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What Do You Need to Make Strategic Choices?

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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What Do You Need to Make Strategic Choices?

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  1. What Do You Need to Make Strategic Choices?

  2. Objectives • Present key decisions and their basic options • Provide tools for selecting a strategy in your business

  3. Key Strategic Decisions • Business Enterprise Focus • Strategic Direction • Marketing and Channel Linkages • Financial • Organizational Structure • Social Responsibility • Managerial Style/Lifestyle

  4. Key Strategic Decisions • Business Enterprise Focus • Product • Product/process technology

  5. Alternative Strategic Focus Strategies

  6. Key Strategic Decisions • Direction • Growth • Delay • Retrenchment

  7. Key Strategic Decisions • Marketing and Channel Linkages • Marketing Your Firm • Merchandising and Selling Products/Services • Sourcing and Purchasing Resources

  8. Key Strategic Decisions IV. Financial • Business/Legal Choices • Financing/Leasing Options • Equity Sources

  9. Key Strategic Decisions V. Organizational Structure • Determining the Chain of Command • Assigning Responsibility • Giving Authority to Those with Responsibility

  10. Key Strategic Decisions • Social Responsibility • Communicating Your Good stewardship Practices • Being Involved in the Community • Understanding the Needs and Concerns of Your Neighbors

  11. Key Strategic Decisions VII. Managerial Style/Lifestyle • Time/Labor Contribution • Living Expenditures • Risk/Stress Level and Attitudes • Learning New Skills • Organization Culture • Leadership

  12. Strategic Direction Growth, Delay, or Retrenchment

  13. 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?

  14. 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

  15. 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

  16. Delay Decision Trigger Pause No Change Profit Strategic Direction Options

  17. Retrenchment Turn around Captive Company Exit Contraction Consolidation Outsourcing Sellout Divest Bankruptcy Liquidation Sole Supplier Preferred Provider Contract Grower Strategic Direction Options

  18. 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

  19. High Star ? EFAS Cash Cow Dog Low High Low IFAS Business Unit Growth Matrix

  20. 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

  21. New Market Development Total Diversification Customer Focus Market Penetration Product Development Old Old New Product/Service Growth Options Matrix

  22. 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

  23. 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.”

  24. 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

  25. 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.

  26. Strategic Business Planning for Commercial Producers

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