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Lecture notes - Strategy Making

Extracts from this document...

Introduction

Lecture Notes 1 Student Learning Objectives Upon completion of this lecture you will be able to: 1. Understand the concept of strategy. 2. Familiarize yourself with strategy as both a theoretical concept and a working tool 3. Trace the history of the development and use of the strategy concept 4. Explain the need for integrating analysis and intuition in strategy process. 5. Why is strategy important to me as a manager? 6. Identify the roles and responsibilities of strategic managers at different levels within the organization. 7. What are the main components of the strategic planning process? 8. Contrast the rational view of strategy with alternate views which describe strategy as an emergent process. 9. Why formal strategic planning may not always lead to success, and identify ways of avoiding some of the common pitfalls associated with strategic planning. 10. Be able to form cohesion of Cases to theoretical concepts. Reading Assignments Text Handout 1 1. What is Strategy and it is Important (Complete) Pages read all Handout 2 2. Strategy Paper (Complete) Pages read all Handout 3 3. Everything CIOs Need to Know About Strategy (Read about all famous strategist) Comprehensive Case Study 4. Coke and Pepsi Hundred year war. Short Cases 5. Jet Blue in US Airline industry 6. Block buster Video to Netflix competitive Advantage Teaching Outline Introductory Points WHAT IS STRATEGY Brief history of the concept Military origins of strategy Origins of strategy in Business Strategy and planning STAGES OF DEVELOPMENT OF STRATEGY Stage 1 (From 1945 to the mid- to late 1960s ) Stage 2 (From the late 1960s to the late 1970s ) Stage 3 (Between the mid-1970s and the mid-1980s) Stage 4 (From the 1980s to 1990s) Strategy - Multiplicity of the meaning Strategic Thinking Different Strategic perspectives Organizational Strategy Competitive Strategy Business Model and strategy Who's job is Strategy Strategic Managers STRATEGY MAKING PROCESS Strategic Planning Process Levels of Strategy Making The Cohesion Case: Strategic Planning at Microsoft Strategy as emergent Process The Cohesion Case: ...read more.

Middle

Select the corporate mission and major corporate goals. 2. Analyze the organization's external competitive environment to identify opportunities and threats. 3. Analyze the organization's internal operating environment to identify the organization's strengths and weaknesses. 4. Select strategies that build on the organization's strengths and correct its weaknesses in order to take advantage of external opportunities and counter external threats. These strategies should be consistent with the mission and major goals of the organization. They should be congruent and constitute a viable business model. 5. Implement the strategies. The components are organized into two phases. The first phase is strategy formulation, which includes selection of the corporate mission, values, and goals; analysis of the external & internal environments; and the selection of appropriate strategies. The second phase is strategy implementation, which includes corporate governance and ethics issues as well as the actions that managers take to translate the formulated strategy into reality. The mission Statement is a formal statement of what the company is trying to achieve over a medium- to long-term time frame. The mission states why an organization exists and what it should be doing. External analysis identifies strategic opportunities and threats that exist in three components of the external environment: the specific industry environment within which organization is based, the country or national environment, and the macro environment. Internal analysis identifies the strengths and weaknesses of the organization. This involves identifying the quantity & quality of an organization's resources. Together, the external and internal analyses result in a SWOT analysis, delineating a firm's strengths, weaknesses, opportunities, and threats. The SWOT analysis is then used to create a business model to achieve competitive advantage by identifying strategies that align, fit, or match a company's resources to the demands of the environment. This model is called a fit model. Strategic choice involves generating a series of strategic alternatives, based on the firm's mission, values, goals, and SWOT analysis, and then choosing those strategies that achieve the best fit. ...read more.

Conclusion

Answer: A company achieves sustainable competitive advantage when an attractive number of buyers prefer its products or services over the offerings of competitors and when the basis for this preference is durable. Q12. Describe the four basic strategies (most frequently used and dependable strategic approaches) to setting a company apart from rivals? Under what conditions is each successful? Answer: Four of the most frequently used and dependable strategic approaches to setting a company apart from rivals, building strong customer loyalty, and winning a sustainable competitive advantage are: 1. Cost leadership: strive to be the low-cost leader. The most successful conditions are when buyers are sensitive to price changes, competing firms sell the same commodity products, and companies can benefit from economies of scale. 2. Differentiation: seeks to build customer loyalty by positioning goods or services in a unique or different fashion. Key concept is to be special at something important to the customer. 3. Focus: select one (or more) segments(s), identify customers' special needs, wants, and interests, and approach them with a product or service specifically designed to excel in meeting these needs, wants, and interests. Key concept is to create the perception of value in the customer's eyes. 4. Core Competency Developing expertise and resource strengths that give the company competitive capabilities that rivals can't easily imitate or trump with capabilities of their own. This is the most ideal situation for an organization. It is what all organization strive for but very few attain. Q13. What is are KSF (Key Success Factors) of an industry? How critical are those for an organization? The Key success factors are relationships between a controllable variable and a critical factor that influence a company's ability to compete in a specific industry or market. It is the Identification specific competencies, capabilities, and process that an organization must do well to be successful in a particular industry. The success and failure of a company, first lies in fulfilling these factors. KSF are keys to unlocking the secrets of competing successfully in a particular market segment. ?? ?? ?? ?? 20 (c) Arshad Farooq- SM/FAST - 2007 ...read more.

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