Del t aAi r l i nes By2002, Del t af acedcompet i t i v et hr eatt oi t smar ketposi t i on: whi ch i sl owcostcar r i er sLCCst hr eat . I t ’ sl owcostcompet i t i onf r om compani esl i keJet Bl ueorSout hwest . Del t a' suni tcost sar ehi ghert hant hoseofSout hwest , Ai r Tr anand Jet Bl ue. Del t a' sabi l i t yt ocompet eef f ect i v el ywi t hl owcostcar r i er sdepends, i npar t , oni t sabi l i t yt oachi ev eoper at i ngcost sperav ai l abl eseat mi l e( " uni tcost s" )t hatar ecompet i t i v ewi t ht hosecar r i er s. Thet askf or ceconsi der edDel t a’ sopt i ons, Amongt heopt i onsont he t abl ewast hepossi bi l i t yt hat: Del t awoul dl aunchi t sownl owcost subsi di ar y ButWe’ v enev erseenahi ghcostcar r i ert r ansf or mi t sel fi nt oal owcostcar r i er They ’ l l st i l l beahi gh-costcar r i ersel l i ngcheapseat s Butt hepr obl em i snear l yal l maj orai r l i neshaddonet hi s unsuccessf ul l y ,pr ov edunsust ai nabl eov ert i me Ther ear et hr eest r at egi copt i onst hatar eav ai l abl e: -Modi f i cat i oni nt heDel t aEx pr ess. -Rei nt egr at ewi t ht hepr i mar yDel t abr and. -l aunchanewl owcostsubsi di ar yt hatr equi r est ensofmi l l i onsof dol l ar sf ort heset upcostandt heexpl anat i ont ot heshar ehol der sas wel l ast ot hei ndust r yanal y st s. I ndust r yanal y si s Bar gai ni ngpowerofsuppl i er shi ghThr eatofnewent r ant s l owBar gai ni ngpowerofbuy er sl owThr eatofsubst i t ut es moder at eFor cesofi ndust r yr i v al r yhi gh St r at egi cal t er nat i v es Est abl i sht henewLLCdi v i si on, Thi sst r at egyneedcont r ol ov ercost andhi ghl oadf act or . Don' tf ol l owLCC' sandf ocusonv al ueaddedser v i cesbyusi ngt he av ai l abl ecapabi l i t i esanddi f f er ent i at et hemsel v es. Usehubandspokest r at egyandwor kwi t hLCC' sai r l i nesby acqui si t i onorpar t ner shi ps, Del t acoul dhav emor el ongdi st ances f l i ght swhi chr educet het ot al cost , andi tcoul dhav eahi gherl oad f act orsot het hi r donei st her ecommendedst r at egyf r om my per spect i v e Recommendat i on -Del t a shoul dt r yt obui l dst r ongr el at i onshi pwi t huni onsaswel l as l owert hel aborcost . -Thecompanyshoul dal sost r engt hent heassoci at i onbet weent he mar ket i ngandsal esdepar t mental ongwi t hdi f f er ent i at i ngt he ser v i cest hant hoseoft hecompet i t or s. -I ti si mpor t antf ort hecompanyt ohav eacostadv ant ageaswel l as adi f f er ent i at i onst r at egyi nor dert oov er comet hei ncr easi ngt hr eat oft hel owcostcompet i t or . -pr ov i det heonl i nespeci al di scountof f er s -Thecompanycani nt r oducehol i daypackageal ongwi t ht he f aci l i t i est oi t sl oy al cust omer s -Del t aAi r l i nesneedst of ocuscont i nuousl yont hei nnov at i onand enhancet hecust omerser v i cet ocompet ewi t ht hegr owi ng compet i t i onf r om t hel owcostcar r i er s. -I ti sal sor ecommendedt hatt heboar dofDel t aAi r l i nesneedst o dev el opat t r act i v epr omot i onpr ogr amsf ort hecust omer st hatmay i ncl udepr omot i onr el at edt ot hef r equentf l y erandmember shi pcar d l ongwi t ht hespeci al f aci l i t i es. Env i r onment alScanni ngi st hemoni t or i ng, ev al uat i ngand di ssemi nat i ngofi nf or mat i onf r om t heex t er nal andi nt er nal env i r onment st okeypeopl ewi t hi nt heor gani zat i on. St r at egy For mul at i on: t hedev el opmentofl ongr angepl ansf ort heef f ect i v e managementofenv i r onment al oppor t uni t i esandt hr eat si nl i ghtof or gani z at i onal st r engt hsandweaknesses( SWOT) . St r at egyf or mul at i on-concer nsdev el opi ngacor por at i on’ smi ssi on, obj ect i v es, st r at egi esandpol i ci esSi t uat i onAnal y si s-t hepr ocessof f i ndi ngast r at egi cf i tbet weenex t er nal oppor t uni t i esandi nt er nal st r engt hswhi l ewor ki ngar oundext er nal andi nt er nal weaknesses Pol i ci es-t hebr oadgui del i nesf ordeci si onmaki ngt hatl i nkst he f or mul at i onofast r at egywi t hi t si mpl ement at i on. St r at egyi mpl ement at i on:t hepr ocessbywhi chst r at egi esand pol i ci esar eputi nt oact i ont hr ought hedev el opmentofpr ogr ams, budget sandpr ocedur es. Ev al uat i onandcont r ol : t hepr ocessi nwhi chcor por at eact i v i t i esand per f or mancer esul t sar emoni t or edsot hatact ual per f or mancecan becompar edt odesi r edper f or mance Tr i gger i ngev ent : somet hi ngt hatact sasast i mul usf orachangei n st r at egyandcani ncl ude: NewCEO, Ex t er nal i nt er v ent i on, Thr eatof changeofowner shi p, Per f or mancegap, St r at egi ci nf l ect i onpoi nt . St r at egi caudi tpr ov i desacheckl i stofquest i ons, byar eaori ssue, t hatenabl esasy st emat i canal y si st obemadeofv ar i ouscor por at e f unct i onsandact i v i t i es. Cor por at i on: amechani sm est abl i shedt oal l owdi f f er entpar t i est o cont r i but ecapi t al , exper t i seandl aborf ort hei rmut ual benef i t Cor por at i oni sgov er nedbyt heboar dofdi r ect or st hat ov er seest opmanagementwi t ht heconcur r enceoft heshar ehol der s. Cor por at egov er nance: t her el at i onshi pamongt heboar dof di r ect or s, t opmanagementandshar ehol der si ndet er mi ni ngt he di r ect i onandper f or manceoft hecor por at i on RESPONSI BI LI TYOFTHEBOARD SETTI NGCORPORATESTRATEGYHI RI NGANDFI RI NGTHECEO ANDTOPMANAGENET. CONTROLLI NG, MONI TORI NGOF SUPERVI SI NGTOPMANAGEMENT. REVI EWI NGANDAPPROVI NG THEUSEOFRESOURCES. LOOKI NGAFTERTHEI NTERESTOF STALKHOLDERS. Theboar dr ol ei