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3-6. Strategy - BA 310 Strategic Management 1 Roadmap...

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1 BA 310: Strategic Management
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2 Roadmap: Strategy What is strategy? How are corporate and business unit strategies different? What process is used for strategic management? What’s a “SWOT” analysis? Where is it used? How do you assess an industry’s competitive situation? How do you build competitive advantage? What are the generic types of strategy?
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3 What is Strategy? Strategy : How the organization is going to compete What organizational goals to pursue How to attract and satisfy customers How to allocate and use resources Business model A design for how the company will make money Do customers value what the company provides? Can the company make money doing that?
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4 Levels of Strategy Choices about how to compete are made at different levels Corporate-Level Strategy Which industries & markets an organization competes in What to do in each business & the role each business plays Business-Level (Competitive) Strategy How a business unit gains advantage versus industry rivals What products & services to produce; what customers to reach Strategic business units – quasi-independent organizational units that formulate their own strategies Functional-Level Strategy How a function (e.g., marketing) supports the business strategy. See figure next slide
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Example: Levels of Strategy at General Electric
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6 Types of Corporate Strategies Growth: Expand existing businesses & enter new businesses Methods: Concentration (increase products/services or markets served); Integration (Horizontal or Vertical); Diversification (Related or Unrelated); Internal growth vs. External growth: Mergers, acquisitions, combinations. Stability: Focus on the current business(es) Not passive – rather, focused attention. Renewal: Reverse weakness By cutting costs & restructuring operations Retrenchment: To address short-term weaknesses. Turnaround: Address fundamental problems, often includes changing business mix (divesting & entering businesses)
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7 Relationship between corporate and business strategies: What advantage is there over each business being independent and/or making its own strategy? There must be a “core competency” at the corporate level or “strategic fit” across businesses, that can be translated into competitive advantage Example: General Electric vs. ITT Example: BCG Matrix (see textbook)
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8 The Strategic Management Process Exhibit 8.1 This slide will guide us frequently
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9 Determining the Organization’s Mission and Goals Mission : “A statement of the purpose of the organization.” In very broad terms, it usually: Identifies the organization’s products or services Identifies the organization’s customers & markets Distinguishes the organization from its competitors Organizational Goals: Desired outcomes
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