Post on 18-Jan-2018
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STRATEGY MANAGEMENT IN
ACTION:CHAPTER 5
Brandon, Gerald, Ryan, Courtney, Brett, William, Kara, Scott
Toyota Started out terribly in the automotive
market Began to use lean manufacturing like just
in time production Jikoda- automation with a human touch Educational schools that specifically
teach Toyota maintenance Successful modern achievements- first
commercial hybrid, custom cars in 5 days
Strategic Management in Action: Process Overall corporate direction and goals set
by organization’s top managers Functional strategies are developed by
taking into account the company’s vision, mission, and strategies
At an organization’s founding overall strategy, goals, and functional strategies must be established
All this helps complete the “puzzle”
What Happens After SWOT? After the SWOT analysis you now have
Information on positive and negative aspects of internal and external environments
Company will be on the right track if Organization´s strengths in functional units can be exploited as
competitive advantages, with regards to external opportunities. Changes in funtional strategies might need to be changed if
Swot analysis points to threats in external environment or weaknesses in internal areas.
Important reasons to analyze functional strategies Strategists base their decisions on the resources, capabilities,
and core competencies found in the functional areas.
Functional Strategies Sets up the framework for which
companies efficiently and effectively use their resources in conducting business.
Three Functional Concerns
Product People Support Processes
PRODUCT Product Design and Development Strategies
Focused on Functions in R&D: ○ when?? (first-mover) or follow and mimic
innovations of other companies
○ Who will design and innovate this new product?
○ How? How will we generate ideas? How much research will be needed? Testing? Prototype use?
PRODUCT Production Operation Strategies
How will we create and provide our product or service? How will they be produced? And Where will we produce them?
There are many strategies, but all have same goal make sure products are available when, where, and how needed by customers or clients
Areas include strategy in capacity, layout, location, and supply-chain, quality, inventory, planning, scheduling, maintenance, etc.
PRODUCT Marketing Strategies
Manage Customers and Competitors, by strategic management of segmenting, target-markets, differentiation, positioning and marketing mix.
4 P’s – Product, Pricing, Promotion, and PlaceOther potential strategies include connecting
with customers, information gathering, building strong brands.
Efficiently and Effectively managing marketing function.
Functional Strategies- The PeopleAn organization’s people and their HR
strategies can help it establish a sustainable competitive advantage.
High performance work practices- Self-directed work teams- Job rotation - Problem-solving groups- Attitude surveys
These practices can… Improve the
knowledge, skills, and abilities of current and potential employees
Increase motivation Help retain quality
employees Encourage non-
performers to leave
Maintain balance between valuing employees and controlling costs
The most common form of controlling costs-Restricting company travel -Hiring freezes -Downgrading holiday parties -Layoffs
To Layoff or Not to Layoff Layoffs
Payroll is one of 1st place a company uses to cut expenses50 companies cut over 200,000 jobsEmployee moral and productivity often decline
“No layoff” policies4 day work-weeks -Unpaid vacationWage freezes -No bonuses paid
HR Strategies reflect the commitment to and treatment of employees Ensuring that the right people with the right
skills are in the right place at the right time Getting people into the organization through
planning and recruiting Training employees so that they posses the
right skills to perform the job Assessing performance through reviews Motivating employees to possess a high level
of effort through compensation and benefits
Functional Strategies-Support Process Companies need information about the
activities taking place in order to acquire and transform resources into products.
Information is collected through the company’s two main support processes: Information Systems Financial-accounting Systems
Like other functional areas, these support processes are a link to creating a sustainable competitive advantage.
Information Systems Information system – a system for
collecting, processing, storing, and disseminating any and all information that managers need to operate a business.
Two strategic decisions most associated with the organizations information systems are: Choice of system technology Choice of types of information systems needed
Decision will depend on how important information is to the organization.
Harrah’s Entertainment Harrah’s researched customer satisfaction in
regards to the service the company provided.
1) Customers who were satisfied with the service they received increased their
gaming expenditures by 10 percent.
2) Customers who were extremely satisfied with the service they received increased their gaming expenditures by 24 percent .
Harrah’s was able to discover this information because of its incredibly sophisticated information system.
All employees were made aware of this information, so they understood their valuable role in providing excellent customer service.
Financial-Accounting Systems Financial accounting systems provide strategic
decision makers with information about the organization’s financial transactions, accounts, and standing.
In designing the financial-accounting systems, a company must make sure they have: The information they need, when they need it, and in the
form needed. Strategic decisions in this functional area would
include: Evaluating financial performance Financial forecasting and budgeting Determining the optimal financing mix
Learning Outcome 5.3Discuss How Functional Strategies Are Implemented and Evaluated
1) Implementing the Various Functional Strategies
2) Evaluating Strategies and Making Changes
3) Coordinating with Other Organizational Strategies
Implementing the Various Functional Strategies
3 Steps:1) Decide what work process and
work activities will need to be done.
2) Make sure these processes and activities have the right resources.
3) DO IT! Key resources and
capabilities might not be exploited.
Strategies can impact each other in a negative way.
*Each functional area has its own specific responsibilities in contributing to the overall organizational goals. BUT, they must coordinate with each other! OR…
Evaluating Strategies The actual performance is evaluated in
comparison to the strategic goals
Strategic goals are implemented within each area of the organization
Strategy evaluation looks at what was supposed to be done versus what was done
Making Changes Change is necessary when the strategy
is vital to accomplishing the goals of the company
If change is necessary we go back to the first steps: Analyze the situationForm appropriate strategies Implement strategies Reevaluate and change again if necessary
Coordinating with Other Organizational Strategies Coordination is crucial to the
development of sustainable competitive advantages
Strategic decisions influence and are influenced by strategies that are put into practice within the company
An organization is a system with interdependent elements, which is evident in strategic coordination
SUMMARY OF FUNCTIONAL STRATEGIES
How Functional Strategies are part of the Strategic Management Process
The functional strategies an organization needsHow functional strategies are implemented and
evaluated
How Functional Strategies are part of the Strategic Management Process
What happens after the SWOT analysis?
○ Positive and negative aspects○ Points to strategic issues
The functional strategies an organization needs
Functional Strategies--The Product
Different Strategies-Product Design and Development Strategies Production-Operations StrategiesMarketing Strategies
How functional strategies are implemented and evaluated
Implementing the Various Functional Strategies
Evaluating Strategies and Making Changes
Coordinating with Other Organizational Strategies