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Strategic

Management

Functional Strategies

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Learning Outline

Different Functions The role of functional strategies

Strategies to consider  Key pointsFunctional strategies are not

Organizational strategiesNeed to implement functional

strategies and coordinate betweenfunctions

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Definition

Functional strategies (or operational

strategies) are the short-term goal-directed

decisions and actions of the organization’svarious functional areas.

Different from:usiness strategy

! "ow do we win#

$orporate Strategy

! %hat do we do#

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S%OT &nalysis

OrganizationStrengthWeakness

Opportunity

Threat

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Different functions

'roduction operations

Mar(eting

"uman )esources )esearch and De*elopment

+nformation Systems

Financial

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'roduction and Operations

$urrent strategies

,ust in time

+n*entory managementMaterials replacement

'ro-ect management

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'roduction and Operations

'roduction process

$apacity

Location %or( design

Lay.out

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Mar(eting

Types of strategies

Segmentation

Target mar(etDifferentiation

/ 's

! 'roduct0 price0 promotion0 place 1channel2

$urrent strategies)elationship mar(eting

Database mar(eting

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") Strategy

"igh 'erformance %or( Team

Self.directed

,ob rotation'roblem sol*ing

$ontingent pay

%or( flow Staffing

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") Strategy

3mployee separation 1retrenchment2

'erformance appraisal

Training and de*elopment $ompensation

3mployee and labor relations

$urrent strategies

'eople first

"igh Tech resource

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)4D and +S

)4D

)4D emphasis

)4D timing'roduct and de*elopment

+S

TechnologyTypes of systems

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Financial

3*aluation Forecasting0 planning0 budgeting

Financial mi5 Other decisions$apital budgetStoc( di*idend

$ash flow%or(ing capital Loans or leases

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+mplementation and

3*aluation

 &ction6 7 'rocesses0 &cti*ities0udgets0 Structure and $ulture

3ach function is specific in scope butbroad in focus Specific performance e*aluation8ualitati*e8uantitati*eenchmar(ing

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Ta(e &ways

S%OT &nalysis

Functional strategies should wor(

together to achie*e business andcorporate strategies