Management 13th edtion by schermerhorn bachrach chapter 10

John R Schermerhorn, Jr 10 Daniel G Bachrach Management th 13 edition Chapter 10 Strategy and Strategic Management Planning Ahead — Key Takeaways  Discuss the process and importance of strategic management  Identify the essential elements in strategic analysis  Explain alternative corporate strategies  Explain alternative business-level strategies  Describe the foundations for strategy implementation Copyright ©2015 John Wiley & Sons, Inc Chapter 10 Outline Strategic Management  Competitive advantage  Strategy and strategic intent  Levels of strategy  Strategic management process Essentials of Strategic Analysis  Analysis of mission, values, objectives  SWOT analysis of organization and environment  Five forces analysis of industry attractiveness  Strategic management process Copyright ©2015 John Wiley & Sons, Inc Chapter 10 Outline Corporate-Level Strategy Formulation  Portfolio planning model  Growth and diversification strategies  Retrenchment and restructuring strategies  Global strategies  Cooperative strategies Business-Level Strategy Formulation  Competitive strategies model  Differentiation strategy  Cost leadership strategy  Focus strategy Copyright ©2015 John Wiley & Sons, Inc Chapter 10 Outline Strategy Implementation  Management practices and systems  Strategic control and corporate governance  Strategic leadership Copyright ©2015 John Wiley & Sons, Inc Strategic Management  Basic concepts of strategy: Competitive advantage — ability to something so well that one outperforms competitors Sustainable competitive advantage — one that is difficult or costly for competitors to imitate Copyright ©2015 John Wiley & Sons, Inc Strategic Management  Sources of competitive advantage Technology Cost and quality Knowledge and speed Barriers to entry Financial resources Copyright ©2015 John Wiley & Sons, Inc Strategic Management  Basic concepts of strategy: Strategy  a comprehensive plan guiding resource allocation to achieve long-term organization goals Strategic intent  focusing all organizational energies on a unifying and compelling goal Copyright ©2015 John Wiley & Sons, Inc Strategic Management  Levels of strategies Corporate  Sets long-term direction for the total enterprise Business  How a division or strategic business unit will compete in its product or service domain Functional  Guides activities within one specific area of operations Copyright ©2015 John Wiley & Sons, Inc Figure 10.1 Three levels of strategy in organizations- corporate, business, functional strategies Copyright ©2015 John Wiley & Sons, Inc Corporate-Level Strategy Formulation Global strategies: Globalization strategy World is one large market; standardize products and advertising as much as possible Multidomestic strategy Customize products and advertising to local markets as much as possible Transnational strategy Balance efficiencies in global operations and responsiveness to local markets Copyright ©2015 John Wiley & Sons, Inc Corporate-Level Strategy Formulation Cooperative strategies Strategic alliances — two or more organizations partner to pursue an area of mutual interest Types of strategic alliances:  Outsourcing alliances  Supplier alliances  Distribution alliances Copyright ©2015 John Wiley & Sons, Inc Corporate-Level Strategy Formulation  Co-opetition – working with rivals on projects of mutual benefit Copyright ©2015 John Wiley & Sons, Inc Business-Level Strategy Formulation Business-level strategy formulation Good strategies help achieve above average returns Key question is “How can we best compete for customers in our market and with our products or services?” Copyright ©2015 John Wiley & Sons, Inc Business-Level Strategy Formulation Porter’s competitive strategies model Business-level strategic decisions are driven by:  Market scope  Source of competitive advantage Market scope and source of competitive advantage combine to generate three generic strategies Copyright ©2015 John Wiley & Sons, Inc Figure 10.7 Porter’s competitive strategies framework: soft-drink industry examples Copyright ©2015 John Wiley & Sons, Inc Business-Level Strategy Formulation Porter’s generic strategies for gaining competitive advantage: Differentiation strategy Cost leadership strategy Focus strategy: - Focused cost leadership - Focused differentiation Copyright ©2015 John Wiley & Sons, Inc Business-Level Strategy Formulation  Differentiation strategy Seeks competitive advantage through uniqueness  Cost leadership strategy Seeks competitive advantage by operating with lower costs than competitors Copyright ©2015 John Wiley & Sons, Inc Business-Level Strategy Formulation Focus strategy Concentrates on a special market segment Two types: Focused differentiation – offers a unique product to a special market segment Focused cost leadership – seeks the lowest cost of operations within a special market segment Copyright ©2015 John Wiley & Sons, Inc Strategy Implementation Strategy implementation Must be supported in every aspect of management  Planning  Controlling  Organizing  Leading Copyright ©2015 John Wiley & Sons, Inc Strategy Implementation  Strategic planning failures that hinder strategy implementation: Failures of substance  Inadequate attention to major strategic planning elements Failures of process  Poor handling of strategy implementation  Lack of participation error  Goal displacement error Copyright ©2015 John Wiley & Sons, Inc Strategy Implementation Corporate governance: – – – – System of control and performance monitoring of top management Done by boards of directors and other major stakeholder representatives Controversies regarding roles of inside directors and outside directors Increasing emphasis on corporate governance in contemporary businesses Copyright ©2015 John Wiley & Sons, Inc Strategy Implementation  Strategic control Makes sure strategies are well implemented and that poor strategies are scrapped or modified  Corporate governance Control and monitoring of top management Copyright ©2015 John Wiley & Sons, Inc Strategy Implementation Strategic leadership Inspires people to continually change, refine, and improve strategies and their implementation Copyright ©2015 John Wiley & Sons, Inc Strategy Implementation Critical tasks of strategic leadership Maintain strategic control Be the guardian of trade-offs Create a sense of urgency Ensure that everyone understands the strategy Be a teacher Copyright ©2015 John Wiley & Sons, Inc ... Copyright ©2015 John Wiley & Sons, Inc Chapter 10 Outline Strategic Management  Competitive advantage  Strategy and strategic intent  Levels of strategy  Strategic management process Essentials of...  Five forces analysis of industry attractiveness  Strategic management process Copyright ©2015 John Wiley & Sons, Inc Chapter 10 Outline Corporate-Level Strategy Formulation  Portfolio planning... leadership strategy  Focus strategy Copyright ©2015 John Wiley & Sons, Inc Chapter 10 Outline Strategy Implementation  Management practices and systems  Strategic control and corporate governance