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The 5 Tasks of Strategic Management
- Task 1 - Develop Vision and Mission
- Task 2 - Set goals and objectives
- Task 3 - Formulate strategy to achieve goals and objectives
- Task 4 - Implement and execute strategy
- Task 5 - Monitor evaluate, and take corrective action
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Objectives
a) quantified
b) time-based
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What is Strategy?
GAME PLAN
- Blend of Proactive Initiatives and
- Reactive Adjustments
- A company’s strategy consists of the set of
- competitive moves and business approaches that management is employing to run
- the company
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Levels of Strategy-Making in a Diversified Company
- Corporate/eXECUTVE-Level Managers
- Division Managers
- Functional Mgrs
- Operating Mgrs
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Levels of Strategy-Making in a Single-Business Company
- Executive-Level Managers
- Functional Managers
- Operating Managers
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What Is a Business Model?
A business model addresses “How do we make money in this business?”
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Relationship Between Strategy and Business
Model
- Strategy . . .
- Deals with a company’s competitive
- initiatives and business approaches
- Business Model . . .
- Concerns whether revenues and costs flowing
- from the strategy demonstrate a business can be profitable and
- viable
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SWOT
- INTERNAL:
- Strengths
- Weaknesses
- EXTERNAL:
- Opportunities
- Threats
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The Five Forces Model of Competition
- Substitutes
- Buyers
- Potential New Entrants
- Supplies
- Rivalry
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A strategic group is
a cluster of firms in an industry with similar competitiveapproaches and market positions
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Example: KSFs for Apparel Manufacturing
Industry
- Appealing designs and color combinations --
- to create buyer appeal
- Low-cost manufacturing efficiency -- to keep
- selling prices competitive
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Competitive advantage exists when
a firm’s strategy gives it an edge in
nAttracting customers and
- Defending against competitive
- forces
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5 Generic Competitive Strategies
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Examples of Core Competencies
- Expertise in integrating multiple
- technologies to create families of new products
- Know-how in creating operating systems for
- cost efficient supply chain management
- Speeding new/next-generation products to
- market
Better after-sale service capability
- Skills in manufacturing a high quality
- product
- System to fill customer orders accurately and
- swiftly
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Examples: Distinctive Competencies
- Toyota
- nLow-cost, high-quality manufacturing
- capability and short design-to-market cycles
- Intel
- nAbility to design and manufacture
- ever more powerful microprocessors for PCs
- Starbucks
- nStore ambience and innovative coffee
- drinks
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Company Value Chain
- A company’s business consists of all
- activities undertaken in designing, producing, marketing, delivering, and
- supporting its product or service
- The value chain contains two types of
- activities
- nPrimary activities -- where most of the value
- for customers is created
- nSupport activities -- facilitate performance of the primary
- activities
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Example: Value Chain Activities for a Department Store Retailer
- Primary Activities
- nMerchandise selection and purchasing
- nStore layout and product display
- nAdvertising
- nCustomer service
- Support Activities
- nSite selection
- nHiring and training
- nStore maintenance
- Administrative activities
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Example: Key Value Chain Activities
Soft-Drink Industry
Processing of basic ingredients
Syrup manufacture
Bottling and can filling
Wholesale distribution
Advertising
Retailing
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Crafting vs. Executing Strategy
- Crafting the Strategy
- Primarily a market-driven activity
- Successful strategy making
- depends on
- nBusiness vision
- nPerceptive analysis of the situation
- nAttracting and pleasing customers
- nOutcompeting rivals
- nForging a competitive advantage
- Executing the Strategy
- Primarily an operations-driven activity
- Successful strategy execution depends on
- nGood organization-building and people
- management
- nCreating a strategy-supportive culture
- nContinuous improvement
- nGetting things done and delivering good
- results
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