Bài giảng Management: A Pacific Rim Focus - Chapter 7 Strategic management

CHAPTER 7 STRATEGIC MANAGEMENT1© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Lecture summaryThe concept of strategic managementRole of competitive analysis in strategy formulationFormulating corporate level strategyFormulating business level strategyFormulating functional level strategyStrategy implementation2© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Concept of strategic management ‘Large-scale action plan for interacting with the environment to achieve long-term goals.’3© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Concept of strategic managementStrategic management processImportance of strategic managementLevels of strategy4© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Concept of strategic management Strategic management process: ‘Process through which managers formulate and implement strategies geared to optimising strategic goal achievement, given available environmental and internal conditions.’5© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Concept of strategic managementStrategic management process:Strategy formulation Identify mission & goals Competitive situation analysis (external & internal) Develop/formulate strategies to achieve identified goalsStrategy implementation Implement plans Control/monitor execution of plans 6© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Strategic management processEnvironmentalanalysisStrategiccontrolStrategyformulationStrategyimplementationConduct SWOT analysisFormulate mission & strategic goalsInternal (organisational) assessment7© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Importance of strategic managementImportant because:Helps organisations develop a competitive advantage (significant edge over competition in dealing with competitive forces).Provides a sense of long-term direction for organisation members.Highlights need for innovation.Process involves members and fosters understanding of goals/strategy.8© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Importance of strategic managementCompetitive advantageDirection for the organisationSupports innovationBuilds manager commitment9© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Levels of strategyCorporate levelBusiness levelFunctional level10© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Levels of strategyCorporate level strategy: ‘Type of strategy addressing what businesses the organisation will operate, how strategies of those businesses will be co-ordinated to strengthen the organisation’s competitive position, and how resources will be allocated among businesses.’11© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Levels of strategyBusiness level strategy: ‘Type of strategy concentrating on the best means of competing within a particular business while also supporting corporate level strategy.’12© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Levels of strategyFunctional level strategy: ‘Type of strategy focussing on action plans for managing a particular functional area within a business in a way that supports business level strategy.’13© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Competitive analysis in strategy formulationBefore managers devise an effective strategyfor getting a competitive edge, they must analyse the organisation’s competitive situation.This is done through:Environmental analysis (external)Organisational assessment (internal)14© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Environmental assessmentThe organisationSocial AnalysisPolitical & Regulatory AnalysisHuman Resources AnalysisIndustry & Market AnalysisCompetitor AnalysisEconomic Analysis15© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Competitive analysis in strategy formulationSWOT analysis: Method of analysing an organisation’s competitive situation involving assessing organisational strengths (S), weaknesses (W), environmental opportunities (O) and threats (T).16© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Competitive analysis in strategy formulationEnvironmental assessment:Five competitive forces model (Porter):RivalryBargaining power of customersBargaining power of suppliersThreat of new entrantsThreat of substitute products/services. 17© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Competitive analysis in strategy formulationOrganisational assessment:ValueDo the firm’s resources & capabilities add value by enabling it to exploit opportunities or neutralise threats?RarenessHow many competing firms already possess these valuable resources & capabilities?ImitabilityDo firms without a resource or capability face a cost disadvantage?OrganisationIs the firm organised to exploit competitive potential of its resources & capabilities?18© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Formulating corporate level strategyCorporate level strategy is the overall strategyan organisation follows. Its development involves selecting a grand strategy and using portfolio-strategy approaches to determine the various businesses making up the organisation:Grand strategyPortfolio-strategy approaches.19© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Formulating corporate level strategyGrand strategies:Growth Concentration Vertical integration DiversificationStability Harvest TurnaroundDefensive Divestiture Bankruptcy Liquidation20© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Formulating corporate level strategyPortfolio strategies: Method of analysing an organisation’s mix of businesses in terms of both individual and collective contributions to strategic goals.BCG growth–share matrix Compares businesses in an organisation’s portfolio on the basis of relative market market share and market growth rate.Product–market evaluation matrix Compares businesses’ strength against product/market life-cycle.21© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.BCG growth-share matrixRelative competitive position (market share)Market growth rateHighLowCash cowsStarsDogsQuestion marks22© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Product-market evaluation matrix Business unit’s competitive position Strong Average Weak Product/ DevelopmentMarket GrowthLife cycle ShakeoutGrowth Maturity Saturation Decline23© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Formulating business level strategyBusiness level strategy is concerned with how a particular business competes.The best known approach for strategy development is based on Porter’s research. 24© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Formulating business level strategy Generic business strategies: Porter outlined three generic business level strategies to gain competitive advantage over other firms operating in the same industry.25© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Formulating business level strategyGeneric business strategies (Porter): Cost leadership strategy Emphasises operational efficiency i.e. overall costs are lower than competitors.Differentiation strategy Attempts to develop products/services viewed as unique in the industry.Focus strategy Concentration on a segment, portion of a market.26© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.27© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Formulating functional level strategyFunctional level strategies spell out specificways that functional areas can bolster businesslevel strategy.For example:Under a product differentiation strategy, the R & D dept. may accelerate the innovation process to provide new products in advance of competitors.28© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Strategy implementation Strategy implementation involves management activities needed to put the strategy in motion, institute strategic controls for monitoring progress, and ultimately achieve organisation goals.29© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Strategy implementationStrategyformulationCarry out plans:TechnologyHuman resourcesReward systemsDecision processesstructureMaintain control:Control systemsAdjustments30© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Lecture summaryConcept of strategic management Process Importance LevelsCompetitive analysis in strategy formulation SWOT analysis Environmental assessment Organisational assessment31© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.Lecture summaryFormulating corporate level strategy Grand strategy Portfolio strategiesFormulating business level strategy Porter generic strategies: cost, differentiation & focusFormulating corporate level strategyStrategy implementation Control systems & adjustments32© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.