APPLYING
STRATEGY
Models, Levels and Tools
Learning Objectives
1.
2.
3.
4.
5.
Describe the 3 basic approaches to
strategy that organizations can adopt
Discuss 3 levels of strategic decision
making in organizations
List the main strategic planning tools
Understand why quantitative tools have
tended to be preferred to qualitative
ones
Appreciate the growing interest in vision
building techniques
Types of Strategies
Teece (1997), there are 3 basic type
that organizations do adopt in
practice :
1. The competitive forces model
2. The strategic conflict model
3. The resource based model
Level of Strategy
The 3 levels of strategic decision
making in organization :
1. The corporate level
2. The business level
3. The functional level
Corporate level strategy
There are 6 basic forms of strategy :
1. Stability strategy
2. Growth strategy
3. Portfolio extension
4. Retrenchment strategy
5. Harvesting strategy
6. Combination strategy
Business level strategy
Porter (1985) create 3 generic
strategies for achieving competitive
advantage :
1. Cost leadership
2. Product differentiation
3. Specialization by focus
Functional level strategy
The main function concern marketing, finance,
R&D, human resource, manufacturing and
purchasing
This level is the most neglected by western
manager cause :
1.
The concentration of corporate and
business led to a lack of internal operations
2.
Key element of function level were in effect
determined and constrained by corporate
3.
Eventhough 1980s tends saw interest in
function level, this tended be one sides,
tending to stress soft, personal type issues
Types of Organization
Miles and Snow (1978) classify the
strategic organization base on the
rate organization changes its
products or market :
1. Defenders
2. Prospectors
3. Analyzers
4. Reactors
Strategic Planning Tools
There some of tools and techniques
available to the strategist :
1. The PIMS (Profit Impact on
Marketing Strategy) model
2. The growth share matrix
3. The scenario construction approach
PIMS
Program was launch in 1972 by Sidney
Schoeffler.
PIMS operate as a form of club. It
collects information from its member
companies relating to such factors as
market share, profitability, product
quality and investment
The Growth Share Matrix
This was brainchild of Boston
Consulting Group.
That business in an organizational
portfolio can be classified into :
1. Stars
2. Cash cows
3. Dogs
4. Problem children or question marks
The scenario approach
 This approach emerge in 1970s.
 Scenario approach is to enable an
organization to picture and make
various assumption about future
events and trends that might affect its
operations
The scenario approach is built through
the construction of case studies
The 2 main scenario-building approach :
1. The Delphi method
2. The Cross Impact method
Vision Building
 Popularity in the last 10-15 years and
influenced more by Japanese
management

1.
2.
3.
The major elements of vision
building :
The conception by senior
management team on an ‘ideal’
future state
The identification of organization
mission, its rationale for existence
A clear statement of desired
outcomes and conditions and
competence needed to achieve
these
Summary
1.
2.
The Prescriptive stream of strategy
has been examine the favour
approaches to applying strategies
The approach to strategy to do with
the type of organization it is and
the orientation on its manager