Strategic Management - II

Identifying Core Competence

1. Provides potential access to a wide variety of markets
2. Should make a significant contribution to the perceived customer benefit of the end products
3. Should be difficult for competitors to imitate and it will be difficult if it is a complex harmonization

Components of a mission statement

• Customers: who are the firms customers
• Products or services: what are the firms major product or services
• Markets: Geographically where does the firm compete
• Technology: Is the firm technologically current?
• Concern for survival, growth and profitability
• Philosophy: what are the basic beliefs, values, aspirations and ethical priorities of the firm
• Self Concept: what is the firms distinctive competence
• Concern for public image
• Concern for employees

Criteria for setting objectives

•  Suitable
• Measurable
• Feasible
• Acceptable
• Flexible
• Motivating
• Understandable
• Commitment
• Participation
• Linkages

Internal External Matrix

• I, II, and IV Grow and Build
• III, V, and VII Hold and Maintain
• VI, VII, and IX Harvest and Divest

Grand Strategy Matrix

Quadrant I

• Market Development
• Market Penetration
• Product Development
• Forward Integration
• Backward Integration
• Horizontal Integration
• Concentric Diversification

Quadrant II

• Market Development
• Market Penetration
• Product Development
• Horizontal Integration
• Divesture
• Liquidation

Quadrant III

• Retrenchment
• Concentric Diversification
• Horizontal Diversification
• Conglomerate Diversification
• Liquidation

Quadrant IV

• Concentric Diversification
• Horizontal Diversification
• Conglomerate Diversification
• Joint Venture

Corporate Strategy

• Concerned with entire organisation
• Resource allocation
• Diversification
• Portfolio Management
• Business, divisional, or strategic business unit (SBU) strategy
• What product or service to offer
• How to compete
• Strategy within business
• Functional plans

Need for Integration

• Avoid duplication and wastage of resources
• Trasfer pricing
• Information sharing
• Knowledge transfer

Remult's Criteria to Evaluate Strategy

• Consistency
• Consonance
• Feasibility
• Advantage

Process of Evaluating Strategies

• Reviewing bases of strategy (IFE EFE)
• Measuring organisational performance
•  compare actual results with expected
• investigate deviations
• evaluate individual performance
• examining the progress in meeting the objectives
• Taking Corrective Actions

Characteristics of Effective Evaluation System

• Economical and simple
• timely information
• true picture of what is happening
• should not dominate decision
• foster mutual understanding, trust and common sense

 

The Man

 

The man went down the street with all the energy he had left in him. He was tired yet he moved swiftly for he had to reach his home early lest he gets late and face the wrath of the woman.