APPLYING APPLYING STRATEGYSTRATEGY

Models, Levels and ToolsModels, Levels and Tools

Learning ObjectivesLearning Objectives

1.1. Describe the 3 basic approaches to Describe the 3 basic approaches to strategy that organizations can adoptstrategy that organizations can adopt

2.2. Discuss 3 levels of strategic decision Discuss 3 levels of strategic decision making in organizationsmaking in organizations

3.3. List the main strategic planning toolsList the main strategic planning tools4.4. Understand why quantitative tools have Understand why quantitative tools have

tended to be preferred to qualitative tended to be preferred to qualitative onesones

5.5. Appreciate the growing interest in vision Appreciate the growing interest in vision building techniquesbuilding techniques

Types of StrategiesTypes of Strategies

Teece (1997), there are 3 basic type Teece (1997), there are 3 basic type that organizations do adopt in that organizations do adopt in practice :practice :

1.1. The competitive forces modelThe competitive forces model

2.2. The strategic conflict modelThe strategic conflict model

3.3. The resource based modelThe resource based model

Level of StrategyLevel of Strategy

The 3 levels of strategic decision The 3 levels of strategic decision making in organization :making in organization :

1.1. The corporate levelThe corporate level

2.2. The business levelThe business level

3.3. The functional levelThe functional level

Corporate level strategyCorporate level strategy

There are 6 basic forms of strategy :There are 6 basic forms of strategy :

1.1. Stability strategyStability strategy

2.2. Growth strategyGrowth strategy

3.3. Portfolio extensionPortfolio extension

4.4. Retrenchment strategyRetrenchment strategy

5.5. Harvesting strategyHarvesting strategy

6.6. Combination strategyCombination strategy

Business level strategyBusiness level strategy

Porter (1985) create 3 generic Porter (1985) create 3 generic strategies for achieving competitive strategies for achieving competitive advantage :advantage :

1.1. Cost leadershipCost leadership

2.2. Product differentiationProduct differentiation

3.3. Specialization by focusSpecialization by focus

Functional level strategyFunctional level strategy

The main function concern marketing, finance, The main function concern marketing, finance, R&D, human resource, manufacturing and R&D, human resource, manufacturing and purchasingpurchasing

This level is the most neglected by western This level is the most neglected by western manager cause :manager cause :

1.1. The concentration of corporate and The concentration of corporate and business led to a lack of internal operationsbusiness led to a lack of internal operations

2.2. Key element of function level were in effect Key element of function level were in effect determined and constrained by corporatedetermined and constrained by corporate

3.3. Eventhough 1980s tends saw interest in Eventhough 1980s tends saw interest in function level, this tended be one sides, function level, this tended be one sides, tending to stress soft, personal type issuestending to stress soft, personal type issues

Types of OrganizationTypes of Organization

Miles and Snow (1978) classify the Miles and Snow (1978) classify the strategic organization base on the strategic organization base on the rate organization changes its rate organization changes its products or market :products or market :

1.1. DefendersDefenders

2.2. ProspectorsProspectors

3.3. AnalyzersAnalyzers

4.4. ReactorsReactors

Strategic Planning ToolsStrategic Planning Tools

There some of tools and techniques There some of tools and techniques available to the strategist :available to the strategist :

1.1. The PIMS (Profit Impact on The PIMS (Profit Impact on Marketing Strategy) modelMarketing Strategy) model

2.2. The growth share matrixThe growth share matrix

3.3. The scenario construction approachThe scenario construction approach

PIMSPIMS

Program was launch in 1972 by Sidney Program was launch in 1972 by Sidney Schoeffler.Schoeffler.

PIMS operate as a form of club. It PIMS operate as a form of club. It collects information from its member collects information from its member companies relating to such factors as companies relating to such factors as market share, profitability, product market share, profitability, product quality and investmentquality and investment

The Growth Share MatrixThe Growth Share Matrix

This was brainchild of Boston This was brainchild of Boston Consulting Group.Consulting Group.

That business in an organizational portfolio That business in an organizational portfolio can be classified into :can be classified into :

1.1. StarsStars2.2. Cash cowsCash cows3.3. DogsDogs4.4. Problem children or question marksProblem children or question marksThe scenario approachThe scenario approach This approach emerge in 1970s.This approach emerge in 1970s. Scenario approach is to enable an Scenario approach is to enable an

organization to picture and make organization to picture and make various assumption about future various assumption about future events and trends that might affect its events and trends that might affect its operationsoperations

The scenario approach is built through The scenario approach is built through the construction of case studiesthe construction of case studies

The 2 main scenario-building approach :The 2 main scenario-building approach :

1.1. The Delphi methodThe Delphi method

2.2. The Cross Impact methodThe Cross Impact method

Vision BuildingVision Building Popularity in the last 10-15 years and Popularity in the last 10-15 years and

influenced more by Japanese influenced more by Japanese managementmanagement

The major elements of vision The major elements of vision building :building :

1.1. The conception by senior The conception by senior management team on an ‘ideal’ management team on an ‘ideal’ future statefuture state

2.2. The identification of organization The identification of organization mission, its rationale for existencemission, its rationale for existence

3.3. A clear statement of desired A clear statement of desired outcomes and conditions and outcomes and conditions and competence needed to achieve competence needed to achieve thesethese

SummarySummary

1.1. The Prescriptive stream of strategy The Prescriptive stream of strategy has been examine the favour has been examine the favour approaches to applying strategiesapproaches to applying strategies

2.2. The approach to strategy to do with The approach to strategy to do with the type of organization it is and the the type of organization it is and the orientation on its managerorientation on its manager