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Strategy_Formulation_Functional_Strategy

Strategy_Formulation_Functional_Strategy - Strategy...

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Strategy Formulation Functional Strategy
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Functional Strategy Key Goals – To achieve corporate and business unit objectives and strategies by maximizing resource productivity To develop & nurture a distinctive competence to provide a company (BU) competitive advantage
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Functional Strategy Functional strategies are primarily concerned with: Efficiently utilizing specialists within the functional area. Integrating activities within the functional area (e.g., coordinating advertising, promotion, and marketing research in marketing; or purchasing, inventory control, and shipping in production/operations). Assuring that functional strategies mesh with business- level strategies and the overall corporate-level strategy.
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Functional Strategy Objectives Profitability ––producing at a net profit in business. Market share ––gaining and holding a specific share of a product market. Human talent ––recruiting and maintaining a high-quality workforce. Financial health ––acquiring financial capital and earning positive returns. Cost efficiency ––using resources well to operate at low cost. Product quality ––producing high-quality goods or services. Innovation ––developing new products and/or processes. Social responsibility––making a positive contribution to society.
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Core Competence is something that a corporation can do exceedingly well. A company must continually reinvest in its core competences or risk losing them.
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Core Competence To be considered a distinctive competency (superior to those of the competition), the competence must meet three tests: Customer Value ––it must make a disproportionate contribution to customer-perceived value. Competitor Unique ––it must be unique and superior to competitor capabilities.
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