1. Strategy Formulation and Implementation
Strategy Formulation and Implementation

2. Learning Outcomes
Define the components of strategic management and discuss the levels of strategy.
Describe the strategic management process and SWOT Analysis.
Define corporate-level strategies and explain the portfolio and diversification approaches.
Describe Porter’s competitive forces and strategies.
Discuss new trends in strategy, including innovation from within and partnership strategies.
Discuss the organizational dimensions used for strategy execution.

3. What is Strategic Management?
Plans and actions that lead to superior competitive standing
Who are our competitors and what are their strengths and weaknesses?
Who are our customers?
What products or services should we offer?
What does the future hold for our industry?
How can we change the rules of the game?

4. Purpose of Strategy Strategy: Strategy should: Plan of action
Strategy:
Plan of action
Resource allocation
Activities for dealing with the environment
Achieving competitive advantage
Strategy should:
Exploit Core Competence
Build Synergy
Deliver Value

5. Building Synergy
The essence of most good strategies is the need to make many choices that are all consistent—choices about production, service, design, and so on. Companies cannot randomly make a lot of choices that all turn out to be consistent. It’s statistically impossible. That means companies need to grasp at least a part of the whole. As we study the histories of successful companies, we see that someone or some group developed insight into how a number of choices fit together…
Michael Porter
Harvard Business School

6. Three Levels of Strategy in Organizations

7. Strategy Formulation Versus Execution
Strategy Formulation
Assess environment and internal problems
Planning
Decision making
Establishment of goals
Strategy Execution
Directing resources
Accomplishing results
Changes in structure
Use managerial and organizational tools

8. The Strategic Management Process

9. Assessment of internal and external factors
SWOT Analysis
Assessment of internal and external factors
Organizational strengths, weaknesses,
Reports
Budgets
Financial ratios
Employee surveys
External information about opportunities and threats
Customers
Government reports
Professional journals
Bankers
Consultants

10. Analyzing Organizational Strengths and Weaknesses

11. Formulating Corporate-Level Strategy
Portfolio Strategy
A diverse mix of business units
Strategic Business Units (SBU) have different products, mission, markets and competitors
The BCG Matrix
Organizes businesses along two dimensions—growth and market share
Diversification Strategy
Movement into new lines of business

12. The BCG Matrix

13. Formulating Business-Level Strategy
Porter’s Five Forces – analyzing a company’s position in the industry
Potential New Entrants
Bargaining Power of Buyers
Bargaining Power of Suppliers
Threat of Substitute Products
Rivalry Among Competitors

14. Porter’s Five Forces

15. Porter’s Competitive Strategies
Porter suggests that a company can adopt one of three strategies after analyzing the forces

16. Global Strategy Finding strategies in the world marketplace
Finding strategies in the world marketplace
Synergy among world operations
Organizations differ in their global strategies
Globalization
Export
Transnational
Multidomestic

17. Global Corporate Strategies

18. Strategy Execution
How will the strategy be implemented—put into action?
The organization must be congruent with the strategy
Execution involves several tools:
Leadership
Structural Design
Human Resources
Information and Control Systems

19. Tools for Putting Strategy into Action