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What Do You Need to Make Strategic Choices? - PowerPoint PPT Presentation


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What Do You Need to Make Strategic Choices?. Objectives. Present key decisions and their basic options Provide tools for selecting a strategy in your business. Key Strategic Decisions. Business Enterprise Focus Strategic Direction Marketing and Channel Linkages Financial

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Presentation Transcript
objectives
Objectives
  • Present key decisions and their basic options
  • Provide tools for selecting a strategy in your business
key strategic decisions
Key Strategic Decisions
  • Business Enterprise Focus
  • Strategic Direction
  • Marketing and Channel Linkages
  • Financial
  • Organizational Structure
  • Social Responsibility
  • Managerial Style/Lifestyle
key strategic decisions4
Key Strategic Decisions
  • Business Enterprise Focus
    • Product
    • Product/process technology
key strategic decisions6
Key Strategic Decisions
  • Direction
    • Growth
    • Delay
    • Retrenchment
key strategic decisions7
Key Strategic Decisions
  • Marketing and Channel Linkages
    • Marketing Your Firm
    • Merchandising and Selling Products/Services
    • Sourcing and Purchasing Resources
key strategic decisions8
Key Strategic Decisions

IV. Financial

  • Business/Legal Choices
  • Financing/Leasing Options
  • Equity Sources
key strategic decisions9
Key Strategic Decisions

V. Organizational Structure

  • Determining the Chain of Command
  • Assigning Responsibility
  • Giving Authority to Those with Responsibility
key strategic decisions10
Key Strategic Decisions
  • Social Responsibility
    • Communicating Your Good stewardship Practices
    • Being Involved in the Community
    • Understanding the Needs and Concerns of Your Neighbors
key strategic decisions11
Key Strategic Decisions

VII. Managerial Style/Lifestyle

  • Time/Labor Contribution
  • Living Expenditures
  • Risk/Stress Level and Attitudes
  • Learning New Skills
  • Organization Culture
  • Leadership
strategic direction

Strategic Direction

Growth, Delay, or Retrenchment

focus on strategic direction
Focus on Strategic Direction
  • Common Direction Questions
    • Should we grow?
    • Which business units should we grow?
    • How do we grow the business unit?
    • What activities, if any, should we give up to grow?
strategic direction options

Strategic Direction

Growth

Delay

Retrenchment

Decision

Trigger

Turn

around

Captive

Company

Concentration

Diversification

Exit

Pause

No Change

Profit

Vertical

Horizontal

Related

Unrelated

Strategic Direction Options
strategic direction options15
Strategic Direction Options

Growth

Concentration

Diversification

Vertical

Horizontal

Related

Unrelated

Diversify into

Related

Agricultural

Production

Enterprises

Capture

Synergies

Non-Ag

Industries

Ignore synergy

For cash flows

Or

Risk reduction

Integrate

Network

Cooperatives

Value-Added

Investments

Intensify

Expand

Replicate

Network

strategic direction options16

Delay

Decision

Trigger

Pause

No Change

Profit

Strategic Direction Options
strategic direction options17

Retrenchment

Turn around

Captive

Company

Exit

Contraction

Consolidation

Outsourcing

Sellout

Divest

Bankruptcy

Liquidation

Sole Supplier

Preferred Provider

Contract Grower

Strategic Direction Options
which units to grow
Which Units to Grow?

Business Unit Growth Matrix

  • Based on EFAS and IFAS
  • 4 Quadrants
    • Cash Cows – Low EFAS, High IFAS
      • Normally Delay Strategy
    • Stars – High EFAS, High IFAS
      • Normally Growth Strategy
    • Question Marks – High EFAS, Low IFAS
      • Growth or Delay Strategy
    • Dogs – Low EFAS, Low IFAS
      • Retrenchment Strategy
business unit growth matrix

High

Star

?

EFAS

Cash Cow

Dog

Low

High

Low

IFAS

Business Unit Growth Matrix
how do we grow
How Do We Grow?

Growth Options Matrix

  • Based on Customers and Products
  • 4 Quadrants
    • Market Penetration
      • More of Same Product to Same Customers
      • Horizontal Growth
    • Market Development
      • Same Product to New Customers
      • Horizontal and/or Vertical Growth
    • Product Development
      • New Product to Same Customers
      • Vertical or Horizontal Growth
    • Total Diversification
      • New Product to New Customers
      • Related or Unrelated Diversification
growth options matrix

New

Market

Development

Total Diversification

Customer Focus

Market Penetration

Product

Development

Old

Old

New

Product/Service

Growth Options Matrix
what do we give up
What Do We Give Up?

Outsourcing Matrix

  • Based on Core Competencies and Competitive Advantage
  • Source of Competitive Advantage?
    • No = a Basic Activity
    • Possibly = an Emerging Activity
    • Absolutely = a Key Activity
  • Competency?
    • Weak
    • Strong
outsourcing matrix

Get Capability

Keep in-house

Yes

(Key Activities)

Possibly

(Emerging Activities)

No

(Basic Activities)

Collaborate

Partner

Source of Competitive Advantage

Exit / Buy

Consider Selling

Weak Strong

Capability and Cost (relative to others)

Outsourcing Matrix

Adapted From Richard Insinga and Michael Werle, “Linking Outsourcing and Strategy.”

the value plate

Firm Infrastructure

Human Resource Management

Supporting

Activities

MARGIN

Technological Development

Procurement

Service

Outbound

Logistics

Marketing

& Sales

Inbound

Logistics

Primary

Activities

Operations

MARGIN

Relationship with buyers

Relationship with suppliers

The Value Plate
summary
Summary
  • Doing things right versus doing the right things.
  • Choosing what to do and what not to do.
  • Answering the what, how, who, why, and when of strategy.