1、STRATEGYvIn Greece:Strategos means arts and science that a general command and direct army.lIn Ancient ChinaBesiege Wei rescue ZhaoPretend to advance along one path while secretly going along another;do one thing under cover of another.Macro levelEnterprise levelNational EconomyLocal EconomyIndustri
2、al EconomyCorporate StrategySBUs StrategyFunctional StrategyP ig m e n tsM a r k e tin gR&DF in a n c eM a n u fa c r u r in gF e r tiliz e r sD y e sC h e m c o r pCorporateSBUsFunctionsThe way a company creates value through the configuration and coordination of its multi-market activities.Corpora
3、te Strategy is?Address the Questions？How to achieve sustainable competitive advantage in given product/marketWhere should we compete？（Which markets，and which segments should we concentrate on？）Competitive StrategyWhat products should we compete with？How will we gain sustainable competitive advantage
4、 in these chosen markets？?123is concerned with interpreting the role of the function or department in delivering the competitive strategy Functional strategyMarketing strategyFinancial strategyPersonnel strategyAnd so forthEvery Competitive Strategy Can be Translated into Congruent X StrategiesvKenn
5、eth R.Andrews vH.I.Ansoff vH.Mintzberg vOur definitionvThe Concept of Corporate Strategy,1971vStrategy is target,intent,purpose,and the model of which a firm formulates main policies and plan in order to achieving the target.The model defines the business scope which the firm is doing,and should do.
6、The model also defines the business type which the firm is in,and should be in.vCorporate Strategy,1965vThe strategy is a common business line throughout the firms business,products and market.It defines the basic nature of the business that a firm is doing,and plans to do.See MorevMarket and Produc
7、tsvGrowth VectorvCompetitive AdvantagevSynergy:Total outcome are more than sum of all parts.SupposeOiCost of Product i Si Sales of Product i(ROI)-Return on InvestmentSuppose ROI of Company i product Pi is as followROI=Si-OiIiST=S1+S2+S3+SnOT=O1+O2+O3+OnIT=I1+I2+I3+In(ROI)T=ST-OTITSS=STIs ITOs OTScal
8、e Effect(ROI)S (ROI)T ST，OT，IT is Sum of Small companys sales,cost and investmentSs，Os，Is Sales,cost and investment of big firmSupposeType of vSales Synergy:from share brand,channelvOperating SynergyvInvestment SynergyvManagement SynergyvThe Rise and Fall of Strategic Planning,1994vPlanvPloyvPattern
9、vPositionvPerspective vA strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.Strategy FormulationStrategy ImplementationSee DetailEnvironmentConditionStrategic IntentStrategic MissionStrategy FormulationStrat
10、egy ImplementationCorporate Level StrategyBusiness Level StrategyOrganizational Structure and ControlsCorporate GovernanceStrategic Competitiveness Above-Average ReturnsfeedbackPerspectives and Enterprise CultureVisionMissionGoalsSWOTStrategy FormulationAlternativesSelectionStrategicPlanStrategy Imp
11、le-mentationStrategic ControlFeedback PerformancevChapter 1 An Introduction to Corporate StrategyvChapter 2 The External EnvironmentvChapter 3 The Internal ConditionvChapter 4 Corporate Level StrategyvChapter 5 Acquisition and Restructuring StrategyvChapter 6 Business Level Strategy vChapter 7 Coope
12、rative StrategyvChapter 8 Corporate GovernancevChapter 9 Organizational Structure and ControlsvChapter 10 Corporate Entrepreneurship and Innovation Chapter1GlobalizationCompetitionPressure to ChangePhysical resourcesHuman resourcesInformation resourcesWorld marketCore businessesOutsourcingBPRTechnol
13、ogy and Technological ChangesRapid technological changeRapid technology diffusionsDramatic changes in information technologiesIncreasing importance of knowledgeThe Competitive LandscapeThe Global EconomyPeople,goods,services,and ideas move freely across geographic bordersSignificant opportunities em
14、erge in multiple global marketsMarkets and Industries become more internationalizedvA firm is viewed as a bundle of market activities and a bundle of resources.(in the lesson)vMarket activities are understood through application of the I/O model.vThe development and effective use of a firms resource
15、s,capabilities,and competencies is understood through application of the resources-based model.vCombination of the two models,firms can increase the probability of achieving strategic competitiveness and earning above-average returns(AARs).vThe external environment was thought to be the primary dete
16、rminant of strategies firms selected to be successful.vIndustry chosen has a stronger influence on the firms performance than do the choices managers make inside their organizations.The External EnvironmentThe general environmentThe industry environmentThe competitive environment1.Study the external
17、 environment,especially the industry environment.An Attractive IndustryAn industry whose structural characteristics suggest AARsStrategy FormulationSelection of a strategy linked with AARs in a particular industryAssets and SkillsAssets and skills required to implement a chosen strategyStrategy Impl
