D: Chapter 8
Strategy Formulation and Implementation
Chapter Outline• Thinking strategically
– What is strategic management?– Grand strategies– Global strategies– Levels of strategy
• Type ofbusiness
• Competitive position• Resource development
BUSINESS STRATEGIES
• How to compete in a particular market
• How to achieve competitive advantage
FUNCTIONAL STRATEGIES• Action plans for each functional area
CORPORATE STRATEGIES
ORGANIZATIONAL LEVELS OF STRATEGIES
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998
TM 7-3
Chapter Outline• The strategic management process
– SWOT analysis
assessenvironmental
factors
assessorganizational
factors
IdentifyCurrent Mission
and Strategic
Goals
ConductCompetitive
Analysis:* Strengths
* Weaknesses* Opportunities
* Threats
DevelopSpecific
Strategies:* Corporate* Business
* Functional
CarryOut
StrategicPlans
Maintain Strategic Control
STRATEGYIMPLEMENTATION
STRATEGYFORMULATION
TM 7-2
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998
Strengths
Weaknesses
Opportunities
Threats
COMPETITIVEADVANTAGE
SWOT ANALYSIS
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998
TM 7-4
Chapter Outline• The strategic management process
– SWOT analysis
• Formulating corporate level strategy– Portfolio strategy
STARSQUESTION
MARKS
CASHCOWS DOGS
BCG GROWTH - SHARE MATRIX
Mar
ket
Gro
wth
Rat
e
LowHigh
High
Low
Relative Competitive Position(market share)
Rem
ain
der
div
este
d
Har
vest
ed, d
ives
ted
,or
liq
uid
ated
(net suppliersof resources)
(net usersof resources)
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998
TM 7-8
Chapter Outline• The strategic management process
– SWOT analysis
• Formulating corporate level strategy– Portfolio strategy
• Formulating business level strategy– Five competitive forces– Competitive strategy
Rivalry
Customer BargainingPower
Threat ofNew Entrants
Threat ofSubstitutes
CustomerCompany
Supplier BargainingPower
SupplierCompany
PORTERS FIVE COMPETITIVEFORCES MODEL
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998
TM 7-5
Porter’s Competitive Strategies
•Cost leadership•Differentiation•Focus
Chapter Outline• The strategic management process
– SWOT analysis• Formulating corporate level strategy
– Portfolio strategy• Formulating business level strategy
– Five competitive forces– Competitive strategy
• Formulating functional level strategy• Putting strategy into action
Putting Strategy into Action
• Leadership• Structural design• Information and control• Human resources