Corporate Strategy BM499 Strategic Management David J. Bryce November 5, 2002.
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Corporate Strategy Corporate Strategy BM499 Strategic Management BM499 Strategic Management David J. Bryce David J. Bryce November 5, 2002
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Transcript of Corporate Strategy BM499 Strategic Management David J. Bryce November 5, 2002.
Corporate StrategyCorporate Strategy
BM499 Strategic ManagementBM499 Strategic Management
David J. BryceDavid J. Bryce
November 5, 2002
Corporate vs. Business Unit Corporate vs. Business Unit StrategyStrategy
Corporate StrategyCorporate Strategy What business(es) should we be in? What business(es) should we be in?
How will we coordinate or integrate How will we coordinate or integrate businesses to create value?businesses to create value?
Business Unit StrategyBusiness Unit Strategy To whom will we sell, for what price?To whom will we sell, for what price?
How will we source, manufacture, How will we source, manufacture, distribute, etc. our product?distribute, etc. our product?
Adapted from M. Porter, 2001, HBR
Definition: Corporate Definition: Corporate AdvantageAdvantage
““The way a company creates The way a company creates value through the configuration value through the configuration and coordination of its and coordination of its multibusiness activities.”multibusiness activities.”
-- Collis & -- Collis & Montgomery, 1998Montgomery, 1998
Source: Creating Corporate Advantage, Collis & Montgomery, HBR, 1998
Scope of the FirmScope of the Firm
Horizontal ScopeV
ertic
al S
cope
Manuf.
Distrib
Sales
Prod./Ind. A
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales
outp
ut-p
rodu
cts
Prod./Ind. B Prod./Ind. C
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales. . .
Inpu
t-pr
oduc
ts
. . .
NewellNewell
Horizontal ScopeV
ertic
al S
cope
Manuf.
Distrib
Sales
Prod./Ind. A
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales
outp
ut-p
rodu
cts
Prod./Ind. B Prod./Ind. C
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales. . .
Inpu
t-pr
oduc
ts
. . .
Wal-martWal-mart
Horizontal ScopeV
ertic
al S
cope
Manuf.
Distrib
Sales
Prod./Ind. A
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales
outp
ut-p
rodu
cts
Prod./Ind. B Prod./Ind. C
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales. . .
Inpu
t-pr
oduc
ts
. . .
GEGE
Horizontal ScopeV
ertic
al S
cope
Manuf.
Distrib
Sales
Refrigerators
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales
outp
ut-p
rodu
cts
Aircraft Engines Prod./Ind. C
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales
Manuf.
Distrib
Sales. . .
Inpu
t-pr
oduc
ts
. . .
The Triangle of Corporate The Triangle of Corporate StrategyStrategy
Competitive Advantage
ControlCoordination Organization
Res
ourc
es
Businesses
Source: Creating Corporate Advantage, Collis & Montgomery, HBR, 1998
The Resource ContinuumThe Resource Continuum
Source: Creating Corporate Advantage, Collis & Montgomery, HBR, 1998
The Resource Continuum The Resource Continuum (continued)(continued)
Source: Creating Corporate Advantage, Collis & Montgomery, HBR, 1998
CoordinationCoordination
“Public Goods”
May be used in a number of production processes without dminishing their value or availability; e.g. Brand names; know-how
“Private Goods”
Usage diminishes value or availability; e.g. human resources, machines, etc.
The Resource Continuum The Resource Continuum (continued)(continued)
Source: Creating Corporate Advantage, Collis & Montgomery, HBR, 1998
ControlControl
FinancialFinancial Run the business by managing to a set of Run the business by managing to a set of
financial measures; e.g. return on assets, financial measures; e.g. return on assets, growth in revenue, profitability, etc.growth in revenue, profitability, etc.
OperationalOperational Run the business by managing to a set of Run the business by managing to a set of
operational measures; e.g. days in operational measures; e.g. days in inventory; reject rates, delivery lead times, inventory; reject rates, delivery lead times, book-to-bill ratios, etc.book-to-bill ratios, etc.
