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Transcript of Organizational Strategy
Organizational Strategy
Strategy ishellipbull Derived from the word Stratagem bull hellipquoted in the Concise Oxford Dictionary as
meaning1 the art of war2 the management of an army or armies in a
campaign 3 the art of moving troopsships aircraft etc into
favourable positions (TACTICS)bull a plan of action or policy in business or politics
the way in which an organization uses its knowledge and other resources to achieve its economic purpose
STRATEGYbull The specific pattern of decisions and actions that
managers take to use core competences to achieve a competitive advantage and outperform competitors
bull The determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of courses of action and the allocation of resources necessary for carrying out these goals
bull Increase value for stakeholders customersbull Can also be called as Planning Mode or
Evolutionary mode
The Nature Of Strategy
bull Defined bull Vaguebull Planned bull Loosebull Proactive bull Reactivebull With detail bull No detail
Range Of Strategic Format
The Purpose of Strategybull Provides directionbull Provides coherencebull Allows day-to-day processes to be designedbull Should give direction for lsquoone offrsquo procedures
lsquoThe essence of strategy is coping with competition
The corporate strategistrsquos goal is to find a position in the market where his or her company can best defend itself against the collective industry forces or can influence them in its favourrsquoMichael E Porter
The Nature of Strategic Decisions
bull Magnitudendash BIG DECISIONS
bull Time-scalendash Medium to long term
bull Commitmentndash Locks in resources locks out altern
2-7
Why Some Organizations Fail
bull Too much emphasis on short-term financial performance
bull Failing to take advantage of strengths and opportunities
bull Neglecting operations strategybull Failing to recognize competitive threats
2-8
Why Some Organizations Fail
bull Too much emphasis in product and service design and not enough on improvement
bull Neglecting investments in capital and human resources
bull Failing to establish good internal communications
bull Failing to consider customer wants and needs
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Strategy ishellipbull Derived from the word Stratagem bull hellipquoted in the Concise Oxford Dictionary as
meaning1 the art of war2 the management of an army or armies in a
campaign 3 the art of moving troopsships aircraft etc into
favourable positions (TACTICS)bull a plan of action or policy in business or politics
the way in which an organization uses its knowledge and other resources to achieve its economic purpose
STRATEGYbull The specific pattern of decisions and actions that
managers take to use core competences to achieve a competitive advantage and outperform competitors
bull The determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of courses of action and the allocation of resources necessary for carrying out these goals
bull Increase value for stakeholders customersbull Can also be called as Planning Mode or
Evolutionary mode
The Nature Of Strategy
bull Defined bull Vaguebull Planned bull Loosebull Proactive bull Reactivebull With detail bull No detail
Range Of Strategic Format
The Purpose of Strategybull Provides directionbull Provides coherencebull Allows day-to-day processes to be designedbull Should give direction for lsquoone offrsquo procedures
lsquoThe essence of strategy is coping with competition
The corporate strategistrsquos goal is to find a position in the market where his or her company can best defend itself against the collective industry forces or can influence them in its favourrsquoMichael E Porter
The Nature of Strategic Decisions
bull Magnitudendash BIG DECISIONS
bull Time-scalendash Medium to long term
bull Commitmentndash Locks in resources locks out altern
2-7
Why Some Organizations Fail
bull Too much emphasis on short-term financial performance
bull Failing to take advantage of strengths and opportunities
bull Neglecting operations strategybull Failing to recognize competitive threats
2-8
Why Some Organizations Fail
bull Too much emphasis in product and service design and not enough on improvement
bull Neglecting investments in capital and human resources
bull Failing to establish good internal communications
bull Failing to consider customer wants and needs
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
STRATEGYbull The specific pattern of decisions and actions that
managers take to use core competences to achieve a competitive advantage and outperform competitors
bull The determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of courses of action and the allocation of resources necessary for carrying out these goals
bull Increase value for stakeholders customersbull Can also be called as Planning Mode or
Evolutionary mode
The Nature Of Strategy
bull Defined bull Vaguebull Planned bull Loosebull Proactive bull Reactivebull With detail bull No detail
Range Of Strategic Format
The Purpose of Strategybull Provides directionbull Provides coherencebull Allows day-to-day processes to be designedbull Should give direction for lsquoone offrsquo procedures