st ocar r youtt hr eebasi ct asks: 1)Moni t or i ng–Moni t ordev el opment si nsi deandout si det he cor por at i on 2)Ev al uat e&I nf l uence-Rev i ewpr oposal s, adv i se, pr ov i de suggest i onsandal t er nat i v es 3)I ni t i at e&Det er mi ne-Del i neat ecor por at i on’ smi ssi onandspeci f y st r at egi copt i ons I dent i f y i ngExt er nal Env i r onment al Var i abl est hr ough: I ndust r yanal y si s-ani ndept hex ami nat i onofkeyf act or swi t hi na cor por at i on’ st askenv i r onment I dent i f y i ngExt er nal Env i r onment al Var i abl es STEEPAnal y si s-moni t or i ngt r endsi nt hesoci et al andnat ur al env i r onment sSoci ocul t ur al Technol ogi cal Economi cEcol ogi cal Pol i t i cal l egal f or cesCompet i t i v eadv ant agecomesf r om: knowl edge ofenv i r onment wi l l i ngnesst ot aker i sksCanni bal i z at i onofown pr oduct s Busi nessmodel s-acompany ’ smet hodf ormaki ngmoneyi nt he cur r entbusi nessenv i r onment I ncl udesWhot hecompanyser v esWhat t hecompanypr ov i desHowt hecompanymakesmoney Howt he companydi f f er ent i at esandsust ai nscompet i t i v eadv ant ageHowt he companypr ov i desi t spr oduct / ser v i ce Val uechai n-al i nkedsetofv al uecr eat i ngact i v i t i est hatbegi nwi t h basi cr awmat er i al scomi ngf r om suppl i er s, mov i ngont oaser i esof v al ueaddedact i v i t i esi nv ol v edi npr oduci ngandmar ki ngapr oduct orser v i ce, andendi ngwi t hdi st r i but or sget t i ngt hef i nal goodsi nt o t hehandsoft heul t i mat econsumer I ndust r yVal ueChai nAnal y si s Thev al uechai nsofmosti ndust r i escanbespl i ti nt ot wosegment s, upst r eam anddownst r eam.I nt hepet r ol eum i ndust r y , f orex ampl e, upst r eam r ef er st ooi l expl or at i on, dr i l l i ng, andmov i ngt hecr udeoi l t ot her ef i ner y , anddownst r eam r ef er st or ef i ni ngt heoi l pl us t r anspor t i ngandmar ket i nggasol i neandr ef i nedoi l t odi st r i but or s andgasst at i onr et ai l er s.Ev ent houghmostl ar geoi l compani esar e compl et el yi nt egr at ed, t heyof t env ar yi nt heamountofexper t i se t heyhav eateachpar toft hev al uechai n Val uechai nsegment si ncl ude: Upst r eamDownst r eam Cent erofgr av i t y -t hepar toft hechai nt hati smosti mpor t antt ot he companyandt hepoi ntwher ei t scor ecompet enci esl i eVer t i cal i nt egr at i on Val uechai nanal y si s Pr i mar yact i v i t i es I nboundl ogi st i cs, Oper at i ons, Out boundl ogi st i cs, Mar ket i ngand sal es, Ser v i ce Suppor tact i v i t i es Pr ocur ement , Technol ogydev el opment , Humanr esour ce management , Fi r mi nf r ast r uct ur e Cor por at eCul t ur e: TheCompanyWay Cor por at ecul t ur e-t hecol l ect i onofbel i ef s, ex pect at i onsandv al ues l ear nedandshar edbyacor por at i on’ smember sandt r ansmi t t ed f r om onegener at i onofempl oy eest oanot her . Cul t ur al i nt ensi t y -t hedegr eeofwhi chmember sofauni tacceptt he nor ms, v al uesandot hercul t ur al cont entassoci at edwi t ht he uni t Showst hedept hoft hecul t ur e Cul t ur al i nt egr at i on-t heex t entofwhi chuni t st hr oughoutt he or gani z at i onshar eacommoncul t ur eShowst hebr eadt hoft he cul t ur e Mar ket i ngMi x-t hepar t i cul arcombi nat i onofkeyv ar i abl esundera cor por at i on’ scont r ol t hatcanbeusedt oaf f ectdemandandt ogai n compet i t i v eadv ant age SFASsummar i zesanor gani zat i on’ sst r at egi cf act or sbycombi ni ng t heex t er nal f act or sf r om t heEFASTabl ewi t ht hei nt er nal f act or s f r om t heI FASTabl eTodeal wi t hswotcr i t i si sm Pr opi t i ousni che-wher eanor gani z at i oncanusei t scor e compet enci est ot akeadv ant ageofapar t i cul armar ketoppor t uni t y andt heni chei sj ustl ar geenoughf oronef i r mt osat i sf yi t sdemand St r at egi csweetspot -acompanyi sabl et osat i sf ycust omer s’ needs i nawayt hatr i v al scannot St r at egi cwi ndow-auni quemar ketoppor t uni t yt hati sav ai l abl ef ora par t i cul art i me TOWSMat r i x-i l l ust r at eshowt heex t er nal oppor t uni t i esandt hr eat s canbemat chedwi t hi nt er nal st r engt hsandweaknessest or esul ti n 4possi bl est r at egi cal t er nat i v es Pr ov i desameanst obr ai nst or m al t er nat i v est r at egi es For cesmanager st ocr eat ev ar i ouski ndsofgr owt hand r et r enchmentst r at egi es Usedt ogener at ecor por at easwel l asbusi nessst r at egi es Busi nessst r at egyf ocusesoni mpr ov i ngt hecompet i t i v eposi t i onof acompany ’ sorbusi nessuni t ’ spr oduct sorser v i ceswi t hi nt he speci f i ci ndust r yormar ketsegmenti tser v es Quest i ons: l owercostordi f f r act i on? Headt oheadwi t hourcompet i t or sorf ocusonadesi r edni ch? Tact i c-aspeci f i coper at i ngpl ant hatdet ai l showast r at egyi sgoi ng t obei mpl ement edi nt er msofwhenandwher ei ti st obeputi nt o act i on Nar r oweri nscopeandshor t eri nt i mehor i z ont hanst r at egi es St r at egi cAl l i ances-al ongt er m cooper at i v ear r angementbet ween t woormor ei ndependentf i r msorbusi nessuni t st hatengagei n busi nessact i v i t i esf ormut ual economi cgai nUsedt o: Obt ai norl ear n newcapabi l i t i esObt ai naccesst ospeci f i cmar ket sReducef i nanci al r i skReducepol i t i cal r i sk Whati saSt r at egyMap? Ast r at egymapi sasi mpl egr aphi ct hatshowsal ogi cal , causeandef f ectconnect i onbet weenst r at egi cobj ect i v es( shownasov al son t hemap) .I ti soneoft hemostpower f ul el ement si nt hebal anced scor ecar dmet hodol ogy , asi ti