ASHLEY BURNETT SHAWN BUCK WHITNEY HORTON KELLY RIESTER JENNIFER SHOTTS SAM SNELLING MICKEA SMITH Overview Strategy: 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 Strategy  Must be clear  Focus on growth  Focused value proposition Execution  Exceed customer expectations  Increase productivity  Identify most important processes to customer needs Culture  Encourage outstanding contributions  Look outside the industry for competitors Structure  Too great a focus on protocols and procedures can impede progress  Successful companies try to eliminate unnecessary bureaucracy

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 obligations Leverage 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 success Four Types of Global Strategy Formulation:  Multinational  International  Global  Transitional

“9 Laws” of Globalization 1. Size means scrutiny 2. Cutting costs raises compliance risk 3. Strategy must involve society 4. Reducing risks means building trust 5. Satisfying shareholders means satisfying stakeholders 6. Global growths requires global gains 7. Productivity requires sustainability 8. Differentiation relies on reputation 9. Good governance needs good representation