1. MANAGEMENT
RICHARD L. DAFT

2. Strategy Formulation and Implementation
Strategy Formulation and Implementation
CHAPTER 7

3. 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.
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4. What’s Your Strategy Strength?
How do you handle challenges and issues?
How did Best Buy overtake Circuit City as the player to beat in consumer electronics retailing?
The strategies managers choose are important.
Strategies must be implemented effectively to work.
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5. Strategy Basics
Why has Apple been so successful with the iPod, iTouch, iPhone?
Why has McDonald’s healthier menu been effective?
Finding ways to respond to competitors, and cope with change is strategy.
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6. Thinking Strategically
The long-term view
Seeing the big picture
The organization
Competition
Strategy are your competitive actions in the market
How do these fit together?
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7. 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?
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8. 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
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9. Three Levels of Strategy in Organizations
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10. Levels of Strategy What business are we in? How do we compete?
What business are we in?
How do we compete?
How do we support the business-level strategy?
Corporate-level strategy
Business-level strategy
Functional-level strategy
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11. 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
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12. The Strategic Management Process
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13. Assessment of internal and external factors
SWOT Analysis
Assessment of internal and external factors
Organizational strengths, weaknesses, opportunities, and threats
Reports
Budgets
Financial ratios
Employee Surveys
External information about opportunities and threats
Customers
Government reports
Professional journals
Bankers
Consultants
Association meetings
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14. Analyzing Organizational Strengths and Weaknesses
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15. 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
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16. The BCG Matrix
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17. 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
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18. Porter’s Five Forces
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19. Porter’s Competitive Strategies
Porter suggests that a company can adopt one of three strategies after analyzing the forces
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20. New Trends in Strategy Mergers and acquisitions
Mergers and acquisitions
Enhancing organizational capacity
Innovation from within
Strategic partnerships
Companies are focusing on internal innovation as well as innovation through strategic partnerships
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21. 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
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22. Global Corporate Strategies
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23. 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
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24. Tools for Putting Strategy into Action
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