18、ementationSelection of strategic actions linked with effective implementation of the chosen strategySuperior ReturnsEarning of AARs2.Locate an industry with high potential for AARs.3.Identify the strategy called for by the attractive industry to earn AARs.4.Develop or acquire assets and skills neede
19、d to implement the strategy.5.Use the firms strengths to implement the strategy.The I/O ModelvEach organization is a collection of unique resources and capabilities that provides the basis for its strategy and is the primary source of its returns.vThe differences in firms performances across time ar
20、e driven primarily by organizations unique resources and capabilities rather than by an industrys structural characteristics.vResources may not be highly mobile across firms.vThe differences in resources form the basis of competitive advantage.ResourcesInputs into a firms production process1.Identif
21、y the firms resources.Study its strengths and weaknesses as compared to those of competitors.CapabilityCapacity of an integrated set of resources to integratively perform a task or activityCompetitive AdvantageAbility of a firm to outperform its rivalsAn Attractive IndustryAn industry with opportuni
22、ties that can be exploited by the firms resources and capabilitiesStrategy Formulation&ImplementationStrategic actions taken to earn AARsSuperior ReturnsEarning of AARs2.Determine the firms capabilities.What do the capabilities allow the firm to do better than its competitors？3.Determine the potenti
23、al of the firms resources and capabilities in terms of a competitive advantage.4.Locate an attractive industry.5.Select a strategy that best allows the firm to exploit its resources and capabilities relative to opportunities in the external environment.The R/B ModelvStrategic intent is the leveragin
24、g of a firms internal resources,capabilities,and core competencies to accomplish the firms goals in the competitive environment.vStrategic intent implies a significant stretch of an organizations resources,capabilities,and core competencies.vStrategic intent exists when all employees and levels of a
25、 firm are committed to the pursuit of a specific performance criterion.vIt seems like a dream,unrealistic goal,imagination.vTo become a high-performance multinational energy companynot the biggest,but the best.(Unocal Corporation)vTo be the top performance in everything the company does.(Philips Pet
26、roleum Company)vTo catch up with and beat Caterpillar.(Komatsus)vTo beat Xerox.(Canon)vTo become second Ford.(Honda)vThe strategic mission is a statement of a firms uniques purpose and the scope of its operations in product and market terms.vIn some firms,mission is called vision.vTo put a car in ev
27、ery home.(Ford)vA computer in every home.(Apple)vA computer on every desk,and every home,running on Microsoft software.(Bill Gates)vPortable communications.(Motorola)Strategic IntentWinning competitive battles through deciding how to leverage resources,capabilities,and core competenciesStrategic Mis
28、sionAn application of strategic intent in terms of products to be offered and markets to be served vProfitability:vProductivity:vMarket Status:vR&D:vOrganizational Change:vHuman ResourcesvSocio Responsibility MSAMS-Absolute MSRMS-Relative MSSales of the industryAMS=Sales of the companyX 100%Sales of
29、 the largest oneRMS=Sales of the companyX 100%numerator is unchangedDenominator:if the companys sales is the biggest,the denominator must be the second one.Return on Capital 12%Return on Sales 8%Turnover Rate of Capital 1.5 ProfitRevenue 3m RevenueTotal Capital 2m Fixed AssetsCurrent AssetsSalesCost
30、Fixed CostVariable CostProfit&TaxFixed CostVariable CostProfit&Taxv1.The Idea of Adapting Environmentv2.The Idea of Competitive Advantagev3.The Idea of Reengineeringv4.The Idea of Strategic Alliancev5.The idea of Organization Learning GlobalizationNetworkPhysical ResourcesHuman ResourcesInfo.Resourc
31、esInternetWorldwide MarketGlobal ProcurementGlobal LogisticsvMichael EPorter put forward to the concept:it is from low cost or differentiation.vThe advantages can come from internal and external.vBased on external condition include:natural environment,natural resources,transportation,information com
32、munication,economic base,public relation.vFormed by internal：decision making ability of top management,innovation ability of technician and engineers,marketing ability of marketer,competence of employee.Core BusinessCustomer OrientationOrganization FlatEnvironment changeBPRCompetitive AdvantageResou
33、rces Focus onCompetition PressureVariety of NeedsNetworkBPRBPRNothing changed except in todays society.change vRCoase said：there are two systems can be used to configuration and coordination resources:vThrough market:by use of the price as a tool to accomplish a set of market transactions.vThrough o
