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100 Strategic Management models, diagrams and charts for powerful business presentations and knowledge. Content: Strategic Pyramid, Strategic Vision, Strategy Alternatives, Five Forces Model, Competitive Advantage, Generic Strategies, Growth Strategies, Diversification Strategy, BCG Matrix, GE Business Screen, Cost Strategies, Exit/Entry Barriers, Resource Analysis, Core Competencies, Product-Life-Cycle, Top-Down-Management, Industry Analysis, International Strategies, SWOT Analysis, Portfolio Analysis, McKinsey’s 7-S Framework, Five-Phase Growth Model, Strategy Development, Merger&Acquisitions, Technology Strategies, Value Propositions, Ansoff Matrix, Experience Curve, Strategic Options, Window of Opportunity More business diagrams to download on http://www.drawpack.com your visual business knowledge

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Slide1 l.jpg

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venture

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branch

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subsidiary

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branch

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venture

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DIVERSITY

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venture

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Strategic Management...

100 Slides

Powered by www.drawpack.com. All rights reserved.


Slide2 l.jpg

Key Words...

Strategic Pyramid – Strategic Vision – Strategy Alternatives – Five Forces Model – Competitive Advantage – Generic Strategies – Growth Strategies – Diversification Strategy – BCG Matrix – GE Business Screen – Cost Strategies – Exit/Entry Barriers – Resource Analysis – Core Competencies – Product-Life-Cycle – Top-Down-Management – Industry Analysis – International Strategies – SWOT Analysis – Portfolio Analysis – McKinsey’s 7-S Framework – Five-Phase Growth Model – Strategy Development – Merger&Acquisitions – Technology Strategies – Value Propositions – Ansoff Matrix – Experience Curve – Strategic Options – Window of Opportunity


The five tasks of strategic management l.jpg

Task 2

Task 3

Task 4

Task 5

Task 1

Evaluating

performance,

monitoring new

developments,

and initiating

corrective

adjustments

Developing a

strategic vision

and business

mission

Crafting a

strategy to

achieve the

objectives

Implementing

and executing

the strategy

Setting

objectives

Improve/

change

as needed

Improve/

change

as needed

Recycle to

tasks 1, 2, 3 or

4 as needed

Revise

as needed

Revise

as needed

The Five Tasks of Strategic Management


Strategic approaches to preparing for future market conditions l.jpg

COMPANY APPROACHES

Reactive/Follower

Proactive/Leader

Rushing to catch

up to keep from

being swamped by

the waves

Aggressively

altering strategy to

make waves and

drive change

Rapid

Revolutionary

Change

FUTURE

MARKET

CONDITIONS

Anticipating

change and

initiating strategic

actions to ride the

crest of the waves

Revising strategy

to catch the waves

Gradual

Evolutionary

Change

Strategic Approaches to Preparing for FutureMarket Conditions


The strategic making pyramid i l.jpg

A DIVERSIFIED COMPANY

Responsibility of

corporate-level

managers

Corporate

Strategy

Two-Way Influence

Responsibility of

business-level

general managers

Business Strategies

Two-Way Influence

Responsibility of heads of

major functional activities

within a business unit

or division

Functional Strategies

(R & D, manufacturing, marketing,

finance, human resources, etc.)

Two-Way Influence

Responsibility of plant

managers, geographic

unit managers, and lower-

level supervisors

Operating Strategies

(regions and districts, plants,

departments within functional areas)

The Strategic-Making Pyramid I


The strategic making pyramid ii l.jpg

A SINGLE – BUSINESS COMPANY

Responsibility of

executive-level

managers

Business

Strategy

Two-Way Influence

Responsibility of heads

of major functional

activities within a

business

Functional Strategies

(R & D, manufacturing, marketing,

finance, human resources, etc.)

Two-Way Influence

Responsibility of plant

managers, geographic

unit managers, and lower-

level supervisors

Operating Strategies

(regions and districts, plants,

departments within functional areas)

