The beliefs and values shared by people who work in an organisation

How people behave with each other How people behave with customers/clients How people view their relationship with stakeholders Peoples responses to energy use, community involvement, absence, work ethic, etc. How the organisation behaves to its employees training, professional development, etc.

May be driven by: Vision where the organisation wants to go in the future Mission Statement summary of the beliefs of the organisation and where it is now

May be reflected in:

Attitude and behaviour of the leadership Attitude to the role of individuals in the workplace open plan offices, team based working, etc. Logo of the organisation The image it presents to the outside world Its attitude to change

The concept of corporate strategy The notion of a resource-based view of corporate strategy How effective corporate strategy can be used to extend and leverage a firms distinctive competence The broad types of corporate strategy, including vertical integration, related diversification, and unrelated diversification.

Economic forces that motivate the pursuit of different corporate strategies. How to balance the benefits and costs of diversification Benefits of sharing and leveraging resources among businesses or activities Costs accompanying diversification and the limits of sharing Why corporations undertake restructuring How spin-offs and divestitures represent a form of restructuring designed to regain focus

Addressing slowdown in growth of earnings Moving into vegetarian and alternative foods Finding growth through snack foods

A finely tuned acquisition strategy A broad array of businesses

Medical products Electronics products Security systems

Recent initiatives

Resource-Based View of the Firm

An evolving set of strategic management ideas that place considerable emphasis on the firms ability to distinguish itself from rivals by means of investing in hard-to-imitate and specific resources, such as:
Technologies Skills Capabilities Assets Management approaches

Ideally, distinctive resources are hard for competitors to duplicate A firms resources should be highly specialized and durable Firms need to monitor the environment so that their corporate resources do not suffer from easy substitution by rivals

Entrance into

New stages of activity

New businesses/ industries

(i.e., vertical integration)

(i.e., industry-based diversification)

A.

More attractive terrain

Faster growth Greater profitability More stability

B.

Access to resources

C.

Physical assets and access to markets Technologies and skills Expertise Sharing of activities (any activity)

Hewlett-Packard
Partial List of Businesses

Shared Expertise

Computer/workstation s Calculators Laser printers Digital imaging Engineering systems Microprocessors

Engineering skills Rapid product development Distinctive manufacturing quality Leverage design skills

Banc-One
Partial List of Businesses

Nationwide system of low-cost, superefficient banks

Shared Expertise

Efficient management of banking activities (especially electronic data processing) New product introduction (e.g., leasing, commercial lending

Nutri/System
Partial List of Businesses

Shared Expertise

Weight loss centers Cosmetic dentistry centers

Operation of retail centers devoted to enhancing physical appearance

KOA
Partial List of Businesses

Shared Expertise

Campgrounds Printing shops

Franchising expertise Selling franchises to small investors

PepsiCo
Partial List of Businesses

Soft drinks (Pepsi, Mountain Dew) Snack food (Frito Lay) Gatorade Quaker Oats Tropicana juices

Shared Expertise

Operating a wide geographic network of franchised outlets Marketing research Segmentation skills Consumer advertising Brand development Advertising

Medtronic
Partial List of Businesses

Shared Expertise

Heart devices Pacemakers Spinal surgery Nervous system disorders

Shared R&D skills Wireless initiatives Advanced techniques for less invasive medicine

Firm
3M

Partial List of Businesses

Sandpaper, tapes, fabric treatments, sealants, weather-stripping, PostIt notes, medical patches, signs Cigarettes, packaged foods, consumer notdurables

Key Shared Activities

Technology development, coatings adhesives, thin-film substrates

PhilipMorris

Marketing: distribution, advertising, market research, promotion

Firm
IBM

Partial List of Businesses

Semiconductors, computers, network systems, disk drives, software, electronic commerce Mutual funds, brokerage, securities, annuities

Key Shared Activities

Technology: silicon etching, systems integration, advanced materials, miniaturization. Operations: network management, telecommunications, internal logistics. Marketing: distribution, sales, service, Internet

Fidelity Investments

(about newly entered fields)

Ignorance

Neglect
(of core business)