susedt oqui ckl ycommuni cat ehow v al uei scr eat edbyt heor gani zat i on. HowDoesSt r at egyMappi ngHel panOr gani zat i on? St r at egymappi ngcanv ast l yi mpr ov eanyst r at egycommuni cat i on ef f or t .Mostpeopl ear ev i sual l ear ner sandsoapi ct ur eofy our st r at egywi l l beunder st oodbymanymor eempl oy eest hanawr i t t en nar r at i v e.Pl ust hepr ocessofdev el opi ngast r at egymapf or cest he t eam t oagr eeonwhatt heyar et r y i ngt oaccompl i shi nsi mpl e, easy t ounder st andt er ms.Wi t hawel l desi gnedst r at egymap, ev er y empl oy eecanseehowt heycont r i but et ot heachi ev ementoft he or gani z at i on’ sobj ect i v es. WhatDoesaSt r at egyMapLookLi ke? Theex ampl ebel owdemonst r at eshowabusi nessmi ghtor gani ze t hei rst r at egi cobj ect i v esacr osst hef ourper spect i v esof t hebal ancedscor ecar d.Ar r owsar eusedt oi l l ust r at et hecauseandef f ectr el at i onshi pbet weent heobj ect i v es.Byf ol l owi ngt hepat hof t hear r ows, y oucanseehowt heobj ect i v esi nt hel owerper spect i v es dr i v et hesuccessoft hehi gherones.Thesecausal r el at i onshi psar e cent r al t ot hei deaofst r at egi cpl anni ngandmanagementwi t ha bal ancedscor ecar d.I fy ouI mpr ov eKnowl edgeandSki l l sand I mpr ov eTool sandTechnol ogy( i nt heOr gani z at i onal Capaci t y per spect i v e) , y ouwi l l mor eeasi l yI ncr easePr ocess Ef f i ci encyandLowerCy cl eTi me( i nt heI nt er nal Pr ocess Per spect i v e) .I fy oudot hoset hi ngs, y ouwi l l mor eeasi l yLowerWai t Ti me, andsoon. HowDoYouDev el opaSt r at egyMap? St r at egyMapdev el opmenthappensdur i ngSt epFouroft heNi ne St epst oSuccess™.Att hi spoi nt , t heor gani zat i onshoul dhav e compl et edaf ul l st r at egyassessmentanddev el opedhi ghl ev el st r at egyel ement sl i keMi ssi on, Vi si onandThemes/ Goal s.The or gani z at i on’ sbusi nessmodel wi l l hel pt hem chooset he r i ghtper spect i v enamesandor der .Themappi ngpr ocessbegi ns whent heor gani zat i oni dent i f i escont i nuousi mpr ov ementobj ect i v es neededt oachi ev ei t sv i si onandgoal s.Wer ecommendobj ect i v es t hatar esi mpl e, easyt ounder st and, andt hati mpl ycont i nuous i mpr ov ement .Obj ect i v esar ei dent i f i edf oral l f ourper spect i v esand t hencauseef f ectar r owsar edr awnt oi ndi cat et hef l owofv al ue cr eat i on. Cor por at est r at egy -t hechoi ceofdi r ect i onoft hef i r m asawhol e andt hemanagementofi t sbusi nessorpr oductpor t f ol i oand concer ns: Di r ect i onal st r at egy Por t f ol i oanal y si sPar ent i ngst r at egy Di r ect i onalst r at egy -t hef i r m’ sov er al l or i ent at i ont owar dgr owt h, st abi l i t y , orr et r enchment Por t f ol i oanal y si s-i ndust r i esormar ket si nwhi cht hef i r m compet es t hr oughi t spr oduct sandbusi nessuni t es Par ent i ngst r at egy -t hemanneri nwhi chmanagementcoor di nat es act i v i t i esandt r ansf er sr esour cesandcul t i v at escapabi l i t i esamong pr oductl i nesandbusi nessuni t s Tur nar oundst r at egy -emphasi zest hei mpr ov ementofoper at i onal ef f i ci encywhent hecor por at i on’ spr obl emsar eper v asi v ebutnot cr i t i cal Cont r act i on-ef f or tt oqui ckl y“ st opt hebl eedi ng”acr osst heboar d buti nsi zeandcost sConsol i dat i on-st abi l i z at i onoft henewl eaner cor por at i on Funct i onal st r at egy -t heappr oachaf unct i onal ar eat akest oachi ev e cor por at eandbusi nessuni tobj ect i v esandst r at egi esbymax i mi zi ng r esour cepr oduct i v i t y Reengi neer i ng-t her adi cal r edesi gnofbusi ness pr ocessest oachi ev emaj orgai nsi ncost , ser v i ce, ort i mePr ogr am t o i mpl ementat ur nar oundst r at egy St r at egi cManagement Manager i al deci si ons&act i onst hatdet er mi nest hel ongr un per f or manceofabusi ness. Apr ocessofmanagi ngaf i r m’ sr el at i onshi pwi t hi t senv i r onment : St r at egi cpl anni ng Capabi l i t ypl anni ng Managi ngchange PHASESOFSTRATEGI CMANAGEMENT 4Ty pesofSt r at egi cManagement Basi cf i nanci al pl anni ng( upt o1y ear ) For ecast basedpl anni ng( 1t o5y ear s) Ext er nal l y or i ent edpl anni ngSt r at egi cmanagement FocusofSt r at egi cManagement : Longt er m or i ent at i onandf i t bet weenenv i r onment , st r at egy , st r uct ur eandpr ocessesmayl eadt o compet i t i v eadv ant age St r at egi es-f or m acompr ehensi v emast erpl ant hatst at eshowt he cor por at i onwi l l achi ev ei t smi ssi onandobj ect i v es Hi er ar chyofst r at egy Cor por at e: ov er al l di r ect i onofcompanyandmanagementofi t s busi ness Busi ness: compet i t i v eandcooper at i v est r at egi es Funct i onalmaxi mi zer esour cepr oduct i v i t y Dur abi l i t y -t her at eatwhi chaf i r m’ sunder l y i ngr esour ces, capabi l i t i es, orcor ecompet enci esdepr eci at eorbecomeobsol et e I mi t abi l i t y -t her at eatwhi chaf i r m’ sunder l y i ngr esour ces, capabi l i t i es, orcor ecompet enci escanbedupl i cat edbyot her s Tr anspar ency -t hespeedatwhi chot herf i r msundert her el at i onshi p ofr esour cesandcapabi l i t i essuppor tasuccessf ul st r at egyGi l l et t e’ s r az ordesi gnsar ev er ydi f f i cul tt ocopy , par t l ybecauset he manuf act ur i ngequi pmentneededt opr oducei ti ssoex pensi v eand compl i cat ed Tr ansf er abi l i t y -t heabi l i t yofcompet i t or st ogat hert her esour ces andcapabi l i t i esnecessar yt osuppor tacompet i t i v echal l enge Repl i cabi l i t y -t heabi l i t yofcompet i t or st ousedupl i cat edr