The Strategic-Making Pyramid II


Identifying strategy for a single business l.jpg

Moves to respond and react

to changing conditions in the

macroenvironment and in industry

and competitive conditions

Planned, proactive moves

to outcompete rivals

Scope of geographic

coverage

Collaborative

partnerships and

strategic alliances

with others

BUSINESS

STRATEGY

Efforts to build competitive

advantage

Key functional strategies to build competitively valuable

recource strengths and capabilities

Financial

strategy

Human

resources

strategy

R & D,

technology,

engineering

strategy

Supply chain

management

strategy

Manufacturing

strategy

Sales,

marketing,

promotion &

distribution

strategies

Identifying Strategy for a Single Business


The networking of strategic visions missions objectives and strategies l.jpg

LEVEL 1

Responsibility of

corporate-level

managers

Overall Corporate

Scope and

Strategic Vision

Corporate-Level

Strategy

Corporate-Level

Objectives

Two-Way Influence

Two-Way Influence

Two-Way Influence

LEVEL 2

Responsibility of

business-level general

managers

Business-Level

Strategic Vision

and Mission

Business-Level

Objectives

Business-Level

Strategy

Two-Way Influence

Two-Way Influence

Two-Way Influence

LEVEL 3

Responsibility of heads

of major functional

activities within a

business unit or division

Functional

Area Missions

Functional

Strategies

Functional

Objectives

Two-Way Influence

Two-Way Influence

Two-Way Influence

LEVEL 4

Responsibility of plant

managers, geographic

unit managers, and

managers of front-line

operating units

Operating

Strategies

Operating Unit

Objectives

Operating Unit

Missions

The Networking of Strategic Visions, Missions, Objectives, and Strategies


Factors shaping the choice of company strategy l.jpg

STRATEGY-SHAPING FACTORS

EXTERNAL TO THE COMPANY

Economic

social,

political,

regulatory and

community

citizenship

considerations

Company

opportunities

and threats to

the company‘s

well-being

Competitive

conditions

and overall

industry

attractiveness

Conclusions

concerning

how internal &

external factors stack up

Crafting a

strategy

that fits

the overall

situation

Identification

and evaluation

of strategy

alternatives

The mix of considerations that determines

a company‘s strategic situation

Company

resource

strengths,

weaknesses,

competencies,

competitive

capabilities

Personal

ambitions,

business

philosophies,

ethical

principles of

key executives

Shared

values

and

company

culture

STRATEGY-SHAPING FACTORS

INTERNAL TO THE COMPANY

Factors Shaping the Choice of Company Strategy


A company s macroenvironment l.jpg

MACROENVIRONMENT

IMMEDIATE INDUSTRY &

COMPETITVE ENVIRONMENT

Technology

Legislation and regulations

Suppliers

Substitute

COMPANY

Rival Firms

Buyers

Social Values and Lifestyles

Population demographics

New Entrants

The Economy at large

A Company‘s Macroenvironment


The five forces model of competition l.jpg

Firms in other

industries

offering

Substitute

Products

Suppliers of

raw materials,

parts,

components or

other resource

inputs

RIVALRY

AMONG

COMPETING

SELLERS

Buyers

Potential

New Entrants

The Five-Forces Model of Competition


Mobilizing company resources to produce competitive advantage l.jpg

Competitive

Advantage

Strategic

Assets and

Market Achievements

Core and Distinctive

Competencies

Competitive

Capabilities

Company Resources

Mobilizing Company Resources to Produce Competitive Advantage


Representative company value chain l.jpg

Purchased

Supplies

and

Inbound

Logistics

Distribution

and

Outbound

Logistics

Primary

Activities

and Costs

Profit

Margin

Sales and

Marketing

Service

Operations

Product R & D, Technology and Systems Development

Support

Activities

and Costs

Human Resources Management

General Administration

Representative Company Value Chain


Representative value chain for an entire industry l.jpg

Company

Value Chain

Distribution Related

Value Chains

Customer Related

Value Chains

Supplier-Related

Value Chains

Activities,

Costs

and Margins of

Forward Channel

Allies and

Strategic

Partners

Internally

Performed

Activities, Costs

and Margins

Activities,

Costs, and

Margins of

Suppliers

Buyer/End User

Value Chains

Representative Value Chain for an Entire Industry


The five generic competitive strategies l.jpg

TYPE OF COMPETITVE

ADVANTAGE BEING PURSUED

Lower Cost

Differentiation

Overall

Low-Cost

Leadership

Strategy

A Broad

Cross-Section

of Buyers

Broad

Differentiation

Strategy

Best-Cost

Provider

Strategy

MARKET

TARGET

A Narrow

Buyer-Segment

(or Market Niche)

Focused

Differentiation

Strategy

Focused

Low-Cost

Strategy

The Five Generic Competitive Strategies


The building and eroding of competitive advantage l.jpg

Buildup Period

Benefit Period

Erosion Period

Size of

Competitive

Advantage

Size of

advantage

achieved

Strategic

moves

are successful

in producing

a competitive

advantage

Imitation,

duplication,

and „attacks“

by rivals erode

the advantage

Time

The Building and Eroding of Competitive Advantage


Strategy options for local companies in competing against global challengers l.jpg

RESOURCES AND COMPETITIVE

CAPABILITIES

Tailored for

home Market

Transferable to

other Countries

Dodge Rivals

by shifting to

a new

Business Model

or Market Niche

Contend on a

Global Level

High

INDUSTRY

PRESSURES

TO GLOBALIZE

Transfer

Company

Expertise to

Cross-Border

Markets

Defend by

using

„Home-Field“

Advantages

Low

Strategy Options for Local Companies in Competing against Global Challengers


The three strategy horizons for sustaining rapid growth l.jpg

Strategy

Horizon 3

Strategy

Horizon 2

Portfolio of

Strategy

Initiatives

„Long-Jump“ initiatives to sow the seeds for growth in in businesses of the future

 Minimal revenue gains now and likely losses, but potential for significant contribution to revenues and profits in 5-10 years

„Medium-Jump“ initiatives to leverage existing resources and capabilities to pursue growth in new businesses

Moderate revenue and profit gains now, but foundation laid for sizable gains over next 2-5 years

Strategy

Horizon 1

„Short-Jump“

initiative to fortify

and extend current

businesses

Immediate gains in

revenues and profits

Time

The Three Strategy Horizons for Sustaining Rapid Growth


Value chains for related businesses l.jpg

Representative Value Chain Activities

Support Activities

Supply

Chain

Activities

Sales

and

Marketing

Customer

Service

Distribution

Business A

Technology

Operations

Competitively valuable opportunities for technology or skills transfer, cost

reduction, common brand name usage, and cross-business collaboration

exist at one or more points along the value chains of A and B.

Supply

Chain

Activities

Sales

and

Marketing

Customer

Service

Business B

Distribution

Technology

Operations

Support Activities

Value Chains for Related Businesses


Value chains for unrelated businesses l.jpg

Representative Value Chain Activities

Support Activities

Supply

Chain

Activities

Sales

and

Marketing

Customer

Service

Business A

Technology

Operations

Distribution

An absence of competitively valuable strategic fits between the value

chain for Business A and the value chain for Business B

Sales

and

Marketing

Supply

Chain

Activities

Customer

Service

Technology

Operations

Business B

Distribution

Support Activities

Value Chains for Unrelated Businesses


Strategy options for a company that is already diversified l.jpg

Divest Some of the Company‘s

Existing Business

Make New Acquisitions and/or Enter

into Additional Strategic Partnerships

 To narrow the company‘s business base and scope of operations

To eliminate weak-performing businesses from portfolio

To eliminate businesses that no longer fit

 To build positions in new related/ unrelated industries

To strengthen the position of business

units in industries where the firm already has a stake

Strategy

Options

for a

Diversified

Company

Become a Multinational,

Multi-Industry Enterprise

Restructuring the Company‘s

Portfolio of Businesses

 To succeed in globally competitive core businesses against international rivals

To capture strategic fit benefits and win a competitive advantage via multinational diversification

