Strategic management test notes essay

INTRO TO STRATEGIC MANGEMENT (LECTURE 1)

YOUR THOUGHTS PLEASE

• WHAT IS ‘STRATEGY’ AND EXACTLY WHAT DOES IT SUGGEST TO YOUR CORPORATION?

• A FEW COMMON ANSWERS Strategy?

Means a number of things to several persons at different points of period. (‘Strategy is acknowledged as a sequence of goals and objectives that is used to run business’ (Strategy is an effort to combine agencies activity and available solutions to achieve explained objectives. (Strategy is the map we use to get to exactly where we want to go’ (Strategy is the framework in order to us achieve our Eyesight and Quest.

(Our Approach is what each of our Boss would like to achieve! )

• SEVERAL EXTREME RESPONSES

Community Sector Planning:

Non-public Sector Preparing:

Not True! Outstanding Open public Sector Strategic Plans

TACTICAL PLANNING IN MALAYSIA

Key Public Sector Plans and Policies:

(Vision 2020 (1991 –2020): Nine challenges initiatives will be identified crucial for making a truly accelerating and modern Malaysian contemporary society in 2020. (National Vision Policy (NVP) [2001 –2010]#@@#@!: The policy aims to make a resilient and competitive nation that in return will result in a prosperous and modern ‘BangsaMalaysia’.

The policy will stress core strategies of Unity, Poverty eradication and restructuring world. (Outline Perspective Plan a few (2001 –2010): Though it includes similar targets as the NVP, the OPP 3 focuses on the introduction of an understanding society and an eco sustainable development initiative.

SIGHTS OF LEADING THINKERS

Strategy

‘The art with the employment of battles as a means to gain the thing of war’ B. They would. Liddell �bertrieben kritisch, Strategy (1967) ‘…the work of battles to gain the

end of battle. ‘ Carl von Clausewitz ‘What a single does to counter a competitor’s actual and expected moves’ George Steiner, Strategic Planning (1979)

Strategy is a plan, a how, a way of getting came from here to presently there Rise and Fall of ing(1 (Competitive strategy is ‘about getting different’. It indicates deliberately choosing a different pair of activities to deliver a unique mix of value. ‘ Michael Porter, ‘What is definitely Strategy? ‘ Harvard Business Review (Jan/Feb 1993)

Emergence of Technique

Where achieved it come from:

(A army concept and discipline

(The term ‘Strategy’ comes from Greek phrase ‘strategia’ –generalship i. e. stratos (the army) and ago (to lead). (Military and business strategy should gain competitive edge. (Both try to use their particular strengths to take advantage of the competition or opponents weaknesses. (Success is the response to careful preparing, close monitoring of environmental changes and good cleverness network. )

(Strategic Management Creation of a ‘route map’in a journey into a destination (objective). A mindful and logical management physical exercise involving preparing activities like understanding, achieving the organizations objectives and implementing their missions. Reflects the agencies response to environmental pressures. Ideal management integrates management, marketing, finance, creation and information systems to attain organizational success.

STRATEGIC SUPERVISION

Strategic supervision is a group of decisions and actions that result in the formulation and rendering of ideas designed to achieve an agencies objectives. ‘ John A Pearce II & Richard Robinson Tactical Management, McGraw Hill, 2007

Formulation calls for defining vision & objective, doing a situational analysis, determining objectives and formulating strategies.

Strategy implementation will involve marshaling the required resources, creating policy and allocating solutions.

Strategy analysis involves appraising how well the organization features performed

Tactical Planning

Proper planning is known as a process to determine the organizations game plan (direction and path) which include establishing long-range objectives the talents and opportunities. (Strategic planning may require personnel in three tiers:

a. Company level. –involves whole enterprise

b. Business Unit or Department level –product or service centered

c. Functional level

 Strategic management operations:

-Strategy formulation

-Strategy setup

-Strategy evaluation

•Benefits of Tactical Management

Financial Advantage:

-Improvement in product sales

-Improvement in success

-Productivity improvement

Benefits associated with Strategic Supervision

Non-Financial Benefits:

•Improved knowledge of competitors approaches

•Mission convenance

•Enhanced awareness of hazards

•Reduced resistance to transform

•Enhanced problem-prevention capabilities

Essential Strategic Administration Questions

•  What kind of business should we all become?

