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Strategy Formulation and Implementation - Coggle Diagram
Strategy Formulation and Implementation
Strategy
Strategic management is a specific type of planning
It is the long-term view of the organization and competition
It impacts performance and financial success
Levels of Strategy
Business Level Strategy
porter's five forces
Competition in the industry
Potential of new entrants into the industry
Bargaining power of suppliers
Bargaining power of customers
Threat of substitute products
porter's competitive strategies
differentiation
encourages creative flair and 'out of the box' thinking
motivates and rewards employee innovation
flexible, loosely knit way, strong co-ordination among departments
strong marketing abilities
cost-leadership
maintains standard operating procedures
close supervision, finite employee empowerment
strong central authority, tight cost controls
highly efficient procurement and distribution systems
focused
organisation concentrates on a specific regional market or buyer group. The organisation will use either a differentiation or low-cost approach, but only for a narrow target market.
concerned with how companies should compete
Functional Level Strategy
departments used to support the business level strategy
Marketing
Production
Finance
Human Resources
Research and Development
Corporate Level Strategy
Diversification strategy
unrelated diversification - moving into new lines of business
vertical integration - expanding into businesses that supply to the business or are distributors - apple opened retail stores for itself
related diversification - expanding within existing line of business - Microsoft expanding into mobile phone business
The BCG matrix
question marks - low market share, high growth rate
cash cows - high market share and low growth rate
stars - high market share and high growth rate
dogs - low market share and low growth rate
Portfolio strategy
organisations should have SBUs (Strategic Business Units) which have unique missions, products and competitors
they should have mix of SBUs to provide synergy and competitive advantage
global corporate strategies
transnational strategy
export strategy
globalisation strategy
multi-domestic strategy
concerned with what the business produces at the corporate level
Strategy formulation vs execution
Strategy Formulation
Assessing the external environment and internal problems to create goals and strategy
Strategy Execution
the use of managerial tools to direct resources into accomplishing strategic goals
Tools to put strategy into action
visible leadership
clear roles and accountability
human resources
candid communication
Competitive Advantage
is the organization’s distinctive edge for meeting customer needs
Elements of competitive advantage
Exploit Core Competencies
Build Synergy
Deliver Value
Target Customers
Strategic Management Process
Evaluate
goals
strategy
mission
SWOT Analysis
Define new
goals
strategy
mission
Formulate Strategy
business
functional
corporate
Execute strategy through changes in
culture
structure
leadership
HR policies
communication systems