 By selling poorly performing or noncore business units

By using cash from divestitures plus unused debt capacity to make new acquisitions

Strategy Options for a Company that is Already Diversified


Identifying a diversified company s strategy what to look for l.jpg

Whether

diversification is

based narrowly in a

few industries or

broadly in many

industries

Approach to

allocating

investment capital

and resources

across business

units

Whether the

businesses the

company has diversified

into are related,

unrelated, or a

mixture of both

A

Diversified

Company‘s

Strategy

Whether the

scope of company

operations is mostly

domestic, increasingly

multinational or

global

Efforts to capture

cross-business

strategic fits

Moves to

strengthen

positions in existing

businesses via new

acquisitions

Moves to divest

weak or

unattractive

businesses

Moves to build

positions in new

industries via

acquisitions, merger,

internal start-up, or

alliances

Identifying a Diversified Company‘s Strategy – What to Look for


A representative nine cell industry attractiveness competitive strength matrix l.jpg

COMPETITIVE STRENGTHS/BUSINESS POSITION

Strong

Average

Weak

High

Business F

Business A

LONG-TERM

INDUSTRY

ATTRACTIVENESS

Medium

Business B

Business C

High priority for investment

Low

Medium priority for investment

Business E

Business D

Low priority for investment

A Representative Nine-Cell Industry Attractiveness-Competitive Strength Matrix


The eight big managerial components of implementing strategy l.jpg

Building an

organisation

with competencies,

capabilities,

and resource

strengths

Exercising the

strategic leadership

needed to drive

implementation

forward

Allocating ample

resources to

strategy-critical

activities

The Strategy implementer‘s

action agenda

 What to do now vs. later

 What requires much time and personal attention What can be delegated to others

Shaping the

work environment

and corporate culture

to fit the strategy

Establishing

strategy-

supportive

policies

Tyring rewards

and incentives

to the achievement

of key strategic

targets

Instituting best

practices and

pushing for

continuous

improvement

Installing

information,

communication, and

operating systems

The Eight Big Managerial Components of Implementing Strategy


The components of building a capable organization l.jpg

Staffing the Organization

 Putting together a strong management team

 Recruiting and retaining talented employees

AN

ORGANIZATION

CAPABLE

OF GOOD

STRATEGY

EXECUTION

Building Core Competencies and Competitive Capabilities

 Developing a competence/capability portfolio suited to current strategy

 Updating and reshaping the portfolio as external conditions and strategy change

Structuring the Organization and Work Effort

 Organizing business functions and processes, value

chain activities, and decision making

The Components of Building a Capable Organization


Value chain as a percent of total price to the consumer l.jpg

31

100

Value added

related to

distribution

and marketing

31%

6

18

45

Value added

related to

supply and

assembly

69%

Purchasing

R & D

Price to

Consumer

Sales &

Marketing

Production

Value Chain (as a Percent of Total Price to the Consumer)


Why do mergers fail l.jpg

FINISH

START

Length of the integration

process

(86% of companies admitted

having inadequate

communication channels)

Excessive competition

for leading positions

Focusing on the old

organizational chart rather

than new business processes

Concepts for integration are

not detailed enough.

The acquired company is

supposed to accept the

company culture of the

purchaser

Disregard for the needs

of employees

(61% of the companies

surveyed defined reduction in

headcount as the main goal

to produce quick success)

Conflicting goals among

newly merged departments

(76% of surveyed companies

only focused on cost reductions)

Disregard for change

in the process of integrating

in new partner

(only 32% had an active risk

management in place)

Why do Mergers Fail?


