Professional Documents
Culture Documents
21
Strategy
A plan for accomplishing organizations goals.
Strategic Management
A management process aimed at formulating and implementing effective strategies.
22
Distinctive Competence
Scope
Resource Deployment
23
Existing
Market Penetration
Market
New Market Extension Diversification
24
2 Corporate-Level Strategy
The set of strategic alternatives that an organization chooses from as it manages its operations simultaneously across several industries and several markets.
Copyright 2002 by South-Western 25
2 Strategy Implementation
The methods by which strategies are operationalized or executed within the organization.
26
27
Using SWOT Analysis to Formulate Strategy Evaluating Organizations Strength Organizational Strength Skills and abilities enabling an organization to conceive of and implement strategies.
1 Common Organizational Strengths A skill or capability held by numerous competing firms 2 Distinctive Competencies Useful for competitive advantage and superior performance. 3 Sustained Competitive Advantage Occurs when a distinctive competence cannot be easily duplicated and is what remains after all attempts at strategic imitations have ceased. Copyright 2002 by South-Western 28
29
Using SWOT Analysis to Formulate Strategy Evaluating Organizations Opportunities Areas in the organizations environment that may generate high performance.
Evaluating Organizations Threats Areas in the organizations environment that make it difficult for the organization to achieve high performance
210
10
211
11
The Miles and Snow Typology Strategy Type Definition Prospector Innovative and growth oriented Defender Protect current market, maintains stable growth Analyzer Maintains current markets and customer satisfaction Reactor Reacts to changes in the environment
Copyright 2002 by South-Western
IBM Yahoo
12
Low
Introduction
Growth Time
Maturity
Decline
213
13
214
14
Defender Strategy
Attempts to protect market from new competitors. (Maruti & LIC) Focus on reducing cost. Focus on improving performance of products.
215
15
216
16
Single-Product Strategy
Organization manufactures one product and sells it in single geographic market. (Harvest Gold)
17
Related Diversification
Organization operates in several different businesses, industries, or markets that are somehow linked. Bases of Relatedness for Implementation Basis of Relatedness Similar technology Common distribution and marketing skills Common name brand and reputation Common customers Examples Phillips, Boeing HUL, Nestle AMUL, Maggi
Airtel
218
18
19
3 ways:
1.
Internal Development of New Products (HONDA) Replacement of Suppliers and Customers Mergers and Acquisitions (Dabur with Balsara) Backward Vertical Integration (Reliance)
2. 3.
220
20
Targeted sales
4 3 2 Diversification
Sales
0
Copyright 2002 by South-Western
2
221
Time (years)
Two important portfolio management techniques The BCG Matrix The GE Business Screen
Copyright 2002 by South-Western 222
22
BCG Matrix
Asian Paints
Nerolac Rajdoot Berger Total
Copyright 2002 by South-Western
5000
2500 1500 1000 10,000
50%
25% 15% 10% 100%
223
23
BCG Matrix
Concept of Relative Market Share and Market Growth
= 5000/2500 =
2
224
24
BCG Matrix
Concept of Relative Market Share and Market Growth
= 2500/5000 = 0.5
225
25
BCG Matrix
Concept of Relative Market Share and Market Growth
10%
226
26
Stars
Question marks
10%
Cash cows
Dogs
Low High
1
Relative market share
Low
227
27
Low
Competitive Position
Industry Attractiveness 1.Market Growth 2.Market Size 3.Capital Requirements 4.Competitive Intensity Competitive position
1.Market share
228
28
229
29