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G1-SMMC-Superior Performance Strategy ((Example (SWATCH (Bankrupt (SMH),…
G1-SMMC-Superior Performance Strategy
Not strategy
operational effectiveness,e.g.,ERP﹑Six Sigma
rank every penny
Superior Profitability
Above the Competitive Level and Make Money
Corporate
Enter business
Business
How compete
Strategy between Firm and Environment
External Environment
macro-level
industry-level
Internal Condition
firm-level
intra firm-level
Strategy Tripod
industry-based competition
firm-specific recourse and capabilities
institutional conditions and transitions
Realized Strategy
Intended and deliberate
Emergent
Corporate Governance
The goal of the Firm
Sustainable Competitive Advantages
Simple purpose
Make money?
Servicing consumers?
Environmental protection?
Innovation?
Short-term or long-run?
Employees' happiness?
People
Planet
Profit
Stakeholders
Agency problems
Governance Mechanisms
Between stockholders and the manager
BOD
Stock-Based Compensation for Executives
Financial Statements & Auditors
Takeover Constraint
Between the manager and employees
Strategic Control Systems
Create systems-measure & monitor performance
Compare actual against targets
Establish standards for performance
Evaluate results and take corrective actions
Employee Incentives
Stock options and ownership plans
Compensation tied to efficiency, quality, innovation, and responsiveness to customers
Difficult to measure performance
Agents' goals not in best interests of principals
Different goals
Take advantage of information asymmetries
Factors
External
Local communities
General public
Unions
Governments
Creditors
Suppliers
Customers
Internal
Employees
Board members
Managers
Stockholders
Globalization
Why
Reduction of costs
Transportation
Communacation
Without artificial barriers
Goods
Knowledge
People
Capital
Technological change
New technology
Elimanation of old products
Example
SOUTHWEST AIRLINE
Lower the cost
Standard Fleet
Hub-and-spoke
Secondary airport (on time)
TSMC
Intergration of IDM
1.Design
2.Manufacture
3.Sale
Refine IDM modle
Foundry business
SWATCH
High-end, hand-made
Replaced by quartz watch
Bankrupt
SMH
Redefine the watch market
Changing brand value
Strategic Management Today
1912 HBS "Business Policy
1980 Michael Porter - Competitive Strategy
Quantitative Analysis
The Viewpoint of Top Management
Beginning
Narrow Sense : Guiding action should be carry out.
Invite Company Chairman、CEO share their experience.
Policy-analysis and action.
AACBS Capstone Course (1960)
Case Method
Actually
1.External environmental analysis. 2.Internal resource capacity assessment. 3.Not Only Top-Down Instruction.
New technology words
Disruptive technologies
Costomized products and services
Replace old technology to new technology
Winner-take-all markets
Internet effect
Monoply
Co-opetition
Cooperate
Competition
Introduction
What is strategy
The highest guiding principle for an organization to take action
(unifying theme)
Not only for profit organization
Genralship (Greek)
≠ Tactics (step by step)
A theory of successful competition and growth
Pursuit 4S
S
uccess
S
uperior Performance
S
urvival
S
ustainability
Evaluate performance
Industry Effects(~20%)
eg: the software is better than the air transport.
Peer influence
Other Effects(35-50%)
Corporate parent
Year effects
Unexplained variance
eg:
Steve Jobs in Apple
Firm Effects(30-45%)
eg: Walmart is better than the Costco/ Target.
Example
Which
school/department
did you graduate from
Strategy across Level
Headquarter
Where to compete
Business function
How to implement
Strategy business unit
How to compete
Effectiveness
of strategies
Profitability
[ROIC(%)]
Shareholder
value
Profit
growth
Profound
understanding of the
competitive
ENVIRONMENT
Effective
Implementation
(i.e. Management = P, O, L& C)
S
urvival,
S
uccess,
S
uperior Performance,
and
S
ustainability
Objective appraisal
of
resources &
capabilities
Long-term, simple
and agreed
objectives
Multiple purposes
Strategy bring for what
Components of Successful Strategies
Strategic development and examples
Strategy Tripod