lsquoThe essence of strategy is coping with competition
The corporate strategistrsquos goal is to find a position in the market where his or her company can best defend itself against the collective industry forces or can influence them in its favourrsquoMichael E Porter
The Nature of Strategic Decisions
bull Magnitudendash BIG DECISIONS
bull Time-scalendash Medium to long term
bull Commitmentndash Locks in resources locks out altern
2-7
Why Some Organizations Fail
bull Too much emphasis on short-term financial performance
bull Failing to take advantage of strengths and opportunities
bull Neglecting operations strategybull Failing to recognize competitive threats
2-8
Why Some Organizations Fail
bull Too much emphasis in product and service design and not enough on improvement
bull Neglecting investments in capital and human resources
bull Failing to establish good internal communications
bull Failing to consider customer wants and needs
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
The Nature Of Strategy
bull Defined bull Vaguebull Planned bull Loosebull Proactive bull Reactivebull With detail bull No detail
Range Of Strategic Format
The Purpose of Strategybull Provides directionbull Provides coherencebull Allows day-to-day processes to be designedbull Should give direction for lsquoone offrsquo procedures
lsquoThe essence of strategy is coping with competition
The corporate strategistrsquos goal is to find a position in the market where his or her company can best defend itself against the collective industry forces or can influence them in its favourrsquoMichael E Porter
The Nature of Strategic Decisions
bull Magnitudendash BIG DECISIONS
bull Time-scalendash Medium to long term
bull Commitmentndash Locks in resources locks out altern
2-7
Why Some Organizations Fail
bull Too much emphasis on short-term financial performance
bull Failing to take advantage of strengths and opportunities
bull Neglecting operations strategybull Failing to recognize competitive threats
2-8
Why Some Organizations Fail
bull Too much emphasis in product and service design and not enough on improvement
bull Neglecting investments in capital and human resources
bull Failing to establish good internal communications
bull Failing to consider customer wants and needs
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
The Purpose of Strategybull Provides directionbull Provides coherencebull Allows day-to-day processes to be designedbull Should give direction for lsquoone offrsquo procedures
lsquoThe essence of strategy is coping with competition
The corporate strategistrsquos goal is to find a position in the market where his or her company can best defend itself against the collective industry forces or can influence them in its favourrsquoMichael E Porter
The Nature of Strategic Decisions
bull Magnitudendash BIG DECISIONS
bull Time-scalendash Medium to long term
bull Commitmentndash Locks in resources locks out altern
2-7
Why Some Organizations Fail
bull Too much emphasis on short-term financial performance
bull Failing to take advantage of strengths and opportunities
bull Neglecting operations strategybull Failing to recognize competitive threats
2-8
Why Some Organizations Fail
bull Too much emphasis in product and service design and not enough on improvement
bull Neglecting investments in capital and human resources
bull Failing to establish good internal communications
bull Failing to consider customer wants and needs
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
The Nature of Strategic Decisions
bull Magnitudendash BIG DECISIONS
bull Time-scalendash Medium to long term
bull Commitmentndash Locks in resources locks out altern
2-7
Why Some Organizations Fail
bull Too much emphasis on short-term financial performance
bull Failing to take advantage of strengths and opportunities
bull Neglecting operations strategybull Failing to recognize competitive threats
2-8
Why Some Organizations Fail
bull Too much emphasis in product and service design and not enough on improvement
bull Neglecting investments in capital and human resources
bull Failing to establish good internal communications
bull Failing to consider customer wants and needs
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-7
Why Some Organizations Fail
bull Too much emphasis on short-term financial performance
bull Failing to take advantage of strengths and opportunities
bull Neglecting operations strategybull Failing to recognize competitive threats
2-8
Why Some Organizations Fail
bull Too much emphasis in product and service design and not enough on improvement
bull Neglecting investments in capital and human resources
bull Failing to establish good internal communications
bull Failing to consider customer wants and needs
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-8
Why Some Organizations Fail
bull Too much emphasis in product and service design and not enough on improvement
bull Neglecting investments in capital and human resources
bull Failing to establish good internal communications
bull Failing to consider customer wants and needs
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-9
MissionStrategyTactics
How does mission strategies and tactics relate todecision making and distinctive competencies
