CORPORATE MANAGEMENT in ACTION
Session 2. Strategies for the Global Organization
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Session 2. Strategies for the Global
Organization
Chapter Objectives
 Formulate Vision and Mission
 Understand Organizational Goals
 Benefit from Core Competencies
 Design Strategy and Implement it
 Evaluate Strategy Implementation
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Vision & Mission
Vision
Expresses an organization’s fundamental
aspirations and purpose, usually by
appealing to its members’ hearts and minds
Mission
The organization’s purpose or reason for existing; often answers
questions such as:
What business are we in?
Who are we?
What are we about?
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Vision & Mission: Examples
Vision
“To pioneer new communities around the
world built on commerce, sustained by trust,
and inspired by opportunity” (E-Bay)
Mission
“To serve as the world’s online marketplace for the sale and
payment of goods and services by a diverse community of
individuals and businesses” (E-Bay)
“To make the people happy” (Walt Disney)
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Organizational Goals
Organizational Goals:
o Desired business outcomes, set as criteria against
which performance is measured.
o Organizations have multiple goals at all times
Types of Goals:
Financial: relate to financial performance (profits, ROI, …)
Organizational: relate to all other functions (efficiency,
market share, etc…)
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Core Competencies
Core competencies:
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Valuable
Rare and unavailable to others
Difficult to imitate
Organized for synergy
 Human resources are the most important source of core
competencies to organizations
 Core competencies affect resource allocation schemes for strategy
planning & implementation
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STRATEGIC PLANNING: Definition
Strategic Planning
o Devising a set of plans in line with the organizational vision,
mission, and strategy, in order to achieve organizational goals
o Effective planning helps in:
• Discovering new opportunities
• Anticipating future risks / problems
• Devising correct set of actions
o Strategy Vs. Tactics:
• Strategy: set as “static” as a result of strategic plan
• Tactics: “dynamic” actions based on daily situations
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STRATEGIC PLANNING: Steps
1. vision & mission
2. SWOT Analysis: strengths, weaknesses,
opportunities, threats.
3. Set Organizational Goals
4. Formulate strategy
5. Allocate resources
6. Implement strategy
7. Evaluate & rectify
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Organizational Strategy: Types
Two main Strategy Levels:
o Business Level Strategy
An integrated set of actions a firm takes to gain
competitive advantage
• Strategy should enable firms to create product/service
advantage
• It should be supported by the firms’ culture
o Corporate Level Strategy
From one product group, to multi product groups
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Organizational Strategy: Types
Business Level Strategy: 4 Types
1. Cost Leadership:
• Produce goods at lower prices
• Must create value for customers
• Sustained capital investment
• Process engineering skills
• Supervision of labor
• Low cost distribution systems
• Products with easy manufacturing process
• Tight cost control
• Frequent detailed cost reports
• Structures organization
• Incentives to meet targets
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Organizational Strategy: Types
Business Level Strategy: 4 Types
2. Product Differentiation:
• Develop products with features different to that of
competitors
• Resist price increases
• Maintain cost levels
• If the features are unique, consumers may pay
higher prices
• Strong marketing
• Product engineering, technological leadership
• Creative abilities, strong research teams
• Cooperative partners, stakeholders
• Reputation
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Organizational Strategy: Types
Business Level Strategy: 4 Types
3. Focus Strategy:
• Target a particular group
• Target a different segment
• Target a different geographic market
• Focused cost leadership
• Focused differentiated leadership
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Organizational Strategy: Types
Business Level Strategy: 4 Types
4. Integrated Strategy:
• Customers expect both: differentiated products, at
competitive prices
• Use flexible manufacturing systems,
• Information systems
• Quality control
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Organizational Strategy: Types
Corporate Level Strategy: 3 Types
A. Growth Strategy:
 Widely pursued; combination of expansion in
existing line; adding new
products/services/markets, or diversification to
new lines/industries
 New product development, mergers and
acquisitions, strategic alliances
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Organizational Strategy: Types
Corporate Level Strategy: 3 Types
B. Concentration Strategy:
Vertical growth
Backward integration
Forward Integration
Horizontal growth
Increasing range of products
Tapping new markets
Acquiring manufacturing facilities
Acquisitions
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Organizational Strategy: Types
Corporate Level Strategy: 3 Types
C. Diversification Strategy:
I. Concentric or related diversification
Acquisition, joint venture into a market with
common customers
Use of existing industry expertise
II. Conglomerate or unrelated diversification
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STRATEGIC PLANNING:
Common Mistakes
Pitfalls in Strategic Planning: Avoid
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xiii.
Using strategic planning to gain control over decisions and resources
Doing strategic planning only to satisfy accreditation or regulatory
requirements
Too hastily moving from mission development to strategy formulation
Failing to communicate the plan to employees, who continue working in
the dark
Top managers making many intuitive decisions that conflict with the
formal plan
Top managers not actively supporting the strategic-planning process
Failing to use plans as a standard for measuring performance
Delegating planning to a “planner” rather than involving all managers
Failing to involve key employees in all phases of planning
Failing to create a collaborative climate supportive of change
Viewing planning as unnecessary
Becoming so occupied with current problems
Being so formal in planning that flexibility and creativity are stifled
FADI MAJZOUB (2013)
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