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Chapter 6 1st part of chapter is on Strategic Management 2nd part of chapter is on entrepreneurship

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Chapter 6 1st part of chapter is on Strategic Management 2nd part of chapter is on entrepreneurship Planning Ahead What is strategic management? How are strategies ... – PowerPoint PPT presentation

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Title: Chapter 6 1st part of chapter is on Strategic Management 2nd part of chapter is on entrepreneurship


1
Chapter 61st part of chapter is on Strategic
Management 2nd part of chapter is on
entrepreneurship
  • Planning Ahead
  • What is strategic management?
  • How are strategies formulated?
  • How are strategies implemented?
  • What is entrepreneurship?

2
Strategy and Competitive Advantage
  • Strategy
  • links an organization to its environment
  • Is a comprehensive plan that sets, directs, and
    guides our allocation of resources to achieve
    long term objectives
  • We would like our strategy to give us a
    competitive advantage.

3
  • The Strategic Management Process
  • the process of collecting information
    (environmental analysis), and then formulating,
    implementing and controlling strategies to
    advance an organizations mission and objectives
    and secure competitive advantage

4
  • The Strategic Management Process
  • Strategy formulation ( Peter Drucker)
  • What is our business mission?
  • What have been our results expected? (Objectives)
  • What is our new strategic plan?
  • Who are our customers?
  • What do our customers value?

5
Strategy and Competitive Advantage
  • Mission, Values, and Objectives
  • Mission statement
  • domain
  • customers
  • products and/or services
  • Location
  • Stance on employees
  • Stakeholders
  • philosophy
  • To analyze how well we are doing we would like to
    find out
  • how well our company serves constituencies.

6
Our Mission should express our values and guide
our culture
  • Our Mission, Values
  • Core values
  • broad beliefs about what is/is not
    appropriatehelp us tell what is appropriate
  • Corporate Culture
  • predominant values for organization as a whole

7
After our Mission we set our Objectives
  • Set Company Objectives
  • direct activities toward key and specific results
  • examples include
  • profitability
  • market share
  • human talent
  • financial health
  • cost efficiency
  • product quality
  • innovation
  • social responsibility

8
After Objectives are set , we igure out what
Strategies will give us a Competitive Advantage-
We can come up with strategies through SWOT and
TOWS Analysis.
  • SWOT analysis
  • Assessing organizational Strengths and Weaknesses
    within SWOT analysis
  • Identifying core competencies
  • Technology
  • Human resources
  • Manufacturing approaches
  • Management talent
  • Financial Strength

9
We try to find a Competitive Advantage
  • Analysis of industry and environment
  • Assessing Opportunities and Threats within SWOT
    analysis
  • Assessment of actual and future environmental
    conditions
  • Macro environment
  • Industry environment (also called specific,
    competitive environment
  • Unattractive industry
  • Attractive industry

10
Levels and Types of Strategies
  • Levels of Strategy
  • Corporate strategydirects the organization as a
    whole toward sustainable competitive advantage.
  • Business strategysets the strategic direction
    for a single business unit or product line.
  • Functional strategyguides the use of resources
    to implement business strategy, focusing on
    activities within a specific area of operations.

11
Levels and Types of Strategies
  • Growth and diversification strategies
  • Growth strategiesseek an increase in size and
    the expansion of current operations.
  • Concentration strategiesgrowth occurs through
    expansion in the same business area.
  • Diversification strategiesgrowth occurs through
    acquisition of or investment in new and/or
    different business areas.

12
Levels and Types of Strategies
  • Retrenchment strategies
  • Reduce the scale of operations in order to gain
    efficiency and improve performance
  • Turnaround downsizing to reduce costs and
    restructuring to improve efficiency
  • Divestiture selling parts of the organization
    to improve efficiency.
  • Liquidation closing operations through complete
    sale of assets or declaration of bankruptcy.