Communication Compromise Accountability

Coordination

Benefits
More attractive terrain Access to key resources Sharing resources

Costs
Ignorance Neglect

Coordination

Achieving more attractive terrain

(This is rarely a source of powerful benefits for all stakeholders)

Transferring resources which are

Competitively important to receiving businesses Difficult for receiving businesses to duplicate on their own Hard for competitors to imitate

Shared activities must be

Large in dollar terms Susceptible to economies of scale & experience

Limit Costs of Ignorance by...

entering familiar fields

entering new areas internally rather than by acquisition

Limit Costs of Neglect by...

ensuring new businesses fit easily with existing ones
leveraging a distinctive competence systemwide

Limit Costs of Cooperation by

carefully managing the sharing of activities designing organizational support systems that promote that promote interrelationships

Selective focus on carefully chosen activities or niches Divestitures and spinoffs

Corporation

SBU-1

SBU-2

First Stage of Strategic Planning may involve: Futures Thinking

Strategic Intents

Thinking about what the business might need to do 1020 years ahead Thinking about key strategic themes that will inform decision making

The thicker the planning document, the more useless it will be

(Brent Davies: 1999)

The Vision

Aims and Objectives:

Communicating to all staff where the organisation is going and where it intends to be in the future Allows the firm to set goals Aims long term target Objectives the way in which you are going to achieve the aim

Example: Aim may be for a chocolate manufacturer to break into a new overseas market Objectives:
Develop relationships with overseas suppliers Identify network of retail outlets Conduct market research to identify consumer needs Find location for overseas sales team HQ

Once the direction is identified: Analyse position Develop and introduce strategy Evaluate:

Evaluation is constant and the results of the evaluation feed back into the vision

Strengths identifying existing organisational strengths Weaknesses identifying existing organisational weaknesses Opportunities what market opportunities might there be for the organisation to exploit? Threats where might the threats to the future success come from?

Political: local, national and international political developments how will they affect the organisation and in what way/s? Economic: what are the main economic issues both nationally and internationally that might affect the organisation? Social: what are the developing social trends that may impact on how the organisation operates and what will they mean for future planning? Technological: changing technology can impact on competitive advantage very quickly!

Examples:
Growth of China and India as manufacturing centres Concern over treatment of workers and the environment in less developed countries who may be suppliers The future direction of the interest rate, consumer spending, etc. The changing age structure of the population The popularity of fads like the Atkins Diet The move towards greater political regulation of business The effect of more bureaucracy in the labour market

Developed by Michael Porter: forces that shape and influence the industry or market the organisation operates in. Strength of Barriers to Entry - how easy is it for new rivals to enter the industry? Extent of rivalry between firms how competitive is the existing market? Supplier power the greater the power, the less control the organisation has on the supply of its inputs. Buyer power how much power do customers in the industry have? Threat from substitutes what alternative products and services are there and what is the extent of the threat they pose?

Changing strategy will impact on the resources needed to carry out the strategy: Specifically the impact on: Land opportunities for acquiring land for development green belt, brownfield sites, planning regulations, etc. Labour ease of obtaining the skilled and unskilled labour required Capital the type of capital and the cost of the capital needed to fulfil the strategy

Data from sales, profit, etc. used to evaluate the progress and success of the strategy and to inform of changes to the strategy in the light of that data

Competitive Advantage something which gives the organisation some advantage over its rivals Cost advantage A strategy to seek out and secure a cost advantage of some kind - lower average costs, lower labour costs, etc.

Market Dominance:
Achieved through:
Internal growth Acquisitions mergers and takeovers

New product development: to keep ahead of

rivals and set the pace

Contraction/Expansion focus on what you

are good at (core competencies) or seek to expand into a range of markets?

Price Leadership through dominating the industry others follow your price lead Global seeking to expand global operations Reengineering thinking outside the box looking at news ways of doing things to leverage the organisations performance

Downsizing selling off unwanted parts of the business similar to contraction Delayering flattening the management structure, removing bureaucracy, speed up decision making Restructuring complete re-think of the way the business is organised

Internal business level strategies