Portfolio Strategy

Mix of Business units and products lines that fil together in a logical way to provide synergy and competative advantage for the corporation.

Situation Analysis

Analysis of the strengths, weaknesses, opportunities, and threats (SWOT).  That affect organizational performance.

Scan Ext. Env.                Identify Strategic Factors

National, Global                                Opportunities., Threats 

Scann Int. Env.              Identify Strategic Factors

core comp., synergy, value creation     Strength, Weaknesses

Strategy Formulation

vs.

Implementation

Formulation - stage that involves the planning and decision making that lead to the establishment of the org. goals and the specific plan.

Implementation - stage that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes.

Partnership Strategies

Degree of Callaboration

High

   1) Acquisition

   2) Mergers

   3) Joint Ventures

   4) Strategic Business Partnering

   5) Preferred Supplier Arrangements

Low

Corporate Level Strategy

(levels of strategy)

"what business are we in?"

 pertains to the organization as a whole and the combination of business units and product lines that make it up.

Grand Strategy

A general plan of major action by which a form intends to achieve its long term goals.

1) Growth

2) Stability

3) Retrenchment

Core Competence

Something the organization does especially will in comparision to it competitors.

Strategic Management

Set of decisions and actions used to formulate and implment strategies that will provide a cometatively superior fit between the organization and the environment as to achieve organizational goals.

Globalization

(gobal strategy)

Products are standardized throughout world.

.

The Strategic Management Process

1) Evaluate Current - mission, goals, strategies

2) SWOT, scan ext. env., scan int. env., identify strategic factors.

3) Define NEW - mission, goals, grand strategy

4) Formulate Strategy - Corporate, Business, Functional.

5) Implement Strategy via Change

The BCG Matrix

(boston consulting group)

Market Share (x) v. Business Growth Rate (y)

High                                                                                            Low

        Star - Rapid growth & expansion             

                                                            Question Mark - New venture,

                                                            risky, few stars others disappear.

        Cash Cow - milk to finance stars

        and M.Q.s

                                                            Dogs - Keep if some profit,

                                                            consider divesting

Low

The Five Competative Factors

Potential new entrants

Threats of                                        Bargaining

substitute             Rivalry among        Power of

products                 Competitors         Buyers

                   Bargaining power of suppliers

Strategy Implentation and Control

Act of putting strategy into action.

1) Leadership

2) Structural Design

3) Human Resources

4) Information & Control Systems

Competative Strategies

1) Differentiation

2) Cost Leadership

3) Focus

Differentiation

(Competative Strategy)

distinguish firm's products of services from others in the industry.

Cost Leadership

(Competative Strategy)

Organization seeks efficient facilities, cut cost, and employs tight cost controls to be more efficient than competitors.

Focus

(Competative Strategy)

Emphasizes concentration on a specific regional market or buyer group.

Growth

(grand strategy)

Internal or external expansion of business.

 Stability

(grand strategy)

"pause stratgy" - remain the same or grow slowly and in a contolled fashion.

Retrenchment

(grand strategy)

organization goes through a period of forced decline by either shrinking current business units or selling off or liquidating entire businesses.

Multidomestic strategy

(gobal strategy)

Each country is handled independently.

Transnational strategy

(global strategy)

Seeks to achieve both global integration and national responsiveness

Synergy

The condition that exists when the organization's parts interact to produce a joint effect that is greater than the sum of the parts acting alone.

Strategic business unit (SBU)

A division of the organization that has a unique business mission, product line, cometitors, and markets relative to other SBUs in the same corporation.

Corporate Level Strategy

(levels of strategy)

"How do we compete?"

Functional Level Strategy

(levels of strategy)

"How do we support the business level strategy?"

pertains to all of the organization's major departments