LECTURE 7 SM.pdf - 1 MODULE- INDICATIVE CONTENT 1. 2. 3. 5....

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MODULE- INDICATIVECONTENT1.Introduction2.The Environment3.Strategic Capabilities4.Integrating Internal & External Environment5.Strategic Purpose6.Culture & Strategy7.Business Strategy / Business Level Strategy8.Corporate Strategy and Diversification9.International Strategy10.Implementation11.Evaluation12.Key Strategic-Management Topics: ethics, CSRSustainability13.Case study analysis2Strategic Management (MBA 7002)
LEARNING OBJECTIVESIdentifystrategic business units(SBUs) inorganisations.Assess business strategy in terms of thegeneric strategiesof cost leadership,differentiation and focus.Get familiar withPorter’s generic strategiesandthe strategy clock.Identify business strategies suited tohypercompetitiveconditions.Assess the benefits ofcooperationin businessstrategy.Apply principles ofgame theoryto businessstrategy.3Strategic Management (MBA 7002)
STRATEGIC CHOICES4Strategic Management (MBA 7002)Figure II.iStrategic choices
BUSINESS STRATEGY5Strategic Management (MBA 7002)Figure 6.1Business strategy
BUSINESSLEVELSTRATEGIES6Exhibit 5.1
STRATEGICBUSINESSUNITSOpposing pitfalls in identifying SBUsToo many different products/markets means lack of focusToo few means not reflecting diversity of products/markets7A strategic business unit is a part of an organisationfor which there is a distinct external market forgoods or services that is different from another SBU
CRITERIA FORIDENTIFYINGSBUSExternalInternalSame customer typesSimilarproducts/servicesSame channelsSimilar technologiesSimilar competitorsSimilar resources andcompetences8
STRATEGIC BUSINESS UNITS(SBUS)A strategic business unit (SBU)suppliesgoods or services for a distinct domain ofactivity.A small business has just one SBU.A large diversified corporation is made up ofmultiple businesses (SBUs).SBUs can be called ‘divisions’ or ‘profitcentres’SBUs can be identified by:Market based criteria (similar customers, channels andcompetitors).Capability based criteria (similar strategic capabilities).9Strategic Management (MBA 7002)
THE PURPOSE OFSBUSTo decentralise initiativeto smallerunits within the corporation so SBUscan pursue their own distinct strategy.To allow large corporations tovarytheir business strategiesaccording tothe different needs of external markets.To encourage accountabilityeachSBU can be held responsible for its owncosts, revenues and profits.10Strategic Management (MBA 7002)
BASES OFCOMPETITIVEADVANTAGECompetitive strategyThe bases for achieving competitive advantageThe bases for providing best valuePorters generic strategiesCost leadershipDifferentiationFocusBowman and DAvenis market facing strategiesProvide customer needs better or more effectively thancompetitorsThe strategy clock11

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