•  Are we in the right discipline?

•  Are presently there new competitors?

•  What approaches should we all pursue?

•  How are our customers changing?

The Fundamentals

Key Problem in Proper Management

Peter Drucker: –Think throughout the overall mission of a business. Ask the real key question: “What is our Business? “

Vision, Quest, Values –link to Strategy

Defining vision, mission & values-foundation for the Strategy

Extensive Strategic Management Model

Fred David ©

Formulation Implementation Evaluation

STRATEGIC MANAGEMENT PROCESS

•Strategic Management is definitely an analytical, dynamic and creative process. The Eight Step Tactical Management Procedure:

Stage 1 Modality

Level 2 Technique

Stage a few Modality

Experiential Learning Physical exercise

Experiential Exercise 1E –Strategic Planning at an area Company. Sally David Pg. 78 (12 th. ed) Surf the net and find a business that really does strategic planning. Examine the written objective statement is to do a critique that answers the question in the event the mission declaration adequately reflects the business activities. To answer this question learners are encouraged to browse further for the characteristics of a good quest statement. Answers to entered out and presented on the next school.

Key Terms

Vision Declaration – So what do we want to become?

Objective Statement – What is our business?

Values -Our Ethos?

Eyesight, Mission, Values –Link to Strategy

By identifying our Vision, identifying the Mission and establishing the Values of the organization, were consciously placing our organizing initiatives on the firm footing and relating it for the Strategic direction. Vision –what we want to always be

Mission – why we all exist (business)

Values – that which we believe in

Strategy- Exactly how are we gonna get there

The Mission Assertion

•Mission Statements generally contain 4 different parts:

•Who You Are

•What You Offer

•Who You Serve

•How You Serve

3 Key Circumstances for Success:

(Widespread Tactical Thinking: Organization to develop capable planners through training and rotation of personnel including line managers and split heads. (Reinforced Management Method: Long Range Preparing and technique formulation processes, budgets, market goals, evaluations and management incentives to assure goal convenance. (Supportive Value Systems: The organizations worth system and quality of should be section of the management method. But flexible enough to handle changes in the environment

Mission Statement

Advantages of a strong mission statement

MAF DIRECTION ASSERTION

Vision:

The Malaysian Armed Forces as a Credible Informed Force.

Mission:

To realize and deliver Battle ready Makes in order to safeguard national sovereignty and sincerity

VISION & MISSION (LECTURE 2)

STRATEGIC ADMINISTRATION

-define Strategic management can be described as set of decisions and actionsthat result in the formulation and setup of programs designed to achieve an organizations objectives. ‘ John A Pearce II & Richard Robinson Strategic Management, McGraw Hill, 3 years ago

DEFINING AN IDEA

-A Plan is a deliberate, conscious, arranged attempt to change the future by taking action in our. -It requires ends, or objectives, activities to reach individuals objectives, assets to make activities possible, and a strategy or approach for doing this in the most effective way. Graduate School of Public and International Affairs University of Pittsburg.

HOW COME PLAN?

-desire to change the status quo and refocus our targets. -control uncertainness and disturbance in the environment -to control the future through action from the -achieve opinion on desired goals and strategies. -to meet up with challenges posed by competitors.

THE VISION STATEMENT

(What is known as a Vision Statement’?

(A Vision is known as a positive assertion of ofwhat we would like to be in the future. (It has to be simple, short, understandable and distributed by everybody in the business. (Vision 2020 embodies Malaysia’s desire to be a

(fully produced nation economically and socially by the season 2020.

VERY GOOD VISION ASSERTION

What makes a good Vision Statement?

-Clear and powerful statement of what we want to work at (bridging the gap among current truth and future potential). -Short, simple, understandable, easily remembered, shared, finish and provides path for the future. -Long Term-Reflects what the organization will be in five to 10 years from right now.

COMPONENTS OF THE VISION DECLARATION

(A good vision statement will have two major parts:

1 ) ‘Core Goal: Organization’s reason behind existing (purpose). The assertion is often wide open ended. It is just a statement by what the organization desires to become for example. Walt Disney –’To get people to happy. ‘ 3M –’To solve unsolved problems innovatively. ‘

Collins C & Porras, T, HBR March. 1996

COMPONENTS OF THE VISION STATEMENT 2

(Second Element:

2 . ‘Core Ideology’ is the stuff that holds the corporation together mainly because it grows, diversifies and extends. The main ideology involves core principles and key purpose. Primary Values will be the organizations essential beliefs.

for example. Sony: elevation of Japan culture and national status. -being a pioneer not just a follower

. -encouraging person ability and creativity.

