Organizational

1
Chapter 6

• Organizational
• Strategy

2
What is Organizational Strategy?

• Definition
• Organizational Strategy is
• 1. an action plan consisting of specific goals
  and objectives
• 2. that is designed to provide an advantageous
  position, fit, or alignment with the firms
  environment.

3
Competitive Advantage

• The objective of strategic management - the
  development and implementation of strategy - is
  to determine, create, and maintain competitive
  advantage
• Factors that contribute to competitive advantage
• 1. Superiority
• 2. Inimitability
• 3. Durability
• 4. Non-Substitutability
• 5. Appropriability

4
Strategic Management

• Strategic Management is a process in which
  managers
• 1. Set the organizations general direction and
  objectives
• 2. Formulate a specific strategy
• 3. Plan and carry out the strategys
  implementation
• 4. Monitor results and make necessary adjustments
• Sound familiar? (P-gtO-gtD-gtC)

5
Setting Direction

• I. Statement of Strategic Intent
• A. What the organization ultimately wants to be
  and do
• B. The heart of the strategic plan
  (ideological core)
• C. Inspires organization members to stretch

6
Setting Direction, contd.

• II. Mission Statement
• A. Generally longer and more specific than the
  statement of strategic intent
• B. Might well include firm philosophy,
  products and services, values, markets, etc.

7
Setting Direction, contd.

• III. Strategic Objectives - translate the
  strategic intent and mission of the firm into
  specific, measurable goals
• - prioritizes goals
• - ensures efficient resource allocation
• - assigns responsibility and accountability for
  results
• - generally longer term gt 5 years

8
Strategy Formulation

• Two Generic Strategies for Achieving Competitive
  Advantage
• 1. Cost Leadership lowest cost producer for a
  good or service
• a. improved technology
• b. increased output, lower per unit cost
  (economies of scale)

9
Strategy Formulation, contd.

• 2. Differentiation presenting your product or
  service as unique/different from competitors on
  dimensions that are valued by customers
• Examples
• - style
• - quality
• - reliability
• - speed
• - durability

10
Internal and External Analysis

• Recall the notion of fit or alignment
• Basically, this involves an examination of
  external environmental forces and internal
  capabilities
• Key Question Given our circumstances, what
  internal capabilities can we use, develop, or
  acquire to achieve an advantageous fit with the
  situation?

11
Internal and External Analysis

• Environmental Analysis
• Value proposition the ratio of what customers
  get from a firm (in terms of reliability or
  quality) to how much they pay relative to
  alternatives from competitors
• Really, it is a statement about the perceived
  reliability/price relationship (value) of your
  good or service relative to competitors

12

• Organizational Analysis
• Value Chain set of activities that directly
  produce or support the production of what a firm
  offers to customers (internal factors/capabilitie
  s)
• Primary activities Supporting Activities
• - Inbound logistics - Procurement
• - Operations - Human resource management
• - Outbound logistics - Technology development
• - Marketing/Sales - Firm infrastructure
• - After sale service

13

• Resource-based approach internal resources that
  you have, build, or acquire should provide
  competitive advantage
• Core competencies internal activities that
  provide advantage in the present and future
• Common thread - value to customers difficult
  to imitate

14

• SWOT Analysis
• Strengths and Weaknesses (internal)
• Opportunities and Threats (external)
• Given these, what type of advantageous alignment
  might we achieve?

15

• Strategy Implementation Seven Ss
• 1. Strategy
• 2. Structure
• 3. Shared Values
• 4. Systems
• 5. Skills
• 6. Style
• 7. Staff

16

• Strategy as a Pattern or Not?
• -gtgtgt Planning model vs. emergent model