The value chain l.jpg

Single-Industry Firm

Supplier

Value Chains

Supplier

Value Chains

Channel

Value Chains

Buyer

Value Chains

Diversified Firm

Firm Value Chain

Business Unit

Value Chain

Buyer

Value Chains

Channel

Value Chains

Supplier

Value Chains

Business Unit

Value Chain

Business Unit

Value Chain

The Value Chain


The generic value chain l.jpg

FIRM INFRASTRUCTURE

HUMAN RESOURCES MANAGEMENT

TECHNOLOGY DEVELOPMENT

PROCUREMENT

MARGIN

INBOUND

LOGISTICS

MARKETING

& SALES

OUTBOUND

LOGISTICS

OPERATIONS

SERVICE

Marketing

Management

Sales Force

Operations

Technical

Literature

Sales Force

Administration

Advertising

Promotion

The Generic Value Chain


Risks of the generic strategies l.jpg

Risks of Cost Leadership

Risks of Cost Differentiation

Risks of Cost Focus

Cost leadership is not sustained

 competitors imitate

 technology changes

 other bases for costs leadership erode

Differentiation is not sustained

 competitors imitate

 bases for differentiation become less important to buyers

The focus strategy is imitated

The target segment becomes

structurally unattractive

 structure erodes

 demand disappears

Proximity in differentiation

is lost

Cost proximity is lost

Broadly targeted competitors

overwhelm the segment

 the segment‘s differences from other segments narrow

 the advantages of a broad line increase

Cost focuses achieve even

lower cost in segments

Differentiation focuses

achieve even greater

differentiation in segments

New focuses subsegment the

industry

Risks of the Generic Strategies


Three generic strategies l.jpg

COMPETITIVE ADVANTAGE

Lower Cost

Differentiation

Broad

Target

2. Differentiation

1. Cost Leadership

COMPETITIVE

SCOPE

Narrow

Target

3B. Differentiation Focus

3A. Cost Focus

Three Generic Strategies


Operational effectiveness versus strategic positioning l.jpg

High

Productivity Frontier

NONPRICE

BUYER

VALUE

DELIVERED

Low

Low

High

RELATIV COST POSITION

Operational Effectiveness Versus Strategic Positioning


Competitor configuration and industry stability l.jpg

EXTENT OF DIFFERENTIATION/SEGMENTATION

Low

High

Modest share

difference

needed for

stability

Good

Competitions

COMPETITORS

Large share

difference

needed for

stability

Bad

Competitions

Competitor Configuration and Industry Stability


Shared value activities and cost position l.jpg

High

Potentially

important if

cost behavior

changes

Strategic

interrelationships

PERCENTAGE

OF OPERATING

COSTS OR ASSETS

REPRESENTED

BY THE VALUE

ACTIVITY

Potentially

important if

cost structure

changes

Unimportant

interrelationships

Low

Low

High

SENSITIVITY TO SCALE,

LEARNING, OR UTILIZATION

IN THE VALUE ACTIVITY

Shared Value Activities and Cost Position


Alternative scope of leader and challenger strategies i l.jpg

GEOGRAPHIC SCOPE

Local

Regional

National

Global

Segment

INDUSTRY

SCOPE

Industry

Related

Industries

Leader Scope

Possible

Challenger Scope

Alternative Scope of Leader and Challenger Strategies I


Alternative scope of leader and challenger strategies ii l.jpg

VERTICAL SCOPE

More Extensive

Backward

Integration

More Extensive

Forward

Integration

Average

Integration

Segment

INDUSTRY

SCOPE

Industry

Leader Scope

Related

Industries

Possible

Challenger Scope

Alternative Scope of Leader and Challenger Strategies II


The wheel of competitive strategy l.jpg

Product Line

Target Market

Finance

and Control

Marketing

GOALS

Objectives for

profitability,

growth, market

share, social

responsiveness

etc.

Definition of

how the

business is

going to

compete

Sales

R & D

Distribution

Purchasing

Labor

Manufacturing

The Wheel of Competitive Strategy


Barriers and profitability l.jpg

EXIT BARRIERS

Low

High

Low, stable

returns

Low, risky

returns

Low

ENTRY

BARRIERS

High, stable

returns

High, risky

returns

High

Barriers and Profitability


Generic competitive strategies l.jpg

Return on

Investment

Market Share

Generic Competitive Strategies


Firm s strategic needs to remain in the business l.jpg

Lacks Strengths

Relative to Competitors

for Remaining Pockets

Has Strengths Relative

to Competitors for

Remaining Pockets

Favorable

Industry

Structure

for Decline

Leadership

or

Niche

Harvest

or

Divest Quickly

Unfavorable

Industry

Structure

for Decline

Niche

or

Harvest

Divest Quickly

Firm‘s Strategic Needs to Remain in the Business


Five forces determining segment structural attractiveness l.jpg

  • Criteria

  • Size

  • Market Growth, Pricing

  • Market Diversity

  • Competitive Structure

  • Industry Profitability

  • Technical Role

  • Social

  • Environmental

  • Legal

  • Human

Industry Attractiveness

Low

High

Medium

High

  • Criteria

  • Size

  • Growth

  • Share

  • Position

  • Profitability

  • Margins

  • Technical Position

  • Strengths/Weaknesses

  • Image

  • Pollution

  • People

Medium

Business Unit Position

Build

Low

Hold

Harvest

Five Forces Determining Segment Structural Attractiveness


The quest for competitiveness l.jpg

The Quest for

Competitiveness

Restructuring

the Portfolio and

Downsizing

Headcount

Reengineering

Process and

Continuous

Improvement

Reinventing

Industries and

Regenerating

Strategies

Different

Smaller

Better

The Quest for Competitiveness


Finding the limits of the current economic engine l.jpg

Concept of

„Served Market“

What customers and needs

aren‘t we serving?

Could profits be extracted at a

different point in the value chain?

Revenue and

Margin Structure

Might customers‘ needs be better

served by an alternate configuration

of skills and assets?

Configuration of

Skills and Assets

Flexibility and

Adaptiveness

What is our vulnerability to

„new rules of the game?“

Finding the Limits of the Current Economic Engine


Beyond customer led l.jpg

CUSTOMER TYPES

Served

Unserved

Articulated

NEEDS

Unexploited

Opportunities

Unarticulated

Beyond „Customer-Led“


Why do great companies fail l.jpg

Accumulation

of abundant

resources

Optimized

business

system

Success

confirms

strategy

Unparalleled

track record

of success

No gap between

expectations

and performance

A view that

resources

will win out

Deeply

etched

recipes

Momentum

is mistaken

for leadership

Contentment

with current

performance

Resources

substitute

for creativity

Vulnerability

to new

rules

Failure to

„reinvent

leadership“

INABILITY TO INVENT THE FUTURE!

INABILITY TO ESCAPE THE PAST!

Why do Great Companies Fail?


Categories of resource leverage l.jpg

Concentrating

Accumulating

Conserving

Complementing

Recovering

Categories of Resource Leverage


Managing migration paths l.jpg

Creating

and Managing

Coalitions

Learning

and

Experimentation

in the Market

Investing

in Core

Competencies

Setting

Standards

and

Influencing

Regulation

Building Global

Brand and

Distribution

Managing Migration Paths


Establishing the core competence agenda l.jpg

MARKET

Existing

New

White spaces

What new products

or services could we

create by creatively

redeploying or

recombining our

current core

competencies?

Fill in the blanks

What is the opportunity

to improve our position

in existing markets by

better leveraging

our existing core

competencies?

Existing

CORE

COMPETENCIES

Premier plus 10

What new core

competencies will we

need to build to

protect and extend

our franchise in

current markets?