BUILDING YOUR PERSPECTIVE STATEMENT

Eye-sight Statement Case in point

To be the first choice inside the printed marketing and sales communications business. The first choice may be the finest choice, and staying the best is what Atlanta Internet pledges to work hard by being—every time! -Atlanta Internet Printers, Incorporation.

Mission Statement

• The Objective Statement

A quest is concerned with the way a company is maintained today, plus the purpose or perhaps reason for is actually existence. ‘What is the business? ‘

Mission Assertions usually have four different parts:

Whom You Will be

Whatever you Offer

Who You Serve

How You Serve

may differ from eyesight statement as it refers to the modern day and not towards the future.

Objective Statement Good examples

The Bellevue Clinic, with respect, compassion, integrity, and bravery, honors the individuality and confidentiality of the patients, workers, and community, and is accelerating in expecting and rendering future health proper care services. –The Bellevue Clinic

Importance of Quest

Benefits associated with A Strong Mission

Mission Elements

Mission Affirmation Evaluation Matrix

Mission Declaration & Consumer Orientation

Ben & Jerry’s Mission Declaration

Quest:

-To make, spread and sell the optimum quality all-natural ice cream and related products in a wide selection of innovative flavours made from Vermont dairy products. -To operate the corporation on a audio financial foundation profitable expansion, increasing value for each of our shareholders, and creating career opportunities and financial benefits for each of our employees. -To operate the organization in a way that positively recognizes the central function that organization plays in the structure of society by initiating ground breaking ways to improve the quality of life of the broad community—local, national and international.

MAF DIRECTION AFFIRMATION

Vision: The Malaysian Armed Forces to be a Reliable Armed Pressure. Mission: To comprehend and deliver Combat all set Forces to be able to protect nationwide sovereignty and integrity. MAF HQ Strat. MgmtSys. (2008)

OBJECTIVE

Objective: the designed outcome or ‘goal’ associated with an activity that should be achieved in a given time frame.

•Used to reflect earnings, efficiency, development, contribution to society, industry position etc . •Objectives should be measurable, suited, feasible, acceptable, motivate, versatile and inspire ‘buy in’.

STRATEGY

Organization’s Strategy can often be reflected as a master plan containing the planned targets, the company values and the resources available to achieve it. (Reflects directional decisions!

(Answers questions like -‘What would be the organizational desired goals and how can it be to be achieved? (3 numbers of strategy: Corporate and business; Business (competition); Functional (departmental)

CONCEPT OF STAKEHOLDER

Stakeholder Defined: Any individual or group of people with an interest, a stake or are affected by the activities, decisions or perhaps policies with the organization.

(2 Categories:

a. Primary Stakeholders –have direct interest (customers, suppliers, creditors, workers and shareholders). b. Supplementary Stakeholders –non market stake holders without direct economic transaction eg. media, community, business support groups & NGO’s.

Epilogue

Experiential Learning Exercise 2

Experiential Exercise a couple of –Writing a Vision and a Objective Statement intended for My School. -Most universities have a vision and mission affirmation.

-As part of the physical exercise, write a eyesight and mission

-statement for your university or college.

-Your mission statement should stick to the characteristics you may have been educated and present your reason. -To solution this query students ought to read additional on the characteristics of a great mission affirmation. -Answers should be typed away and presented at the up coming class.

EXTERNAL AUDIT (LECTURE 3)

oThe external environment represents elements which are beyond the control of an organization. oThis analysis provides information on crucial environmental developments: (Demographic moves & changes(e. g. the aging process population)

(Information technology use

(New government polices

ENVIRONMENTAL AUDIT

For successful formulation of strategy –Managers need to examine, understand and take cognizance of the External Environmental Factors and tendencies.

Two levels:

(General (Macro) Environment Environmental factors that effects all businesses or countries Political, Monetary, Social, Technology and Environment. (PESTE).