esour ces andcapabi l i t i est oi mi t at et heot herf i r m’ ssuccess.Forex ampl e, ev ent houghmanycompani eshav et r i edt oi mi t at ePr oct er& Gambl e’ ssuccesswi t hbr andmanagementbyhi r i ngbr and manager sawayf r om P&G, t heyhav eof t enf ai l edt odupl i cat eP&G’ s success.Thecompet i t or sf ai l edt oi dent i f yl essv i si bl eP&G coor di nat i onmechani smsort or eal i zet hatP&G’ sbr and managementst y l econf l i ct edwi t ht hecompet i t or ’ sowncor por at e cul t ur e Expl i ci tknowl edge-knowl edget hatcanbeeasi l yar t i cul at edand communi cat ed Taci tknowl edge-knowl edget hati snoteasi l ycommuni cat ed becausei ti sdeepl yr oot edi nempl oy eeex per i enceori nt he company ’ scul t ur e Ver t i cal gr owt h-t aki ngov ert hef unct i onpr ev i ousl ypr ov i dedbya suppl i erorbyadi st r i but or Ver t i cal i nt egr at i on-t hedegr eet owhi cha f i r m oper at esv er t i cal l yi nmul t i pl el ocat i onsonani ndust r y ’ sv al ue chai nf r om ex t r act i ngr awmat er i al st omanuf act ur i ngt or et ai l i ng Backwar di nt egr at i on-assumi ngaf unct i onpr ev i ousl ypr ov i dedbya suppl i er For war di nt egr at i on-assumi ngaf unct i onpr ev i ousl ypr ov i dedbya di st r i but or Hor i zont algr owt h-ex pansi onofoper at i onsi nt oot hergeogr aphi c l ocat i onsand/ ori ncr easi ngt her angeofpr oduct sandser v i ces of f er edt ocur r entmar ket sHor i zont al gr owt hi sachi ev edt hr ough: I nt er nal dev el opment Acqui si t i onsSt r at egi cal l i ances Hor i zont ali nt egr at i on-t hedegr eet owhi chaf i r m oper at esi n mul t i pl egeogr aphi cl ocat i onsatt hesamepoi ntonani ndust r y ’ s v al uechai n Hor i zont alst r at egy -cut sacr ossbusi nessuni tboundar i est obui l d sy ner gyacr ossbusi nessuni t sandt oi mpr ov ecompet i t i v eposi t i on i noneofmor ebusi nessuni t sMul t i poi ntcompet i t i on-l ar gemul t i busi nesscor por at i onscompet eagai nstot herl ar gemul t i busi ness f i r msi nanumberofmar ket s Mar ketdev el opmentst r at egy -pr ov i dest heabi l i t yt o: Capt ur ea l ar germar ketshar eMar ketsat ur at i onMar ketpenet r at i onDev el op newusesand/ ormar ket sf orcur r entpr oduct sP&gcol ogat epal mol i v e Pr oductdev el opmentst r at egy -pr ov i dest heabi l i t yt o: Dev el opnew pr oduct sf orexi st i ngmar ket sDev el opnewpr oduct sf ornewmar ket s Out sour ci ngpur chasi ngf r om someoneel seapr oductorser v i ce t hathadbeenpr ev i ousl ypr ov i dedi nt er nal l y Av oi dout sour ci ng di st i nct i v ecompet enci es Of f shor i ng-t heout sour ci ngofanact i v i t yoraf unct i ont oawhol l y ownedcompanyorani ndependentpr ov i deri nanot hercount r y Di sadv ant agesofout sour ci ngandof f shor i ng Cust omercompl ai nt sLongt er m cont r act sAbi l i t yt ol ear nnewski l l s anddev el opnewcor ecompet enci esLackofcostsav i ngsPoor pr oductqual i t y I ncr easedt r anspor t at i oncost s STRATEGI CAUDI TOFACORPORATI ON 1-CURRENTSI TUATI ON: STRATEGI CPOSTURE MI SSI ON OBJECTI VES STRATEGI ESPOLI CI ES 2-CORPORATEGOVERNANCE: BOARDOFDI RECTORS TOPMANAGEMENT 3-EXTERNALENVI RONMENT: GENERALENVI RONMENT: ECONOMI C TECH POLI TI CAL SOCI OCULTURAL 4-TASKENVI RONMENT: COMPETI TORS NEW ENTRANTS SUPPLI ERS SUBSTI TUTES UNI ONSGOV. I NTERESTGROUPS SUMMARYOFE. F( EFASMATRI X)P1744 I NTERNALENVI RONMENT: STRENGTHANDWEAKNESSES: STRUCTURECULTURERESOURCES: MARKETI NGFI NANCE R&D OPERATI ONANDLOGI STI CS HUMANRESOURCES I NFORMATI ONTECH SUMMARYOFI NTERNALFACTORS( I FASP. 212) 5-ANALYSI SOFSTRATEGI CFACTORS: SI TUATI ONALANALYSI S( SFASMATRI XP. 226227. 6-REVI EW OFMI SSI ONANDOBJECTI VES. 7-STRATEGI CALTERNATI VESANDRECOMMENDATI ONS: STRATEGI CALTERNATI VES( TOWSMATRI XP. 230 RECOMMENDEDSTRATEGY CaseSt udy HowdoIpr epar e, anal y zeanddi scusscasepr obl ems? Pr epar i ngf or i ncl assdi scussi onTr yf i r stt ogetaqui cksenseoft hewhol ecaseI f t hi si sacaser equi r i ngadeci si on, whoi st hekeydeci si onmaker ? Rer eadt hecasef orunder l i ni ngorhi ghl i ght i ngkeyf act sandt r yt o i dent i f yt hekeypr obl emsWhatar et hepossi bl ecour sesofact i onf or t hedeci si onmaker ?Di scussi oni ncl assBepr epar edt opr esenty our i deaswi t hconv i ct i on, andt osuppor tt hem wi t hcar eDonotwai tt oo l ongt ogeti nv ol v edi nt hedi scussi onI fy ouwantt or ai seani ssue t hati scompl et el ydi f f er entf r om t heonet hecl assi sdi scussi ng, consi derwai t i ngunt i l t hecl assi sr eadyt omov et oanot heri ssue. Tr yt obeal er tt okeept hecl assdi scussi onmov i ngt owar d const r uct i v esol ut i onst ot hecase.Don’ thesi t at et oadmi ty ouar e conf used, needcl ar i f i cat i on, orsi mpl ybewr ong. Ast r at egi cmanagement( SM)casest udydescr i besanor gani z at i on’ sex t er nal andi nt er nal condi t i onandr ai sesi ssuesconcer ni ngt he f i r m’ smi ssi on, st r at egi es, obj ect i v esandpol i ci es. SM casesmor e compr ehensi v et hani not hercour ses Poi nt st obecov er edi ncasedi scussi onsandpr esent at i ons Ext er nal oppor t uni t i esandt hr eat sMaj orst r engt hsandweaknesses ofor gani z at i onFi nanci al condi t i onExi st i ngst r at egi esand obj ect i v esFi r m’ scompet i t or sandt hei rst r at egi esRecommended obj ect i v esandst r at egi eswi t hr easoni ngWay sofi mpl ement i ngy our r ecommendat i on; l i kel ypr obl emsencount er edandhowt oav oi d t hem I ndust r y -agr oupoff i r mst hatpr oducesasi mi l arpr oductorser v i ce Por t er ’ s5f or ces: Thr eatofnewent r ant sRi v al r yamongexi