Tutorial-On-Strategy-Management-Ch01 SLIDES 17 ESTUPENDO OJO

8/20/2019 Tutorial-On-Strategy-Management-Ch01 SLIDES 17 ESTUPENDO OJO

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What Is Strategy andWhat Is Strategy and

Why Is It Important?Why Is It Important?

11

Chapter

Screen graphics created by: Jana F. Kuzmicki, Ph.D.

Troy State Uniersity!F"orida and #estern $egion


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%hapter $oadmap%hapter $oadmap

What Is Strategy?

Identifying a Company’s Strategy

Strategy and the Quest for Competitive Advantage

Strategy Is Partly Proative and Partly !eative

Strategy and "this# Passing the $est of %oral Srutiny

$he !elationship &et'een a Company’s Strategy and Its

&usiness %odelWhat %a(es a Strategy a Winner?

Why Are Crafting and ")euting Strategy Important?


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Thinking Strategica""y:Thinking Strategica""y:The Three &ig StrategicThe Three &ig Strategic

'uestions'uestions

1. Where are 'e no'?

2. Where do 'e 'ant to go?

&usiness+es, to e in and mar(et positions to sta(e out

&uyer needs and groups to serve

.utomes to ahieve

3. /o' 'ill 'e get there?

A ompany’s ans'er to 0ho'

'ill 'e get there? is its strategy


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#hat (s Strategy)#hat (s Strategy)

Consists of the combination of competitive moves andbusiness approaches used y managers to run the

ompany

%anagement’s “game plan” toAttrat and please ustomers

Sta(e out a mar(et position

Compete suessfully3ro' the usiness

Ahieve targeted o4etives


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How to please ustomers

How to respond to hanging

mar(et onditions

How to outompete rivals

How to gro' the usiness

How to manage eah funtional piee of the usiness anddevelop needed organi6ational apailities

How to ahieve strategi and finanial o4etives

Strategy is HOW

to . . .

TheThe HowsHows That ThatDe*ine a Firm+s StrategyDe*ine a Firm+s Strategy


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Fig. 1.1: Identifying a Company’s StrategyFig. 1.1: Identifying a Company’s Strategy


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Striing *orStriing *or%ompetitie dantage%ompetitie dantage

$o ahieve sustainale ompetitive advantage9 aompany’s strategy usually must e aimed at either

Providing a distintive produt or servie or

:eveloping ompetitive apailities rivals an not math

Ahieving a sustainale ompetitive advantage greatlyenhanes a ompany’s prospets for

Winning in the mar(etplae and

!eali6ing aove-average profits

What separates a powerful strategy from an ordinary strategyis management’s ability to forge a series of moves,

both in the marketplace and internally, that produces sustainable competitive advantage!

St t i h tSt t i h t


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Strategic pproaches toStrategic pproaches to&ui"ding %ompetitie&ui"ding %ompetitie

dantagedantage Strive to e the industry’s lo'-ost provider

.utompete rivals on a (ey differentiating feature


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Fig. -.: %ompany/s StrategyFig. -.: %ompany/s Strategy(s Part"y Proactie and Part"y(s Part"y Proactie and Part"y

$eactie$eactie


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A ompany’s strategy is a work in progress

Changes may e neessary to react to


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"thial and moral standards go eyond

Prohiitions of la' and the language of “thou shalt not”

to issues of

Duty and “right” vs. “wrong”

"thial and moral standards address

“What is the right thing to do”

$'o riteria of an ethical strategy

:oes not entail ations and ehaviors that ross the line from

“can do” to “should not do" and “unsavory” or “shady” and

Allo's management to fulfill its ethial duties to all sta(eholders

1inking Strategy #ith1inking Strategy #ith0thics0thics

Firm/s 0thica" Firm/s 0thica"


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Firm/s 0thica" Firm/s 0thica"$esponsibi"ities$esponsibi"ities

to (ts Stakeho"dersto (ts Stakeho"ders

#wners$shareholders – Rightfully epect some form ofreturn on their investment

%mployees ! Rightfully epect to be treated "ith dignityand respect for devoting their energies to the enterprise

Customers ! Rightfully epect a seller to provide them"ith a reliable, safe product or service

&uppliers ! Rightfully epect to have an e#uitable

relationship "ith firms they supply and be treated fairly

Community ! Rightfully epect businesses to be goodciti$ens in their community


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#hat (s a &usiness#hat (s a &usiness2ode")2ode")

A usiness model addresses “How do we make money inthis business”

Is the strategy apale of delivering

good ottom-line results?

:o the revenue'cost'profit economics

of the strategy ma(e good usiness sense?

@oo( at revenue streams the strategy is e)peted to produe

@oo( at assoiated cost structure and potential profitmargins

:o resulting earnings streams and !.I indiate the strategy

ma(es sense and the ompany has a viale usiness model for

ma(ing money?

$e at ons p &et3eene a ons p e 3een


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&trategy - :eals 'ith a

ompany’s ompetitive

initiatives and usiness

approahes

(usiness )odel

-Conerns 'hether

revenues and osts flo'ing

from the strategy demonstrate the usiness

an e amply profitale

and viale S t r

a t e g y

B u s i n e s

s

M o d e l

$e at ons p &et3eene a ons p e 3eenStrategy and &usinessStrategy and &usiness

2ode"2ode"

T * #i i


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Tests o* a #inningTests o* a #inningStrategyStrategy

*##D+%&& #, ,- %&

/o' 'ell does strategy fit

the firm’s situation?

C#)/%--0% 1D01+1*% %&

:oes strategy lead to sustainale

ompetitive advantage?

/%2,#2)1+C% %&

:oes strategy oost firm performane?

er r er a orer r er a or


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er r er a orer r er a or Judging the 2erits o* a Judging the 2erits o* a

StrategyStrategy Internal onsisteny and unity among all piees of the

strategy

:egree of ris( the strategy poses as ompared to

alternative strategies

:egree to 'hih the strategy is fle)ile and adaptale to

hanging irumstanes

While these criteria are relevant, they seldom override

the importance of the three tests of a winning strategy!

5ood Strategy 6 5ood5ood Strategy 6 5ood


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5ood Strategy 6 5ood5ood Strategy 6 5oodStrategy 07ecution 8 5oodStrategy 07ecution 8 5ood

2anagement2anagement

Crafting and e)euting strategy are ore management funtionsAmong all things managers do9 nothing affets a ompany’s

ultimate suess or failure more fundamentally than ho' 'ell

its management team

Charts the ompany’s diretion9 :evelops ompetitively effetive strategi moves and usiness

approahes9 and

Pursues 'hat needs to e done internally to produe good day-

inday-out strategy e)eution

%3cellent e3ecution of an ecellent strategy is the besttest of managerial e3cellence !! and the most reliable

recipe for "inning in the marketplace%

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Tutorial-On-Strategy-Management-Ch01 SLIDES 17 ESTUPENDO OJO