(Sectoral or Market Environment (Micro Environment) Main business or perhaps core activity zone from the organization that directly results organization and ability to compete. Influenced by policies, sites, suppliers, clientele, competitors plus the influence of substitutes. Michael Porter’s 5 Forces Version is sometimes used to explain the dynamics from the situation.

Purpose of External Audit

To recognize

Opportunities -factors which can help boost performance and achieve its strategic aims

Threats -factors which can prevent an organization’s progress

External Environmental Examine

(Allows managers to formulate approaches that:

(Take good thing about opportunities

(Avoid/reduce impact of hazards

(Information source to get external environmental analysis (customer surveys, industry surveys, periodicals, journals, reports, books, newspaper publishers, conferences plus the Internet.

Essential External Forces

PESTE

-Political, governmental & legal forces

-Economic and competitive forces

-Social, cultural & demographic forces

-Technological causes

-Ecological forces

MACRO ENVIRONMENTAL DECIPHERING

Macro Environmental Factors (PESTE ) impacts productivity and performance.

(Social Factors

Beliefs, ideals, attitudes, opinions and life styles, is often the result of cultural, environmental, demographic, spiritual, educational and ethnic fitness. Technological Elements Concerns scientific change -should avoid obsolescence and showcase innovation. Using new solutions help improve production. (Ecological Elements

Ecology is a relationship among man, additional living things as well as the natural environment involving the soil, drinking water and surroundings. Issues like pollution (oil spills), effect air pollution, environmental impact (open burning) and soil

stability can affect productivity, general health and task completion. ‘It is not really the most powerful of the varieties that survive, nor one of the most intelligent, but the one many responsive to transform. ‘ –Charles Darwin

Crucial External Pushes & the business

ORGANIZATION’S EXTERIOR ENVIRONMENT

Macro Environment Personal, Economic, Social, Technological, Environmental

MICRO as well as INDUSTRY EVALUATION

oFactors that directly affect the business ( mini environment) oAnalysis determines the way the immediate environmental forces impact the success, profitability or expansion potential in the firm. oMichael Porter’s Five Forces Version is the best well-known conceptual construction in use with this analysis.

The Five-Forces Type of Competition

-Porters Five Forces Model of competitive evaluation is used to develop strategies in numerous industries. -The intensity of competition among industries differs depending on the sector. (Aim is always to cope with competition) -The ordinaire impact from the five makes may be so brutal the industry might be clearly unsightly for earnings taking -To determine if a firm can make appropriate profit: 1 ) Identify essential competitive factors 2 . Evaluate how solid these elements happen to be

3. See whether it is useful for the for company to continue operating

The Five-Forces Model of Competition

Michael E Porter’s ‘Five Forces Model’

Clarifies the competitive forces that shape approach.

(The Five Forces that affect competition are:

1 . Hazards of new entrants: (Trade Barriers; Economies of scale; Manufacturer identity; Capital requirements; Expense disadvantage; use of distribution

channels; government policy etc).

2 . Bargaining power of consumers: (Buying electric power; buyer volume; switching costs; buyer info; substitutes and so forth )

a few. Bargaining power of suppliers: (Number of suppliers; switching costs; importance of volume level; threat of forward incorporation etc . )

4. Danger of substitute products or services(Price of substitute; turning costs; tendency to substitute)

5. Competition among contending firms(Bargaining benefits of the potential buyers and the suppliers. )

The Five-Forces Unit

Potential Development of Replacement Products

The Five-Forces Model

Competition Among Competitive Firms

The Five-Forces Style

Negotiating Power of Customers

The Five-Forces Model

Bargaining Power of Suppliers

The Five-Forces Unit

Potential Entry of recent Competitors

Info Mining

Collection & evaluation of data on opponents is essential intended for successful strategy formulation

EXTERNAL FACTOR ANALYSIS MATRIX (EFE)

The EFE Matrix enables strategists in summary and evaluate the factors that

will influence proper policy formulation.

Five steps to construct the EFE Matrix:

1 . List the key external factorsidentified (10 to 20 factors) in the exterior audit process including the chances and risks.

2 . Give each aspect a pounds ranging from zero. 0 (ofcourse not important) to 1. 0 (very important) –the weight signifies the comparable importance of each factor. Possibilities often get higher weighted scores than threats.

a few. Assign a rating 1 to 4 to each crucial external factor to indicate how effective current strategies may respond to these factors. The size 4 symbolizes superior response; 3 to symbolize above average

5. Multiply every single factor’ by its ratingto determine the total weighted report.

5. five. Sum the weighted scoresfor each variable to determine the total weighted credit score for the business.

