This is a strategic leveraging slide presented under the DBA course of Strategic Issues and Management. It discusses the means by which the company can develop or improve its strategic position thru the human resources and the value chain.

1. Strategic Leveraging
Group VI
Ferdinand C. Importado
August 4, 2013

2. Strategy
A strategy of a corporation forms a
comprehensive master plan that states how the
corporation will achieve its mission and
objectives. It maximizes competitive advantages
and minimizes competitive disadvantages.
Wheelen and Hunger, 2010

3. Strategy
A company’s strategy consists of the
competitive moves and business
approaches that managers employ to
attract and please customers,
compete, successfully, grow the
business, conduct operations, and
achieve targeted objectives.
Thompson, Strickland and Gamble
(2005)

4. Strategy according to Porter
• The creation of a unique and
valuable position, involving
different set of activities. (1996)
• It requires a strong focus on
profitability rather than just
growth, an ability to define a
unique value proposition, and a
willingness to make tough trade-
offs in choosing what not to do.
(2001)
• Lastly, it involves the
configuration of a tailored value
chain that enables a company to
offer unique value.

5. Value chain
Logistics Operations Marketing Sales
Administrative functions
Human resources
Research and development

6. Leveraging
The exertion of a force
(power) to influence a
person or situation in
order to gain maximum
advantage.
Use of a quality or
(competitive) advantage in
order to obtain a desired
effect or result.
• Small initial
investment
• Credit
• Other borrowed
funds

7. Strategic Leveraging
Use of quality and competitive advantages
within the value chain through the exercise of
power or influence in order to attract achieve
missions and targeted objectives at its
maximum.

8. Scope of Strategic Leveraging
• Leveraging human capital
• Though employee development
• Through the use of technology
• Leveraging core competencies
• Leveraging value across the supply chain

9. Strategic Resources
Physical Financial
Human Organizational
• State-of-the-art
manufacturing
facilities
• Plant or service
locations
• Cash flow
• Financial position
• Results of
operation
• Strong leadership
• Experienced
managers
• Well-trained,
motivated
employees
• Competencies
• Processes,
• Skills
• Knowledge

10. Leveraging Human Capital
Thru Employee Development
• Orientation
• Organizational involvement
• Tracking the development
• Use of sabbaticals
• Evaluating human capital

11. Leveraging Human Capital
Orientation
Expectation setting
Transforming
employees as key
contributors
Employee success
assessment
Organizational
involvement
Sharing approach
Cascading approach
Tracking
development
How they’re doing
What skills they need to
work on
Where else in the
company they might
thrive

12. Leveraging Human Capital
Sabbaticals
Evaluating human capital

13. Leveraging Human Capital
Thru Technology
• Using networks to share information
• Creation of electronic team to enhance
collaboration
• Codifying knowledge for competitive
advantage
• Retaining knowledge when employees
leave

14. Electronic team
Advantages
• Less restricted
by the
geographic
constraints
• Effective in
generating
social capital
Requirements
• Identification
• Combination
Process loss
• Low cohesion
• Low trust
among
members
• Lack of
appropriate
norms
• Lack of shared
understanding

15. Leveraging Human Capital
Thru Technology
• Using networks to share information
• Creation of electronic team to enhance
collaboration
• Codifying knowledge for competitive
advantage
• Retaining knowledge when employees
leave

16. Retaining Knowledge
Customer
relationship software
Email messages

17. Core Competencies
Enhance
competitive
advantage
Similar in
at least
one way
Difficult to
imitate
It must enable the
business to develop
strengths relative to
the competition.
To develop a means
or a point of
comparison
If it can be imitated, it
must be costly

18. Leveraging Across Supply Chain
Balancing
price and
functionality
Commodity
management
Leveraging
knowledge
to create
value

19. Balancing Price and Functionality
Low
technology
consumer
products
Blue sky
pioneer
products
Commodity
products
Mature
initiative
products
LOW HIGH
FUNCTIONALITY
P
R
I
C
E
H
I
G
H
L
O
W

20. Commodity products
• Low functionality – low price
• Products either fail or generate low
return
• Supplied either as the result of inferior
product development process or
because it is a readily available, non-
differentiated commodity
• Expected to generate high volume
• May encourage other companies to
join
• Little prospect for generating higher
prices
• Rapid entry of me too companies

21. Low technology consumer products
• Low functionality – high price
• Volatile, high risk but potentially high
reward market place
• Brand marketing
• Needs to build or capture as much
volume as possible before
competitors enter the market
• Gains favorable customer reaction it
soon attracts me too competitors
• Prices can be forced down very
quickly
• Continuous product innovation is
required

22. Blue sky pioneer products
• High functionality – high price
• Creates a new market
• Successful if the levels of
functionality can be readily
sourced or manufactured including
the protection intellectual property
rights
• Often technology led without
sufficiently prudent regard to cost

23. Risks of blue sky pioneer products
Damages sales volume
Quickly draws me too competition
Little room for price and
functionality increases

24. Mature initiative products (High
functionality – low price)
• High functionality – low
price
• Target costing is adopted
with all of the suppliers
involved
• Acts as a barrier to me too
competitors
• Capable of stimulating rapid
product take up by
customers

25. Leveraging knowledge to create and
deliver value
• Invest in technology and the electronic supply chain
• Invest equally in inter- and intra- team processes
• Make staff and supplier responsible for the
development and sharing of knowledge
• Maintain a strong focus on new product development
• Develop an audit process.
• Establish the market value of your intellectual property
• Build that evaluation into the operating processes and
relational strategies applied within collaborative
relationships with major suppliers

26. Commodity management
Beat the
market
Hedging
Supply
conditioning
Single
sourcing

27. Commodity management
Formula
pricing
Rebate
pricing
Historical
pricing
with caps