Management meeting and exceeding customer expectation 8th ch07

Strategic Planning and Strategic Management Chapter MANAGEMENT Meeting and Exceeding Customer Expectations EIGHTH EDITION Prepared by Deborah Baker Texas Christian University Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved learning objectives Describe the nature of strategic planning and strategic management Distinguish between strategy formulation and strategy implementation Explain the steps involved in the strategic planning process Explain the importance of assessing the internal Chapter and external environments as a basis for strategic planning Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved learning objectives (continued) Identify the sources and kinds of information required in the strategic planning process Describe the factors involved in strategy implementation Explain the formulation of corporate-level Chapter strategy, business-level strategy, and functionallevel strategy Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Strategic Planning Organization’s Organization’s Mission Mission Chapter Long-Term Long-Term Goals Goals and and Strategies Strategies Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Resources Resources Strategic Management 11     Top Topmanagement’s management’sresponsibility responsibility Defines Definesthe the firm’s firm’sposition position Formulates Formulates strategies strategies Guides Guidesthe the execution execution of of long-term long-term organizational organizationalfunctions functions  Helps Helpsposition positionthe the organization organizationto to achieve achieve Chapter aasuperior superiorcompetitive competitive fit fit Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 11 Strategic Planning Questions  What Whatis isthe theorganization’s organization’s position positionin in the the marketplace? marketplace?  What Whatdoes doesthe the organization organization want wantits its position positionto tobe? be?  What Whattrends trendsand and changes changes are are occurring occurring in in the the marketplace? marketplace?  What Whatare are the the best bestalternatives alternatives to to help helpthe the Chapter organization organizationachieve achieve its itsgoals? goals? Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 11 Four Elements of Strategy Scope Scope Resource Resource Deployment Deployment Chapter Competitive Competitive Advantage Advantage Synergy Synergy Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 11 Scope Position Position or or size size Geographic Geographic markets markets Chapter Products Products and and services services Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 11 Resource Deployment Allocation Allocationof ofResources Resources  Material  Financial Chapter  Human Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Distinctive Competitive Advantage 11 Distinctive Distinctive Competitive Competitive Advantage Advantage A unique position in relationship to competition Core Competencies Chapter  what a company knows  what it does best Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 10 77 Grand Strategies Growth Growth Integration Integration Diversification Diversification Chapter Retrenchment Retrenchment Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Stability Stability 30 Grand Strategies 77 Growth Growth Integration Integration Achieved Achieved internally internally by by investing investing or or externally externally by by acquisition acquisition Adopted Adopted to to stabilize stabilize its its supply supply line line or or reduce reduce costs, costs, or or to to consolidate consolidate competition competition Adopted Adopted ifif the the company company wants wants to to move move Diversification Diversification into new products or markets into new products or markets Chapter Used Used to to reduce reduce the the size size or or scope scope Retrenchment Retrenchment of a firm’s activities of a firm’s activities Stability Stability Adopted Adopted when when the the organization organization wants wants to to remain remain the the same same Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 31 77 Integration Strategies  Vertical Integration – Gaining ownership of resources, suppliers, or distribution systems that relate to a company’s business  Horizontal Integration Chapter – A strategy to consolidate competition by acquiring similar products or services Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 32 Chapter 77 Portfolio Strategy Portfolio Portfolio Strategy Strategy Determines the mix of business units and product lines that will provide a maximum competitive advantage Strategic Strategic Business BusinessUnits Units Autonomous businesses with their own identities but operating within the framework of the organization Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 33 Chapter 77 BCG Growth-Share Matrix Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 34 77 Formulating Business-Level Strategy Chapter Adaptive Adaptive Strategies Strategies Competitive Competitive Strategies Strategies Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 35 Chapter 77 Adaptive Strategies Prospector Prospector Based Based on on innovation, innovation, taking taking risks, risks, seeing seeing out out opportunities, opportunities, and and expansion expansion Defender Defender Based Based on on holding holding current current market market share share or or retrenching retrenching Analyzer Analyzer Attempt Attempt to to maintain maintain current current market market share share while while innovating innovating in in some some markets markets Reactor Reactor No No strategy responds strategy responds to to environmental environmental threats threats as as they they occur occur and and has has no no clear clear sense sense of of direction direction Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 36 Chapter 77 Adaptive Strategies Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 37 77 Competitive Strategies Chapter Set Set products products or or services services apart apart from from Differentiation Differentiation those those of of other other companies companies CostCostLeadership Leadership Keep Keep costs costs as as low low as as possible possible through through efficient efficient operations operations and and light light controls controls Focus Focus Target Target aa specific specific market—a market—a particular particular region region or or group group of of potential potential customers customers Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 38 77 Porter’s Generic Strategies Competitive Competitive Scope Scope Competitive Competitive Advantage Advantage Low Low Cost Cost Higher Higher Cost Cost Broad Broad Overall Overall Cost Cost Leadership Leadership Differentiation Differentiation Narrow Narrow Cost Cost Focus Focus Differentiation Differentiation Focus Focus Chapter Source: Adapted from Michael E Porter, The Competitive Advantage of Nations (New York: The Free Press, 1980), p 39 Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 39 Chapter 77 Marketing Strategy Pricing Pricing Promotion Promotion Distribution Distribution Products Products Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 40 Production Strategy 77 Chapter      Plant location Inventory control methods Manufacturing techniques Quality and productivity improvement Outside suppliers Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 41 77 Human Resources Strategy Chapter  Recruiting  Training  Developing Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 42 77 Financial Strategy Chapter  Distribution or retention of profits  Spending and investing funds  Raising additional funds Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 43 77 R & D Strategy  Invention and development of new technologies Chapter  New applications for existing technologies Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 44 ... Goals and and Strategies Strategies Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Resources Resources Strategic Management 11     Top Topmanagement’s... 11 Create Create mission mission statement statement and and goals goals Step Step 22 Analyze Analyze SWOT SWOT of of internal internal and and external external environments environments Step... statement, goals, goals, and and strategies strategies Step Step 44 Formulate Formulate aa strategic strategic plan plan containing containing goals, goals, strategies, strategies, and and resources resources