16324287 strategy management tutorial thompson

7/21/2019 16324287 Strategy Management Tutorial THOMPSON

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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 Companys 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 Companys 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 ompanys ans'er to 0ho'

'ill 'e get there? is its strategy


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

Consists of the combinationof competitive movesandbusiness approachesused y managers to run the

ompany

%anagements game plantoAttrat and please ustomers

Sta(e out a mar(et position

Compete suessfully3ro' the usiness

Ahieve targeted o4etives


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Howto please ustomers

Howto respond to hanging

mar(et onditions

Howto outompete rivals

Howto gro' the usiness

Howto manage eah funtional piee of the usiness anddevelop needed organi6ational apailities

Howto ahieve strategi and finanial o4etives

Strategyis HOW

to . . .

TheThe HowsHows ThatThatDe*ne a Firm+s StrategyDe*ne a Firm+s Strategy


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Fig. 1.1: Identifying a Companys StrategyFig. 1.1: Identifying a Companys Strategy


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Striing orStriing or%ompetitie -dantage%ompetitie -dantage

$o ahieve sustainale ompetitive advantage9 aompanys 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 ompanys prospets for

Winning in the mar(etplae and

!eali6ing aove-average profits

What separates apowerful strategyfrom an ordinary strategyis managements ability to forge a series of moves,

both in the marketplace and internally, thatproduces 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

-dantage-dantage Strive to e the industrys lo'-ost provider

.utompete rivals on a (ey differentiating feature


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Fig. ./: - %ompany0s StrategyFig. ./: - %ompany0s Strategy(s Part"y Proactie and Part"y(s Part"y Proactie and Part"y

$eactie$eactie


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"thial and moral standards go eyond

Prohiitions of la' andthelanguage of thou shalt not

to issues of

Dutyand 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 doto should not do"and unsavoryor shadyand

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

2inking Strategy #ith2inking Strategy #ith1thics1thics

- Firm0s 1thica"- Firm0s 1thica"


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- Firm0s 1thica"- Firm0s 1thica"$esponsibi"ities$esponsibi"ities

to (ts Stakeho"dersto (ts Stakeho"ders

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

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

%mployees! Rightfully epect to be treated "ith dignity

and respect for devoting their energies to the enterprise

%mployees! Rightfully epect to be treated "ith dignity

and respect for devoting their energies to the enterprise

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

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

&uppliers! Rightfully epect to have an e#uitablerelationship "ith firms they supply and be treated fairly

&uppliers! Rightfully epect to have an e#uitablerelationship "ith firms they supply and be treated fairly

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

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


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#hat (s a &usiness#hat (s a &usiness3ode")3ode")

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 streamsthe strategy is e)peted to produe

@oo( at assoiated cost structureand potentialprofit margins :o resulting earnings streams and !.I indiate the strategy

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

ma(ing money?

$e"ationship &et4een$e at ons p &et4een


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&trategy- :eals 'ith aompanys ompetitive

initiatives and usiness

approahes

(usiness )odel

-Conerns 'hether

revenues and osts flo'ing

from the strategydemonstrate the usiness

an e amply profitale

and vialeStr

ategy

Busines

s

Model

$e"ationship &et4een$e at ons p &et4eenStrategy and &usinessStrategy and &usiness

3ode"3ode"


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Tests o a #inningTests o a #inningStrategyStrategy

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

/o' 'ell does strategy fit

the firms situation?

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

:oes strategy lead to sustainale

ompetitive advantage?

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

:oes strategy oost firm performane?

t er r ter a orer r er a or


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t er r ter a orer r er a orJudging the 3erits o aJudging the 3erits 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 testsof a winning strategy!

6ood Strategy 7 6ood6ood Strategy 7 6ood


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6ood Strategy 7 6ood6ood Strategy 7 6oodStrategy 18ecution 9 6oodStrategy 18ecution 9 6ood

3anagement3anagement

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

ultimate suess or failure more fundamentally than ho' 'ell

its management team

Charts the ompanys 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 e3ecutionof an ecellent strategy is the besttest of managerial e3cellence!! and the most reliable

recipe for "inning in the marketplace%

16324287 strategy management tutorial thompson

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