Strategy

Strategy

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� Planning

- strategic

- emergent

- contingency plans

Objectives: LT, ST

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� Mission statement

� Environmental analysis (SWOT)

� Competitive analysis (Porter’s 5 forces)

� Portfolio analysis

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Identifying Mission Statement Components:

A compilation of Excerpts from Actual Corporate

Mission Statements

1. Customer-market

We believe our first responsibility is to the doctors, nurses, and

patients, to mothers and all others who use our products and

services. (Johnson & Johnson)

To anticipate and meet market needs of farmers, ranchers, and

rural communities within North America. (CENEX)

2. Product-service

AMAX’s principal products are molybdenum, coal, iron, ore,

copper, lead, zinc, petroleum and natural gas, potash,

phosphates, nickel, tungsten, silver, gold, and magnesium.

(AMAX)

3. Geographic domain

We are dedicated to the total success of Corning Glass Works as

a worldwide competitor. (Corning Glass)

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Identifying Mission Statement Components:

A compilation of Excerpts from Actual Corporate

Mission Statements (cont’d)

4. Technology Control Data is the business of applying microelectronics and

computer technology in two general areas: computer-related

hardware and computing-enhancing services, which include

computation, information, education, and finance. (Control Data)

The common technology in these areas relates to discrete

particle coatings. (NASHUA)

5. Concern for Survival

In this respect, the company will conduct its operation prudently,

and will provide the profits and growth which will assure Hoover’s

ultimate success. (Hoover Universal)

6. Philosophy We are committed to improve health care throughout the world.

(Baxter Travenol)

We believe human development to be the worthies of the goals

of civilization and independence to be the superior condition for

nurturing growth in the capabilities of people. (Sun Company)Wali Memon5

Identifying Mission Statement Components:

A compilation of Excerpts from Actual Corporate

Mission Statements (cont’d)

7. Self-concept Hoover Universal is a diversified, multi-industry corporation with

strong manufacturing capabilities, entrepreneurial policies, and

individual business unit autonomy. (Hoover Universal)

8. Concern for public image

We are responsible to the communities in which we live and work

and to the world community as well. (Johnson & Johnson)

Also, we must be responsive to the broader concerns of the

public, including especially the general desire for improvement in

the quality of life, equal opportunity for all, and the constructive

use of natural resources. (Sun Company)

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� This exercise should help you think about 1) your long-term personal goals, and 2) companies you might want to work for

� 1. What do you want inscribed on your gravestone?

� What would be your primary goal if you were told you had 18 months to live?

� If you had a child, what is the most important lesson that you would like him or her to know?

� Book says, “…every organization has a mission statement that defines its purpose and answers the question ‘what business are we in?’

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�Use the answers to the above questions to write a personal mission statement/paragraph that should specify your life’s goal!

� Consider:

Values: what’s important to you, e.g. health, friends

Principles: guidelines to follow, e.g. fairness, quality, service

Strengths: your qualities, e.g. adaptable, confident

Blockers: what’s stopping you? e.g. shyness, laziness

Next write a paragraph describing the mission of a company you would want to work for.

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SWOT analysis

� Environmental Scan – Both internal and external factors need to be considered:

1. Internal factors – characteristics in the firm (management, mission, resources, systems process, and structure) that can be considered strengths or strong points and weaknesses or weak points.

2. External factors - characteristics in the environment that are “outside” the firm (customers, competitors, suppliers, labor force, shareholders, society, technology, the economy, and governments)

that represent opportunities to tap or threats to flank.

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Starbuck’s Five-

Force

Competitive

Analysis

Exhibit –5

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Portfolio Analysis: BCG Matrix

Exhibit 5–11

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IND

US

TR

Y A

TT

RA

CT

IVE

NE

SS

BUSINESS STRENGTH

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Organizational Strategies occur on 3

levels: Grand, Business, and Functional

� A. Grand level strategies:

- 1. Growth (a. concentration; b. diversification)

- 2. Retrenchment

- 3. Stability (status quo)

- 4. Combination (multiple strategies)

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1a. Growth through concentration – concentrating

on your existing specialization

i. market penetration – aggressively targeting current

markets with existing product specialties

ii. market development/geographic expansion –

expanding into new markets

iii. market segmentation – dividing existing

markets

iv. product development – modify existing

products, or develop new but related

products

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1b. Growth through diversification – branching out into new areas

i. horizontal integration – expanding across the general industry (e.g. Coke acquires Minutemaid).

ii. vertical integration – expanding into industries populated by suppliers/buyers (e.g. Ford buys steel plant).

iii. conglomerate diversification – expanding into unrelated industries (e.g. GM buys Hershey’s candy).

iv. joint venture – expanding together with another company in order to diversity efficiently.

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2. Retrenchment

i. Turnaround – downsizing existing

company/divisions

ii. Divestiture – selling off existing

divisions/subdivisions

iii. Liquidation – Chapter 11 bankruptcy

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3. Stability - maintain status quo (e.g.

continuous improvement)

4. Combination – multiple use of

strategies

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�B. Business level strategies

1. Michael Porter’s Competitive Strategies:

i. low cost (e.g. Wal-Mart)

ii. differentiation (Volvo/Mercedes)

iii. focus (Penny’s/Pea in a Pod)

2. Adaptive business level strategies:

a. prospecting

b. defending

c. analyzing

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�B. Business level strategies (cont’d)

3. Product life cycle

i. introduction stage

ii. growth stage

iii. maturity stage

iv. decline stage

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Product Life Cycle: Starbucks

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�C. Functional level strategies

i. Marketing

ii. Manufacturing

iii. Human resources

iv. Etc.

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Strategy Formulation is followed by

Implementation

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SKILLS

STAFF

SHARED

VALUES

STRATEGY

STRUCTURE

STYLE

SYSTEMS

Seven S Model of Implementation

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Seven S Model

1. Strategy – Plan or course of action leading to the allocation of firm’s resources to reach identified goals.

2. Structure – The ways people and tasks relate to each other. The basic grouping of reporting relationships and activities. The way separate entities of an organization are linked.

3. Shared Values – The significant meanings or guiding concepts that give purpose and meaning to the organization.

4. Systems – Formal processes and procedures, including management control systems, performance measurement and reward systems, and planning and budgeting systems, and the ways people relate to them.

5. Skills – Organizational competencies, including the abilities of individuals as well as management practices, technological abilities, and other capabilities that reside in the organization.

6. Style – The leadership style of management and the overall operating style of the organization. A reflection of the norms people act upon and how they work and interact with each other, vendors, and customers.

7. Staff – Recruitment, selection, development, socialization, and advancement of people in the organization.

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Figure 4.

Contingency –Constrained Coefficients.

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