STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION

1. CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice STRATEGIC MANAGEMENT & BUSINESS POLICY11TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER

2. Functional Strategy The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity

3. Functional Strategy • Marketing Strategy – • Pricing • Selling • Distribution

4. Functional Strategy • Marketing Strategy – • Product development • Line extension

5. Functional Strategy • Marketing Strategy – • Advertising and promotion • Push strategy • Pull strategy

6. Functional Strategy • Marketing Strategy – • Pricing • Skim pricing • Penetration pricing • Dynamic pricing

7. Functional Strategy • Financial Strategy – • Leveraged buyout • Reversed stock split • Tracking stock

8. Functional Strategy • R&D Strategy – • Technological leader • Technological follower • Open innovation

9. Functional Strategy • Operations Strategy – • Job shop • Connected line batch flow • Flexible manufacturing systems • Dedicated transfer lines • Mass production • Continuous improvement system • Modular manufacturing

10. Functional Strategy • Purchasing Strategy – • Multiple sourcing • Sole sourcing • Just-in-time (JIT) • Parallel sourcing

11. Functional Strategy • Logistics Strategy – • Centralization • Outsourcing • Internet

12. Functional Strategy • HRM Strategy – • 360 degree appraisal

13. Functional Strategy • Outsourcing errors – • Activities that should not be outsourced • Wrong vendor selection • Writing poor contract • Overlooking personnel issues • Hidden costs of outsourcing • Failing to plan exit strategy

14. Proposed Outsourcing Matrix

15. Functional Strategy • Strategies to Avoid – • 3 Follow the leader • Hit another home run • Arms race • Do everything • Losing hand

16. Corporate Strategy • Growth Strategies -- • External mechanisms • Mergers • Acquisitions • Strategic alliances

17. Constructing Corporate Scenarios

18. Functional Strategy • Subjective Factors Affecting Decisions -- • Management’s attitude toward risk • Pressures from stakeholders • Pressures from corporate culture • Needs and desires of key managers

19. Stakeholder Priority Matrix

20. Strategic Choice • Avoiding the Consensus Trap -- • Devil’s Advocate • Dialectical Inquiry

21. Strategic Choice • Evaluation of Strategic Alternatives -- • Mutual exclusivity • Success • Completeness • Internal consistency