EFE MATRIX

Understanding the elements used in the EFE Matrix is more essential than the real weights and ratings given.

SAMPLE EFE MATRIX

WHAT THE WEIGHTED SCORES MEAN

Total weighted score of 4. 0

(Organization response is usually outstanding to threats and weaknesses

Competitive Profile Matrix (CPM)

Sector Analysis CPM

Important: Just because one organization receives a 3. a couple of rating and another

receives a 2 . almost 8 rating, it does not follow that the first company is 20% better than the other.

Experiential Learning Exercise 3

INTERNAL EXAMINE (LECTURE 4)

MODUS OPERANDI

Inside evaluation (audit) of the company management, finance, operations and marketing functions aim’s to ascertain its strong points & weaknesses. The analysis starts with the analysis info obtained from the business itself.

Essential Internal Forces

Practical Business Areas:

•Vary with organizations

•Divisions have differing strengths & weaknesses

Distinctive Competencies:

(Organization’s strengths that cannot be easily matched or perhaps imitated by competitors (Building competitive advantage involves using distinctive expertise (build on your strengths)

Inside Audit

Performing an internal strategic-management examine provides a good opportunity for comprehending the nature and effect of decisions on various other functional parts of the organization.

Interior Audit

Internal Review ‘… concentrates on the identifying and analyzing the useful areas of any organization pertaining to it’s interior strengths and weaknesses …including the process actions and the support activities. ‘

PUBLIC SECTOR SYSTEMS PLATFORM

UPNM ORGANIZATIONAL STRUCTURE

Training, Appointment, Research, Distribution.

PROCESS ACTIONS (PUBLIC SECTOR)

Process Actions …relates to core organization functions that have an external client. In a teaching organization just like UPNM they are: (Training

(Consulting

(Research

(Publications

When assessing the strong points and weak point of the procedures it is important to pay attention to individual and group expertise, its operating and the usage of technology.

SUPPORT ACTIVITIES (PUBLIC SECTOR)

Support Activities …….

correspond with activities which experts claim not have an external client tend to be important for the efficient operating of the primary business.

to get UPNM it will be the support activities or staff functions like administration, finance and technical issues (IT networks) …eg. Catalogue, scientific and engineering labs.

Management

Functions of Management

•Planning

•Organizing

•Motivating

•Staffing

•Controlling

SUPERVISION FUNCTIONS

•Five basic functions:

we. Planning

Involves setting vision, mission and goals, strategic prepare, action programs and procedures including undertaking risk research.

ii. Organizing

iii. Discover job opportunity, role and tasks, abordnung of forces, establishing a series of command word and coordinating training requirements.

iii. Encouraging –Effective Leadership by inspiring staff to get the jobs carried out under little supervision. Likewise establishing effective communication and conflict management.

iv. Staffing –Human Resource management -recruiting, selecting, training, career creation and settlement.

. v. Handling –Setting efficiency standards, testing actual functionality, standard change and currently taking remedial action.

Management

Marketing

•Marketing –Is transferring of goods or providers from the maker to the end user at a pre-determined cost, quantity and quality.

•Marketing Mix –The Marketing blend is a mixture of product, syndication, promotion and pricing tactics (based about 4Ps -product, price, place and promotion) that can supply the organization the competitive advantage.

Marketing

(Product

( –The marketing mixture is essentially geared towards marketing the product or result of the business. –Products is going to undergo several life circuit phases: preliminary stage, growth stage, maturity stage, and decline stage. Product Life Cycle

Phase 1 ) -Introductory stage: a new merchandise could confront high-failure level, little competition, frequent product modification and limited syndication

Phase a couple of -Growth stage:. In this level, sales typically grow at an increasing level and competition may your market although existing competitive edge sees profits go up rapidly with this stage.

Stage 3 -Maturity stage: the longest level of the product life cycle when ever sales price decreases as a result of emergence of niches entrepreneurs who focus on specific segments of a industry.

Phase 4 –Declining stage: features a long-run drop in sales due to changing consumer tastes plus the emergence of substitutes.

