Bus 411 Day 8 Copyright 2005 Prentice Hall1. Ch 1 -2 Agenda Question? Assignment 2 DUE Assignment 3 Posted IFE and Ratio analysis Due Feb 27 @ 12:30.

Bus 411

Day 8

Copyright 2005 Prentice Hall 1

Copyright 2005 Prentice Hall Ch 1 -2

Agenda Question? Assignment 2 DUE Assignment 3 Posted

IFE and Ratio analysis Due Feb 27 @ 12:30 PM Bus 411 assignment three.pdf

Begin Discussion on Strategies in Action


Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch 5 -4

Chapter 5Strategies in Action

Strategic Management: Concepts & Cases

13th Edition

Fred David


Ch 5 -5

CHAPTER OBJECTIVES

Discuss the value of establishing long-term objectives. Identify 16 types of business strategies. Identify numerous examples of organizations pursuing

different types of strategies. Discuss guidelines when particular strategies are most

appropriate to pursue. Discuss Porter’s five generic strategies. Describe strategic management in nonprofit,

governmental, and small organizations.


Ch 2 -6

Discuss joint ventures as a way to enter the Russian market.

Discuss the Balanced Scorecard. Compare and contrast financial with strategic objectives. Discuss the levels of strategies in large versus small

firms. Explain the First Mover Advantages concept. Discuss recent trends in outsourcing. Discuss strategies for competing in turbulent, high

velocity markets.


Ch 2 -7


Strategies for taking the hill won’t necessarily hold it. –Amar Bhide

Strategies in Action

The early bird may get the worm, but the second mouse gets the cheese. – Unknown


Strategies in Action

-- Quest for higher revenues

-- Quest for higher profits

Companies Embrace Strategic Planning


Results expected from pursuing certain strategies

Strategies represent actions to accomplish long-term objectives

Long-Term Objectives


A SMART way to Look at Objectives1. Specific – Objectives should specify what they

want to achieve.

2. Measurable – You should be able to measure whether you are meeting the objectives or not.

3. Achievable - Are the objectives you set, achievable and attainable?

4. Realistic – Can you realistically achieve the objectives with the resources you have?

5. Time – When do you want to achieve the set objectives?


Ch 5 -12

Long Term Objectives

Quantitative

Measurable

Realistic

Understandable

Challenging

Hierarchical

Obtainable

Congruent


Ch 5 -13


Ch 5 -14


Ch 5 -15

Financial vs. Strategic Objectives

Financial ObjectivesGrowth in revenues

Growth in earnings

Higher dividends

Larger profit margins

Greater ROI

Higher earnings per share

Rising stock price

Improved cash flow


Ch 5 -16

Financial vs. Strategic ObjectivesStrategic Objectives Larger market share Quicker on-time delivery than rivals Shorter design-to-market times than rivals Lower costs than rivals Higher product quality than rivals Wider geographic coverage than rivals Achieving technological leadership Consistently getting new or improved

products to market ahead of rivals


Ch 5 -17

Not Managing by Objectives

Managing by Extrapolation – “If it ain’t broke, don’t fix it”

Managing by Crisis – The true measure of a good strategist is the ability to fix problems

Managing by Subjectives – “Do your own thing, the best way you know how”

Managing by Hope – The future is full of uncertainty and if at first you don’t succeed, then you may on the second or third try


Ch 5 -18

The Balanced Scorecard

Robert Kaplan & David Norton –

Strategy evaluation & control technique

Balance financial measures with nonfinancial measures

Balance shareholder objectives with customer & operational objectives

Balanced Scorecard


Ch 2 -19

Adapted from Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review (January-February 1996): 76.


Ch 5 -20

Levels of Strategies – Large Company


Ch 5 -21

Levels of Strategies – Small Company


Ch 5 -22

Types of Strategies

Vertical IntegrationStrategies

Forward Integration

BackwardIntegration

HorizontalIntegration


Ch 5 -23

Vertical Integration Strategies

ForwardIntegration

Gaining ownership or increased control over distributors or retailers

BackwardIntegration

Seeking ownership or increased control of a firm’s suppliers

HorizontalIntegration

Seeking ownership or increased control over competitors


Ch 5 -24

Types of Strategies

IntensiveStrategies

MarketPenetration

MarketDevelopment

ProductDevelopment


Ch 5 -25

Intensive Strategies

MarketPenetration

Seeking increased market share for present products or services in present markets through greater marketing efforts

Market Development

Introducing present products or services into new geographic areas

ProductDevelopment

Seeking increased sales by improving present products or services or developing new ones


Ch 5 -26

Types of Strategies

DiversificationStrategies

Related Diversification

Unrelated Diversification


Ch 5 -27

Diversification Strategies

Related Diversification

Adding new but related products or services

Unrelated Diversification

Adding new, unrelated products or services

Growth Strategies


Ch 5 -29

Types of Strategies

DefensiveStrategies

Retrenchment

Divestiture

Liquidation


Ch 5 -30

Defensive Strategies

RetrenchmentRegrouping through cost and asset reduction to reverse declining sales and profit

Divestiture Selling a division or part of an organization

LiquidationSelling all of a company’s assets, in parts, for their tangible worth


Ch 5 -31

Defensive Strategy

Bankruptcy types Chapter 7 – liquidation Chapter 9 – municipalities Chapter 11 – reorganization Chapter 12 – family farmers Chapter 13 – small businesses


Ch 5 -32

Porter’s Five Generic Strategies

Type 1 Cost Leadership – Low cost Type 2 Cost Leadership – Best value Type 3 Differentiation Type 4 Focus – Low cost Type 5 Focus – Best value


Ch 5 -33


Ch 5 -34

Type 1 or 2 Cost Leadership Strategy Conditions Vigorous price competition Plentiful supply of identical products Little product differentiation Products used in same ways Low cost to switch Large buyers with power Industry newcomers use low prices to attract

buyers


Ch 5 -35

Type 3 Differentiation Strategy Conditions Many ways to differentiate and buyers

perceive the differences as having value Diverse buyer needs and uses Few rival firms following similar

differentiation approach Fast paced technological change and

evolving product features


Ch 5 -36

Type 4 or 5 Focus Strategy Conditions Large, profitable, and growing target market

niche Industry leaders do not consider the niche

crucial to their success Industry leaders consider it costly or difficult

to meet the needs of this niche Industry has many niches and segments Few rivals are specializing on this target

segment


Ch 5 -37

Means for Achieving Strategies

Cooperation among competitors Joint venture / partnering Merger / acquisition First mover advantages Outsourcing


Ch 5 -38

Strategic Management in Nonprofit and Governmental Organizations

Educational Institutions

Medical Organizations

Governmental Agencies and Departments


Ch 5 -39

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Bus 411 Day 8 Copyright 2005 Prentice Hall1. Ch 1 -2 Agenda Question? Assignment 2 DUE Assignment 3 Posted IFE and Ratio analysis Due Feb 27 @ 12:30.

Documents

prentice hallcopyright

pearson education

levels of strategies

generic strategies

particular strategies

strategic objectives

set objectives

different types of strategies