Levels of strategy:

Levels of strategy: corporate

-it's what gets people out of bed in the morning, the noble good, do what they love to do

- it is important to have core values

- Big Hairy Audacious Goal: this is our vision, where we want to be, who we want to be

-Vivid description: what life looks like when you get from point A to point B

Dominant traits- characteristics of the industry: number of competitors, growth rate (Report D), trends (global competition),

Creation (creativity) is extremely high cost à quantum change/ game changer if have money

who: customers

what: product/servies

how: structure value chain

a company would change their strategis psotion to: better serve customers, update/upgrade products, attract new customers, to address perfomance issues, change when environment change

involves reducing attributes then adding back a few select attributes

blue ocean= unexplored territory, no set urles. companies get here through innovation

red ocean= know market space, rules are set. competition

condition or pressure, either internal or external that significantly affects the functioning of the org. or its future interests

-identify through proactive modeling

-stratey relevance-what epople are trying to do

-degree of impact- how important is the issue

-urgency- decide what issues to handle first

1-advent of nanotechnology

2- gloablization

3- global warming

4- water and other resource shortages

5- human capital power shift

examines forces that influence the potential in a industry or segment- each force can reduce that a firm can earn profits while competing in an industry. takes a look at competition more broadly. can help identify an attractive postition in an industry and key to use these forces because this environment has a direct effect.

*be in places where these forces aren't strong

bargining power relationship between company and suppliers

are capabilites the firm emphasizes and performs especially well while pursuing its vision. when these are formed, it allows the firm to create vaule for the customers, exceeding the value competitiors create for them. (product inovation)

-helps the firm cerate value for the customer, exploit market opportunities, or neutralize threats

rare-it means competitors have few competencies need to compelte a task or set of tasks with the same quality as the local firm

-nonsubstitutable- to be a competitve advantage, a competitor that can perform the sam function must not possess equivalent competencies

is an action plan the firm uses to complete in different product markets- allows firm to become more diverse.

- used to improve performance

firm that does not try to transfer resources and activities between its businesses or core competencies into its businesses. is used in both developed markets and emergine mkts.

-emphasize on financial economies to creates economies of scope.

corporate personnel allocate the firms capital across its portfolio of divisons each of which sells a variety of prodcuts.

-capital is allocated on the basis of what will generate the greatest amount of financial economies.shareholders see a greater return.

relies on information produced by the firm to estimate organizations ability to generate attractive future revenue an earnings.

-annual reports, press conferences, and filings are the most common sources

can buy some or all of another company's assets. a firm can buy anothers assets because it believes those assets would create more value if they were operated under its ownership.

achieved when a corp. leve competencies are sucessfully into some of the firms businesses

-based on intangible assets, makerting knowledge, desing skills, brand name

-> related linked

semi-autonomous unit of diversified firm with a collection of related businesses. these divisions has a set of identifiable product groups.

EX: GE has technology infrastructure with 3 divisions (aviation, health care, transportation. wheil energy has another 3 division (services, oil and gas, power and wter)

the products differ withing each division --> innovation is the core competency that is transferred to each

(challengin)

transfer of core competencies/ intangible resources between businesses is the most difficult b/c the potential outcome is less visable.

-overall it is difficult for a firm to focus on sharing tangible resources and activities while simultaneously concertating on transferring intangible core competencies

-it is evident that if a firm can simulatenously do the both of these they develop a compettivie advantage that is difficult for competitors to imitate

1. reucing the risk of losing their job for top-level executives (adding diversification reduces the changes... greater leavels of products and multiproduct strategy)

2. relationship between size and executive compensation- as the firms size increases, so does the compensation for top-level managers

is an organizational structre in which the firm is organized to generate economies of scope or financial economies

-structure of choice for firms with moderate to high levels of product diversification.

is an org. structure in which horizontal integration is used so that divisions can share resources and activities

-

organizational structure in which corporate headquarters personnel try to transfer corp level core competencies into a firms businesses -firms that use related linked strategy adopt this form

-each sbu is a profit cneter that corporate headquarters evaluates and controls

is an org structure in which there is complete independence between the firms divisions

-headquarters personnel rely on strategic controls to establish financial performance criteria; financial controls are then used to monitor divisional perfomance relative to those criteria

-headquarters focus on performance appraisal, resource allocation, and long-rance planning to ensure that the firms financial capital is being used to max financial success

companies seek to gain economies of scale and scope in the use of thier current resources by expanding into new mkts, increasingly foreign mkts and access to new resources

-use their well-known products to enter new international mkts

-social networks/alliances to help enter

an action plan that the firm develops to produce and sell unique products in different mkts- establish relative independent set of operating susidaries specifically to particulare market

- successful: effective clear differences between national mkts exist, potential economies of scale for production, distribution, and mkt are low, and the cost of coordination b/t a parent and foreign subsidaries are hig

-makes it difficult to transer knowledge across subsidaries.

action plan firm develops to produce and sell standardized products in different mkts

-seeks to caputre economies of scale in production, as well as economies of scope in location advantage

 firm producing and selling somewhat unique, yet standardized products in differen t markets

-firm attempts to combine the benefits of global scale efficiencies with advantages of being locally responsive.