st i ngf i r msThr eatof subst i t ut epr oduct sBar gai ni ngpowerofbuy er sBar gai ni ngpowerof suppl i er sRel at i v epowerofot herst akehol der s( added) Thr eatofnewent r ant s-newent r ant st oani ndust r ybr i ngnew capaci t y , adesi r et ogai nmar ketshar eandsubst ant i al r esour ces Ent r ybar r i er -anobst r uct i ont hatmakesi tdi f f i cul tf oracompanyt o ent erani ndust r y Economi esofscal e Pr oductdi f f er ent i at i on Capi t al r equi r ement s Swi t chi ngcost s Accesst odi st r i but i onchannel s Costdi sadv ant agesduet osi ze Gov er nmentpol i ci es Ri v al r yAmongExi st i ngFi r ms-newent r ant st oani ndust r ybr i ngnew capaci t y , adesi r et ogai nmar ketshar eandsubst ant i al r esour cesNumberofcompet i t or sRat eofi ndust r ygr owt hPr oductor ser v i cechar act er i st i csAmountoff i x edcost sCapaci t y Hei ghtofexi t bar r i er sDi v er si t yofr i v al s Thr eatofSubst i t ut ePr oduct sorSer v i ces-pr oduct st hatappear di f f er entbutcansat i sf yt hesameneedasanot herpr oduct Bar gai ni ngPowerofBuy er s-abi l i t yofbuy er st of or cepr i cesdown, bar gai nf orhi gherqual i t y , pl aycompet i t or sagai nsteachot her Lar ge pur chasesBackwar di nt egr at i onAl t er nat i v esuppl i er sLowcostt o changesuppl i er sPr oductr epr esent sahi ghper cent ageofbuy er ’ s cost Buy erear nsl owpr of i t sPr oducti suni mpor t antt obuy er Bar gai ni ngPowerofSuppl i er s-abi l i t yofsuppl i er st or ai sepr i cesor r educequal i t y I ndust r yi sdomi nat edbyaf ewcompani es Uni quepr oductorser v i ce Subst i t ut esar enotr eadi l yav ai l abl e Abi l i t yt of or war di nt egr at e Uni mpor t anceofpr oductorser v i cet ot hei ndust r y Rel at i v ePowerofOt herSt akehol der s Gov er nment Local communi t i es Cr edi t or s Tr adeassoci at i ons Speci al i nt er estgr oups Uni ons Shar ehol der s Compl ement or s-pr oduct st hatwor kwel l wi t haf i r m’ spr oduct St r at egi cTy pes Def ender s-f ocusoni mpr ov i ngef f i ci ency Pr ospect or s-f ocusonpr oducti nnov at i onandmar ketoppor t uni t i es Anal y zer s-f ocusonatl eastt wodi f f er entpr oductmar ketar eas React or s-l ackaconsi st entst r at egy st r uct ur ecul t ur er el at i onshi p Compet i t i v ei nt el l i gence( busi nessi nt el l i gence) -af or mal pr ogr am of gat her i ngi nf or mat i ononacompany ’ scompet i t or sSour cesof compet i t i v ei nt el l i gence: I nf or mat i onbr oker sI nt er net I ndust r i al espi onageI nv est i gat or yser v i ces Moni t or i ngCompet i t or sf orSt r at egi cPl anni ng Pr i mar yact i v i t yofcompet i t i v ei nt el l i gencei st omoni t or compet i t or sCompet i t or sor gani z at i onst hatof f ersame, si mi l ar , or subst i t ut epr oduct sorser v i cesi nt hebusi nessar easi nwhi cha par t i cul arcompanyoper at es Or gani zat i onalanal y si s-concer nedwi t hi dent i f y i nganddev el opi ng anor gani z at i on’ sr esour cesandcompet enci es Cor eandDi st i nct i v eCompet enci es Resour ces-anor gani zat i on’ sasset s Tangi bl e I nt angi bl e Capabi l i t i es-acor por at i on’ sabi l i t yt oex pl oi ti t sr esour ces Cor eandDi st i nct i v eCompet enci es Compet ency -acr ossf unct i onal i nt egr at i onandcoor di nat i onof capabi l i t i es Cor ecompet ency -acol l ect i onofcompet enci est hatcr ossdi v i si onal boundar i es, i swi de spr eadt hr oughoutt hecor por at i onandi ssomet hi ngt hecor por at i on doesexceedi ngl ywel l Di st i nct i v ecompet ency -cor ecompet enci est hatar esuper i ort ot hoseoft hecompet i t i on Cor eandDi st i nct i v eCompet enci es VRI Of r amewor k( Bar ney ) Val ue, Rar e, I mi t abi l i t y , andOr gani zat i on Por t er ’ scompet i t i v est r at egi es Twogener i cst r at egi es: Lowercostst r at egy -t heabi l i t yofacompanyorabusi nessuni tt o desi gn, pr oduceandmar ketacompar abl epr oductmor eef f i ci ent l y t hani t scompet i t or s Di f f er ent i at i onst r at egy -t heabi l i t yofacompanyorabusi nessuni t t opr ov i deauni queorsuper i orv al uet ot hebuy eri nt er msofpr oduct qual i t y , speci al f eat ur es, oraf t ersal eser v i ce Costl eader shi p-al ower costcompet i t i v est r at egyt hatai msatt he br oadmassmar ketandr equi r esef f i ci entscal ef aci l i t i es, cost r educt i ons, costandov er headcont r ol ; av oi dsmar gi nal cust omer s, costmi ni mi z at i oni nR&D, ser v i ce, sal esf or ceand adv er t i si ng. eg. WALMART, DELL, ALAMO, ALDI Pr ov i desadef ense agai nstcompet i t or sPr ov i desabar r i ert oent r y Gener at esi ncr eased mar ketshar e Di f f er ent i at i on-i nv ol v est hecr eat i onofapr oductorser v i cet hati s per cei v edt hr oughoutt hei ndust r yasuni que.Canbeassoci at edwi t h desi gn, br andi mage, t echnol ogy , f eat ur es, deal ernet wor k, or cust omer .Eg: wal t di sney , May t age, Ni ke, Appl e com. , Mer cedesLower scust omer ssensi t i v i t yt opr i ceI ncr easesbuy er l oy al t y Bar r i ert oent r y Cangener at ehi gherpr of i t s CostFocus-l owcostcompet i t i v est r at egyt hatf ocusesona par t i cul arbuy ergr ouporgeogr aphi cmar ketandat t empt st oser v e onl yt hi sni chet ot heexcl usi onofot her sser v i ce. eg: pot l ack( t oi l et t i ssue)housebr andf orsav wayv s.P&G: samequal i t yf orl owercost byr ed. adv .Cost . Di f f er ent i at i onFocus-concent r at esonapar t i cul arbuy ergr oup, pr oductl i nesegment , orgeogr aphi cmar kett oser v et heneedsofa nar r owst r at egi cmar ketmor eef f ect