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STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION

CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice. STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION. THOMAS L. WHEELEN J. DAVID HUNGER. Functional Strategy.

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STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION

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  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 • Product development • Line extension • Advertising and promotion • Push strategy • Pull strategy • Pricing • Skim pricing • Penetration pricing • Dynamic pricing

  4. Functional Strategy • Financial Strategy – • Leveraged buyout • Reversed stock split • Tracking stock • R&D Strategy – • Technological leader • Technological follower • Open innovation

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

  6. Functional Strategy • Purchasing Strategy – • Multiple sourcing • Sole sourcing • Just-in-time (JIT) • Parallel sourcing • Logistics Strategy – • Centralization • Outsourcing • Internet • HRM Strategy – • 360 degree appraisal

  7. 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

  8. Proposed Outsourcing Matrix

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

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

  11. Constructing Corporate Scenarios

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

  13. Stakeholder Priority Matrix

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

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

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