Mega-opportunities

What new core

competencies would

we need to build to

participate in the most

exciting markets of the

future?

New

Establishing the Core Competence Agenda


An alternate conception of the diversified firm l.jpg

Banner

Brand

Business

Units

Core

Products

(Platforms)

Core

Competencies

An Alternate Conception of the Diversified Firm


Criteria for integration decisions l.jpg

Coordination

Effectiveness

Transaction

Costs

Setup Costs

Risk

Capital

(e.g., equipment,

acquisitions)

Information

collection and

processing

Possibility for

unreasonable

price changes

Run lengths,

inventory levels

Systems

development

Legal

Supply or

outlet

foreclosure

Capacity

utilization

Training

Sales and

purchasing

Delivery

performance

Insulation from

market (e.g., from

technical changes,

new products)

Quality

Criteria for Integration Decisions


Vertical market structures l.jpg

NUMBER OF BUYERS

Many

One

Few

Buyers

dominate

No one

dominates

Many

NUMBER

OF

SELLERS

Few

High

trading

risk

Sellers

dominate

One

Vertical Market Structures


Transaction asset matrix l.jpg

ASSET SPECIFICITY, DURABILITY, AND INDENSITY

Low

High

Detailed, standardized

contracts (e.g., office

lease, credit sale

arrangements)

Detailed, probably

unique contract

(e.g., major public

construction projects)

Seldom

TRANSACTION

FREQUENCY

Vertical integration

(e.g., bauxite,

specialized auto

components)

Standardized

transactions

(e.g., groceries)

Often

Transaction-Asset Matrix


Primary influence processes l.jpg

BROAD ENVIRONMENT

Global

Political/Legal

Forces

Global

Economic

Forces

Competitors

Customers

Financial

Intermediaries

Suppliers

The

Organization

Government

Agencies and

Administrators

Activist

Groups

Local

Communities

Unions

OPERATING ENVIRONMENT

Technological

Change

Sociocultural

Forces

Primary Influence Processes


The product life cycle l.jpg

Introduction

Growth

Unit

Sales

Volume

A

B

C

Maturity

Commodity or Decline

Time

Note: A = Moderate Growth, B = Commodity, C = Decline

The Product Life Cycle


Internal venturing alternatives l.jpg

STRATEGIC IMPORTANCE

Not important

Important

High Control/

No Operational

Coupling

Special Business

Units

No Control/

No Operational

Coupling

Complete Spinoff

Unrelated

OPERATIONAL

IMPORTANCE

No Control/

Strong Operational

Coupling

Nurturing and

Contracting

High Control/

Strong Operational

Coupling

Direct Integration

Related

Internal Venturing Alternatives


The boston consulting group matrix l.jpg

18%

16%

Stars

Question Marks

14%

12%

BUSINESS

GROWTH

RATE

10%

8%

Cash Cows

Dogs

6%

4%

2%

10X 4X 2X1.5X 1X .5X .2X .1X

RELATIVE COMPETITIVE POSITION

(RELATIVE MARKET SHARE)

The Boston Consulting Group Matrix


The general electric business screen l.jpg

COMPETITIVE POSITION

Weak

Strong

Average

Low

INDUSTRY

ATTRACTIVENESS

Medium

High

The General Electric Business Screen


The top down control cycle l.jpg

Ownership of Accounting Information

empowers

Top Management

to plan, analyze, and transmit

instructions to the

Workforce

who manipulate processes

and cajole customers

to achieve accounting

Results

Read

down

from

here

Feedback

The Top-Down Control Cycle


The bottom up empowerment cycle l.jpg

Satisfying Customers

to learn and make changes that

continuously improve processes

capable of

Workforce

to be responsive (listen) and

flexible (change quickly) by

empowering the

Companies

to choose among global

opportunities and requires

Customers

empowers

Ownership of Information

Feedback

Read

up

from

here

The Bottom-Up Empowerment Cycle


The internal diversification process l.jpg

Diversification

Decision

Desire to expand into a

broad area acceptable

to key stakeholders

Search and Idea

Generation

Development of

specific new business

proposals based on

existing knowledge

fused with newly

developing

knowledge

Selection, Review,

and Development

Ongoing selection of

new products for

funding

Institutionalization

Test marketing and

commercialization

The Internal Diversification Process


Designs for organizational entrepreneurship l.jpg

STRATEGIC IMPORTANCE

Very Important

Uncertain

Not Important

3.

High Control/

No Operational

Coupling

Special business

units

6.

Moderate Control/

No Operational

Coupling

Independent

business units

9.

No Control/

No Operational

Coupling

Complete spin-off

Unrelated

2.

High Control/

Some Operational

Coupling

New product

business department

5.

Moderate Control/

Some Operational

Coupling

New venture

division

8.

No Control/

Some Operational

Coupling

Contracting

Partly

Related

OPERATIONAL

RELATEDNESS

1.

High Control/

Strong Operational

Coupling

Direct Integration

4.

Moderate Control/

Strong Operational

Coupling

Micro new ventures

department

7.

