Brandon, Gerald, Ryan, Courtney, Brett, William, Kara, Scott

Toyota  Started out terribly in the automotive market  Began to use lean manufacturing like just in time production  Jikoda- automation with a human touch  Educational schools that specifically teach Toyota maintenance  Successful modern achievements- first commercial hybrid, custom cars in 5 days

Strategic Management in Action: Process  Overall corporate direction and goals set by organization’s top managers  Functional strategies are developed by taking into account the company’s vision, mission, and strategies  At an organization’s founding overall strategy, goals, and functional strategies must be established  All this helps complete the “puzzle”

What Happens After SWOT?  After the SWOT analysis you now have Information on positive and negative aspects of internal and external environments  Company will be on the right track if Organization´s strengths in functional units can be exploited as competitive advantages, with regards to external opportunities.  Changes in funtional strategies might need to be changed if Swot analysis points to threats in external environment or weaknesses in internal areas.  Important reasons to analyze functional strategies Strategists base their decisions on the resources, capabilities, and core competencies found in the functional areas.

Functional Strategies  Sets up the framework for which companies efficiently and effectively use their resources in conducting business.

Three Functional Concerns  Product  People  Support Processes

PRODUCT  Product Design and Development Strategies Focused on Functions in R&D: ○ when?? (first-mover) or follow and mimic innovations of other companies ○ Who will design and innovate this new product? ○ How? How will we generate ideas? How much research will be needed? Testing? Prototype use?

PRODUCT  Production Operation Strategies How will we create and provide our product or service? How will they be produced? And Where will we produce them? There are many strategies, but all have same goal make sure products are available when, where, and how needed by customers or clients Areas include strategy in capacity, layout, location, and supply-chain, quality, inventory, planning, scheduling, maintenance, etc.

PRODUCT  Marketing Strategies Manage Customers and Competitors, by strategic management of segmenting, target- markets, differentiation, positioning and marketing mix. 4 P’s – Product, Pricing, Promotion, and Place Other potential strategies include connecting with customers, information gathering, building strong brands. Efficiently and Effectively managing marketing function.

Functional Strategies- The People An organization’s people and their HR strategies can help it establish a sustainable competitive advantage.  High performance work practices - Self-directed work teams - Job rotation - Problem-solving groups - Attitude surveys

These practices can…  Improve the knowledge, skills, and abilities of current and potential employees  Increase motivation  Help retain quality employees  Encourage non- performers to leave

Maintain balance between valuing employees and controlling costs  The most common form of controlling costs -Restricting company travel -Hiring freezes -Downgrading holiday parties -Layoffs To Layoff or Not to Layoff  Layoffs Payroll is one of 1 st place a company uses to cut expenses 50 companies cut over 200,000 jobs Employee moral and productivity often decline  “No layoff” policies 4 day work-weeks-Unpaid vacation Wage freezes-No bonuses paid

HR Strategies reflect the commitment to and treatment of employees  Ensuring that the right people with the right skills are in the right place at the right time  Getting people into the organization through planning and recruiting  Training employees so that they posses the right skills to perform the job  Assessing performance through reviews  Motivating employees to possess a high level of effort through compensation and benefits

Functional Strategies-Support Process  Companies need information about the activities taking place in order to acquire and transform resources into products.  Information is collected through the company’s two main support processes: Information Systems Financial-accounting Systems  Like other functional areas, these support processes are a link to creating a sustainable competitive advantage.

Information Systems  Information system – a system for collecting, processing, storing, and disseminating any and all information that managers need to operate a business.  Two strategic decisions most associated with the organizations information systems are: Choice of system technology Choice of types of information systems needed  Decision will depend on how important information is to the organization.

Harrah’s Entertainment  Harrah’s researched customer satisfaction in regards to the service the company provided.   1) Customers who were satisfied with the service they received increased their gaming expenditures by 10 percent.   2) Customers who were extremely satisfied with the service they received increased their gaming expenditures by 24 percent.  Harrah’s was able to discover this information because of its incredibly sophisticated information system.  All employees were made aware of this information, so they understood their valuable role in providing excellent customer service.

Financial-Accounting Systems  Financial accounting systems provide strategic decision makers with information about the organization’s financial transactions, accounts, and standing.  In designing the financial-accounting systems, a company must make sure they have: The information they need, when they need it, and in the form needed.  Strategic decisions in this functional area would include: Evaluating financial performance Financial forecasting and budgeting Determining the optimal financing mix

Learning Outcome 5.3 Discuss How Functional Strategies Are Implemented and Evaluated 1) Implementing the Various Functional Strategies 2) Evaluating Strategies and Making Changes 3) Coordinating with Other Organizational Strategies

Implementing the Various Functional Strategies 3 Steps: 1) Decide what work process and work activities will need to be done. 2) Make sure these processes and activities have the right resources. 3) DO IT!  Key resources and capabilities might not be exploited.  Strategies can impact each other in a negative way. *Each functional area has its own specific responsibilities in contributing to the overall organizational goals. BUT, they must coordinate with each other! OR…

Evaluating Strategies  The actual performance is evaluated in comparison to the strategic goals  Strategic goals are implemented within each area of the organization  Strategy evaluation looks at what was supposed to be done versus what was done

Making Changes  Change is necessary when the strategy is vital to accomplishing the goals of the company  If change is necessary we go back to the first steps: Analyze the situation Form appropriate strategies Implement strategies Reevaluate and change again if necessary

Coordinating with Other Organizational Strategies  Coordination is crucial to the development of sustainable competitive advantages  Strategic decisions influence and are influenced by strategies that are put into practice within the company  An organization is a system with interdependent elements, which is evident in strategic coordination

How Functional Strategies are part of the Strategic Management Process The functional strategies an organization needs  How functional strategies are implemented and evaluated

How Functional Strategies are part of the Strategic Management Process  What happens after the SWOT analysis? ○ Positive and negative aspects ○ Points to strategic issues

The functional strategies an organization needs  Functional Strategies--The Product  Different Strategies- Product Design and Development Strategies Production-Operations Strategies Marketing Strategies

How functional strategies are implemented and evaluated  Implementing the Various Functional Strategies  Evaluating Strategies and Making Changes  Coordinating with Other Organizational Strategies