5 forces vs swot
TRANSCRIPT
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STRATEGIC MANAGEMENT
Insights and hard work deliver results
What types of strategies are used by organizations?
How are strategies formulated and implemented in
strategic management?
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STRATEGIC MANAGEMENT
Types Of Strategies
Strategy is a comprehensive plan for achieving competitiveadvantage.
Organizations use strategy at the corporate, business andfunctional levels.
Growth and diversification strategies focus on expansion.
Restructuring and divestiture strategies focus onconsolidation.
Global strategies focus on international business initiatives. E-business strategies focus on using the Internet for business
transactions.
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STRATEGIC MANAGEMENT
Types Of Strategies
Strategy
a comprehensive plan guiding resource allocation to
achieve long-term organization goals.
Strategic Intent focuses organizational energies on achieving a
compelling goal.
Competitive Advantage
operating in successful ways that are difficult to
duplicate
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TYPES OF STRATEGIES
Corporate Strategies
Corporate Strategy
Sets long-term direction for the total enterprise
Business Strategy
Identifies how a strategic business unit or divisionwill compete in its product or service domain
Functional Strategy
Guides activities within one specific area of
operations
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TYPES OF STRATEGIES
Corporate Strategies
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TYPES OF STRATEGIES
Growth And Diversification Strategies
Growth Strategy
Expansion through current operations
Concentration
Expansion within an existing business area
Diversification
Expansion occurs by entering new business areas
Vertical IntegrationExpansion by acquiring existing suppliers or
distributors
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TYPES OF STRATEGIES
Restructuring and Retrenchment Strategies
RetrenchmentChanges operations to correct weaknesses
LiquidationAn extreme form of retrenchment wherein the business
closes and sells off its assets
RestructuringReduces the scale or mix of operations
Downsizing
Decreases the size of operationsDivestiture
Sells off part of the organization to focus on corebusinesses
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TYPES OF STRATEGIES
Global Strategies
Globalization Strategy
Adopts standardized products andadvertising for use worldwide
Multidomestic StrategyCustomizes advertising and products to best
fit local needs
Transnational StrategySeeks efficiencies of global operations with
attention to local markets
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TYPES OF STRATEGIES
E-Business Strategies
E-Business Strategies
Focus on Using the Internet for Business
Transactions
B2B Business Strategies use IT and Web portals to vertically link
organizations with members of their supply chains.
B2C Business Strategies
use IT and Web portals to vertically link
organizations with members of their customers.
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STRATEGIC MANAGEMENT
Strategic Management
MODULE GUIDE 12.2
Strategy formulation begins with the organizationsmission and objectives.
SWOT analysis identifies strengths, weaknesses,
opportunities, and threats. Porters five forces model examines industry
attractiveness.
Porters competitive strategies model examines
business or product strategies. Portfolio planning examines strategies across
multiple businesses or products.
Strategic leadership activates organizations forstrategy implementation.
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STRATEGIC MANAGEMENT
Strategic Management
Strategic management
the process of formulating and implementing
strategies.
Strategy Formulation
the process of creating strategies
Strategy Implementation
the process of putting strategies into action.
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STRATEGIC MANAGEMENT
Strategic Management
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STRATEGIC MANAGEMENT
Strategy Formulation
Mission Statement The reason for the organizations existence in
society
Operating Objectives
Specific results that organizations attempt toachieve
Common Operating Objectives of OrganizationsProfitability
Market share
High-quality workforce
Cost efficiency
Product and service quality
Innovativeness
Social responsibility
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STRATEGY FORMULATION
SWOT
SWOT Analysis Identifies Organizations Strengths, Weaknesses, Opportunities, and Threats
Core Competency A special strength that gives an organization a competitive advantage
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STRATEGY FORMULATION
Porters Five Forces
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STRATEGY FORMULATION
Porters Five Forces
Porters Competitive Strategies
Differentiation Strategy
Offers products and services that are uniquely different
from the competition
Focused Differentiation Strategy
offers a unique product to a special market segment.
Cost Leadership Strategy
Seeks to operate at lower costs than competitors
Focused Cost Leadership Strategy
uses cost leadership and target needs of a special market.
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STRATEGY FORMULATION
Porters Five ForcesCOMPETITIVE ANALYSIS
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STRATEGY FORMULATION
Boston Consulting Group (BCG)
BCG MatrixAnalyzes business opportunities according to
growth rate and market share
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STRATEGIC MANAGEMENT
Strategy Implementation
Strategic Leadership
the capability to inspire people to
successfully engage in a process of
continuous change, performanceenhancement, and implementation of
organizational strategies.
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Porters Value Chain Model
Value chain model addresses the activities
that create, deliver, and support a companys
product or service.
Two broad categories:Primary activitiesrelate directly to the value created
in a product or service.
Support activitiesmake it possible for the primary
activities to exist and remain coordinated.
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Altering the Value Chain
The Value Chain model suggest that competition cancome from two sources:
Lowering the costto perform an activity and
Adding value to a product or serviceso buyers willbe willing to pay more.
Lowering costs only achieves competitive advantageif the firm possesses information on the competitorscosts
Adding value is a strategic advantage if a firmpossesses accurate information regarding itscustomer such as: which products are valued?Where can improvements be made?
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Figure 2.4 Value chain of the firm.