i v el yt hani t scompet i t or s. eg. Mor ganMot or s( Br i t i sh spor tcar s) et hni cgr ocer y Ful l i nt egr at i on-af i r mi nt er nal l ymakes100%ofi t skeysuppl i er sand compl et el ycont r ol si t sdi st r i but or sTaperi nt egr at i on-af i r mi nt er nal l y pr oducesl esst hanhal fofi t sownr equi r ement sandbuy st her est f r om out si desuppl i er s Quasi i nt egr at i on-acompanydoesnotmakeanyofi t skeysuppl i es butpur chasesmostofi t sr equi r ement sf r om out si desuppl i er st hat ar eunderi t spar t i al cont r ol Longt er m cont r act s-agr eement s bet ween2f i r mst opr ov i deagr eedupongoodsandser v i cest oeach ot herf oraspeci f i cper i odoft i me Di v er si f i cat i onSt r at egi es Concent r i c( Rel at ed)Di v er si f i cat i on-gr owt hi nt oar el at edi ndust r y whenaf i r m hasast r ongcompet i t i v eposi t i onbutat t r act i v enessi s l ow Sy ner gy -whent wobusi nesseswi l l gener at emor epr of i t st oget her t hant heycoul dsepar at el y Congl omer at e( Unr el at ed)Di v er si f i cat i on-gr owt hi nt oanunr el at ed i ndust r yManagementr eal i z est hatt hecur r enti ndust r yi s unat t r act i v eFi r ml acksout st andi ngabi l i t i esorski l l st hati tcoul d easi l yt r ansf ert or el at edpr oduct sorser v i cesi not heri ndust r i es St abi l i t ySt r at egi es-cont i nui ngact i v i t i eswi t houtanysi gni f i cant changei ndi r ect i onPause/ Pr oceedwi t hcaut i onst r at egy -an oppor t uni t yt or estbef or econt i nui ngagr owt horr et r enchment st r at egy Nochangest r at egy -cont i nuanceofcur r entoper at i onsand pol i ci es Pr of i tSt r at egi es-t odonot hi ngnewi nawor seni ngsi t uat i onbut i nst eadt oactast hought hecompany ’ spr obl emsar eonl y t empor ar y Ret r enchmentSt r at egi es-usedwhent hef i r m hasaweak compet i t i v eposi t i oni nsomeoral l ofi t spr oductl i nesf r om poor per f or mance Capt i v eCompanySt r at egy -companygi v esupi ndependencei n exchangef orsecur i t y Sel l outst r at egy -managementcanst i l l obt ai n agoodpr i cef ori t sshar ehol der sandt heempl oy eescankeept hei r j obsbysel l i ngt hecompanyt oanot herf i r mDi v est ment -sal eofa di v i si onwi t hl owgr owt hpot ent i al Por t f ol i oanal y si s-managementv i ewsi t spr oductl i nesandbusi ness uni t sasaser i esofi nv est ment sf r om whi chi tex pect sapr of i t abl e r et ur nPopul arpor t f ol i oanal y si st echni quesi ncl ude: BCGMat r i x GE Busi nessScr een Quest i onmar ks-newpr oduct swi t ht hepot ent i al f orsuccessbut r equi r eal otofcashf ordev el opment St ar s-mar ketl eader satt hepeakoft hei rpr oductcy cl eandar eabl e t ogener at eenoughcasht omai nt ai nt hei rhi ghmar ketshar eand usual l ycont r i but et ot hecompany ’ spr of i t s Cashcows-pr oduct st hatbr i ngi nf armor emoneyt hani sneededt o mai nt ai nt hei rmar ketshar e Dogs-pr oduct swi t hl owmar ketshar eanddonothav et hepot ent i al t obr i ngi nmuchcash Cor por at epar ent i ng-v i ewsacor por at i oni nt er msofr esour cesand capabi l i t i est hatcanbeusedt obui l dbusi nessuni tv al ueaswel l as gener at esy ner gi esacr ossbusi nessuni t sGener at escor por at e st r at egybyf ocusi ngont hecor ecompet enci esoft hepar ent cor por at i onandt hev al uecr eat edf r om t her el at i onshi pbet weent he par entandi t sbusi nesses St r at egyi mpl ement at i on-t hesum t ot al ofal l act i v i t i esandchoi ces r equi r edf ort heexecut i onofast r at egi cpl anWhoar et hepeopl et o car r youtt hest r at egi cpl an? Whatmustbedonet oal i gncompany oper at i onsi nt hei nt endeddi r ect i on? Howi sev er y onegoi ngt owor k t oget hert odowhati sneeded? Act i onpl an-whatact i onsar egoi ngt obet aken, bywhom, dur i ng whatt i mef r ame, andwi t hwhatexpect edr esul t s Ev al uat i onandCont r olensur est hatacompanyi sachi ev i ngwhati t setoutt oaccompl i shbycompar i ngper f or mancewi t hdesi r ed r esul t sandt aki ngcor r ect i v eact i onasneeded Benchmar ki ng-t hecont i nual pr ocessofmeasur i ngpr oduct s, ser v i cesandpr act i cesagai nstt het oughestcompet i t or sort hose compani esr ecogni zedasi ndust r yl eader s Bal ancedscor ecar d–combi nesf i nanci al measur est hatt el l r esul t s ofact i onsal r eadyt akenwi t hoper at i onal measur esoncust omer sat i sf act i on, i nt er nal pr ocessesandt hecor por at i on’ si nnov at i onand i mpr ov ementact i v i t i es Fi nanci al Cust omer I nt er nal busi nessper spect i v e I nnov at i onandl ear ni ng Mar ketVal ueAdded( MVA) -measur est hedi f f er encebet weent he mar ketv al ueofacor por at i onandt hecapi t al cont r i but edby shar ehol der sandl ender sMeasur est hest ockmar ket ’ sest i mat eof t henetpr esentv al ueofaf i r m’ spastandexpect edcapi t al i nv est mentpr oj ect s Shar ehol derVal ue-t hepr esentv al ueoft heant i ci pat edf ut ur e st r eamsofcashf l owsf r om t hebusi nesspl ust hev al ueoft he companyi fl i qui dat ed Economi cVal ueAdded( EVA) -measur est hedi f f er encebet weent he pr est r at egyandpost st r at egyv al uesf ort hebusi ness Pr i mar yMeasur esofCor por at ePer f or mance Ret ur nonI nv est ment( ROI ) Ear ni ngspershar e( EPS) Ret ur nonequi t y( ROE) Oper at i ngcashf l owFr eecashf l ow Out putcont r ol s-speci f ywhati st obeaccompl i shedbyf ocusi ngon t heendr esul t Behav i orcont r ol sspeci f yhowsomet hi ngi sdonet hr oughpol i ci es, r ul es, st andar doper at i ngpr ocedur esandor der sf r om super v i sor s I nputcont r