Chapter 08, Strategic Management

2 3 cost leadership goal is to become the lowest cost

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Unformatted text preview: . TYPES OF ORGANIZATIONAL STRATEGIES (cont'd) FunctionalLevel Strategy 1. 2. Used to support the businesslevel strategy. Creates an appropriate supporting role for each functional area of the organization. Current Trends The Rule of Three The competitive forces in an industry, if unfettered, will inevitably create a situation where three companies (fullline generalists) will dominate any given market Some firms in the same market become super niche players and while others end up as stuckin theditch dwellers. THE IMPORTANCE OF STRATEGIC MANAGEMENT( cont'd) A strategic design for how a company intends to profit from its strategies, work processes and work activities. It focuses on two things: Whether customers will value what the company is providing to the customers. Whether the company can make any money doing that. Business Model 1. 2. Corporate Portfolio Analysis used when corporate strategy involves a number of business Boston Consulting Group (BCG) matrix strategy tool that guides resource allocation decisions on basis of market share and growth rate of SBU Market Share cash cows "milk" stars require heavy investment High High Low Stars Question Marks question marks attractive but hold a small market share Anticipated Growth Rate Cash Cows Low Dogs dogs sold off or liquidated SWOT ANALYSIS AND GRAND STRATEGIES Valuable Strengths Firm Status Corporate Growth Strategies Corporate Stability Strategies Critical Weaknesses Corporate Stability Strategies Corporate Retrenchment Strategies Critical Environmental Threats Abundant Environmental Opportunities Environmental Status Innovative Strategies Possible Events Strategic Decisions about Innovation Radical breakthroughs in products. Application of existing technology to new uses. Basic research Product development Process innovation First Mover An organization that brings a product innovation to market or use a new process innovations IDENTIFYING THE ORGANIZATION'S OPPORTUNITIES Organization's Organization's Resources/Abilities Opportunities Opportunities in the Environment...
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