STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITIONTHOMAS L. WHEELEN J. DAVID HUNGERCHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice

Functional StrategyThe approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity

Functional StrategyMarketing Strategy

PricingSellingDistribution

Functional StrategyMarketing Strategy

Product developmentLine extension

Functional StrategyMarketing Strategy

Advertising and promotionPush strategyPull strategy

Functional StrategyMarketing Strategy

PricingSkim pricingPenetration pricingDynamic pricing

Functional StrategyFinancial Strategy

Leveraged buyoutReversed stock splitTracking stock

Functional StrategyR&D Strategy

Technological leaderTechnological followerOpen innovation

Functional StrategyOperations Strategy

Job shopConnected line batch flowFlexible manufacturing systemsDedicated transfer linesMass productionContinuous improvement systemModular manufacturing

Functional StrategyPurchasing Strategy

Multiple sourcingSole sourcingJust-in-time (JIT)Parallel sourcing

Functional StrategyLogistics Strategy

CentralizationOutsourcingInternet

Functional StrategyHRM Strategy

360 degree appraisal

Functional StrategyOutsourcing errors

Activities that should not be outsourcedWrong vendor selectionWriting poor contractOverlooking personnel issuesHidden costs of outsourcingFailing to plan exit strategy

Proposed Outsourcing Matrix

Functional StrategyStrategies to Avoid

3 Follow the leaderHit another home runArms raceDo everythingLosing hand

Corporate StrategyGrowth Strategies --

External mechanisms

Mergers

Acquisitions

Strategic alliances

Constructing Corporate Scenarios

Functional StrategySubjective Factors Affecting Decisions --

Managements attitude toward riskPressures from stakeholdersPressures from corporate cultureNeeds and desires of key managers

Stakeholder Priority Matrix

Strategic ChoiceAvoiding the Consensus Trap --

Devils Advocate

Dialectical Inquiry

Strategic ChoiceEvaluation of Strategic Alternatives --

Mutual exclusivitySuccessCompletenessInternal consistency

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