Download - Overview Strategy: A View From The Top
ASHLEY BURNETTSHAWN BUCKWHITNEY HORTONKELLY RIESTERJENNIFER SHOTTSSAM SNELLINGMICKEA SMITH
OverviewStrategy: A View From The
Top
Strategy
Strategy is about positioning an organization for a competitive advantage
Good strategies: Reflect a company’s clear strategic intent Have a deep understanding of a company’s core
competencies Create the best value
Strategies are not all planned Many things can change as the plan is implemented. Important to be open-minded and realize that many
factors can influence and change intended strategy
Vision and Mission Statements
Vision Statement: a road map for upper management’s long run goals for their organization. Inspirational image that will be remembered and become synonymous with your establishment Frames a company’s strategic focus on the future Expresses core competencies used or needed to attain goals
Mission Statement: Purpose for an organization’s existence A guide for management to use to reach their goals Important values and ethics that are essential to the
company
The Importance of Stakeholders
Stakeholders include partners, suppliers, and even competitors
Internal stakeholders include employees, managers, top executives, and directors
Motivating these stakeholders is vital; companies greatly rely on them to supply their customers with value
A mistake with any stakeholder can affect a company for years
Stakeholders have different types of stakes held with a company Formal, Economic, or Political
Four Primary Practices
Product Life Cycle Model
Definition: Based on the theory of diffusion of innovations and its logical counterpart and the pattern of acceptance of new ideas
The model states that industry passes through stages: Introduction Growth Maturity Decline
These stages are defined by changes in the rate of growth of industry sales
Ratio Analysis
Financial Ratio Analysis Can provide a quick overview of a company’s or businesses
unit’s current or past profitability, liquidity, leverage, and activity
Profitability Ratios Measures how well a company is allocating its resources
Liquidity Ratios Focus on cash flow generation and a company’s ability to meet
its financial obligationsLeverage Ratios
May suggest potential improvements in the financing of operations
Activity Ratios Measure productivity and efficiency
Profit Impact of Market Strategy (PIMS)
Was developed with the intention of providing empirical evidence of which business strategies lead to success, within particular industries.
Seeks to answer three basic questions: What is the typical profit rate for each type of business? Given current strategies in a company, what are the future
operating results likely to be? What strategies are likely to help improve future operating
results?Six Major Findings:
characteristics of the business environment competitive position of the business structure of the production process how the budget is allocated strategic movement operating results. Source: Wikipedia
Value Disciplines
The different ways a company can create value for customers
Choosing a value discipline and focusing on it sharpens a company’s strategic focus
Three different value discipline strategies: Product leadership Operation excellence Customer intimacy
Business Models
Creating an effective model requires a clear understanding of how the firm will generate profits and the strategic actions it must make to succeed over the long term
Is a critical part of formulating a business unit strategy
The two most important productive questions asked of executives: What is our business model? How do we make a profit?
Business Unit Strategy
In order to identify a clear business unit strategy, a company must analyze the industry characteristics in which it will be competing First, we look at three contexts that relate to the various
evolutionary stages of an industry: Emerging Growth Mature Decline
Next, we discuss three industry environments that pose a unique strategic challenges: Fragmented Deregulating Hypercompetitive
Global Strategy Formulation
“Going Global” Gradual process Core competencies, mission, structure, culture, and
processes of international corporations evolve in the creation of global corporations
Truly global strategies are extremely rare To create a vision, a company must accurately define what
globalization means for its particular business Each company and industry will have very different
requirements for global successFour Types of Global Strategy Formulation:
Multinational International Global Transitional
“9 Laws” of Globalization
1. Size means scrutiny2. Cutting costs raises compliance risk3. Strategy must involve society4. Reducing risks means building trust5. Satisfying shareholders means satisfying
stakeholders6. Global growths requires global gains7. Productivity requires sustainability8. Differentiation relies on reputation9. Good governance needs good representation