MGT 435 Management Strategies and Policies

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MGT 435 Management Strategies and Policies

• Professor Cynthia Miree
• 413 Elliott Hall
• miree_at_oakland.edu
• [phone]

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Introductions

• What is your name?
• What is your Major?
• Please describe your work experience.
• What are your plans after graduation?
• What are two words that best describe you?

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The N E M Effect

• Have you ever heard of this phenomenon?

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The N E M Effect
Nathaniel (Born10/20/03)
Emmanuel (Born1/22/05)
Michael (Born 11/16/06)
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What is Strategy? Key Concepts

• Strategy Defined
• Operational Effectiveness
• Three Activities Models
• Strategy-Making Process
• Vision and Mission
• Different Types of Objectives
• Three Levels of Strategy

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Management What is it? What does this word
mean?
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Strategic Management What is it? What does
this word mean?
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Strategy What is it? What does this word mean?
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Strategy Defined The creation of a unique and
valuable position involving a different set of
activities. Strategy is about
being different!!!!
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Strategy involves the deliberate choice of a
different set of activities that deliver a unique
mix of value. In other words, Choosing to
perform different activities OR Performing
common activities in different ways Examples
IKEA (retail sales/inventory) and Google
(Recruiting)
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Three Activities Models Variety-based (ex.
Jiffy Lube) Needs-based (ex. IKEA) Access-base
d (Amazon.com) These differences impact the
activities that are performed.
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Lets look within the same industry
Healthcare Variety-based (ex. Specialized
Clinics) Needs-based (ex. General
Hospitals/IMs/FPs) Access-based (ex.
MDAdvice.com or Video Conferencing)
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Operational Effectiveness
Involves operational practices that lead to
efficiency (e.g., better utilization of
inputs, reducing defects, or developing
products faster.) Things that lead to
operational effectiveness Eliminating wasted
effort Employing more advanced technology Motivati
ng employees better than others Having greater
insight into managing particular activities or
sets of activities
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Operational Effectiveness can be an important
source of differences in profitability. Why is
this true? Is operational effectiveness a
sufficient condition to sustain a competitive
advantage? Why or why not?
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Strategy is about being different!!!!
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Typical Airline
Gets passengers from almost any point A to point
B Hub to spoke system centered on major
airports Offers first-class or business
class Accommodates customers who change plans by
coordinating schedules and checking and
transferring bags Offers meals
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Southwest Airlines
Offers low cost, point to point service
Preference for less congested airports No
meals, no assigned seats, no inter-line baggage
checking No premium class Flight attendants
also clean-up crew Standardized fleet
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• Strategy is about making trade-offs and involves
  choice
• Choosing not only what to do, but also what not
  to do.
• Trade-offs arise from
• Inconsistencies with image (Purdue Chicken)
• The activities themselves (Ready to eat breakfast
  technology)
• Internal coordination issues

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A Framework for the Strategy Making Process
I m p l e m e n t a t i o n
Vision and Mission
Corporate Strategy
P e r f o r m a n c e
Managers Mental Models (Beliefs Understanding
Market Position
Business Strategy
Set Objectives
Functional Strategy
Business Definition
Decisions about
Feedback
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A Framework for the Strategy Making Process
Vision and Mission
Managers Mental Models (Beliefs Understanding
Business Definition
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Strategic Management Model Vision or Mission
Mission Describes Who we are, what we do, where
we are headed Also provides the company
with Image Identity Decision Making
Guide Statement of Strategic Intent
Create a Vision or Mission
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Vision What do we want to become (an ideal
state, a utopia) Mission What is our business?
(typically associated with the present) Does
every company need one? If not, who doesnt need
one? Why wouldnt they need one?
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• What do mission statements provide the
  organization with?
• Unanimity of purpose within the organization
• A basis or standard for allocating resources
• Identity
• Organizational Image
• Decision-making guide
• Specifies organizational purpose

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How specific do they need to be? How does an
organization determine Who we are, what we do
and where we are headed?
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A Framework for the Strategy Making Process
Vision and Mission
Managers Mental Models (Beliefs Understanding
Set Objectives
Business Definition
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Strategic Management Model Set Objectives
What are some of the characteristics of
objectives? There are Two Types of
Objectives 1. Strategic Competitive
position Overall competitiveness 2. Financial
(e.g., ROA, ROI)
Set Objectives
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A Framework for the Strategy Making Process
Vision and Mission
Corporate Strategy
Managers Mental Models (Beliefs Understanding
Business Strategy
Set Objectives
Functional Strategy
Business Definition
Decisions about
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Craft a Strategy Corporate-level
Corporate Level Determines what industries
should the firm compete in Overall
Objective Increase Shareholders Wealth Key
Idea Multiple Industries Examples Ford,
Pfizer
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Craft a Strategy Business-Level
Business Level Determines how the firm will
position itself to compete within a single
industry Overall Objective Competitive
Advantage Key Idea Single Industry Examples
(Ford Automotive or Ford Credit), Wal-Mart
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Craft a Strategy Functional-Level
Functional Level Determines how the different
functional areas will position themselves to
support the business-level strategy Overall
Objective Organizational Alignment Key
Idea Individual Functions Examples Marketing
, Operations, etc
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A Framework for the Strategy Making Process
I m p l e m e n t a t i o n
Vision and Mission
Corporate Strategy
Managers Mental Models (Beliefs Understanding
Business Strategy
Set Objectives
Functional Strategy
Business Definition
Decisions about
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A Framework for the Strategy Making Process
I m p l e m e n t a t i o n
Vision and Mission
Corporate Strategy
P e r f o r m a n c e
Managers Mental Models (Beliefs Understanding
Market Position
Business Strategy
Set Objectives
Functional Strategy
Business Definition
Decisions about
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A Framework for the Strategy Making Process
I m p l e m e n t a t i o n
Vision and Mission
Corporate Strategy
P e r f o r m a n c e
Managers Mental Models (Beliefs Understanding
Market Position
Business Strategy
Set Objectives
Functional Strategy
Business Definition
Decisions about
Feedback