LEVELS OF STRATEGY
 CORPORATE
 BUSINESS (SBU)
 FUNCTIONAL (OPERATIONAL)
GENERIC STRATEGIES
COMPETITIVE ADVANTAGE
Low Cost
MARKET
SCOPE
Broad
Target
Narrow
Target
Michael E. Porter, Competitive Advantage
Differentiation
Cost
Differentiation
Leadership
Cost
Focus
Differentiation
Focus
CORPORATE STRATEGY
 OVERALL, GRAND STRATEGY
 PORTFOLIO STRATEGY
 BCG MATRIX
 GE BUSINESS SCREEN
BCG MATRIX
High
STAR
?
Market
growth
rate
Low
CASH
GENERATOR
High
“DOG”
Low
Market share
GE BUSINESS SCREEN
High
Industry
attractiveness
Med.
Low
High
Med.
Competitive position
Low
BENCHMARKING
 COMPARE TO “BEST IN CLASS”
 BASED ON KEY SUCCESS FACTORS
Multi-national Strategy
High
Global
Strategy
Transnational
Strategy
Multi-domestic
Strategy
Low
High
Need for local responsiveness
TYPES OF PLANS
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STRATEGIC
OPERATIONAL
TACTICAL
GOALS/OBJECTIVES
POLICY
PROCEDURE
RULE
GOAL SETTING
SINGLE, SPECIFIC TOPIC
 Not a vague abstraction
 We will maximize profits.
 We will be the best.
 Better: We will increase
profits by 10%.
FOCUS ON RESULT,
Not on Activity
 Activity will not result in goal
 Example: Goal is to increase advertising
expenditure by 15% in 2000.
 Goal is result of activity
 Better: Advertising will be increased by 15%
in 2000 in order to increase market share
from 8% to 10%.
MEASURE WHEN FEASIBLE
 Must at least be verifiable
HAVE A DEADLINE
GOALS
 SETTING GOALS
 NETWORK OF GOALS
 MULTIPLE GOALS
 SET PRIORITIES
GOALS
 STATED GOALS
 REAL GOALS
MBO
 A PLANNING TOOL
 MOTIVATIONAL TOOL
 CONTROL TOOL
POLICY
 GUIDELINE TO AUTHORITY
 USE TO DELEGATE AUTHORITY
PROCEDURE
 GUIDE TO ACTION
 SERIES OF STEPS
 NO AUTHORITY
 USUALLY A STANDING PLAN
RULE
 A REQUIREMENT
 “COMMAND” TO DO/NOT DO SOMETHING
 NO AUTHORITY, NO DECISION TO MAKE
TYPES OF BUDGETS
 CASH
 EXPENSE
 SALES
 CAPITAL EXPENDITURE
BASE OF BUDGET
 INCREMENTAL
 ZERO BASE
FORECASTING
 QUANTITATAIVE METHODS
 TIME SERIES
 REGRESSION...
 QUALITATIVE METHODS
 JURY OF OPINION
 SALES FORCE COMPOSITION
 CUSTOMER
OTHER TYPES OF PLANS
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SINGLE USE
STANDING
CONTINGENCY (ALTERNATIVE)
FLEXIBLE
DIRECTIONAL
SPECIFIC
SCHEDULING
 GANTT CHART
 LOAD CHART
 PERT
OTHER TOOLS
 BREAK EVEN ANALYSIS
 LINEAR PROGRAMMING
 QUEUING THEORY
 PROBABILITY THEORY
 SIMULATION
LENGTH OF PLAN
 SHORT TERM
 USUALLY ONE YEAR OR LESS
 LONG TERM
 USUALLY FIVE YEARS
 COMMITMENT CONCEPT
 SUNK COSTS
IMPLEMENTATION PLANS
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WHO
WHAT
WHEN
WHERE
HOW
SUPPLIERS
COORDINATION
WHAT TO MEASURE/CONTROL
“PLAN OF ACTION” OUTLINE
 State Goal
 Way(s) to accomplish it
 Accomplishment interfere with another?
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Date(s) to be finished
Problems I may encounter/create?
Suppliers, sources of help
Coordinate with???
Things to monitor, measure
IMPLEMENT THE PLAN
 ACTION PLANS
 TIME MANAGEMENT
 IMPORTANT TASKS
 URGENT TASKS
LEVEL IN ORGANIZATION
 HIGHER LEVEL IN ORGANIZATION
 STRATEGIC
 LONGER TERM
 MORE DIRECTIONAL
 LOWER LEVEL IN ORGANIZATION
 OPERATIONAL, TACTICAL
 SHORTER TERM
 MORE SPECIFIC
ENVIRONMENTAL UNCERTAINTY
 MORE UNCERTAIN
 DIRECTIONAL
 SHORTER TERM
 MORE CERTAIN
 SPECIFIC
 LONGER TERM
COMPANY LIFE CYCLE
 FORMATION
 MORE DIRECTIONAL
 GROWTH
 SHORTER TERM
 MORE SPECIFIC
 MATURITY
 SPECIFIC
 LONGER TERM
 DECLINE
 SHORTER TERM
 MORE DIRECTIONAL