No Control/

Strong Operational

Coupling

Nurturing and

contracting

Strongly

Related

Designs for Organizational Entrepreneurship


The firm s external environment l.jpg

  • Remote Environment

  • (Global and Domestic)

  • Economic

  • Social

  • Political

  • Technological

  • Ecological

  • Industry Environment

  • (Global and Domestic)

  • Entry barriers

  • Supplier power

  • Buyer power

  • Substitute availability

  • Competitive rivalry

  • Operating Environment

  • (Global and Domestic)

  • Competitors

  • Creditors

  • Customers

  • Labor

  • Suppliers

THE FIRM

The Firm‘s External Environment


Forces driving industry competition l.jpg

Potential Entrants

Threat of

new entrants

Industry

competitors

Rivalry among

existing firms

Bargaining power

of suppliers

Bargaining power

of buyers

Suppliers

Buyers

Threat of

substitute products

or services

Substitutes

Forces Driving Industry Competition


International strategy options i l.jpg

LOCATION OF ACTIVITIES

Geographically

dispersed

Geographically

concentrated

High foreign investment

with extensive coordination

among subsidiaries

High

Global strategy

COORDINATION

OF ACTIVITIES

Country-centered strategy

by multinationals with

a number of domestic firms

operating only one

country

Export-based strategy

with decentralized

marketing

Low

International Strategy Options I


International strategy options ii l.jpg

High

Joint

venture

Foreign

branch

Foreign

subsidiary

Foreign

branch

Joint

venture

PRODUCT

DIVERSITY

Licensing/

Joint

venture

Licensing/

Export

Low

Low

High

MARKET COMPLEXITY

International Strategy Options II


Swot analysis diagram l.jpg

Numerous

environmental

opportunities

Cell 3:

Supports a turnaround-

oriented strategy

Cell 1:

Supports an

aggressive strategy

Substantial

internal

strengths

Critical

internal

weaknesses

Cell 4:

Supports a

defensive strategy

Cell 2:

Supports an

diversification strategy

Major

environmental

threats

SWOT Analysis Diagram


Decay of new product ideas l.jpg

60

Screening

55

Business analysis

Commercialization

20

NUMBER OF

IDEAS

Development

One successful

new product

15

Testing

10

5

10 20 30 40 50 60 70 80 90 100

CUMULATIVE TIME (PERCENT)

Decay of New Product Ideas


Grand strategy selection matrix l.jpg

Overcome

weaknesses

Turnaround or

retrenchment

Divestiture

Liquidation

Vertical integration

Conglomerate

diversification

External

(acquisition

or merger for

resource

capability)

Internal

(redirected

resources

within the

firm)

I

II

III

IV

Concentrated growth

Market development

Product development

Innovation

Horizontal integration

Concentric diversification

Joint venture

Maximize

strengths

Grand Strategy Selection Matrix


Bcg s growth share matrix i l.jpg

RELATIVE MARKET SHARE

High

Low

Question Mark

Star

A

High

Divest

E

B

D

MARKET GROWTH RATE

F

C

Low

G

Divest

Dog

Cash Cows

Targeted

future position

in the corporate

portfolio

Present position

in the corporate

portfolio

BCG‘s Growth/Share Matrix I


Bcg s growth share matrix ii l.jpg

RELATIVE MARKET SHARE

10x

High

1.0x

Low

0.1x

Low

Star businesses

Question marks

REAL

MARKET

GROWTH

10%

Cash generating

businesses

High

Dog businesses

BCG’s Growth/Share Matrix II


Underlying relationship between roi and market share in the new bcg matrix l.jpg

SIZE OF THE ADVANTAGE

Small

Large

Volume

Stalemate

ROI

ROI

Few

Market share

Market share

NUMBER OF WAYS

TO ACHIEVE

COMPETITVE

ADVANTAGE

Specialization

Fragmented

ROI

ROI

Many

Market share

Market share

Underlying Relationship between ROI and Market Share in the New BCG Matrix


The life cycle portfolio matrix l.jpg

THE BUSINESS UNIT‘S COMPETITIVE

POSITION

Strong

Average

Weak

Development

A

C

Growth

B

D

Competitive

shakeout

THE INDUSTRY‘S STAGE

IN THE EVOLUTIONARY

LIFE CYCLE

F

E

Maturity

Saturation

G

H

Decline

The Life-Cycle Portfolio Matrix


Mckinsey 7 s framework l.jpg

Strategy

Structure

Systems

Shared Values

(culture)

Style

(leadership)

Skills

(management)

Staff

(management)

McKinsey 7-S Framework


Managing the strategy culture relationship l.jpg

POTENTIAL COMPATIBILITY OF CHANGES

WITH EXISTING CULTURE

High

Low

Synergistic – focus on

reinforcing culture

Manage around

the culture

Few

CHANGES IN KEY

ORGANIZATIONAL

FACTORS THAT ARE

NECESSARY TO

IMPLEMENT THE

NEW STRATEGY

3

2

1

4

Link changes to

basic mission and

fundamental

organizational norms

Reformulate strategy or

prepare carefully for

long-term, difficult

change

Many

Managing the Strategy-Culture Relationship


A typical budgeting system for controlling strategy implementation l.jpg

Long-term objectives

Grand strategy

Annual objectives

Operating strategy

Capital-

investment

requirement

Capital

budget

With which management develops

MONITOR,

EVALUATE,

AND ADJUST

Sales/revenue

budgets

Sales forecasts

Income goals

Which are broken down into overall expense and cost goals

Expenditure budgets

and schedules

Budgets and schedules in

Manufacturing

Marketing

R & D

Administration

Financial

Production

Materials

Personnel

Capital

Advertising

Selling

Personnel

Overhead

Research

Cash flow Capital

Budgeted financial statements

1. Cash flows

2. Income statement

3. Balance sheet

Which are consolidated into

A Typical Budgeting System for Controlling Strategy Implementation


Strategy is the primary determinant of success or failure l.jpg

Success

Mission,

goals, and

objectives

Window

of

opportunity

Strategy

Tactics and operations

(effectiveness and efficiency)

