Business 475 - INTEGRATED BUSINESS TOPICS Class 4: STRATEGY IMPLEMENTATION

1. Welcome

3. Agenda

4. Agenda
Walmart case study / video

5. Agenda
Walmart case study / video
Exercise: using the 5 forces

6. Agenda
Walmart case study / video
Exercise: using the 5 forces
Short term objectives

7. Agenda
Walmart case study / video
Exercise: using the 5 forces
Short term objectives
Executive compensation

8. Agenda
Walmart case study / video
Exercise: using the 5 forces
Short term objectives
Executive compensation
Test prep - part I

9. Agenda
Walmart case study / video
Exercise: using the 5 forces
Short term objectives
Executive compensation
Test prep - part I
Organizational structure

10. Agenda
Walmart case study / video
Exercise: using the 5 forces
Short term objectives
Executive compensation
Test prep - part I
Organizational structure
Presentation hints

11. Questions before we begin?

12. Concept Review

13. 1
Introduction to Strategic Management

14. 2
Internal and External Environment

15. 3
Strategy development

16. 4
Strategy Implementation

17. External environment

19. 5 Forces framewor k

20. What are entry barriers?

21. 5 Forces framewor k
capital requirements
patents & trademarks
branding
distribution
long term contracts
switching costs

22. example: Univer sity of Phoenix
Take 10 minutes
Analyze 5 forces
Select spokesman

24. Social Economic Technology Ecological Political

27. TECHNOLOGICAL OBSOLESCENCE

28. TECHNOLOGICAL OBSOLESCENCE

29. RE GU LATORY FORCES

30. RE GU LATORY FORCES

31. RE GU LATORY FORCES

32. Social Economic Technology Ecological Political

33. Long term objectives

35. Profitability

36. Profitability
Productivity

37. Profitability
Productivity
Competitive position

38. Profitability
Productivity
Competitive position
Employee development

39. Profitability
Productivity
Competitive position
Employee development
Employee relations

40. Profitability
Productivity
Competitive position
Employee development
Employee relations
Technological leadership

41. Profitability
Productivity
Competitive position
Employee development
Employee relations
Technological leadership
Public responsibility

42. Qualities of Long-Term Objectives
Acceptable
Achievable
Profitability
Productivity
Competitive position
Employee development Flexible
Understandable
Employee relations
Technological leadership
Public responsibility
Measurable
Suitable
Motivating

43. The Balanced Scorecard

44. The Balanced Scorecard
Tangible goals linked to long term objectives

45. The Balanced Scorecard
Tangible goals linked to long term objectives

46. Generic Strategies

47. michael porter

48. michael porter

49. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus

50. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus

51. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus

52. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus
FOOD

53. Source of Competitive Advantage
Cost Differentiation
Broad
Cost Leadership Differentiation
Scope
Narrow
Differentiation
Cost Focus
Focus
FOOD

54. So how do we decide?
Differentiation
Cost Advantage Overall ROI
Advantage
High High 35%
Low High 26%
High Low 22%
Low Low 9.5%

55. michael treacy

56. michael treacy

57. michael treacy

58. Another view: value disciplines
Operational
Customer intimacy Product leadership
excellence

59. Another view: value disciplines
Operational
Customer intimacy Product leadership
excellence

60. Another view: value disciplines
Operational
Customer intimacy Product leadership
excellence

61. Another view: value disciplines
Operational
Customer intimacy Product leadership
excellence

62. Source of Competitive Advantage
Cost Differentiation
Operational intimacy
Broad
Cost Customer
Leadership Product leadership
Differentiation
excellence
Scope
Narrow
Differentiation
Cost Focus
Focus

63. “Our mission is to develop the most innovative
products at the lowest cost through operational
excellence and intimate knowledge of our customers”

64. “Our mission is to develop the most innovative
products at the lowest cost through operational
excellence and intimate knowledge of our customers”
You can’t
do it all

65. Grand strategies

66. A
B
Concentrated growth
Liquidation
Market development
Bankruptcy
Product development
Joint ventures
Innovation
Strategic alliances
Horizontal integration
Consortia
Vertical integration
C
Concentric diversification
Conglomerate diversification
Turnaround
Divestiture

67. Core competencies, mergers &
the synergy myth

70. Why do companies merge?

71. Control Costs Increase Revenue

72. What is synergy?

73. What is synergy?

74. Costs savings work, revenue synergy doesn’t

75. +

77. 5 Forces framewor k

78. 5 Forces framewor k

79. Business school 101:
If you don’t know the answer, guess

80. Business school 101:
If you don’t know the answer, guess

81. Walmart, Part I

82. Questions
• How could rubbermaid have reacted faster?
• Could they survive in the U.S.?
• Which stakeholders love Walmart, which hate it?

