Mgmt 300 - Chapter 8

Exploit Core Competence

A company's core competence is something the organization does especially well in comparison to its competitors. what are your core strengths? Labor skill, strong connection with suppliers.

Create Value

Delivering value to customers should be the heart of strategy. quality and price goes together

Corporate level strategy

Dictates what type of industry we should be in. To fulfill the strategic goals of the organization

Candid communication

Managers openly and avidly promote their ideas, but they also listen to others and encourage disagreement and debate.

Clear roles and accountability

Top executives clearly define roles, establish measures and metrics, and delegate authority to individuals and teams who are accountable for results.

Threats

any factor in the external environment which negatively impacts a firm

Strengths

core competencies

Weakness

disadvantages of a company relative to its competitors

business level strategy

how do we compete

functional level strategy

how do we support the business level strategy

Delivering Value

is at the heart of strategy

Business level strategy

pertains to EACH business unit or product line within the organization.

Corporate level strategy

what business are we in

Factors that contribute to the failure of strategy execution

-Employee resistance - 39% .-Manager behavior doesn't support new direction - 33% .-Inadequate budget or resources - 14% .-Other barriers - 14%

How to Gain Competitive Advantages

Set an organization apart from others . Choose how the organization will be different. Provide an organization with a distinctive edge in the marketplace

The elements of competitive advantage

1. Target customer. 2. exploit core competencies. 3. create value. 4. achieve synergy

Three levels of strategy in organizations

1. corporate level. 2. business level. 3. functional level

Strategy

1st step in strategic management is to define an explicit -----

Target customers

An effective strategy defines the customers and their needs which are to be served by the company. - how do you target customers? The perception of returning a good varies among regions

Formulation

Assessing the external environment and internal problems to create goals and strategy

Achieve above-average profitability

Looking at the industry to see if you are performing above the average of the competitors.

Execution

Relates to the culture value of the organization. -Allows employees to gain rewards when they follow their direction. -Most difficult part of strategic management.-Strategy must be skillfully executed.-Alignment requires all aspects of the organization to focus on strategy goals.-Everyone is moving in the same direction

strategic management process

begins when executives evaluate their current position with respect to mission, goals, and strategies

formulating strategy

begins with understanding the circumstances, forces, events, and issues that shape the organizations competitive situation

Strategic Management

refers to decisions and actions used to formulate and execute strategies that will provide competitively superior fit between the organization and its environment to achieve organizational goals.

Tools for Putting Strategy into Action

1. visible leadership. 2. clear roles and accountability. 3. candid communication. 4. appropriate human resource practices

Purpose of strategy -

Gain Competitive Advantages and Achieve above average profitability

The strategic management process

SWOT

corporate level strategy

Strategic actions at this level usually relate to acquisition of new businesses, additions or divestments of business units, plants, or product lines, and joint ventures with other corporations in new areas.

Business level strategy

Strategic decisions focus on advertising, direction and extent of R&D, product changes and development, equipment and facilities, and expansion or contraction of product and service lines. Tactical skills. To fulfill technical goals of the organization

Achieve synergy

Synergy occurs when organizational parts interact to produce a joint effect that is greater than the sum of its parts acting alone.

Appropriate human resource practices

The human resource function recruits, selects, trains, compensates, transfers, promotes, and lays off employees to achieve strategic goals.

Value

combination of benefits received and costs paid

Functional level strategy

concerns the daily operations of the organization. operation goals

Opportunities

induced by various factors and changing conditions in the external environment

Strategy

is the continuous evaluation of what is going on in the real world. helps superior competitive advantage. gives the organization strategy

Strategy

is the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals.

Visible leadership

means using persuasion, motivating employees, shaping culture and values to support the new strategy.

Functional level strategy

pertains to the major functional departments within the business unit. Functional strategies involve all of the major functions, including finance, research and development, marketing, and manufacturing.

Corporate level strategy

pertains to the organization as a whole. COMBINATION of business units and product lines that make up the corporate entity.

Leadership

primary key to successful strategy execution is ----

Candid communication

supports the cascade of the strategy from the top to the bottom of the organization

Strategy execution

the administration and implantation of the strategic plan

Execution

the use of managerial and organizational tools to direct resources toward accomplishing strategic results

Competitive advantage

you have uniqueness that your competitors do not have. do something better, like utilizing your resources better. you have a better brand image