Strategy Formulation and Implementation

 

MANAGEMENT RICHARD L. DAFT

 

Strategy Formulation and Implementation CHAPTER 7

 

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Learning Outcomes

Define the components of s trateg i c ma manag nag ement and discuss the le level velss of

 s trateg y . •

Describe the s trateg i c ma manag nag eme ement nt pr proc oces es s and S W OT A nalys i s .

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Define cor corporat porate-l e-level evel s tra trate tegg i es and explain the por  portfoli tfolio o and

divers ifi ifica cattion app pproa roaches ches..

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Describe Porter’s competitive forces and s trat rateg eg ies .

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Discuss the org anizat nizational ional dime dimens ns ions used for strategy execution.

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Strategy Basics

Finding ways to respond to competitors, and cope with change is strategy.

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Thinking Strategically 

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The long-term view

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Seeing the big picture

•

 –

The organization

 –

Competition

How do these fit together?

Strategy are your competitive actions in the market 5 Copyright ©2010 by South-Western, a division division of Cengage

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 What is Strategic Management?

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P lans and a acc ti ons that hat lea ead d tto o s upe uperr i or c om ompe petti ti ve s tandi nding ng Who

are our competitors and what are their strengths and weaknesses?

Who

are our customers?

What

products or services should we offer?

What

does the future hold for our industry?



How can we change the rules of the game? Copyright ©2010 by South-Western, a division division of Cengage

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 S tra tr ateg y :  –

 –

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Purpose of Strategy 

Plan of action

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Resource allocation  Activities for dealing dealing with the environme environment nt

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 Achieving  Achievin g competitive advantage advantage

 S tra tr ateg y s hould: ho uld:  –

Exploit Core Competence

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Build Synergy

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Deliver Value

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chapter7 chapter7

Three Levels of Strategy in Organizations

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Levels of Strategy 

What business are we in?

Corporate-level strategy

How do we compete?

Business-level strategy

How do we support

Functional-level Functional -level strategy

the business-level strategy? Copyright ©2010 by South-Western, a division division of Cengage

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The Strategic Management Process

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Formulating CorporateLevel Strategy 

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Portfolio Strategy  –

 –

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Strategic Business Units (SBU) have different products, mission, markets and competitors

The BCG Matrix  –

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 A diverse mix mix of business business units

Organizes businesses along two dimensions and market share

growth

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Diversification Strategy  –

Movement into new lines of business 11 Copyright ©2010 by South-Western, a division division of Cengage

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The BCG Matrix

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Porter’s Five Forces

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Porter’s Competitive Strategies

Porter suggests that a company can adopt one of three strategies after analyzing the forces

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Global Strategy 

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Finding strategies in the world marketplace

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Synergy among world operations

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Organizations differ in their global strategies  –

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Globalization

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Export Transnational

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Multidomestic 15

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•

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Strategy Execution

How will the strategy be implemented into action?

put

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The organization must be congruent with the strategy Execution involves several tools:  –

Leadership Structural Design

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Human Resources

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Information and Control Systems

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