1. Once a company has settled on which of the five generic competitive strategies to employ,
attention turns to how strategic choices regarding (1) competitive actions, (2) timing, and (3) scope
of operations can complement its competitive appro
C. Outsourcing Strategies: Narrowing the Boundaries of the Business
1. Outsourcing makes sense whenever:
An activity can be performed better or more cheaply by outside specialists.
The activity is not crucial to the rms ability to achieve sustainable co
10. To align the firm's organizational structure with its strategy, it is important to make strategycritical activities the main building blocks. There are four basic types of organizational structures:
the simple structure, the functional structure, the
Company cultures vary widely in strength and influence. Some are strongly embedded and have a
big impact on a company's practices and behavioral norms. Others are weak and have
comparatively little influence on company operations.
to bring together the personnel and expertise needed to create desirable new skill sets and
to improve supply chain efciencies,
to gain economies of scale in production and/or marketing, and
to acquire or improve market access through jo
Related diversification provides a stronger foundation for creating shareholder value than
unrelated diversification, since the specialized resources and capabilities that are leveraged in
related diversification tend to be
businesses, and (4) restructuring the company's business lineup with a combination of divestitures
and new acquisitions to put a whole new face on the company's business makeup.
1. Ethics concerns standards of right and wrong. Business ethics co
CSR and environmental sustainability strategies are in the best long-term interest of shareholders,
for the reasons above and because they can avoid or preempt costly legal or regulatory actions.
1. Executing strategy is an action-oriented, ope
across borders. A third concerns benefiting from cross-border coordination in ways that are
unavailable to domestic-only competitors.
8. Profit sanctuaries are country markets in which a company derives substantial profits because of
its protected market
mergers and acquisitions; they serve as a supplement to outsourcing, allowing more control
relative to outsourcing via arm's-length transactions.
11. Companies that manage their alliances well generally (1) create a system for managing their
The character of a company's culture is a product of the core values and business principles that executives
espouse, the standards of what is ethically acceptable and what is not, the work practices and behaviors that
define "how we do things
Leading the drive for good strategy execution and operating excellence calls for five actions on the part of
the manager in charge:
1- Staying on top of what is happening, closely monitoring progress, ferreting out issues, and
learning what obstacles lie
Implementing and executing strategy is an operation-driven activity revolving around the management of
people and business processes. The managerial emphasis is on converting strategic plans into actions and
good results. Management's handling
A. The Advantages of a Vertical Integration Strategy
1. The two best reasons for investing company resources in vertical integration are to strengthen
the rms competitive position and/or boost its protability,
Integrating Backward to Achieve Greater Co
B. Choosing Which Rivals to Attack
1. Offensive-minded rms need to analyze which of their rivals to challenge as well as how to
mount that challenge. The following are the best targets for offensive attacks:
Market leaders that are vulnerable
2. If a rm learns how to assemble its product more efciently at one plant, the accumulated
expertise and knowledge can be shared with assembly plants in other world locations.
3. Efciencies can be achieved by shifting workloads from where they are unusual
Assurance of Learning Exercises
Harley-Davidson has chosen to compete in various country markets in Europe and Asia using an
export strategy. Read the sections of its latest annual report at www.harley-davidson.com related
to its international operatio
d. The recipe for successful business alliances requires many meeting of many people working
in good faith over a period of time to iron out what is to be shared, what is to remain
proprietary, and how the cooperative arrangements will work.
IV. Using Int
b. They do not promote building a single, unied competitive advantageespecially one
based on low cost.
7. Think Global, Act Global Approaches to Strategy. As a rule, most companies that operate
multinationally endeavor to employ as global a strategy as cu
4. The big problem a franchisor faces is maintaining quality control.
5. Another problem that may arise is whether to allow foreign franchisees to make modications
in the franchisors product offerings so as to better satisfy the tastes and expectations of
III. Strategy Options for Entering and Competing in Foreign Markets
1. There are several general strategic options for a company that decides to expand outside its
domestic market and compete internationally or globally:
a. Maintain a national (one-countr
Market growth varies from country to country. In emerging markets, market growth potential
is far higher than in the more mature economies.
One of the biggest concerns of companies competing in foreign markets is whether to customize
ATM-outsourcing agreement between NCR Corporation and Co-op Financial Services that enables
Co-ops credit-union members to lease instead of buy new ATMs to reduce participating credit
unions capital expenses. According to Bill Allen, NCRs marketing direct
Bridgestone Tire Co., Ltd. was established in 1931. As Japans automobile industry grew, The
Bridgestone Group expanded to become Japans largest tire manufacturer. The company also
actively expanded overseas, particularly in Asia. In 1988, the company acqu
B. Signaling Challengers that Retaliation is Likely
Publicly announcing managements commitment to maintain the rms present market share.
Publicly committing the company to a policy of matching competitors terms or prices.
Maintaining a war chest of cas
B. Deciding Whether to Be an Early-Mover or Late Mover
1. In weighing the pros and cons of being a rst-mover versus a fast follower versus a slow
mover, it matters whether the race to market leadership in a particular industry is a marathon
or a spring.
To expand a companys geographic coverage.
To extend the companys business into new product categories or international markets.
To gain quick access to new technologies or other resources and competitive capabilities.
To try to invent a new industry a
Step 4: Check whether the firm's resource strengths fit the resource requirements of its present business
lineup. Resource fit exists when (1) businesses add to a company's resource strengths, either financially or
strategically, (2) a company has the res
and beat them in the marketplace with a superior strategy, the chief way to achieve lasting competitive
advantage is to outexecute them (beat them by performing certain value chain activities in superior
fashion). Building core competencies and competitiv
During the whole of the next day we
proceeded on our journey through this
interminable gallery, arch after arch, tunnel
Henry Lawson in Journey to the Center of
the Earth by Jules Verne.