SUPPORT LIFE CYCLE

Marketing

Opportunity Analysis

Finance/Accounting

Deciding financial strong points & weaknesses key to technique formation

Finance/Accounting Audit

Monetary Ratios

Monetary Ratios

ii. Leveraging ratio steps the magnitude to which the firm have been financed by debt. Illustrations: Debt-to-asset proportion, Long-term debt-to-equity ratio

iii. Activity rate measures how effectively the firm uses its methods. Examples: Products on hand turnover, Fixed assets turnover

iv. Success ratio actions the results generated in sales and investment. Examples: Gross profit margin, Returning on total assets

versus. Growth rate measures the performance of the company when compared with industry. Cases: Sales, Net gain Production/Operations

Production/Operations Capabilities Operations may be the process of changing or value adding to input / organic material methods (e. g. steel, olive oil, etc . ) to produce valuable products/outputs for consumers. Businesses function contain:

(Processing

(Capacity building

(Inventory control

(Workforce

(Quality Assuarance

BREAK EVEN POINT ANALYSIS

BEP analysis shows the optimum revenue volume pertaining to break even to happen when total costs the same total revenues (no revenue no loss).

Strength and Weakness Analysis

1 ) List all the internal elements (management, advertising, financial, and operation/production) in the organization.

2 . Assign an ‘Importance Score’ to each internal factor (1–10) with most critical factors provided higher ratings.

3. Do’Weighted Average’: Importance Score sama dengan 1 . 0 Sum worth addressing Scores

4. Assign a’Capability Score’* with each internal element –again follow a range 1–10 with large score pertaining to high capacity.

5. EstablishWeighted Capability: * Refers to Org. ability to manage factors Weighted Average times Capability, Quantity of Importance Ratings.

6. The 5 top rated factors (highest weighted capability) become ‘Internal Strengths’.

six. Determine the difference gap between importance report and the capacity score to get the remaining inner factors. ( outside top 5 weighted functionality scores).

almost 8. Select a few factors with largest great difference space as “weaknesses”. These internal factors are important but the company has problems

in beating them.

INTERIOR FACTOR EVALUATION MATRIX

Production/Operations

Production/Operations Audit

-Are quality-control policies & procedures effective?

-Are facilities, methods, and marketplaces strategically located? -Does the organization have technical competencies?

Exploration & Creation

Study & Development Functions

-Development of new products just before

-CompetitorsImproving product top quality

-Improving manufacturing operations to reduce costs

Research & Development Taxation

Would be the R&D features adequate?

If R&D is outsourced, is it cost effective?

Will be the R&D staff well certified?

Happen to be R&D assets allocated properly?

Exploration & Advancement Audit

Are MIS and computers adequate?

Is conversation between R&D & different organizational models effective? Can be found products scientifically competitive?

Purpose

Boost performance associated with an enterprise by improving the caliber of managerial decisions.

Management Taxation Checklist

-Does the firm work with strategic management concepts?

-Are objectives/goals measurable?

-Well conveyed?

-Do managers in any way levels strategy effectively?

-Is worker absenteeism low?

-Is employee turnover low?

-Are the reward components effective?

-Are the organization’s control mechanisms successful?

ACTIONABLE TACTICS (LECTURE 5)

Lesson Describe

-Levels of Strategy –Corporate, Business & Efficient Levels -Types of Strategies

-Integration Strategies

-Intensive Tactics

-Diversification Strategies

Tactics in Action

Organizations Adopt Strategic Planning

Quest for higher earnings

Pursuit of higher profits

Quest for lower costs of operations

Tactical Decision Levels

The decision-making procedure is done at three different levels or perhaps under three different instances within the firm.

The three wide levels of decision making are:

–Corporate level strategies (Grand)

–Business level tactics (Secondary)

–Functional level strategies (Tactical)

Strategic Decision Levels

Corporate Level Strategies can be grouped as follows:

Grand strategies:

Growth

Stable progress

Transformation

Combination

Secondary level strategies:

Expand

Integrate

Diversify

Strategic Decision Amounts

–Tactical level approaches:

Organic

Joint venture

Combination

Buy

Reverse takeover

Strategic cha?non

Licensing/Franchising

Strategic Decision Levels

Ideal Decision Amounts

Corporate Level Strategies

oThese approaches are often built to benefit the complete organization um oInvolves the best management level

to oOften emphasis is within the future welfare of the entire corporation to accomplish higher profit, return on investment, superior market location and improved overall performance.