Competitive

advantage

Distinctive

competence,

comparative

advantage

Failure

Strategy is the Primary Determinant of Success or Failure


Strategic tactical and operational views at various organizational levels l.jpg

Strategic

Upper

management

Tactical

Operational

Strategic

Middle

management

Tactical

Operational

First-line suppervisory

employees

Strategic

Tactical

Operational

t+2+5

t0

t+1

PLANNING HORIZON

Strategic, Tactical, and Operational Views at Various Organizational Levels


Greiner s five phase growth model l.jpg

Phase 1

Phase 2

Phase 5

Phase 3

Phase 4

Large

5. Crisis of ?

4. Crisis of

RED TAPE

5. Growth through

COLLABORATION

3. Crisis of

CONTROL

4. Growth through

COORDINATION

SIZE OF

ORGANIZATION

2. Crisis of

AUTONOMY

3. Growth through

DELEGATION

1. Crisis of

LEADERSHIP

2. Growth through

DIRECTION

Evolution stages

1. Growth through

CREATVITY

Small

Revolution stages

Young

Mature

AGE OF ORGANIZATION

Greiner‘s Five-Phase Growth Model


Firms compete for customers and resources two cases l.jpg

Case 1

Little

competition

for

resources

Business A

Intense

competition

for

customers

Resource K

Resource L

Resource M

Customer X

Customer Y

Customer Z

Business B

Case 2

Customer X

Customer Y

Customer Z

b

Intense

competition

for

resources

Business A

Little

competition

for

customers

Resource M

Resource N

Resource O

Customer J

Customer K

Customer L

Business B

Firms Compete for Customers and Resources; Two Cases


Intensity of competition l.jpg

COMPETITION FOR CUSTOMERS

Moderate pressure

(purchasing)

Case 2

Intense competitive

pressure

Intense

COMPETITION

FOR

RESOURCES

Moderate pressure

(marketing)

Case 1

Little competitive

pressure

Minimal

Minimal

Intense

Intensity of Competition


Value and the price performance curve l.jpg

High

Lesser value

Premium

Loser

Good

RELATIVE

PRICE

Average

Commodity

Greater value

Winner

Economy

Low

High

Low

RELATIVE QUALITY

Value and the Price-Performance Curve


Functional strategy areas l.jpg

  • Delivery strategies

  • Pricing

  • Promotion

  • Channels

  • Sales

  • Distribution

  • Service

  • Processing strategies

  • Process development

  • Operations and productivity

    • Fabrication

    • Assembly

  • Sourcing strategies

  • Procurement

  • Resources

  • Supporting strategies

  • Planning and control

  • Training and development

  • Maintenance

  • Legal

  • Etc.

Functional Strategy Areas


Basic organizational forms for multinational operations l.jpg

Degree of

parent company

control

Organizational Form

Main Characteristics

Minimum capital commitment

Minimum long-term profits

Risk of loss of license

Minimum control over operations

Licensing

Minimum

Low capital commitment

Easy entry

Risk of loss of franchise

Long-term profitability is tentative

Branch operations

Low

Flexible capital commitment

Relatively easy entry

Local commitment

Good opportunity for long-term profits

Acquisition of local knowhow and

management skills

Joint ventures

Substantial

Risk of expropriation or discriminatory

action

Large capital commitment

Long-term profit potential is high but

so is risk

Close control over operations

Subsidiary operations

Almost complete

Basic Organizational Forms for Multinational Operations


Types of acquisitions l.jpg

Vertical

integration

Concentric

diversification

Horizontal

diversification

Mining

Steel

ingot

producer

A

Steel

ingot

producer

B

Aluminium

ingot

producer

Steel

frabricator

Electronics

company

Unrelated

diversification

Types of Acquisitions


Strategic options and the life cycle l.jpg

PRODUCT/MARKET STAGE

Embryonic

or

introduction

Aging

or

decline

Growth

Maturity

Dominant

Strong

Wide range of

strategic

options

COMPETITIVE

POSITION

Favorable

Caution, selective development

Tenable

Danger zone,

Retreat to niche,

withdraw, or liquidate

Weak

Strategic Options and the Life Cycle


Attractiveness competitive position strategies l.jpg

COMPETITIVE POSITION

Strong

Average

Weak

  • Evaluate

  • potential for

  • leadership via

  • Segmentation

  • Identify

  • weaknesses

  • Build strengths

  • Specialize

  • Seek niches

  • Consider acquisitions

  • Grow

  • Seek dominance

  • Maximize

  • investment

High

  • Identify growth segments

  • Invest strongly

  • Maintain position elsewhere

  • Identify growth segments

  • Specialize

  • Invest selectively

INDUSTRY

ATTRACTIVENESS

  • Specialize

  • Seek niches

  • Consider exit

Medium

  • Trust leader‘s statesmanship

  • Sic on competitor‘s cash generators

  • Time exit and divest

  • Maintain overall position

  • Seek cash flow

  • Invest at maintenance levels

  • Prune lines

  • Minimize investment

  • Position to divest

Low

Attractiveness/Competitive Position Strategies


Technology strategies for a sustainable competitive advantage l.jpg

Technology change

Political/legal

National endowments

Block

  • Firm capabilities

  • Technology

  • Structure, systems and people

Run

Team-up

Customer

preferences and

expectations

Competition

Globalization

Macro-economic

Technology Strategies for a Sustainable Competitive Advantage


Value propositions across four quadrants l.jpg

Create

Collaborate

  • Innovation

  • Focuses on innovation in products, processes and services

  • Creates growth and industry leadership

  • Capability

  • Focuses on developing abilities

  • Creates a sustainable advantage

  • Market awareness

  • Focuses on competitive advantage through agility and market awareness and speed

