Quản trị kinh doanh - Chapter 8: Strategy formulation and implementation

Strategy Formulation and ImplementationChapter 81Strategic PlanningStrategic planning has taken on new importance in today’s world of globalization, deregulation, advancing technology, and changing demographics, and lifestylesManager’s Challenge: Nintendo2Strategy Formulation and ImplementationStrategic ManagementDefinitionComponentsModel of Strategic Management ProcessModels of Strategy FormationManagerial Tools to Implement Strategic Plans Topics:Chapter 83Thinking StrategicallyAnswers to the following define an overall direction for the organization's grand strategyWhere is the organization now?Where does the organization want to be?What changes are among competitors?What courses of action will help us achieve our goals?4Strategic ManagementSet of decisions and actions used to implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goalsResponsibility = top managers & chief executive5Strategic ManagementManagers ask such questions as...What changes and trends are occurring?Who are our customers?What products or services should we offer?How can we offer these products or services most efficiently?6Grand Strategy General plan of major action to achieve long-term goalsFalls into three general categories 1. Growth 2. Stability 3. RetrenchmentA separate grand strategy can be defined for global operationsEthical Dilemma: A Great Deal for Whom?7Grand Strategy: GrowthGrowth can be promoted internally by investing in expansion or externally by acquiring additional business divisionsInternal growth = can include development of new or changed productsExternal growth = typically involves diversification – businesses related to current product lines or into new areas8Grand Strategy: StabilityStability, sometimes called a pause strategy, means that the organization wants to remain the same size orto grow slowly and in a controlled fashion9Grand Strategy: RetrenchmentRetrenchment = the organization goes through a period of forced decline by either shrinking current business units or selling off or liquidating entire businessesLiquidation = selling off a business nit for the cash value of the assets, thus terminating its existenceDivestiture = involves selling off of businesses that no longer seem central to the corporation10Global Corporate StrategiesNeed for National ResponsivenessHighLowLowHigh Transnational StrategySeeks to balance global efficiencies and local responsivenessCombines standardization and customization for product/advertising strategiesGlobalization StrategyTreats world as a single global marketStandardizes global products/advertising strategiesMulti-domestic StrategyHandles markets independently for each countryAdapts product/advertising to local tastes and needsNeed for Global IntegrationExportStrategyDomestically focusedExports a few domestically produced products to selected countries11Global StrategyGlobalization = product design and advertising strategies are standardized around the worldMulti-domestic = adapt product and promotion for each countryTransnational = combine global coordination with flexibility to meet specific needs in various countries12Purpose of Strategy The plan of action that prescribes resource allocation and other activities for dealing with the environment, achieving a competitive advantage, that help the organization attain its goalsStrategies focus on:Core competenciesDeveloping synergyCreating value for customers13Three Levels of Strategy in OrganizationsCorporate-Level Strategy: What business are we in?CorporationBusiness-Level Strategy: How do we compete? Textiles UnitChemicals UnitAuto Parts UnitFunctional-Level Strategy: How do we support the business-level strategy?FinanceR&DManufacturingMarketing14Strategic Management ProcessImplement Strategy via Changes in: Leadership culture, Structure, HR, Information & control systemsSWOTFormulate Strategy – Corporate, Business, FunctionalDefine new Mission Goals, Grand StrategyIdentify Strategic Factors – Strengths, WeaknessesIdentify Strategic Factors – Opportunities, ThreatsScan Internal Environment – Core Competence, Synergy, Value CreationEvaluate Current Mission, Goals, StrategiesScan External Environment – National, Global15Strategy Formulation vs. ImplementationStrategy 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 planStrategy Implementation = stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomesExperiential Exercise: Developing Strategy for a Small Business16Checklist for AnalyzingOrganizational Strengths and WeaknessesSources: Based on Howard H. Stevenson, “ Defining Corporate Strengths and Weaknesses,” Sloan Management Review 17 (spring 1976), 51-68; and M.L.Kastens, Long-Range Planning for Your Business (New York: American Management Association, 1976).Management and OrganizationManagement qualityStaff qualityDegree of centralizationOrganization chartsPlanning, information, control systemsFinanceProfit marginDebt-equity ratioInventory ratioReturn on investmentCredit ratingMarketing Distribution channelsMarket shareAdvertising efficiencyCustomer satisfactionProduct quality Service reputation Sales force turnover ProductionPlant location Machinery obsolescencePurchasing systemQuality controlProductivity/efficiencyHuman ResourcesEmployee experience, education Union statusTurnover, absenteeismWork satisfaction GrievancesResearch and DevelopmentBasic applied researchLaboratory capabilitiesResearch programsNew-product innovationsTechnology innovations17Portfolio StrategyMix of business units and product lines that fit together in a logical way to provide synergy and competitive advantageBCG Matrix18Five Forces Affecting Industry CompetitionSource: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980).Internet reduces barriers to entryInternet expands market size, but creates new substitution threatsInternet tends to increase the bargaining power of suppliersInternet shifts greater power to end consumersInternet blurs differences among competitors in an industryBargaining Power of BuyersBargaining Power of SuppliersThreat of Substitute ProductsPotential New EntrantsRivalry among Competitors19Competitive Edge ThroughCompetitive StrategiesDifferentiation = attempt to distinguish products or services from that of competitorsCost leadership = aggressively seeks efficient facilities, pursues cost reductions, and uses tight cost controls to produce products more efficiently than competitorsFocus = concentrates on a specific regional market or buyer group20Continuum of Partnership StrategiesOrganizational CombinationStrategic AlliancesPreferred Supplier ArrangementsStrategic Business PartneringMergersAcquisitionsLowHighJoint VenturesDegree of CollaborationDegree of Collaboration21Implementing Strategy ToolsLeadershipStructural designInformation and control systemsHuman resources22Tools for Putting Strategy into ActionEnvironmentOrganizationStrategyPerformanceLeadership  Persuasion  Motivation  Culture/values Structural Design  Organization Chart  Teams  CentralizationDecentralization, Facilities, task designHuman Resources  Recruitment/selection  Transfers/promotions Training Layoffs/recallsSource: 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.Information and Control Systems  Pay, reward system  Budget allocations  Information systems  Rules/procedures 23