1 - Policy & Strategy Defined(2)
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Transcript of 1 - Policy & Strategy Defined(2)
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8/13/2019 1 - Policy & Strategy Defined(2)
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Business Strategy
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extension of Business
Policy
Policy refers to the goals and direction of a
company that considers the internal dynamicsof
a firm. (resources, strengths/weaknesses)
Policy is a predecessor to what is now a broader
field of strategic management.
Business Strategy looks not only internally, but
also externally.
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Strategy is about..
InternalAct
ivities Resources
Planning
Processes
People
ResponsibilitiesExternalFactors Customer
Competition
Economy
Trends
Suppliers
Government ThatleadtoStr
ategy
ProductOfferings
Services
ImplementationPlans
Policies
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Michael PorterWhat is Strategy?(Harvard Business Review, Nov/Dec96 Vol 74, Issue 6)
Operational Effectiveness Different from Strategy
Performing similar activities better than rivals, beingefficient
Leads to butnot sufficient to achieve superior
profitability
Benchmarking leads to companies looking more andmore alike and diluting the impact of OE
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Michael PorterWhat is Strategy?(Harvard Business Review, Nov/Dec96 Vol 74, Issue 6)
Being different deliberately choosing a different set
of activities to deliver a unique mix of value
Value
=
The Price One Pays
minus What One Gets
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What makes Burger King
Different?
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What makes Chick-fil-A
Different?
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Michael PorterWhat is Strategy?(Harvard Business Review, Nov/Dec96 Vol 74, Issue 6)
Strategy requires Fit - Combining activities that are:
Complimentary and Consistent with the overall strategy
Wal-Martlow cost / supply chain emphasis
McDonaldsbreakfast capability with given equipment
Cracker Barrel Restaurant and Gift Shop
Reinforcing
CVS brick and mortar stores and Caremark
Google and YouTube
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Michael PorterWhat is Strategy?(Harvard Business Review, Nov/Dec96 Vol 74, Issue 6)
Strategy requires Tradeoffs More of one
thing results in less of another
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Southwest Airlines
Describe the strategy
Describe the tradeoffs
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Strategy is not static, it is
dynamic
Internal Factors Change (minor) Personnel (training, experience, culture, processes, etc.)
Facilities (capacity, location, efficiencies)
Finances (working capital, leverage, sources of funds) Unplanned events
External Factors Change (major) Suppliers
Customers Competitors
Legal / Regulatory
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Strategy over-simplified
Being Different
Making things Fit
Choosing Tradeoffs
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What Is Strategic
Management?
The ongoing process companies use to form
a vision and mission, analyze their internal
and external environment, select one or more
strategies, then develop and implement
tactical plans that create value for all
stakeholders (customers, shareholders,
employees, community, etc.)
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Components of Strategic
Management
External Analysis
Formulate the Mission(Vision, Core Values, G&Os)
Internal Analysis
Formulate the Strategy
Implement the Strategy
Evaluate the Strategy
SWOT Analysis
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ASSIGNMENT
1. Select your team of two to four students
2. Working with your partners, select two
struggling firms
Select firms you would enjoy researching
and
For which information is readily available