Components. – Model of Strategic Management Process. – Models of Strategy
Formation. ○ Managerial Tools to Implement Strategic. Plans. Topics: Chapter 8
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Pertemuan 5
Penyusunan Strategi dan Implementasi
Strategic Planning z
Strategic planning has taken on new importance in today’s world of globalization, deregulation, advancing technology, and changing demographics, and lifestyles Manager’s Challenge: Nintendo
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Strategy Formulation and Implementation z
Strategic Management – – – –
z
Definition Components Model of Strategic Management Process Models of Strategy Formation
Managerial Tools to Implement Strategic Plans
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Topics: Chapter 8
Thinking Strategically z ) ) ) )
Answers to the following define an overall direction for the organization's grand strategy Where is the organization now? Where does the organization want to be? What changes are among competitors? What courses of action will help us achieve our goals?
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Strategic Management z
Set of decisions and actions used to implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals
z
Responsibility = top managers & chief executive
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Strategic Management Managers ask such questions as... n o p q
What changes and trends are occurring? Who are our customers? What products or services should we offer? How can we offer these products or services most efficiently?
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Grand Strategy z z
General plan of major action to achieve long-term goals Falls into three general categories A separate grand 1. Growth strategy can be 2. Stability defined for global 3. Retrenchment operations Ethical Dilemma: A Great Deal for Whom?
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Grand Strategy: Growth z
Growth can be promoted internally by investing in expansion or externally by acquiring additional business divisions -
Internal growth = can include development of new or changed products External growth = typically involves diversification – businesses related to current product lines or into new areas
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Grand Strategy: Stability z
Stability, sometimes called a pause strategy, means that the organization wants –
to remain the same size or
–
to grow slowly and in a controlled fashion
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Grand Strategy: Retrenchment z
Retrenchment = the organization goes through a period of forced decline by either shrinking current business units or selling off or liquidating entire businesses
z
Liquidation = selling off a business nit for the cash value of the assets, thus terminating its existence
z
Divestiture = involves selling off of businesses that no longer seem central to the corporation
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Global Corporate Strategies High
Need for Global Integration
Globalization Strategy
Low
• Treats world as a single global market • Standardizes global products/advertising strategies
Export Strategy •Domestically focused •Exports a few domestically produced products to selected countries
Low
Transnational Strategy • Seeks to balance global efficiencies and local responsiveness • Combines standardization and customization for product/advertising strategies
Multi-domestic Strategy • Handles markets independently for each country • Adapts product/advertising to local tastes and needs
Need for National Responsiveness
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High
Global Strategy z
z z
Globalization = product design and advertising strategies are standardized around the world Multi-domestic = adapt product and promotion for each country Transnational = combine global coordination with flexibility to meet specific needs in various countries
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Purpose of Strategy The plan of action that prescribes resource allocation and other activities for dealing with the environment, achieving a competitive advantage, that help the organization attain its goals Strategies focus on: ● Core competencies ● Developing synergy ● Creating value for customers z
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Three Levels of Strategy in Organizations Corporate-Level Strategy: What business are we in?
Corporation
Business-Level Strategy: How do we compete? Textiles Unit
Chemicals Unit
Auto Parts Unit
Functional-Level Strategy: How do we support the business-level strategy? Finance
R&D
Manufacturing
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Marketing
Strategic Management Process Scan External Environment – National, Global Evaluate Current Mission, Goals, Strategies Scan Internal Environment – Core Competence, Synergy, Value Creation
Identify Strategic Factors – Opportunities, Threats
SWOT
Define new Mission Goals, Grand Strategy
Identify Strategic Factors – Strengths, Weaknesses
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Formulate Strategy – Corporate, Business, Functional
Implement Strategy via Changes in: Leadership culture, Structure, HR, Information & control systems
Strategy Formulation vs. Implementation z
Strategy Formulation = stage of strategic management that involves planning and decision making that lead to the establishment of the organization’s goals and of a specific strategic plan
z
Strategy Implementation = stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes Experiential Exercise: Developing Strategy for a Small Business
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Checklist for Analyzing Organizational Strengths and Weaknesses Management and Organization
Marketing
Human Resources
Management quality Staff quality Degree of centralization
Distribution channels Market share
Employee experience, education
Advertising efficiency
Union status
Organization charts
Customer satisfaction
Turnover, absenteeism
Planning, information, control systems
Product quality Service reputation
Work satisfaction
Sales force turnover Finance Profit margin
Production
Grievances Research and Development Basic applied research
Debt-equity ratio
Plant location Machinery obsolescence
Inventory ratio
Purchasing system
Return on investment
Quality control
Laboratory capabilities Research programs New-product innovations
Credit rating
Productivity/efficiency
Technology innovations
Sources: Based on Howard H. Stevenson, “ Defining Corporate Strengths and Weaknesses,” Sloan Management Review 17 (spring 1976), 51-68; and M.L.Kastens, Long-Range Planning for Your Business (New York: American Management Association, 1976). Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 17
Portfolio Strategy BCG Matrix z
Mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage
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Five Forces Affecting Industry Competition •Internet reduces barriers to entry
Potential New Entrants
Internet blurs differences among competitors in an industry
Threat of Substitute Products •Internet expands market size, but creates new substitution threats
•Internet tends to increase the bargaining power of suppliers
Bargaining Power of Buyers
Rivalry among Competitors
•Internet shifts greater power to end consumers
Bargaining Power of Suppliers
Source: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980). Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 19
Competitive Edge Through Competitive Strategies z
Differentiation = attempt to distinguish products or services from that of competitors
z
Cost leadership = aggressively seeks efficient facilities, pursues cost reductions, and uses tight cost controls to produce products more efficiently than competitors
z
Focus = concentrates on a specific regional market or buyer group Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved.
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Continuum of Partnership Strategies Organizational Combination
Acquisitions
Degree of Collaboration
Mergers
Strategic Alliances
Joint Ventures
Strategic Business Partnering
Preferred Supplier Arrangements Low
Degree of Collaboration Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 21
High
Implementing Strategy Tools z z z z
Leadership Structural design Information and control systems Human resources
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Tools for Putting Strategy into Action
Environment Organization
Leadership Persuasion Motivation Culture/values
Strategy
Structural Design Organization Chart Teams Centralization Decentralization, Facilities, task design
Human Resources Recruitment/selection Transfers/promotions Training Layoffs/recalls
Performance
Information and Control Systems Pay, reward system Budget allocations Information systems Rules/procedures Source: Adapted from Jay R. Galbraith and Robert K. Kazanjian, strategy Implementation: Structure, Systems and Process, 2d ed. (St. Paul, Minn.: West, 1986), 115, Used with permission. Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 23