StrategyStrategy TacticsTacticsMissionMission
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-10
Strategy
bull Missionndash The reason for existence for an organization
bull Mission Statementndash States the purpose of an organization
bull Goalsndash Provide detail and scope of mission
bull StrategiesndashPlans for achieving organizational goals
bull Tacticsndash The methods and actions taken to accomplish strategies
What is Mercerrsquos Mission Statement and Goals
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-11
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 21
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-12
Strategy Example
Rita is a high school student She would like to have a career in business have a good job and earn enough income to live comfortably
Mission Live a good lifebull Goal Successful career good incomebull Strategy Obtain a college educationbull Tactics Select a college and a majorbull Operations Register buy books take
courses study graduate get job
Example 1
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-13
Banks ATMsConvenienceLocationLocation
DisneylandNordstroms
Superior customer service
ServiceService
Burger KingSupermarkets
VarietyVolume
FlexibilityFlexibility
Express Mail FedexOne-hour photo UPS
Rapid deliveryOn-time delivery
TimeTime
Sony TVLexus CadillacPepsi Kodak Motorola
High-performance design or high quality Consistent quality
QualityQuality
US first-class postageMotel-6 Red Roof Inns
Low CostPricePrice
Examples of Operations StrategiesTable 22
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-14
Strategy Formulation
bull Distinctive competenciesbull Environmental scanningbull SWOTbull Order qualifiersbull Order winners
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-15
Strategy Formulation
bull Order qualifiers ndash Characteristics that customers perceive as
minimum standards of acceptability to be considered as a potential purchase
bull Order winnersndash Characteristics of an organizationrsquos goods or
services that cause it to be perceived as better than the competition
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-16
bull Economic conditionsbull Political conditionsbull Legal environmentbull Technologybull Competitionbull Markets
Strategy FormulationKey External Factors
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
2-17
bull Human Resourcesbull Facilities and equipmentbull Financial resourcesbull Customersbull Products and servicesbull Technologybull Suppliers
Strategy FormulationStrategy FormulationKey Internal FactorsKey Internal Factors
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Influences on strategic choices
bull Organizational Purposebull The Macro-Environmentbull The Industry Environmentbull Competitive Positioningbull Resourcesbull The Value Chainbull Organizational Structurebull Organizational Culture
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Organizational PurposeBusiness Ethicsbull Which purposesshould be prioritisedbull Why
Organizational Purposesbull Vision Mission
bull Objectives
Stakeholdersbull Whom does the organization serve
Cultural Contextbull Which purposes are prioritisedbull Why
Corporate Governancebull Whom should the organization servebull How should purposes be determined
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Levels of Organizational Strategy
CorporateStrategy
BusinessStrategy
FunctionalStrategy
Corporate Head Office
Division BDivision A
R amp D
Human Resources
Finance
Production
MarketingSales
R amp D
Human Resources
Finance
Production
MarketingSales
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Brief Overview of Corporate Strategy
bull Those strategies concerned with the broad and long-term questions of what business(es) the organization is in and what it wants to do with those businesses
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
1 What businesses should the corporationenterprise be in
2 How should the corporateGO office manage the array of business units (GBUrsquosSBUrsquos Wholly owed subsidiaries)
Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts
Key Questions of CorporateFirm-level Strategies
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Corporate (and International) Strategies
bull Three directions for corporate strategyndash Growth
bull MampA JV and SA (external growth)bull International (internal growth)
ndash Stability (internal growth)ndash Renewal (internal growth)
bull Retrenchmentbull Turnaroundbull Increase the four capabilities via core
competencies
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
The Macro-Environmentbull Political- Taxation Policy Foreign Trade
Regulationsbull Economic- Interest Rates Inflation
Unemploymentbull Sociocultural- Attitudes to work and leisure
Income distribution Levels of educationbull Technological- New discoveries developments
Spending on researchbull Environmental- Emission levels Planning
regulationsbull Legal -Monopolies Commission Employment Law
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
The Industry Environment Threat of
newentrants
Bargainingpower ofcustomer
Threat ofsubstitute
products or
Bargainingpower ofsuppliers
BargainingpThe Industry Jockeying
for position amongst current competitors