ol semphasi z er esour ces St eer i ngcont r ol smeasur ev ar i abl est hati nf l uencef ut ur epr of i t abi l i t y Costperpassengermi l e( ai r l i nes) I nv ent or yt ur nov err at i o( r et ai l ) Cust omersat i sf act i on Tot al Qual i t yManagement( TQM) -phi l osophyt hati scommi t t edt o cust omersat i sf act i on andcont i nuousi mpr ov ement ManagementbyObj ect i v es( MBO) -encour agespar t i ci pat i v e deci si onmaki ngt hr oughshar edgoal set t i ngandper f or mance assessmentbasedonachi ev i ngst at edobj ect i v es Pr ogr amsmakest r at egi esact i onor i ent ed Budget -pr ov i dest hel astr eal checkont hef easi bi l i t yoft hest r at egy Pr ocedur es( or gani zat i onal r out i nes) -det ai l t hev ar i ousact i v i t i es t hatmustbecar r i edoutt ocompl et eacor por at i on’ spr ogr ams Er r or si nOut sour ci ngEf f or t s Out sour ci ngt hewr ongact i v i t i es Sel ect i ngt hewr ongv endor Poorcont r act s Per sonnel i ssues Lackofcont r ol Hi ddencost s Lackofanexi tst r at egy Ri sk-composednotonl yoft hepr obabi l i t yt hatt hest r at egywi l l be ef f ect i v ebutal sooft heamountofasset st hecor por at i onmust al l ocat et ot hest r at egyandt hel engt hoft i met heasset swi l l be unav ai l abl ef orot herusesI ndust r ySt r uct ur eandCompet i t i v e St r at egy Fr agment edi ndust r y -manysmal l -andmedi umsi z edcompani es compet ef orr el at i v el ysmal l shar esoft het ot al mar ket Pr oduct sar et y pi cal l yi near l yst agesofpr oductl i f ecy cl e Focusst r at egi esar eused Consol i dat edi ndust r y -domi nat i onbyaf ewl ar gecompani es Emphasi soncostandser v i ce Economi esofscal e Regi onal andnat i onal br ands Sl owergr owt hov ercapaci t y Knowl edgeabl ebuy er s Resour cesar eanor gani zat i on’ sasset sandar et hust hebasi c bui l di ngbl ocksoft heor gani zat i on.Theyi ncl udet angi bl easset s ( suchasi t spl ant , equi pment , f i nances, andl ocat i on) , humanasset s ( t henumberofempl oy ees, t hei rski l l s, andmot i v at i on) , and i nt angi bl easset s( suchasi t st echnol ogy[ pat ent sandcopy r i ght s] , cul t ur e, andr eput at i on) Capabi l i t i esr ef ert oacor por at i on’ sabi l i t yt oex pl oi ti t sr esour ces. Theyconsi stofbusi nesspr ocessesandr out i nest hatmanaget he i nt er act i onamongr esour cest ot ur ni nput si nt oout put s.Forex ampl e, acompany ’ smar ket i ngcapabi l i t ycanbebasedont hei nt er act i on amongi t smar ket i ngspeci al i st s, di st r i but i onchannel s, and sal espeopl e. Acapabi l i t yi sf unct i onal l ybasedandi sr esi denti napar t i cul ar f unct i on.Thus, t her ear emar ket i ngcapabi l i t i es, manuf act ur i ng capabi l i t i es, andhumanr esour cemanagementcapabi l i t i es.When t hesecapabi l i t i esar econst ant l ybei ngchangedandr econf i gur edt o maket hem mor eadapt i v et oanuncer t ai nenv i r onment , t heyar e cal l eddy nami ccapabi l i t i es. Acompet encyi sacr ossf unct i onal i nt egr at i onandcoor di nat i on ofcapabi l i t i es.Forexampl e, acompet encyi nnewpr oduct dev el opmenti nonedi v i si onofacor por at i onmaybet he consequenceofi nt egr at i ngi nf or mat i onsy st emscapabi l i t i es, mar ket i ngcapabi l i t i es, R&Dcapabi l i t i es, andpr oduct i oncapabi l i t i es wi t hi nt hedi v i si on. Acor ecompet encyi sacol l ect i onofcompet enci est hatcr osses di v i si onal boundar i es, i swi despr eadwi t hi nt hecor por at i on, andi s somet hi ngt hatt hecor por at i oncandoex ceedi ngl ywel l .Thus, new pr oductdev el opmenti sacor ecompet encyi fi tgoesbey ondone di v i si on. Forexampl e, acor ecompet encyofAv onPr oduct si si t sex per t i sei n door t odoorsel l i ng.FedExhasacor ecompet encyi ni t sappl i cat i on ofi nf or mat i ont echnol ogyt oal l i t soper at i ons.Acompanymust cont i nual l yr ei nv esti nacor ecompet encyorr i ski t sbecomi ngacor e r i gi di t yordef i ci ency —t hati s, ast r engt ht hatov ert i memat ur esand becomesaweakness. Al t houghi ti st y pi cal l ynotanasseti nt heaccount i ngsense, acor e compet encyi sav er yv al uabl ecapabi l i t y —i tdoesnot“ wearout ”wi t h use.I ngener al , t hemor ecor ecompet enci esar eused, t hemor e r ef i nedt heyget , andt hemor ev al uabl et heybecome. Whenuni quer esour cesand/ orcor ecompet enci esar esuper i ort o t hoseoft hecompet i t i on, t heyar ecal l eddi st i nct i v ecompet enci es. Forex ampl e, Gener al El ect r i ci swel l knownf ori t sdi st i nct i v e compet encyi nmanagementdev el opment .I t sex ecut i v esar esought outbyot hercompani eshi r i ngt opmanager s. 5 Resour cesandcapabi l i t i esar eonl yofv al uei ft heypr ov i det he or gani z at i onanabi l i t yt omakeex t r aor di nar yr et ur ns.Ther esour cebasedappr oachi sawel l r esear ched, v er yef f ect i v emeansof anal y zi ngr esour cesandcapabi l i t i esi nor dert odet er mi newhi ch mi ghtpr ov i det heor gani zat i onwi t hr eal compet i t i v eadv ant ages. St r at egy :Def i ni ngt heCompet i t i v eAdv ant ages Anor gani zat i onmustexami net heex t er nal env i r onmenti nor dert o det er mi newhoconst i t ut est heper f ectcust omerf ort hebusi nessas i texi st st oday , whot hemostdi r ect compet i t or sar ef ort hatcust omer , whatt hecompanydoest hati s necessar yt ocompet e, andwhatt hecompanydoest hatt r ul yset si t apar tf r om i t scompet i t or s.Theseel ement s canber ephr asedi nt ot hest r engt hsoft hebusi ness, t he under st andi ngofi t sweaknessesr el at i v et oi t