C 6 S F

Transcription

C 6 S F

CHAPTER 6
STRATEGY FORMULATION;
SITUATION ANALYSIS & BUSINESS STRATEGY
STRATEGIC MANAGEMENT
AND BUSINESS POLICY
11th Edition
Thomas L. Wheelen
J. David Hunger
Strategies in Action
Companies Embrace Strategic Planning
-- Quest for higher revenues
-- Quest for higher profits
Situation Analysis & Business Strategy
2
Anatomy of Strategic Planning
Vision
Mission
SWOT
Top-Down
NEVER
Bottom-Up
Objectives
Strategies
Strategic
Planning
3
Long-Term Objectives


Results expected from pursuing certain
strategies.
Strategies represent actions to accomplish
long-term objectives.
4
SMART Objectives
Some is not a number
Soon is not a time
“May be” is not an answer
5
SMART Objectives
Specific
Measurable
Achievable
Relevant
Time-bound
6
Smarter Objectives
Quantifiable
Measurable
Realistic
Understandable
Challenging
Hierarchical
Obtainable
Congruent
Time-line
7
Objectives Necessary -Corporate Level
Divisional Level
Functional Level
8
Varying Performance Measures
by Organizational Level
Organizational
Level
Corporate
Division
Function
Basis for Annual Bonus/Merit Pay
75% on long-term objectives
25% on annual objectives
9
Strategic Objectives
Larger market share
Quicker on-time delivery than rivals
Quicker design-to-market times than rivals
Lower costs than rivals
Higher product quality than rivals
Wider geographic coverage than rivals
10
SWOT Analysis

STRENGTHS: is a resource advantage
relative to competitors and the needs of the
market a firm serves or expects to serve.

WEAKNESSES: is a limitation or deficiency in
one or more resources or competencies
relative to competitors that obstructs a firms’
effective performance.
11
SWOT Analysis

OPPORTUNITIES: is a major favorable
situation in a firms’ environment; breakthrough
technology, improved supplier relationships,
changes
in
regulatory
circumstances,
identification of a previously overlooked
market segment.

THREATS: is a major unfavorable situation in
a firms’ environment; entrance of new
competitors, slow market growth, increased
bargaining
power
of
key
suppliers,
technological changes, new regulations.
12
Strategic Factors Analysis Summary
(SFAS) Matrix
Generated mainly to deal with the cons
of SWOT analysis
13
Generating Alternative Strategies
Using TOWS Matrix
SWOT considers only Opportunities and
Strengths when thinking of alternative
strategies
Thus a TOWS Matrix is developed to
generate further alternative strategies that
might not be considered in a SWOT analysis
14
Generating Alternative Strategies Using TOWS Matrix
15
Generating Alternative Strategies
through Business Strategies
Business Strategy focuses on improving
the competitive position of a company
Business strategies could be either:
•Competitive Strategies
•Cooperative Strategies
16
Porter’s Generic Competitive Strategies
Cost Leadership Strategies
Differentiation Strategies
Focus Strategies
Strategies that allows org. to gain competitive advantage
17
Cost Leadership:
Producing standardized products at a low per-unit cost for
a broad range of consumers who are price-sensitive.
Considered effective when:
•Low switching costs
•Buyers have high bargaining power
•Rivals introduce low prices to build a customer base
•No product differentiation
18
Differentiation
Producing P/S considered unique to consumers who are
price-insensitive.
There are many ways to differentiate the product.
Buyers needs & uses are diverse
Few rival firms are following a similar approach
Technological change is fast paced.
19
Focus:
Producing P/S that fulfill the needs of small groups of
customers, e.g. mkt. penetration, mkt. development
strategies. Essential when consumers have distinctive
preferences that rivals cannot provide.
• Low-cost focus
Offering P/S to a small range of consumers (niche
group) at the lowest P available.
• Differentiation Focus (Best-value focus)
Offering P/S to a small range of consumers at the bestprice value; lowest P available compared to those of rivals’
given the quality attributes.
20
Industry leaders do not consider the niche to be
crucial.
The industry has many different niches, thus
allowing focuser to pick a competitive attractive niche.
The target mkt. niche is large, profitable, & growing.
21
Cooperative Strategies Means for Achieving Strategies
Joint Venture/Partnering

Two or more companies form a temporary
partnership or consortium for purpose of
capitalizing on some opportunity.
 Globalization is the major reason why firms
use partnering to achieve strategies.
22
Why Joint Ventures Fail 
Managers who must collaborate daily; not
involved in developing the venture
 Benefits the company not the customers
 Not supported equally by both partners
 May begin to compete with one of the
partners
23
Considered an effective strategy when:
Synergies between private and publicly held
Domestic with foreign firm, local management can
reduce risk
Complementary distinctive competencies
Resources & risks where project is highly profitable
(e.g. Alaska Pipeline)
Two or more smaller firms competing w/larger firm
Need to introduce new technology quickly
24
Mergers & Acquisitions
Reasons for M&A:
 Provide improved capacity utilization
 Better use of existing sales force
 Reduce managerial staff
 Gain economies of scale
 Smooth out seasonal trends in sales
 Gain new technology
 Access to new suppliers, distributors, customers,
products, creditors
25
Recent Mergers
Acquiring Firm
IBM
Yahoo
U.S. Steel
Pfizer
Krispy Kreme Doughnuts
Oracle
Palm
Nike
Acquired Firm
Rational Software Corp
Inktomi Corp
National Steel Corp
Pharmacia
Montana Mills
People Soft
Handspring
Converse
26
First Mover Advantages
The benefits a firm may achieve by entering a new
market or developing a new product/service prior
to rival firms.
Potential Advantages
 Securing access to rare resources
 Gaining new knowledge of key factors & issues
 Carving out market share
 Easy to defend position & costly for rival firms to
overtake
27
First Mover Advantages
• Build a firm’s image with buyers.
• Produce cost advantages (new tech., distribution
channels, etc.)
• Create strong loyal customers
28
Outsourcing
Business-process outsourcing (BPO)
Companies taking over the functional operations of
other firms, e.g. HR, customer service.
Why Outsourcing?
 Less expensive
 Allows firm to focus on core business
 Enables firm to provide better services
29

C 6 S F

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