Professional Documents
Culture Documents
Approach a functional area takes to achieve corporate & business unit objectives and strategies by maximizing resource productivity. Developing & nurturing a distinctive competence
Marketing Strategy
Pricing, selling and distributing a product Market development strategy
Capture a larger share of existing market through market penetration Develop new uses and/ or markets for current products
Financial Strategy
Examines the financial implications of corporate and business-level strategic options and identifies the best financial course of action. Maximizes financial value of the firm Influenced by corporate diversification strategy. Equity financing for related & debt financing for unrelated. Leveraged Buyout Dividend Policy
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Financial Strategy
REL buyback of shares to raise EPS HUL buyback of 25% of its stake to increase stock price
R & D Strategy
Deals with product & process innovation Appropriate mix of different types of R&D How to access new technology? Technological leader or follower Technology alliance with academic labs, govt., corporates Purchase stakes in new ventures Reddy s Lab, Biocon, Dabur, Panacea Biotech
Chapter 7 Wheelen/Hunger
Operations Strategy
Determines:
How and where product is manufactured Level of vertical integration in process Deployment of physical resources Relationships with suppliers
Advanced Manufacturing technology- CAD/CAM, FMS, robotics, JIT systems quick response time, increased flexibility, higher productivity From mass production systems to continuous improvement strategy, modular manufacturing & mass customization
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Chapter 7 Wheelen/Hunger
HRM Strategy
HRM strategy
Addresses issues of:
Low-skilled employees
Low pay Repetitive tasks High turnover
Skilled employees
High pay Cross trained Self-managing teams
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Functional Strategy
Outsourcing
Purchasing from someone else a product or service that had been previously provided internally. Reverse of vertical integration Increasing efficiency & quality
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AMA Survey
Outsourced activities - General & Administrative (78%) - HR (77%) - Information systems (63%) - Manufacturing (56%) - Marketing (51%) 51% brought the activity in-house
Disadvantages
Complaints Delays Reduces the ability to learn new skills
Keep core-activities in-house Proper selection of vendor Establish a balanced relationship Keep personnel issues in mind Not loosing control over the outsourced activity Identify hidden costs Plan an exit strategy
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Strategic Choice
Attitude Toward Risk:
Risk is composed of:
Probability of effective strategy Amount of assets committed Length of time of asset commitment Risk increases for global cos Mgrs with ownership position are more likely to engage in risky decisions Risk in one reason why innovations occur more often in small organizations Real Options approach
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