customer
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Competitive Positioning
bull Market segmentationbull Product differentiatorbull 1048708 The low cost leaderbull 1048708 Nicher
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Resources
bull 1048708 Capabilities and competenciesbull 1048708 Learning and knowledgebull 1048708 Analysing competitive advantage
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Organizational Structure
bull Structure typesbull Organizational designbull Communication
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Organizational Culture
bull Leadership behaviourbull 1048708 Reward systemsbull 1048708 Language
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Types of Strategybull Competitive Advantage ndash something which gives
the organisation some advantage over its rivalsbull Cost advantage ndash A strategy to seek out and
secure a cost advantage of some kind - lower average costs lower labour costs etc
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Types of Strategybull Market Dominancebull Achieved through
ndash Internal growthndash Acquisitions ndash mergers and takeovers
bull New product development to keep ahead of rivals and set the pace
bull ContractionExpansion ndash focus on what you are good at (core competencies) or seek to expand into a range of markets
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Types of Strategybull Price Leadership ndash through dominating the
industry ndash others follow your price leadbull Global ndash seeking to expand
global operationsbull Reengineering ndash thinking outside the box ndash
looking at news ways of doing things to leverage the organisationrsquos performance
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Types of Strategyndash Internal business level strategies ndash
bull Downsizing ndash selling off unwanted parts of the business ndash similar to contraction
bull Delayering ndash flattening the management structure removing bureaucracy speed up decision making
bull Restructuring ndash complete re-think of the way the business is organised
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
THE STRATEGY IMPERATIVEEnvironmental
Factors and
Organizationalcapabilities
Structure
Strategy
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Four Basic Strategies
High
Cost pressures
Low
Low High
GlobalStrategy
TransnationalStrategy
Multi domesticStrategy
InternationalStrategy
Pressures for local responsiveness
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Strategic Choices
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
TransnationalExploit experienced
based cost and location economies transfer core competencies
within the firm and pay attention to local
responsiveness needs
Internationalcreate value by
transferring skills to local markets where
skills are not present
Internationalcreate value by
transferring skills to local markets where
skills are not present
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Multidomesticoriented toward
achieving maximumlocal
responsiveness
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
Globalincrease profitability
through cost reductions from
experience curve effects and location
economies
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Global Exploit experience curve effects
Exploit location economies
Lack of localresponsiveness
International
Transfer distinctive competencies to
Foreign Markets
Lack of localresponsivenessInability to realizelocation economiesFailure to exploit experience curve effects
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
The Advantages and Disadvantages of the Four Strategies
Strategy Advantages Disadvantages
Multi-domesticCustomize product offeringsand marketing in accordancewith local responsiveness
Inability to realize locationeconomies
Failure to exploitexperience curve effects
Failure to transferdistinctive competenciesto foreign markets
TransnationalExploit experience curveeffects
Exploit location economiesCustomize product offeringsand marketing in accordancewith local responsiveness
Reap benefits of global learning
Difficult to implement due to organizationalproblems
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-
Strategy and Centralization
Global
CentralizeMulti-domestic
Decentralize
International
Centralize for core competencies
Decentralize for operating decisions
Transnational
Both CentralizeAnd Decentralize
- Organizational Strategy
- Strategy ishellip
- STRATEGY
- The Nature Of Strategy
- The Purpose of Strategy
- The Nature of Strategic Decisions
- Why Some Organizations Fail
- Slide 8
- MissionStrategyTactics
- Strategy
- Planning and Decision Making
- Strategy Example
- Examples of Operations Strategies
- Strategy Formulation
- Slide 15
- Strategy Formulation Key External Factors
- Slide 17
- Influences on strategic choices
- Organizational Purpose
- Slide 20
- Brief Overview of Corporate Strategy
- Slide 22
- Corporate (and International) Strategies
- The Macro-Environment
- The Industry Environment
- Competitive Positioning
- Resources
- Organizational Structure
- Organizational Culture
- Slide 30
- Slide 31
- Slide 32
- Slide 33
- THE STRATEGY IMPERATIVE
- Slide 35
- Slide 36
- Slide 37
- Slide 38
- Slide 39
-