Bài giảng Principles of Management - Chapter 6 Strategy

chapter 6StrategyMcGraw-Hill/IrwinPrinciples of Management © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.Learning ObjectivesDefine strategy.Explain why the goal of strategy is to attain superior performance.Describe what is meant by competitive advantage.Explain how business-level strategy can lead to competitive advantage.Explain how operations strategy can lead to competitive advantage.Explain how corporate-level strategy can lead to competitive advantage.Strategy An action managers take to attain a goal of an organization.Superior PerformanceSuperior performancerequires HighprofitabilityGrowth in profits overtimeWal-MartFirst year of operation – 1962 – Rogers, Arkansas1960s – 15 Wal-Mart stores1979-80 – 276 stores with $1 billion in sales1989 – 1,400 stores with $26 billion in sales1983 – SAM’s Club1988 – SupercentersToday -- More than 1.8 million associates worldwide, nearly 6,500 stores and wholesale clubs across 15 countries, and over $312 billion in sales. Source: www.walmart.comCompetitive AdvantageCompetitive advantage: Advantage obtained when a firm outperforms its rivals.Distinctive competency: A unique strength that rivals lack.Sustainable competitive advantage: A distinctive competency that rivals cannot easily match or imitate.Barrier to imitation: Factors that make it difficult for a firm to imitate the competitive position of a rival.Legacy constraints: Prior investments in a particular way of doing business that are difficult to change and limit a firm’s ability to imitate a successful rival.Competitive AdvantageDistinctivecompetencies Competitive advantageLow costsProductdifferentiationSuperiorperformanceIf protected from copying bybarriers to imitation andlegacy constraintscompetitive advantagewill be sustainedU.S. HospitalsIn the 20th Century, U.S. Hospitals were considered as the premier, top-notch facilities for healthcare21st Century has brought the competitive pressures from focused providersResult: Competitive disadvantage and the need for changeSource: US Hospitals for the 21st Century, The McKinsey Quarterly, August 2006Business-Level StrategyBusiness-level strategy: Strategy concerned with deciding how a firm should compete in the industries in which it has elected to participate.Low-cost strategy: Focusing managerial energy and attention on doing everything possible to lower the costs of the organization.Economies of scale: Cost advantage derived from a large sales volume.Differentiation strategy: Increasing the value of a product offering in the eyes of consumers.Question What type of business level strategy does Wal-Mart employ? Would Wal-Mart be successful, if it were to change its business-level strategy? Explain.The Low-Cost Value CyclesLower costsEconomiesof scaleLower pricesIncreaseddemandHigherprofitabilityand profitgrowthOptions for Exploiting DifferentiationIncreaseprices morethan costsHigherprofitabilityand profit growthOption 1SuccessfuldifferentiationModerate orno priceincreaseIncreaseddemandEconomies ofscale andlower costsOption 2Segmenting the MarketMarkets are characterized by different types of consumers.Some are wealthy, some are not.Some are old, some are not.Some are influenced by popular culture, some never watch TV.Some care deeply about status symbols, others do not.Some place a high value on luxury, some on value of money. Consumer MarketsConsumer markets segmentation characteristics:GeographicDemographicPsychographicBehavioralistic Source: www.netmba.comChoosing Segments to ServeFocus Strategy: Serving a limited number of segments.Broad market strategy: Serving the entire market.Types of Business-Level StrategyBroad low costBroad differentiationFocused low costFocused differentiationManySegments servedFewLow costDifferentiationCompetitive themeQuestion In the retail industry sector, Wal-Mart could be described as following ________ strategy, whereas Nordstrom could be described as following _________ strategy.broad low cost; broad differentiationfocused low cost; broad low costbroad differentiation; broad low costfocused differentiation; focused low costConfiguring the Value ChainPrimary activities: Activities having to do with the design, creation, and delivery of the product; its marketing; and its support and after sales services.Support activities: Activities that provide inputs that allow the primary activities to occur. Organization architecture: The operations of the firm are embedded within the internal organization architecture of the enterprise, which includes the organization structure, incentives, control systems, people, and culture of the firm.Strategic FitOperationsstrategyInternalorganizationarchitectureBusiness-levelstrategyIndustryconditionsSupportsFitsSupportsSupportsCompetitive TacticsCompetitive tactics: Actions that managers take to try to outmaneuver rivals in the market.Tactical pricing decisions: - Price war - Price signaling - Razor and razor blade pricingTactical Product decisions: - Product proliferation - BundlingPrice Wars and SignalingPepsi vs. Coca-colaCellular phonesInternet servicesLong distance call ratesCorporate-Level StrategyCorporate-level strategy: Strategy concerned with deciding which industries a firm should compete in and how the firm should enter or exit industries.Vertical integration: Moving upstream into businesses that supply inputs to a firm’s core business or downstream into businesses that use the outputs of the firm’s core business. Disney Is Disney (a diversified entertainment company) vertically integrated?Domestic and international cable networksTV production and distributionInternet and mobile operationsTheme parks, hotels, restaurants, and cruise lineAnimated motion pictures and licensingDisney Stores and Web sitesSource: finance.yahoo.comDiversificationDiversification: Entry into new business areas.Related diversity: Diversification into a business related to the existing business activities of an enterprise by distinct similarities in one or more activities in the value chain.Unrelated diversity: Diversification into a business not related to the existing business activities of an enterprise by distinct similarities in one or more activities in the value chain.