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Strategy Formulation: BusinessStrategy, Azyura Humaira, 120310180025 -…
Strategy Formulation: BusinessStrategy
A Framework for Examining Business Strategy
Generating a Strategic Factors Analysis Summary (SFAS) Matrix
summarizes an organization’s strategic factors by combining the external factors from the EFAS Table with the internal factors from the IFAS Table
Finding Market Niches
goal
is so well suited to the firm’s competitive advantages that other organizations are not likely to challenge or dislodge it
look for strategic window
strategic window: a unique market opportunity that is available only for a particular time
Criticisms of SWOT
It is simply the opinions of those filling out the boxes
Virtually everything that is a strength is also a weakness
Virtually everything that is an opportunity is also a threat
Adding layers of effort does not improve the validity of the list
It uses a single point in time approach
There is no validated evaluation approach.
There is no tie to the view from the customer
Mission and Objectives
5 common elements to created weel-mission
The design must be simple so that everyone in the company can understand what the senior leadership team desires.
The statement should enable employees knowing exactly what the company does and what it does not do
It must be short so that every employee can remember the statement
The statement should be measurable so that the company can visibly see progress.
The design must be simple so that everyone in the company can understand what the senior leadership team desires.
Business Strategies
focus
on improving the competitive position of a company’s or business unit’s products or services within the specific industry or market segment that the company or business unit serves
three “generic” competitive strategies
Cost leadership
the ability of a company or a business unit to design, produce, and market a comparable product or service more efficiently than its competitors
Differentiation
the ability of a company to provide unique and superior value to the buyer
Focus
Focus
Cooperative Strategies
Collusion
the active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand
tacit collusion in an industry is most likely to be
successful if:
there are a small number of identifiable competitors
costs are similar
among firms
one firm tends to act as the price leader
there is a common industry
culture that accepts cooperation
sales are characterized by a high frequency of small orders
large inventories and order backlogs are normal ways of dealing with fluctuations in demand
there are high entry barriers to keep out new competitors
Strategic Alliances
Definition
a long-term cooperative arrangement between two or more independent firms or business units that engage in business activities for mutual economic gain
Reason
To obtain or learn new capabilities
To obtain access to specific markets
To reduce financial risk
To reduce political risk
Type of Alliance
Mutual Service Consortia
a partnership of similar companies in similar industries that pool their resources to gain a benefit that is too expensive to develop alone
Joint Venture.
a “cooperative business activity, formed by two or
more separate organizations for strategic purposes
Licensing Arrangements
an agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product
Value-Chain Partnerships
a strong and close alliance in which one company or unit forms a long-term arrangement with a key supplier or distributor for mutual advantage
Azyura Humaira
120310180025