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1. Business Strategic
Planning
Understand Strategy and
how it differs from plans, and
tactics
Look at models of strategy
development
Understand the process of
strategy development
Product Life Cycle and
Generic Strategies
2. Functions of Planning
1) Identifying future opportunities
2) Identifying and avoiding future
problems
3) Developing courses of action
4) Understanding the risks and
uncertainties associated with
various options
3. Strategy
The major courses of action that
an organization should take to
achieve its goals
Plans-deal more with actions that
should be taken
Tactics-specific moves
4. Intended and Realized
Strategies
Intended-Plans that managers
develop
Realized-What actions actually
occur
Unrealized-Plans that never occur
Emergent Strategy-Unplanned
actions that occur
6. SWOT Analysis
Internal
Strengths and Weaknesses
External
Opportunities and Threats in the
business environment
7. Core Competencies
Strengths that make an
organization distinctive from
competitors
Groups of sustainable competitive
advantages
8. External-O’s and T’s
Porter’s Five Forces Model-P94
Threat of New Entrants
Supplier Bargaining Power
Customer Bargaining Power
Substitute Goods or Services
Rivalry of Existing Firms
9. Product Life Cycle
Market phases that products
usually go through during their
lifetimes
Introduction
Growth
Maturity
Decline
Termination
10. Basic Product Life Cycle
Model
Adapted from Figure 7.4
Introduction Growth Maturity Decline Termination
Biogenetics
Electric cars
Cellular
phones
PCs
Software
Autos
Airlines
Breakfast
cereals
Black
and white
TV
Cigarettes
Slide rule
Drive-ins
High
Low
Sales
Volume
Time
7.10
11. Diversification
The variety of goods or services
provided by the firm
Focused Strategy
Dominant Business
Related Diversification
Unrelated Diversification
12. The Risks and Opportunities of
Diversification
Identifying the Risks and Opportunities of Diversification
What can we do better than any of our competitors if we enter a
new market?
What strategic assets are needed to succeed in the new market?
Are there synergies to be realized?
Will we be simply a player
in the new market or will
we emerge a winner?
What can we learn by diversifying, and are we sufficiently
organized to learn it?
13. Level of Diversification and
Planning
Scopeofstrategicplanning
Dick Clark
Productions
Southwest Airlines
Cemex
GE
Dominant-
business
firm
Single-
business
firm
Related-
business
firm
Unrelated-
businesses
firm
Broad
Narrow
HighLow
Level of
diversification
ABB
16. Related Diversification
A variety of similar goods or
services
Concentric Growth Strategy
Synergies are realized
Examples
GM
Microsoft
Honda
17. Unrelated Diversification
Provide diverse products to
different markets
Conglomerate Growth Strategy
Examples
GE
ABB
Mitsubuishi
19. Strategic Business Unit
SBU-a division or subsidiary of a
firm that operates relatively
independently
Examples
pizza hut, taco bell, kfc
IBM computers, mainframes,
financial
other examples??
20. Growth Strategies
Think of facing the ultimate
customer
Forward Integration-when a firm
buys its customers
Backward Integration-when a firm
buys its suppliers
Horizontal Integration-when a firm
buys its competitors
21. Growth Strategies (cont)
Market Penetration-development of
current markets with current
products
Market Development-seeking new
markets for current products
Product Development-new or
improved products for the current
market
25. Application of the Generic Strategies
Model
Feature
Company ExamplesBusiness-Level
Strategy
Differentiation Premium Quality
Brand image
Technological
leadership
Customer service
Lexus - autos
Compaq - PCs
Gillette - razors
Maytag - appliances
Nike - shoes
26. Application of the Generic Strategies Model
(contd.)
Feature Company Examples
Business-Level
Strategy
Cost leadership Tight cost controls
Efficient scale of
facilities
Efficient service,
sales force, and
advertising
Competitive pricing
Feature
Discount Tires - tire
replacement
Motel 6 - travel
accommodations
Wal-Mart - retailing
UPS - package delivery
27. Feature Company Examples
Business-Level
Strategy
Focus Careful identification
of target market (niche)
Cost leadership
emphasis or
differentiation emphasis
Constant review of
customer demand in
niche
Nieman Marcus - elite
retailing
Dick Clark Productions
Polo - clothing
Rolex - watches
Application of the Generic Strategies Model
(contd.)