34、rganization:a coordinator within organization to direct production.vBoth mechanisms cost money.So,which one is used depends on which has the lower cost.Whether a company will expand or reduce its businesses depend on the save of transaction cost.vTheFifthDiscipline ArtsandPracticesofTheLearningOrgan
35、ization(Peter Senge,1990)vTo bring peoples creativity into play is the key successful factor in the 21st.It is also the key point of the management efforts.vOrganization learning is an unremitting process.It is the process which an organization ceaselessly acquire lore,and pass lore each other in th
36、e organization,and create new lore by various ways and manners in order to boost up organizational abilities and improve organizational behavior and performance.vThree Key Points of Organization Learning：1.The organization can ceaselessly acquire lore and accumulate lore2.The organization can pass l
37、ore each other in the organization3.The organization can create new lore By studying the internal environment,Firms determineWhat they can doBy studying the external environment,Firms identifyWhat they might choose to do vGeneral External Environmental AnalysisvIndustry Environment AnalysisEconomicD
38、emographicSocioculturalPolitical/LegalGlobalTechnologicalGeneral EnvironmentvThe general environment is composed of elements in the broader society that can influence an industry and the firms within it.lThe industry environment is the set of factors the threat of new entrants,suppliers,buyers,produ
39、ct substitutes,and the intensity of rivalry among competitors that directly influences a firm and its competitive actions and responses.Definitions of general and industry environmentDemographic Segment Population sizeAge structureGeographic distributionEconomic cycleInterest and Inflation ratesTrad
40、e deficits or surplusesBudget deficits or surplusesAntitrust lawsTaxation lawsDeregulation philosophiesWomen in the workforceWorkforce diversityAttitudes about quality of work lifeProduct innovationsProcess innovationsApplications of knowledgeEconomic SegmentPolitical/Legal SegmentSociocultural Segm
41、entTechnological SegmentGlobal SegmentImportant political eventsCritical global marketsEthnic mixIncome distributionPersonal saving ratesBusiness saving ratesGross domestic productLabor training lawsEducational philosophies and policiesConcerns of environmentShifts in work&career preferanc Shifts in
42、 preferences in products and service characteristicsFocus of private and govern-ment supported R&D expenditurNew communication technologyNewly industrialized countriesDifferent cultural and institu-tional attributesvRevivevBoomvStagnancyvCrisisABlRevivelBoom lWeaklSoft LandfallvIdentifying early sig
43、nals of environmental changes and trendsvDetecting meaning through ongoing observations of environmental change and trendsvDeveloping projections of anticipated outcomes based on monitored changes and trendsvDetermining the timing and importance of environmental changes and trends for firms strategi
44、es and their managementScanningMonitoringForecastingAssessingChinalNot directly mention key pointlAsk questions or have requirements by a subtle waylPraising grouplSaying words to boost harmoniouslSomething have not been express are also very importantlUsually not to say“No”，instead of changing othe
45、r topic or give a blurry answerlHaving a expression for the most important thing in the lastlGuangxi is the first thing in allfirstly discussed topic is about private things before discussing businesslSynthesizing different ideas，struggle to be consistent lPerson and mind cannot be separatedlDumbnes
46、s does not mean disagreeAmericanlDirectly mention key pointlBluntly discussing requirements and problem being facedlPraising individuallPrecisely saying what one wants to saylWhat one say is the most importantlDirectly say“No”lHaving a expression for the most important thing in the beginninglRules a
47、re the most important，firstly discussing business than private lMaking ideas diversely，struggle to have the best onelPerson and mind can be separated lDumbness means disagreevAn industry is a group of firms producing products that are close substitutes.vThe industry environment is the set of factors
48、 the threat of new entrants,suppliers,buyers,product substitutes,and the intensity of rivalry among competitors that directly influences a firm and its competitive actions and responses.vIndustry environment has a more direct effect on strategic competitiveness and AARs.IndustryCompetitorsThe Threat
49、 of EntryAbsolute cost advantagesGovernment policyEconomies of scaleCapital requirementsBrand identitySwitching costsAccess to distributionExpected retaliationThe Threat of SubstituteRelative price/performanceSwitching costsBuyer propensity toSupplier PowerSupplier concentrationImportance of volume
50、to supplierDifferentiation of inputs Impact of inputs on cost of differentSwitching costs of supplier/firmsPresence of substitute inputsThe Degree of RivalryIndustry growthProduct differencesBrand identitySwitching costExit barriersInformational complexity Buyer PowerBargaining leverage Price sensit
