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Ch. 5: Concepts and Context of Business Strategy. Business Strategy. Mission. Goals. Objectives. Marketing oriented efforts. Strategies. Tactics. Sales oriented efforts. Corporate Strategy. Business Unit Strategy. Product. Product. Product. Strategies. Strategies. Strategies.

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Presentation Transcript
business strategy
Business Strategy

Mission

Goals

Objectives

Marketing oriented efforts

Strategies

Tactics

Sales oriented efforts

business strategy hierarchy

Corporate Strategy

Business UnitStrategy

Product

Product

Product

Strategies

Strategies

Strategies

Functional Area

Strategies

Functional Area

Strategies

Functional Area

Strategies

Business Strategy Hierarchy

Business UnitStrategy

Business UnitStrategy

critical elements of strategy development
Critical Elements of Strategy Development
    • Set Goals and Objectives
    • Understand Environment of Business Operations
  • Learn from Experience, Update Experience
  • Critical Thinking
strategic management process
Strategic Management Process
  • Setting Goals and Objectives
  • Analysis of the current situation
  • SWOT Analysis: Strengths, Weaknesses,Opportunities and Threats
  • Strategy design and choice of the best strategy
  • Implementation plan design
  • Strategy implementation
  • Monitoring of environment and performance results
  • Analysis of variance from desired performance levels
  • Adjustments based on analysis of variance
key strategy concepts
Key Strategy Concepts
  • Seek to establish a fit between the business environment and the strategy

Fit—providing superior value through differentiated pieces of the total offering

key strategy concepts1
Key Strategy Concepts
  • Drive Change rather than adapting to it
    • Quality and Process improvement are essential to superior value
    • Measuring and Tracking results necessary for continuous improvement
summary strategy concepts
Summary Strategy Concepts
  • Change in customers, Channels and Competitors cause discontinuities in the evolution of industries or markets
  • Companies seldom impact change in market
  • Keep up with changes in the rules of the market
resource allocation
Resource Allocation
  • Includes Infrastructure, personnel, finances etc.
  • They are not limitless
  • Strategic Planning Process is a resource allocation process
boston consulting group growth share matrix

?

Question Marks

Stars

Dogs

Cash Cows

Boston Consulting Group: Growth Share Matrix

Relative Market Share

High

Low

High

Market GrowthRate

Low

growth share matrix star

?

Stars

Question Marks

Dogs

Cash Cows

Growth Share Matrix: Star
  • High Growth, High Share
  • Needs heavy investment, Builds market share
  • Manage with market ownership
    • Eventually become Cash Cows
growth share matrix cash cows

?

Stars

Question Marks

Dogs

Cash Cows

Growth Share Matrix: Cash Cows
  • Low Growth, High Share
  • Established, Successful, invest enough to hold market
  • Cash Generators
  • Harvest to increase short term cash
growth share matrix question marks

?

Stars

Question Marks

Dogs

Cash Cows

Growth Share Matrix: Question Marks
  • Low Share, High Growth Markets
  • Requires cash to hold share
  • What should be done?
  • Match with organization’s distinctive competences?
  • Obtain the resources

needed?

Build these into stars or

phase out, sell

growth share matrix dogs

?

Stars

Question Marks

Dogs

Cash Cows

Growth Share Matrix: Dogs
  • Low Growth, Low Share
  • May be self-sustaining
  • One organization’s dog could be another’s cash cow
  • Discontinue, Divest
growth share matrix and product life cycle
Growth Share Matrix and Product Life Cycle

Maturity

Sales Revenue/ period

?

Decline

Growth

Introduction

Time

strategy of market ownership
Strategy of Market Ownership
  • Define
  • Evolve
  • Collaborate
strategy of market ownership1
Strategy of Market Ownership

Define

Evolve

Collaborate

  • Define Market Niche
  • Work towards domination
  • Brand identified as standard
  • Competitors note equivalence to such products
strategy of market ownership2
Strategy of Market Ownership

Define

Evolve

Collaborate

  • Continue to evolve offerings
  • Keep definitions of value current with market
  • Present these values to consumers
strategy of market ownership3
Strategy of Market Ownership

Define

Evolve

Collaborate

  • Development of ancillary products by other organizations help owners build the market
  • Third parties define their products as compatible with market owner
  • Market owner gains insight to other points of view within the market
ge multi factor attractiveness strength matrix

Invest/Grow

Selectively Earn

Harvest/Divest

GE Multi-Factor Attractiveness/Strength Matrix

MARKET

ATTRACTIVENESS

Protect Position

Invest to Build

Build Selectively

High

Build Selectivelyor Manage for

Earnings

LimitedExpansion or Harvest

Build Selectively

Medium

Protect &Refocus

Manage forEarnings

Low

Divest

Medium

Strong

Weak

BUSINESS STRENGTH

the balanced scorecard
The Balanced Scorecard
  • Focus on forward-looking measures in four core areas:
  • Financial Performance Perspective
  • Customer Perspective
  • Stakeholder Perspective
    • Upper Management
    • Partners
    • Channels
  • Value Perspective
special issues in business strategy
Special Issues in Business Strategy
  • Strategy Implications of Value Networks and Integrated Supply Chain
  • Strategy Development and the Internet
  • Volatility and Uncertainty Require Flexibility
  • Strategy Development in New Businesses
special issues in business strategy1
Special Issues in Business Strategy

Strategy Implications of Value Networks and Integrated Supply Chain

  • Agility
  • Adaptability
  • Alignment of members’ interests
    • Strong supply chains lead to inflexibility
    • Value networks
special issues in business strategy2
Special Issues in Business Strategy
  • Manage customer relationships
  • Streamline purchasing relationships
  • Increase the speed with which the environment changes
  • Reduce transaction, shipping and inventory costs

Strategy Development and the Internet

special issues in business strategy3
Special Issues in Business Strategy

Volatility and Uncertainty Require Flexibility

  • Increased uncertainty and speed of change makes future inexact
  • A pursued task is short lived as definition and boundaries of a business become blurred
  • Resource allocations across businesses become more critical
  • Core competencies take on increased importance