2. 1. The Nature of Strategic Management
2. Using SWOT Analysis to Formulate Strategy
3. Formulating Business-Level Strategies
4. Implementing Business-Level Strategies
5. Formulating Corporate-Level Strategies
6. Implementing Corporate-Level Strategies
7. International and Global Strategies
3. Strategy
Is a comprehensive plan for progressing an
organization’s goals.
Strategic Management
Involves formulating and implementing strategies
to take advantage of business opportunities and
meet competitive challenges.
Effective Strategies
Promote superior alignment between an
organization, its environment, and its goals.
6. Business-Level Strategy
The set of strategic alternatives that an
organization chooses from as it
conducts business in a particular
industry or a particular market.
Corporate-Level Strategy
The set of strategic alternatives that an
organization chooses from as it
manages its operations simultaneously
across several industries and several
markets.
7. Strategy Formulation
The set of processes involved in creating or
determining the organization’s strategies; it
focuses on the content of strategies.
Strategy Implementation
The methods by which strategies are
operationalized or executed within the
organization; it focuses on the processes
through which strategies are achieved.
8–7
8. Deliberate Strategy
A plan, chosen and implemented to support
specific goals.
Emergent Strategy
A pattern of action that develops over time in the
absence of goals or missions, or despite goals and
missions.
10. Evaluating Organizational Strengths:
Organizational strengths
Common organizational strengths
Distinctive competencies
Imitation of distinctive competencies
Sustained competitive advantage
Strategic imitation of a distinctive competence is
difficult when:
it is based on unique historical circumstances.
it is difficult for competitors to understand its nature or
character.
it is based on a complex phenomenon (e.g., organizational
culture).
11. Evaluating
Organizational
Weaknesses
Organizational
weaknesses
Skills and capabilities that
do not enable an
organization to choose
and implement strategies
that support its mission.
Competitive
disadvantage
occurs when an
organization fails to
implement strategies
being implemented by
competitors.
Evaluating an
Organization’s
Opportunities and
Threats
Organizational
opportunities
are areas that may
generate high
performance.
Organizational threats
are areas in environment
that make it difficult for
the organization to
achieve high
performance.
20. Prospector
Encourages creativity to seek out new market
opportunities and to take risks.
Develops the flexibility to meet changing market
conditions by decentralizing its organizational
structure.
8–20
21. Defender
Focuses on defending its current markets by
lowering its costs and/or improving the
performance of its current products.
8–21
25. Strategic Business Units
Each business or group of businesses within an
organization is engaged in serving the same
markets, customers, or products.
Diversification
The number of businesses an organization is
engaged in and the extent to which these
businesses are related to one another
8–25
26. Single-Product Strategy
An organization manufactures one product or
service and sells it in a single geographic
market.
Related Diversification
A strategy in which an organization operates in
several different businesses, industries, or
markets that are somehow linked.
Avoids the disadvantages and risks of a single-
product strategy.
8–26
31. Major Tools for Managing Diversification
Organization structure
Portfolio management techniques
Methods used by diversified firms to make decisions
about what businesses to engage in and how to
manage these businesses to maximize corporate
performance.
Two important portfolio management
techniques
The BCG Matrix
The GE Business Screen
8–31
32. Stars(have large
shares of rapidly
growing markets)
Question
marks(have
small market
shares in quickly
growing markets)
Cash Cows
(have large shares
of mature
markets)
Relative Market Share
Dogs (have
small market
shares and no
growth prospects)
MarketGrowthRate
High
Low
High Low
8–32
8.3 The BCG Matrix
33. GE Business Screen
A method of evaluating businesses in a
diversified portfolio along two dimensions, each
of which contains multiple factors:
Industry attractiveness.
Competitive position (strength) of each firm in
the portfolio.
In general, the more attractive the industry and
the more competitive a business is, the more
resources an organization should invest in that
business.
8–33
34. Developing International and Global Strategies
Global efficiencies
Location efficiencies—seeking lower input cost locations
Economies of scale—larger facilities result in lower costs
Economies of scope—broadening product lines
Multimarket flexibility
International businesses may respond to a change in one
country by implementing a change in another country.
Worldwide learning
The diverse operating environments of multinational corporations
(MNCs) contribute to organizational learning that can be
transferred to other operating environments.
8–34
36. Home Replication
Utilizing a core competency or a firm-specific advantage
developed at home as a main competitive weapon in foreign
markets.
Multi-Domestic Strategy
Managing a corporation as a collection of independent
operating subsidiaries frees a firm to customize its products, its
marketing campaigns, and operating techniques to meet local
customer needs.
Global Strategy
Viewing the world as a single marketplace and having as a
primary goal the creation of standardized goods
and services that will address the needs of customers worldwide.
Transnational Strategy
Attempting to combine the benefits of scale efficiencies pursued
by a global corporation, with the benefits and advantages of
local responsiveness of a multi-domestic corporation.
8–36
