CH06

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CH06

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  1. Chapter 6Organizational Strategy

    Slide 1 - Chapter 6Organizational Strategy

    • © 2015 Cengage Learning
    • MGMT7
  2. © 2015 Cengage Learning

    Slide 2 - © 2015 Cengage Learning

    • 6-1 specify the components of sustainable competitive advantage and explain why it’s important
    • 6-2 describe the steps involved in the strategy-making process
    • 6-3 explain the different kinds of corporate-level strategies
    • 6-4 describe the different kinds of industry-level strategies
    • 6-5 explain the components and kinds of firm-level strategies
  3. Competitive Advantage

    Slide 3 - Competitive Advantage

    • Resources
    • assets, capabilities, processes, employee time, information, and knowledge that an organization controls.
    • Competitive advantage
    • providing greater value for customers than competitors can
    • Sustainable competitive advantage
    • when other companies cannot duplicate the value a firm is providing to customers
    • © 2015 Cengage Learning
    • 6-1
  4. Sustainable Competitive Advantage

    Slide 4 - Sustainable Competitive Advantage

    • Resources must be…
    • Valuable
    • Rare
    • Imperfectly imitable
    • Nonsubstitutable
    • © 2015 Cengage Learning
    • 6-1
  5. Three Steps of the Strategy-Making Process

    Slide 5 - Three Steps of the Strategy-Making Process

    • © 2015 Cengage Learning
    • 6-2
  6. Assess

    Slide 6 - Assess

    • Difficult because there is a lot of uncertainty in business.
    • Also, top managers are often slow to recognize the need for strategic change.
    • competitive inertia
    • Managers must be aware of strategic dissonance.
    • © 2015 Cengage Learning
    • 6-2
  7. Situational Analysis

    Slide 7 - Situational Analysis

    • Strengths
    • Weaknesses
    • Opportunities
    • Threats
    • © 2015 Cengage Learning
    • 6-2
  8. Internal Analysis

    Slide 8 - Internal Analysis

    • Distinctive competence
    • something that a company can make, do, or perform better than competitors
    • Core capabilities
    • less visible, internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs
    • © 2015 Cengage Learning
    • 6-2
  9. Looking Outside

    Slide 9 - Looking Outside

    • Environmental scanning
    • Strategic group
    • group of companies within an industry that top managers choose to compare, evaluate, and benchmark strategic threats and opportunities
    • Core firms
    • central companies in a strategic group
    • Secondary firms
    • firms that use strategies related to but somewhat different from those of core firms
    • © 2015 Cengage Learning
    • 6-2
  10. Choosing Strategic Alternatives

    Slide 10 - Choosing Strategic Alternatives

    • Risk-avoiding strategy
    • Risk-seeking strategy
    • © 2015 Cengage Learning
    • 6-2
  11. Strategic Reference Points

    Slide 11 - Strategic Reference Points

    • © 2015 Cengage Learning
    • 6-2
  12. Portfolio Strategy

    Slide 12 - Portfolio Strategy

    • A corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines.
    • Companies can grow through:
    • acquisitions
    • unrelated diversification
    • © 2015 Cengage Learning
    • 6-3
  13. Boston Consulting Group Matrix

    Slide 13 - Boston Consulting Group Matrix

    • 6-3
    • © 2015 Cengage Learning
  14. U-Shaped Relationship between Diversification and Risk

    Slide 14 - U-Shaped Relationship between Diversification and Risk

    • 6-3
    • © 2015 Cengage Learning
  15. Grand Strategies

    Slide 15 - Grand Strategies

    • Broad strategic plans used to help an organization achieve its strategic goals
    • Growth strategy
    • Stability strategy
    • Retrenchment strategy
    • make significant cuts
    • recovery
    • © 2015 Cengage Learning
    • 6-3
  16. Porter’s Five Industry Forces

    Slide 16 - Porter’s Five Industry Forces

    • © 2015 Cengage Learning
    • 6-4
  17. Positioning Strategies

    Slide 17 - Positioning Strategies

    • Cost leadership
    • Differentiation
    • Focus
    • © 2015 Cengage Learning
    • 6-4
  18. Adaptive Strategies

    Slide 18 - Adaptive Strategies

    • Defenders
    • Prospectors
    • Analyzers
    • Reactors
    • © 2015 Cengage Learning
    • 6-4
  19. Direct Competition

    Slide 19 - Direct Competition

    • The rivalry between two companies offering similar products or services that acknowledge each other as rivals and take offensive and defensive positions as they act and react to each other’s strategic actions.
    • Market commonality
    • Resource similarity
    • © 2015 Cengage Learning
    • 6-5
  20. A Framework of Direct Competition

    Slide 20 - A Framework of Direct Competition

    • © 2015 Cengage Learning
    • 6-5
  21. Strategic Moves of Direct Competition

    Slide 21 - Strategic Moves of Direct Competition

    • Attack
    • a competitive move designed to reduce a rival’s market share or profits
    • Response
    • a countermove, prompted by a rival’s attack, designed to defend or improve a company’s market share or profit
    • © 2015 Cengage Learning
    • 6-5
  22. Theo Chocolate

    Slide 22 - Theo Chocolate

    • Evaluate Theo’s new strategy in light of the company’s strengths, weaknesses, opportunities, and threats.
    • Using the BCG Matrix, explain Theo’s decision to offer a classic line of chocolate bars after having limited success with Fantasy Flavor chocolates.
    • Which of the three competitive strategies—differentiation, cost leadership, or focus—do you think is right for Theo Chocolate? Explain.
  23. Theo Chocolate

    Slide 23 - Theo Chocolate