1、Strategy Formulation and ImplementationChapter 81Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Strategic PlanninglStrategic planning has taken on new importance in todays world of globalization,deregulation,advancing technology,and changing demographics,and lifes
2、tylesManagers Challenge:Nintendo2Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Strategy Formulation and ImplementationlStrategic ManagementDefinitionComponentsModel of Strategic Management ProcessModels of Strategy FormationlManagerial Tools to Implement Strategi
3、c Plans Topics:Chapter 83Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Thinking StrategicallylAnswers to the following define an overall direction for the organizations grand strategylWhere is the organization now?lWhere does the organization want to be?lWhat cha
4、nges are among competitors?lWhat courses of action will help us achieve our goals?4Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Strategic ManagementlSet of decisions and actions used to implement strategies that will provide a competitively superior fit between
5、the organization and its environment so as to achieve organizational goalslResponsibility=top managers&chief executive5Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Strategic ManagementManagers ask such questions as.lWhat changes and trends are occurring?lWho are
6、 our customers?lWhat products or services should we offer?lHow can we offer these products or services most efficiently?6Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Grand StrategylGeneral plan of major action to achieve long-term goalslFalls into three general
7、categories1.Growth2.Stability3.RetrenchmentA separate grand strategy can be defined for global operationsEthical Dilemma:A Great Deal for Whom?7Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Grand Strategy:GrowthlGrowth can be promoted internally by investing in e
8、xpansion 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 areas8Copyright 2005 by South-Western,a division of Thomson
9、Learning.All rights reserved.Grand Strategy:StabilitylStability,sometimes called a pause strategy,means that the organization wants to remain the same size orto grow slowly and in a controlled fashion9Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Grand Strategy:R
10、etrenchmentlRetrenchment=the organization goes through a period of forced decline by either shrinking current business units or selling off or liquidating entire businesseslLiquidation=selling off a business nit for the cash value of the assets,thus terminating its existencelDivestiture=involves sel
11、ling off of businesses that no longer seem central to the corporation10Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Global Corporate StrategiesNeed for National ResponsivenessHighLowLowHigh Transnational Strategy Seeks to balance global efficiencies and local re
12、sponsiveness Combines standardization and customization for product/advertising strategiesGlobalization Strategy Treats world as a single global market Standardizes global products/advertising strategiesMulti-domestic Strategy Handles markets independently for each country Adapts product/advertising
13、 to local tastes and needsNeed for Global IntegrationExportStrategyDomestically focusedExports a few domestically produced products to selected countries11Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Global StrategylGlobalization=product design and advertising s
14、trategies are standardized around the worldlMulti-domestic=adapt product and promotion for each countrylTransnational=combine global coordination with flexibility to meet specific needs in various countries12Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Purpose o
15、f Strategy lThe 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:lCore competencieslDeveloping synergylCreating value for customers13Copyright 2005
16、 by South-Western,a division of Thomson Learning.All rights reserved.Three 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 th
17、e business-level strategy?FinanceR&DManufacturingMarketing14Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Strategic Management ProcessImplement Strategy via Changes in:Leadership culture,Structure,HR,Information&control systemsSWOTFormulate Strategy Corporate,Bus
18、iness,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,Global15Co
19、pyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Strategy Formulation vs.ImplementationlStrategy Formulation=stage of strategic management that involves planning and decision making that lead to the establishment of the organizations goals and of a specific strategic
20、planlStrategy 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 Business16Copyright 2005 by South-Western,a division of Thomson Learnin
21、g.All rights reserved.Checklist 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 Assoc
22、iation,1976).Management and OrganizationManagement qualityStaff qualityDegree of centralizationOrganization chartsPlanning,information,control systemsFinanceProfit marginDebt-equity ratioInventory ratioReturn on investmentCredit ratingMarketing Distribution channelsMarket shareAdvertising efficiency
23、Customer satisfactionProduct quality Service reputation Sales force turnover ProductionPlant location Machinery obsolescencePurchasing systemQuality controlProductivity/efficiencyHuman ResourcesEmployee experience,education Union statusTurnover,absenteeismWork satisfaction GrievancesResearch and Dev
24、elopmentBasic applied researchLaboratory capabilitiesResearch programsNew-product innovationsTechnology innovations17Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Portfolio StrategylMix of business units and product lines that fit together in a logical way to pro
25、vide synergy and competitive advantageBCG Matrix18Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Five Forces Affecting Industry CompetitionSource:Based on Michael E.Porter,Competitive Strategy:Techniques for Analyzing Industries and Competitors(New York:Free Press
26、,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 BuyersBar
27、gaining Power of SuppliersThreat of Substitute ProductsPotential New EntrantsRivalry among Competitors19Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Competitive Edge ThroughCompetitive StrategieslDifferentiation=attempt to distinguish products or services from t
28、hat of competitorslCost leadership=aggressively seeks efficient facilities,pursues cost reductions,and uses tight cost controls to produce products more efficiently than competitorslFocus=concentrates on a specific regional market or buyer group20Copyright 2005 by South-Western,a division of Thomson
29、 Learning.All rights reserved.Continuum of Partnership StrategiesOrganizational CombinationStrategic AlliancesPreferred Supplier ArrangementsStrategic Business PartneringMergersAcquisitionsLowHighJoint VenturesDegree of CollaborationDegree of Collaboration21Copyright 2005 by South-Western,a division
30、 of Thomson Learning.All rights reserved.Implementing Strategy ToolslLeadershiplStructural designlInformation and control systemslHuman resources22Copyright 2005 by South-Western,a division of Thomson Learning.All rights reserved.Tools for Putting Strategy into ActionEnvironmentOrganizationStrategyP
31、erformanceLeadership 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
