Professional Documents
Culture Documents
Strategic
Assessment Strategic
Choice
11
Grand Strategy
General plan of major action to
achieve long-term goals
Falls into three general
categories
1. Growth
A se p a ra te
2. Stability g ra n d stra te g y
3. Retrenchment ca n b e d e fin e d
fo r g lo b a l
o p e ra tio n s
Ethical Dilemma: A Great Deal for Whom?
12
Grand Strategy: Growth
Growth can be promoted
internally by investing in
expansion or externally by
acquiring additional business
divisions
- Internal growth = can include
development of new or changed
products
- External growth = typically involves
diversification – businesses
related to current product lines or
into new areas 13
Grand Strategy: Stability
Stability,
sometimes called a
pause strategy, means that the
organization wants
◦ to remain the same size or
◦ to grow slowly and in a controlled
fashion
14
Grand Strategy:
Retrenchment
Retrenchment = the organization goes
through a period of forced decline by either
shrinking current business units or selling
off or liquidating entire businesses
15
Global Corporate
Strategies
High Transnational
Globalization
Strategy Strategy
•Treats world as a •Seeks to balance global
single global market
Need for Global Integration
Export
Strategy Multi - domestic
Strategy
•Domestically focused •Handles markets
•Exports a few independently for each
domestically produced country
products to selected •Adapts
countries product/advertising to
local tastes and needs
Low
Low Need for National Responsiveness High
16
Global Strategy
Globalization= product design
and advertising strategies are
standardized around the world
Multi-domestic = adapt product
and promotion for each country
Transnational = combine global
coordination with flexibility to
meet specific needs in various
countries
17
Purpose of Strategy
● Core competencies
● Developing synergy
● Creating value for customers
18
Three Levels of Strategy in
Organizations
Corporate - Level Strategy:
What business are we in?
Corporation
19
Strategic Management
Process
Scan Identify
External Strategic
Environment Factors –
– National , Opportunities ,
Global Threats Implement
Strategy
via Changes
Evaluate Formulate in :
Current Define new Strategy
SWOT Mission Leadership
Mission , – culture ,
Goals , Goals , Grand Corporate ,
Strategy Structure ,
Strategies Business , HR ,
Functiona Information
l & control
systems
Scan Internal
Environment – Identify
Core Competence , Strategic
Synergy , Value Factors –
Creation Strengths ,
Weaknesses
20
Strategy Formulation vs.
Implementation
Strategy Formulation = stage of strategic
management that involves planning and
decision making that lead to the
establishment of the organization’s goals
and of a specific strategic plan
Strategy Implementation = stage of strategic
management that involves the use of
managerial and organizational tools to
direct resources toward achieving strategic
outcomes
21
Checklist for Analyzing
Organizational Strengths and
Weaknesses
Management and Marketing Human Resources
Organization
Distribution channels Employee experience,
Management quality education
Staff quality Market share
Degree of centralization Advertising efficiency Union status
Organization charts Customer satisfaction Turnover, absenteeism
Planning, information, Product quality
Work satisfaction
control systems Service reputation
Grievances
Sales force turnover
Finance Production Research and Development
Profit margin Plant location Basic applied research
Debt-equity Machinery obsolescence Laboratory capabilities
ratio Research programs
Inventory Purchasing system
ratio New-product innovations
Return on investment Quality control
Credit rating Productivity/efficienc Technology innovations
y
22
BCG
M a trix
Portfolio Strategy
M ix o f b u sin e ss u n its
a n d p ro d u ct lin e s
th a t fit to g e th e r in a
lo g ica lw a y to
p ro vid e syn e rg y a n d
co m p e titive
a d va n ta g e
23
Five Forces Affecting Industry
Competition
24
Competitive Edge Through
Competitive Strategies
Differentiation = attempt to
distinguish products or services
from that of competitors
Cost leadership= aggressively
seeks efficient facilities,
pursues cost reductions, and
uses tight cost controls to
produce products more
efficiently than competitors
Focus = concentrates on a
specific regional market or buyer
group
25
Implementing Strategy
Tools
Leadership
Structuraldesign
Information and control systems
Human resources
26
Tools for Putting Strategy into Action
Environment
Organization
Leadership
Persuasion
Motivation
Structural Design
Human
Culture / values Resources
Organization Chart
Strategy Recruitment / selection Performance
Teams
Transfers / promotions
Training
Centralization Layoffs / recalls
nDecentralization
Information
, and Control
nFacilities task
Systems
, design
Pay , reward system
Budget allocations
Information systems
Source: Adapted from Jay R. Galbraith and Robert K. Kazanjian, strategy Implementation: Structure, Systems and Process, 2d ed. (St. Paul, Minn.: West, 1986), 115,
Used with permission.
Rules / procedures 27
Results from the strategy
formulation process
Goals that are simple, consistent
and long term.
Profound understanding of the
competitive environment
Objective appraisal of resources
Effective implementation
THANK
YOU