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Management Simulation Week3

Management Simulation Week3. Getting it together. Corporation. Sensors Unit. Nano-Tech Unit. Cons.Elec. Unit. Finance. Production. Marketing. HR / R&D. 3 Levels of Strategy. Corporate-Level : In what business do we compete?. Business-Level : How do we compete?.

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Management Simulation Week3

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  1. Management Simulation Week3 Getting it together

  2. Corporation Sensors Unit Nano-Tech Unit Cons.Elec. Unit Finance Production Marketing HR / R&D 3 Levels of Strategy Corporate-Level :In what business do we compete? Business-Level: How do we compete? Functional-Level : How do we coordinate?

  3. Level 3- Functional Strategy How do we coordinate?

  4. Marketing Coordinates w/: • R&D when products are launched or repositioned • Production in its unit sales & margins forecast • Finance w/ overall sales projections & the budget

  5. Marketingwhen products are repositioned or introduced Production when products are launched or material costs change Finance over budget. R&D coordinates w/:

  6. Production coordinates w/: • R&D about new product introduction & material costs • Marketing about demand, scheduling, and inventory • Finance about plant and equipment changes, inventory levels, & margins • HR about levels of personnel training & support

  7. Finance coordinates w/: • R&D over budgets & product introductions • Marketing about sales projections, margins & budgets • Production about margins, plant & equipment changes & inventory levels

  8. Management Simulation Week3Strategic Alignment &Functional Integration

  9. What makes a decision strategic? • Multi-functional in scope & consequences • Requires choice & trade-offs, integration & alignment R&D Prdtn Mrktg

  10. In order to execute & achieve selected growth & competitive strategies--Need to coordinate decisions across all Functional domains Production R&D Marketing HR Finance

  11. Getting In-Sync w/ Functional Planning The goal of functional planning is to achieve a state of Internal Strategic Alignment FINANCE PRODUCTION MARKETING

  12. INTERNAL STRATEGIC ALIGNMENT FINANCE Achieved when : All Decisions made by & within all functional areas are in sync w/ one another, As well as with the overall strategic direction of the firm PRODUCTION MARKETING

  13. Functional Planning Matrices Examples of: internal strategic alignment

  14. Functional Alignment: In Achieving Cost Efficiency

  15. Functional Alignment: Implementing Differentiation Strategy

  16. Functional Alignment: In Achieving Superior Innovation

  17. Functional Alignment: Superior Customer Rlshps

  18. Distinctive Competencies When all decisions made by & within all functional areas are in sync w/ one another, As well as w/ your overall strategic direction -- you achieve… Distinctive Competencies

  19. Distinct competencies needed to achieve selected competitive strategy Competitive Advantage* Distinctive Competencies *Achieved when you sustain profits above Industry Average

  20. Areas in which you can develop “Distinct Competencies” • MARKETING: Awareness & Accessibility • R&D: Product innovation & design • PRODUCTION: Plant Automation & utilization • Human Resources: Worker Expertise & Training

  21. Distinct Competencies Competencies in automation & human resources could lead to a competitive advantage in cost leadership.

  22. Achieving Competitive Advantage thru Cost-Focused Strategy • Allows for good profit margins on sales while keeping prices low especially in price-sensitive segments… Functional Alignment

  23. Distinct Competencies Competencies in awareness, accessibility & design could lead to a competitive advantage built upon differentiation

  24. Differentiator • Seeks to create maximum awareness & brand equity. • Wants to be well known as a maker of high quality/highly desirable products Functional Alignment

  25. Virtually all tactical mistakes that are made when implementing strategy are a consequence of the lack of synchronization of decisions made in at least two functional areas

  26. R&D and Production breakdown • You develop a new product but forget to buy plant & equipment for it…the year before it is to be launched…

  27. Marketing, Production & Finance out of sync • The company takes an emergency loan because inventory levels increase…

  28. Marketing, R&D, and Production out of sync • You reposition a product from the High End to the Traditional segment, but do not address their material & labor costs…

  29. Everybody is out of sync! • Financial decisions are made before knowing the budget demands of all R&D, Marketing and Production decisions…

  30. TODAY’S Begin drafting “functional alignment” strategic & tactical decisions matrices

  31. Need to begin to determine the basic objectives & specific tactical decisions that need to be made within & across each management domain …in order to successfully implement your growth & competitive strategies

  32. Functional alignment- decisions matrix

  33. EXAMPLE: Functional alignment- decisions matrix

  34. EXAMPLE: Functional alignment- decisions matrix

  35. TACTICS -Example:decision matrix- to add a new High End product…

  36. Tonight’s Begin drafting “functionally aligned” strategic & tactical decisions matrices

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