83. Short term objectives

85. “You can’t manage what you don’t measure”

86. Characteristics of good short term objectives

87. Characteristics of good short term objectives
Specific

88. Characteristics of good short term objectives
Specific
Achievable

89. Characteristics of good short term objectives
Specific
Achievable
Measurable

90. Specific
Achievable
Measurable

91. “Increase profits 500% in Q3”
Specific
Achievable
Measurable

92. “Increase profits 500% in Q3”
“Create a safer working environment”
Specific
Achievable
Measurable

93. “Increase profits 500% in Q3”
“Create a safer working environment”
“Increase customer satisfaction”
Specific
Achievable
Measurable

95. Deficient Objectives Good Objectives

96. Deficient Objectives Good Objectives
To reduce turnover (absenteeism, number of rejects,
etc.) among sales managers by 10 percent by January
1, 2004
To improve morale
Assumption: Morale is related to measurable outcomes
(i.e., high and low morale are associated with different
results)

97. Deficient Objectives Good Objectives
To reduce turnover (absenteeism, number of rejects,
etc.) among sales managers by 10 percent by January
1, 2004
To improve morale
Assumption: Morale is related to measurable outcomes
(i.e., high and low morale are associated with different
results)
To reduce the time lapse between order date and
Improve support of sales
delivery by 8 percent (2 days) by June 1, 2004

98. Deficient Objectives Good Objectives
To reduce turnover (absenteeism, number of rejects,
etc.) among sales managers by 10 percent by January
1, 2004
To improve morale
Assumption: Morale is related to measurable outcomes
(i.e., high and low morale are associated with different
results)
To reduce the time lapse between order date and
Improve support of sales
delivery by 8 percent (2 days) by June 1, 2004
To conduct a public opinion poll using random samples
in the five largest U.S. metropolitan markets to
determine average scores on 10 dimensions of
Improve the firm’s image
corporate responsibility by May 15, 2004. To increase
our score on those dimensions by an average of 7.5
percent by May 1, 2005

99. Conflicting objectives

100. Walmart, Part II - Globalization

101. Questions
• What drove Walmart’s globalization?
• “Walmart and China are a joint venture”
• good, bad or indifferent?

102. Executive compensation

105. Executive Compensation

106. Organizational structure

107. 59
Conclusions of Research on
Organizational Structure
 A single-product firm or single dominant
business firm should employ a functional
structure
 A firm in several lines of business that are
somehow related should employ a
multidivisional structure
 A firm in several unrelated lines of business
should be organized into strategic business
units
 Early achievement of a strategy-structure fit
can be a competitive advantage
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

108. 60
Restructuring to Support Strategically
Critical Activities
• Concept – Some activities within a business’s
value chain are more critical to the success of
the strategy than others
• Considerations in restructuring
• Strategically critical activities must be the central
building blocks for designing the organization
structure
• Organizational structure must be designed to help
coordinate and integrate support activities to
• Maximize their support of strategy-critical
primary activities
• Minimize their costs and time spent on internal
coordination
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

109. 61
Reengineering Strategic Business
Processes (BPR)
• Concept – Involves placing the decision
making authority that is most relevant to the
customer closer to the customer, in order to
make the firm more responsive to the needs of
the customer.
• Potential outcomes of BPR
• Reduces fragmentation by crossing
traditional department lines
• Reduces overhead by compressing formerly
separate tasks that are strategically
intertwined in the process of focusing on
the customer
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

110. 62
Steps Involved in BPR
• Develop a flow chart of the total business process
• Try to simplify the process first, eliminating unnecessary
tasks and streamlining remaining tasks
• Determine which parts of the process can be automated
• Benchmark strategy-critical activities
• Consider outsourcing non-critical activities
• Design a structure for performing remaining activities and
reorganize personnel accordingly
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

111. 63
Downsizing, Self-Management, and
Outsourcing
• Downsizing – Eliminating employees,
particularly middle managers, in a
company
• Self-management – Delegating work to
lower, operating levels of an
organization
• Outsourcing – Obtaining work
previously done by employees inside a
company from sources outside the
company
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

112. 64
Virtual Organization
A temporary network of independent
companies – suppliers, customers,
subcontractors, even competitors –
linked primarily by information
technology to share skills, access to
markets, and costs
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

113. Walmart, Part III

114. Assignments

115. Discuss scorecard ideas with learning team (5
threads, 5 responses, 5 summaries)
Develop balanced scorecard and 300-word
discussion of what you learned
Start work on week 5 strategic plan presentation

116. Week 4
Individual Assignment: Balanced Scorecard 10
Discuss scorecard ideas with learning team (5
threads, 5 responses, 5 summaries)
Develop balanced scorecard and 300-word
discussion of what you learned
Start work on week 5 strategic plan presentation

117. Week 4
Individual Assignment: Balanced Scorecard 10
Learning Team Assignment: Strategic Direction Evaluation 2
Discuss scorecard ideas with learning team (5
threads, 5 responses, 5 summaries)
Develop balanced scorecard and 300-word
discussion of what you learned
Start work on week 5 strategic plan presentation

118. Next Week

119. Implementation strategies
Exam prep

120. Testing tips

121. • Thefinal exam will have three questions for each
course objective
• No 2 tests / questions the same
•3 hours, open book/PC, one sitting
• Call
tech support if you lose internet access
(877-832-4867)

122. • You have time to search for answers
• build your info sources index with the practice test
• Answer easy questions first
• you can skip questions with forward/back
• guess & write down questions to return to

123. • Come up with the answer in your head before looking at the possible answers,
this way the choices given on the test won't throw you off or trick you.
• Eliminate answers you know aren't right.
• Read all the choices before choosing your answer.
• Always take an educated guess and select an answer.
• Don't Do keep on changing your answer, usually your first choice is the right one.
• In "All of the above" and "None of the above" choices, if you are certain one of
the statements is true don't choose "None of the above" or one of the
statements are false don't choose "All of the above".
• In a question with an "All of the above" choice, if you see that at least two correct
statements, then "All of the above" is probably the answer.
• A positive choice is more likely to be true than a negative one.
• Usually the correct answer is the choice with the most information.

124. Don’t get discouraged

125. Schedule short breaks
even a scheduled 30-second break each
half hour can help

126. Use search wisely
http://desktop.google.com/
search through pdf ’s of texts

127. Use search wisely