategy

the business-level
strategy? 9
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 The Strategic
chapter7
Management Process

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 Formulating Corporate-
chapter7
Level Strategy
• Portfolio Strategy
– A diverse mix of business units
– Strategic Business Units (SBU) have different
products, mission, markets and competitors
• The BCG Matrix
– Organizes businesses along two dimensions—growth
and market share
• Diversification Strategy
– Movement into new lines of business
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chapter7 The BCG Matrix

12
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chapter7 Porter’s Five Forces

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 Porter’s Competitive
chapter7
Strategies
• Porter suggests that a company can adopt one
of three strategies after analyzing the forces

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chapter7 Global Strategy
• Finding strategies in the world marketplace
• Synergy among world operations
• Organizations differ in their global strategies
– Globalization
– Export
– Transnational
– Multidomestic

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chapter7 Strategy Execution

• How will the strategy be implemented—put

into action?
• The organization must be congruent with
the strategy
• Execution involves several tools:
– Leadership
– Structural Design
– Human Resources
– Information and Control Systems
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Learning. All rights reserved.