scompet i t or s, what oppor t uni t i eswoul dbemostpr udent , andwhatt hr eat smi ghtaf f ect t hebusi ness’ spr i mar ycompet i t i v eadv ant ages. Ast r at egyofabusi nessf or msacompr ehensi v emast erappr oach t hatst at eshowt hebusi nesswi l l achi ev ei t smi ssi onandobj ect i v es. I tmax i mi zescompet i t i v eadv ant ageandmi ni mi zescompet i t i v e di sadv ant age. Scanni ngandanal y zi ngt heext er nal env i r onmentf oroppor t uni t i es andt hr eat si snecessar yf ort hef i r mt obeabl et ounder st andi t s compet i t i v eenv i r onmentandi t spl acei nt hatenv i r onment .I ti st he absol ut est ar t i ngpl acef orst r at egi canal y si s.Howev er , i nor derf or t heor gani zat i ont ot hr i v e, t heseni orl eader shi pt eam mustl ook wi t hi nt hecor por at i oni t sel ft oi dent i f yi nt er nal st r at egi cf act or s— cr i t i cal st r engt hsandweaknessest hatar el i kel yt odet er mi ne whet heraf i r m wi l l beabl et ot akeadv ant ageofoppor t uni t i eswhi l e av oi di ngt hr eat s.Thi si nt er nal scanni ng, of t enr ef er r edt oas or gani z at i onal anal y si s, i sconcer nedwi t hi dent i f y i ng, dev el opi ng, andt aki ngadv ant ageofanor gani z at i on’ sr esour cesand compet enci es. Usi ngResour ces/ Capabi l i t i est oGai nCompet i t i v eAdv ant age Wher edot heser esour ces/ compet enci escomef r om?Acor por at i on cangai naccesst oadi st i nct i v ecompet encyi nf ourway s: ■■ I tmaybeanassetendowment , suchasakeypat ent , comi ng f r om t hef oundi ngoft hecompany .Suchwast hecasewi t hXer ox, whi chgr ewont hebasi sofi t sor i gi nal copy i ngpat ent . ■■ I tmaybeacqui r edf r om someoneel se.Di sneyboughtPi x ari n or dert or eest abl i shi t sel fi nt heani mat edmov i emar ket . ■I tmaybeshar edwi t hanot herbusi nessuni toral l i ancepar t ner .LG hast akeni t sel ect r oni csandpr oduct i onex per t i sei nt oappl i ances wi t hast oni shi ngsuccessi nt hemar ket . ■■ I tmaybecar ef ul l ybui l tandaccumul at edov ert i mewi t hi nt he company .Forexampl e, Hondacar ef ul l yext endedi t sex per t i sei n smal l mot ormanuf act ur i ngf r om mot or cy cl est oaut os, boatengi nes, gener at or s, andl awnmower s. Scanni ngFunct i onalResour cesandCapabi l i t i es Thesi mpl estwayt obegi nananal y si sofacor por at i on’ sv al uechai n i sbycar ef ul l yexami ni ngi t st r adi t i onal f unct i onal ar easf orpot ent i al st r engt hsandweaknesses.Funct i onal r esour cesandcapabi l i t i es i ncl udenotonl yt hef i nanci al , phy si cal , andhumanasset si neach ar eabutal sot heabi l i t yoft hepeopl ei neachar eat of or mul at eand i mpl ementt henecessar yf unct i onal obj ect i v es, st r at egi es, and pol i ci es.Theser esour cesandcapabi l i t i esi ncl udet heknowl edgeof anal y t i cal concept sandpr ocedur al t echni ques commont oeachar ea, aswel l ast heabi l i t yoft hepeopl ei neach ar eat ouset hem ef f ect i v el y .I fusedpr oper l y , t heser esour cesand capabi l i t i esser v easst r engt hst ocar r youtv al ueaddedact i v i t i esand suppor tst r at egi cdeci si ons.I naddi t i ont ot heusual busi ness f unct i onsofmar ket i ng, f i nance, R&D, oper at i ons, humanr esour ces, andi nf or mat i onsy st ems/ t echnol ogy , weal sodi scussst r uct ur eand cul t ur easkeypar t sofabusi nesscor por at i on’ sv al uechai n. Basi cOr gani zat i onal St r uct ur es Al t hought her ei sanal mosti nf i ni t ev ar i et yofst r uct ur al f or ms, cer t ai nbasi ct y pespr edomi nat ei nmoder ncompl exor gani z at i ons. Fi gur e5–3i l l ust r at est hr eebasi cor gani z at i onal st r uct ur es.The congl omer at est r uct ur ei sav ar i antoft hedi v i si onal st r uct ur eandi s t husnotdepi ct edasaf our t hst r uct ur e.I foneoft hebasi cst r uct ur es doesnoteasi l ysuppor tast r at egyunderconsi der at i on, t op managementmustdeci dewhet hert hepr oposedst r at egyi sf easi bl e orwhet hert hest r uct ur eshoul d bechangedt oamor ecompl i cat edst r uct ur esuchasamat r i xor net wor k.( Ot herst r uct ur al desi gnsi ncl udi ngt hemat r i xandnet wor k ar edi scussedi nChapt er9. ) Gener al l yspeaki ng, eachst r uct ur et endst osuppor tsomecor por at e st r at egi esbet t ert hanot her s: ■■ Si mpl est r uct ur ehasnof unct i onal orpr oductcat egor i esandi s appr opr i at ef orasmal l , ent r epr eneur domi nat edcompanywi t hone ort wopr oductl i nest hatoper at esi nar easonabl ysmal l , easi l y i dent i f i abl emar ketni che.Empl oy eest endt obegener al i st sand j acksof al l t r ades.I nt er msofst agesofdev el opment( t obe di scussedi nChapt er9) , t hi si saSt ageIcompany . Funct i onal st r uct ur ei sappr opr i at ef oramedi umsi zedf i r m wi t h sev er al pr oduct l i nesi nonei ndust r y .Empl oy eest endt obespeci al i st si nt he busi nessf unct i ons t hatar ei mpor t antt ot hati ndust r y , suchasmanuf act ur i ng, mar ket i ng, f i nance, andhumanr esour ces.I nt er msofst agesofdev el opment ( di scussedi nChapt er9) , t hi si saSt ageI Icompany . ■■ Di v i si onal st r uct ur ei sappr opr i at ef oral ar gecor por at i onwi t h manypr oductl i nesi nsev er al r el at edi ndust r i es.Empl oy eest endt o bef unct i onal speci al i st sor gani z edaccor di ngt opr oduct / mar ket di st i nct i ons.TheCl or oxCompany i smadeupoff i v ebi gdi v i si ons: ( 1)Cl eani ng) ; 2)Househol d; ( 3)Li f est y l e 4) ; Pr of essi onal ; and( 5)I nt er nat i onal 26.Managementat t empt st of i ndsomesy ner gyamongdi v i si onal