RELATIONSHIPS BETWEEN LEVELS OF STRATEGIES

The Grand Approaches

The majority of organizations will choose from any one ot this four strategies in the beginning: –Growth strategy

–Stable development strategy

–Turnaround approach

–Combination strategy

The Grand Tactics

1 . The Growth Strategy -Designed to make sure each year’s growth level is larger that of the prior year

installment payments on your The Secure Growth Technique. This strategy is definitely selected when the company is facing negative times or perhaps needs to combine its businesses. The aim of this strategy is to maintain the same development rate just as the past yr.

3. The Turnaround Technique Strategy of preference when a business has bad growth and desires to do a transformation for confident growth.

5. The Combo Strategy Sometimes large businesses may need to divest some a part of its composition (low progress potential subsidiaries) to achieve a turnaround. This tactic involves sacrificing the poor to help the strong.

The Secondary Level Strategies

(Having chosen the Grand Strategy, the management must decide on the right secondary level strategy.

(4 Secondary Level Strategies:

–Expansion

–Integration

–Diversification

–Turnaround

The Secondary Level Strategies

1 . The Expansion Strategy

(This strategy is essentially designed for development and market expansion throughout the efficient use of existing methods. (There will be no fresh inputs in to the production process and the success of this assess will be the embrace activity level when compared to past years performance. •Eg: Hypermarkets –Tesco, Carefour; Fast Food Shops –KFC, Starbucks & Kenny Rodgers; Banking companies –CIMB, Maybank;

2 . The mixing Strategy

a few. Organizations in aiming to control the supply chain activities via raw materials through manufacturing to marketing the item will favor this strategy. A nearby Tyre Company for example , want to control the provision of inputs to some from the processes, just like raw plastic, steel cords, carbon black etc within the manufacturing of radial tires. This will give the company better control of supply, price and quality in the critical insight into the tyre making process.

INTEGRATION STRATEGIES

The forward, backwards and horizontal integration approaches are sometimes labelled as Top to bottom Integration Technique

(a) In reverse integration approach: control the availability of resources/raw material products in terms of prices, quality, delivery, choice of material, source of source, etc .

(b) Forward the usage strategy: control of down line value added activities following the manufactured products is sold for the wholesaler, elizabeth. g. product packaging, transporting, warehousing, setting up retail outlets, etc .

Forwards Integration Strategies

Gain Control Over

If:

Current marketers – high-priced or difficult to rely on

Accessibility to quality marketers – limited

Organization competing in industry anticipated to grow markedly

Firm has the two capital & HR to manage new business of distribution Current distributors have high income

(c) Side to side integration technique:

This plan aims to reduce the number of rivals as the business would choose an purchase, joint venture or perhaps strategic alliance to reduce competition. Malaysian Planting and Financial sectors include adopted this tactic to reduce competition and obtain competitive power in offshore markets.

Side to side Integration Strategies

Title or Control of –

Firm’s opponents

Backward Incorporation Strategies

Producer handles the availability of raw materials supplies in terms of pricing, top quality, supply and choice. Suggestions –

a few. The Variation Strategy

Diversification is basically increasing the number of outputs made or providers rendered. Important question is how to improve the variety of actions in its present operations. You will find four decisions that come beneath this category:

a. Concentric variation strategy -increase the variety of their manufactured goods, related to the present functions. E. g. Bata shoes or boots produces sneaker polish

b. Conglomerate diversity strategy adds to your home variety in a different or perhaps unrelated sector. Penang Port Corp also operates NDSB, Ferry Co & a tiny Nigerian dockyard. a.

c. Horizontal variation strategy–often being forced to diversify due to requests by simply regular consumers to provide further service. For example. Air Asia has Tune hotels and tour features. Goodyear ServitcarTyreShop also gives one end automobile restore services.

4. Turnaround Approaches These tactics are activities commonly used by simply corporations facing negative progress. -negative progress rate, price of come back,  making loss with no gross payout. Retrenchment Strategy – Option to lower overhead costs without forsaking embrace productivity and efficiency. Divestiture strategy consists of supporting onlythose making profits when non-profitable actions are shut down and marketed off. Liquidation Strategy – closing down / retrenchment

one particular

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