13
Levels and Types of Strategies
  • Stability strategies
  • Maintain the present course of action without
    major cha
  • Pause and proceed with Caution
  • Short-run Profit

14
Levels and Types of Strategies
  • Cooperative strategies
  • Strategic alliancestwo or more organizations
    partner to pursue an area of mutual interest.
  • Types of strategic alliances
  • Outsourcing alliances
  • Supplier alliances IGA and Associated Groceries
  • Distribution alliances Sunkist and Idaho Potatoes

15
Levels and Types of Strategies
  • E-business strategies
  • The strategic use of the Internet to gain
    competitive advantage
  • Popular e-business strategies
  • Business-to-business (B2B) strategies
  • Business-to-customer (B2C) strategies

16
Strategy Formulation
  • Opportunities for Competitive Advantage
  • Cost and quality
  • Knowledge and timing
  • Barriers to entry
  • Financial resources

17
Strategy Formulation
  • Portfolio Planning
  • investing scarce organizational resources among
    competing business opportunities

18
Strategy Formulation
  • Boston Consulting Group (BCG) Matrix
  • ties strategy formulation to analysis of business
    opportunities according to market growth rate and
    market share
  • stars
  • cash cows
  • question marks
  • dogs

19
The BCG Matrix
Relative Market Share Position in the Industry
High Medium
Low 1.0
.50
0.0
High 20 Medium 0 Low -20
Question Marks (I)
Stars (II)
Industry Sales Growth Rate (Percent)
?
Cash Cows (III)
Dogs (IV)
20
General Electric Business Screen
Source Adapted from Strategic Management in GE,
Corporate Planning and Development, General
Electric Corporation. Used by permission of
General Electric Company.
21
Strategy Formulation
  • Porters Competitive Strategies Model
  • new competitors
  • bargaining power of suppliers
  • bargaining power of customers
  • threats of substitute products and services
  • competition between existing companies

22
Strategy Formulation
  • Porters Competitive Strategies Model
  • Strategies to Gain Competitive Advantage
  • Differentiation strategy
  • Cost leadership strategy
  • Focused differentiation strategy
  • Focused cost leadership strategy

23
Strategy Formulation
  • Product Life Cycles
  • A series of stages that a product or service goes
    through during the life of its marketability
  • Stages of the life cycle
  • Introduction
  • Growth
  • Maturity
  • Decline

24
Strategy Formulation
  • Product life cycle
  • Introduction and growth stages
  • Use differentiation and prospector strategies
  • Maturity stage
  • Use focus and/or cost leadership strategies
  • Decline stage
  • Use defender or analyzer strategies

25
Strategy Formulation
  • Emergent Strategies
  • develop progressively over time
  • Logical incrementalism
  • strategies that develop as modest adjustments to
    past patterns

26
Strategy and Competitive Advantage
  • The Strategic Management Process
  • Strategy implementation
  • putting plans into action

27
Strategy Implementation
  • Management Practices and Systems
  • Strategic management failures
  • inadequate attention to major strategic planning
    elements
  • poor handling of strategy implementation

28
Strategy Implementation
  • Leadership and Top Management Teams
  • effective strategy implementation depends on all
    managers
  • Corporate Governance
  • boards of directors
  • inside
  • outside

29
Strategy and Entrepreneurship
  • Who are the Entrepreneurs?
  • Risk-taking individuals who pursue opportunities
    that others do not see

30
Strategy and Entrepreneurship
  • Typical Characteristics of Entrepreneurs
  • internal focus of control
  • high energy level
  • high need for achievement
  • tolerance for ambiguity
  • self-confidence
  • action oriented

31
Strategy and Entrepreneurship
  • Entrepreneurship and Small Business
  • Small business
  • fewer than 500 employees
  • most common type of business in the U.S.
  • high failure rate

32
Strategy and Entrepreneurship
  • Small Business Development
  • Small Business Administration (SBA)
  • Small Business Development Centers
  • offer guidance on how to run a business
    successfully

33
Strategy and Entrepreneurship
  • Entrepreneurship and Large Enterprises
  • intrapreneurship
  • entrepreneurial behavior within large
    organizations
  • skunk works
  • groups of employees work in a creative setting
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