Chapter 9 Organizational Strategy

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Chapter 9 Organizational Strategy

• Learning Objectives
• 1.    Explain the components of sustainable
  competitive advantage and why it is important.
• 2.    Describe the steps involved in the
  strategy-making process.

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Organizational Resources

• Assets
• Capabilities
• Processes
• Information
• Knowledge

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Competitive Advantage

• Providing greater value for customers than your
  competitors
• Create sustainable competitive advantage by
  using
• Valuable or rare resources
• Resources that are costly or difficult to
  duplicate
• Non-substitutable resources

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Competitive Advantage Issues

• Fixed Variable Costs
• Lowest, high operating leverage
• Control over costs, prices and distribution
• Moderate to strong
• Barriers to entry proprietary protection
• Have or can gain

• Response/Lead Time
• Competition slow napping
• Legal Contractual Advantage
• Well-developed accessible
• Contacts and Networks
• Well-developed accessible
• Key People
• Top talent an A team

Source Timmons, Jeffry, Venture Opportunity
Screening Guide, New Venture Creation, 1994, p.
144.
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Strategy

• The plan of action that prescribes resource
  allocation and other activities for dealing with
  the environment and helping the organization
  attain its goals.
• Core competence something the organization does
  extremely well
• Synergy organizational parts interact to
  produce a joint effect that is greater than the
  sum of the parts acting alone
• Value Creation exploiting core competencies and
  attaining synergy help companies create value

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Value Creation

• Value Costs Benefits
• Delivering value should be at the heart of
  strategy.
• Managers need to know which parts of the
  companys operation create value.
• A company is profitable when the value it creates
  is greater than the cost of resources.

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Strategic Management

• Set of decisions and actions to formulate and
  implement strategies that provide a competitive
  fit between the organization and its environment
  to achieve organizational goals.

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Grand Strategy

• Growth
• Stability (pause strategy)
• Retrenchment (forced decline)
• Global

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Levels of Strategy

• Corporate What business are we in?
• Industry How do we compete?
• Firm How do we support the business-level
  strategy?

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Strategic Management Process
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Planning to Strategy
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