  • Creates asset productivity and shareholder value

  • Efficiency

  • Focuses on improving process efficiency

  • Creates better products more cheaply

Compete

Control

Value Propositions Across Four Quadrants


The ansoff matrix l.jpg

PRODUCTS AND/OR SERVICES

Existing

New

New

product

development

Market

penetration

Existing

MARKETS

Market

development

Diversification

New

The Ansoff Matrix


The customer growth matrix l.jpg

PRODUCTS AND/OR SERVICES

Existing

New

Customer

loyalty

Customer

extension

Existing

CUSTOMERS

Customer

acquisition

Customer

diversification

New

The Customer Growth Matrix


Combining elements of the customer growth matrix l.jpg

PRODUCTS AND/OR SERVICES

Existing

New

Loyalty

through

extension

Customer

loyalty

Customer

extension

Existing

Acquisition

through

referral

CUSTOMERS

Customer

acquisition

Customer

diversification

New

Combining Elements of the Customer Growth Matrix


Conceptual model for the evaluation of product innovation projects l.jpg

PROJECT ENVIRONMENT

parent

organization

holding

organization

subcontractors

market

client

competitor

formulate specify organize realize

PROJECT

Conceptual Model for the Evaluation of Product Innovation Projects


Alternative aims in various stadia of product development l.jpg

BUSINESS

INVESTMENT

STRATEGIC

POSITIONING

KNOWLEDGE

BUILDING

is it attractive?

do we want it?

CONCEPT

What is

possible?

how we gonna

do it?

can we do it?

hope

and fear

making profit

  • create the future:

  • alternatives

  • analyses

  • choice

UNCERTAINTY

Cost

Investment

Option

MARKET

COMMITMENT OF RESOURCES

Alternative Aims in Various Stadia of Product Development


Core competence management model l.jpg

Distinctive

assets

Raw materials

Country-specific

Co-specialized

assets

Company-specific

Product positioning with

intended competitive advantages

Internal learning

Internal alignment

Competitive dynamics

External interpretation

Learning from

resource markets

Learning from

output markets

The „intelligent enterprise“

Core Competence Management Model


Core competencies the link between the economics of the firm management cognition l.jpg

Interpreting the external environment

Flexible

recipes and

routines

CORE

COMPETENCES

Tacit knowledge

and

understandings

Shared values

and

beliefs

Understanding

internal dynamics

Understanding

competitive dynamics

Core Competencies: The Link between the Economics of the Firm & Management Cognition


Technical risk business risk model l.jpg

High

Very

risky

Business

safe

(Maximum

Management

Involvement)

(Moderate

Management

Involvement)

TECHNICAL

RISK

Very

safe

Technically

safe

(Minimal

Management

Involvement)

(Moderate

Management

Involvement)

Low

High

Low

BUSINESS RISK

Technical Risk/Business Risk Model


Typical industry experience curve strategies l.jpg

On-Line Inventory

On-Line Teller

Terminals

Bar Code

Point-of-Sale Terminals

ATM, Customer

Information Database

People Systems

Home Computers

People Systems

Home Computers

Retail

Banking

Shop Floor Systems

On-Line Inventory

Just-in-Time Manufacturing

Personal Computers

for Customers

CAD/CAM, CIM

Robotics

Interorganizational

Systems

Distribution through

People Systems

Manufacturing

Distribution

Typical Industry Experience Curve Strategies


The cycle of timing know how competition l.jpg

Escalating Costs

and Risks on

Each Cycle

The Firm builds a Technological

Resource Base

to Create Advantage

Then Moves into a New

Market First

Followers Imitate Products and Overcome Switching Costs and Brand Loyalties

First Mover Throws Up Impediments to

Imitation of Subsequent Products

First Mover

Moves

Downstream

into Higher

Value-added

Products

Followers Overcome the

Impediments and Replicate the

Resource Base of the First Mover

First Mover Uses a

Transformation Strategy

and Abandons Product Design/

Technology-based Approach

First Mover Uses a

Leapfrog Strategy

to a New Resouce Base

Builds Resources to Match

the Follower‘s

Manufacuring Skills

Price War

The Cycle of Timing/Know-How Competition


Disruption and the new 7 s s l.jpg

VISION PLANNING

  • Vision for Disruption

  • Identifying and creating

  • opportunities for

  • temporary advantage

  • through understanding

  • Stakeholder Satisfaction

  • Strategic Soothsaying

  • directed at identifying new ways to serve

  • existing customers better or new

  • customers that no one else

  • serves now.

  • Capability for Disruption

  • Sustaining for momentum by

  • developing flexible capacities for

  • Speed

  • Surprise

  • that can be applied across

  • many actions to build a series

  • of temporary advantages

  • Tactics for Disruption

  • Seizing the initiative to gain

  • advantage by

  • Shifiting the Rules

  • Signaling

  • Simultaneous and

  • Sequential Strategic

  • Thrusts

  • with actions that shape, mold, or

  • influence the direction or nature of

  • the competitors‘ responses.

Market

Disruption

RESOURCE PLANNING

PUNCH-COUNTERPUNCH PLANNING

Disruption and the New 7-S’s


The cycle price quality competition moving up an escalation ladder i l.jpg

METHODS/TECHNOLOGIES USED TO SERVE CUSTOMERS

Frequent Incremental

Improvements

Radically New

Method

Rapid

Evolutionary

Competition

Revolutionary

Competition

Existing

CUSTOMER

NEEDS

SERVED

Niche

Creation

Market

Creation

New

The Cycle Price-Quality Competition – Moving up an Escalation Ladder I


The cycle price quality competition moving up an escalation ladder ii l.jpg

Beliefs System

Boundary Systems

Risk to

be avoided

Core

Values

Business

Strategy

Strategic

Uncertainties

Critical

Performance

Variables

Interactive Control Systems

Diagnostic Control Systems

The Cycle Price-Quality Competition – Moving up an Escalation Ladder II


The cycle price quality competition moving up an escalation ladder iii l.jpg

High

Laissez-Faire

Management

Professional

Management

DELEGATION OF

RESPONSIBILITY

Entrepreneurial

Management

Bureaucratic

Management

Low

Low

High

USE OF FORMAL CONTROL

MECHANISMS

The Cycle Price-Quality Competition – Moving up an Escalation Ladder III


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