Strategy: A View From the Top
TEAM 3
RANDY GREINERT
MASON MITCHELL
SARAH YELVERTON
ALEC COOPER
A View From the Top
 Positioning a company for competitive advantage by




focusing on unique ways to create value for
customers.
Mission
Vision
Strategic
intent
Stretch
Strategy Defined
 Slowing down the erosion process by protecting
current sources of advantage against the actions of
competitors.
 Investing in new capabilities that form the basis for
the next position of competitive advantage.
Good to Great into Strategy
 Level five leadership must be obtained before an
overall strategy can be developed
 Financial gain is not as important as long term
benefit of the company
 With the correct management in the correct places,
management complications hurting the firm will
cease.
What can you be the best at the world at?
 Driving success towards a goal, or hedgehog.
 Going back to BOS and steering the firm to a blue
ocean un dominated by the cut throat business world
of today.
 Understand technology and the business
environment.
 What drives you, $?
CH. 4
Industry is defined in 4 dimensions
 Products (wine, beer, and spirits)
 Customers ( +21, Drinkers, segmented )
 Geography
 Stage in the production-distribution
Industry Structure, Concentration, and Product
Differentiation
 Rule of Three and Four
 “Many stable markets will have only three significant
competitors and the market shares of these competitors will
roughly be proportioned as four-to-two-to-one, reflecting a
concentration level of approximately 70% of total industry
sales for the three competitors.“
 2007 Big three 78%
Product Life Cycle
 Intro- High level of uncertainty
 Growth- Most intense competition
 Mature- Sales growth stagnant
 Declining- Industry considered unattractive
 Example- Bud Light Lime
CH.5 To evaluate the relative worth of a company's
strategic resources, 4 questions should be asked;
1- How valuable is a resource; does it help build and
sustain competitive advantage?
2- Is this a unique resource or do other competitors
have similar resources?
3- Is the strategic resource easy to imitate?
4- Is the company positioned
to exploit the resource?
Human Capital
 First and foremost – Companies are run by and for
people
 Understanding people’s aspirations and concerns
and capabilities is key to determine strategic position
 Dallas Cowboys
Motorola
 Execs report that their company receives $33 for
every $1 invested in employee education
Organizational Strategic Resources
 Include a firm’s knowledge and intellectual capital
base
 Reputation with customers partners suppliers and
the financial community
 Specific competencies processes and skills sets
 And its corporate culture
Ch.6 Introduction formulating
business unit strategy
•
•
•
Involves creating competitive strategy within the
industry.
- SABMiller and Molson Coors merge US
operations in 2007
Focus on how firms should compete in given
setting.
Factors Concerning Business Unit Strategy
 Nature of the Industry
 Company’s Mission, Goals and Objectives
 Current position
 Core competencies
 Competitors’ strategic choices
Two Generic Strategies
 Low cost
 Differentiation
 Which one do you choose?
Critique of Porter’s generic strategies
 Low cost production and differentiation are mutually
exclusive, and when they exist together they result in
sustained profitability.
 Differentiation can permit a firm to attain a low-cost
position.
 The possibility of providing both improved quality
and lower costs exists within the total quality
management framework.
CHAPTER 7
EMERGING INDUSTRIES - PRESENTS NEW OPPORTUNITIES
EX: SOLAR ENERGY AND INTERNET TECHNOLOGY
- G R O W T H I N D U S T R I E S - C H A L L E N G E S A R E FA C E D A S F I R M S
T R A N S I T I O N T O M A R K E T M AT U R I T Y
- M AT U R E A N D D E C L I N I N G I N D U S T R I E S - I M P O R TA N T T O C H O O S E
B A L A N C E B E T W E E N D I F F E R E N T I AT I O N A N D C O S T S
- F R A G M E N T E D I N D U S T R I E S - T H R I V I N G R E Q U I R E S C R E AT I V E
S T R AT E G Y
-
D E R E G U L AT I N G I N D U S T R I E S - T H E R E M O VA L O F G O V E R N M E N T
R U L E S A N D R E G U L AT I O N S T H AT C O N S T R A I N A M A R K E T F O R C E H A S
RESHAPED SEVERAL INDUSTRIES
E X : AT & T Q U I C K LY R E D U C E D P R I C E S T O H I G H - V O L U M E
BUYERS TO COUNTER
MCI AND SPRINTS AGGRESSIVE MARKETING EFFORTS
-H Y P E R C O M P E T I T I V E I N D U S T R I E S - C O M P A N I E S D I S R U P T S T H E
M A R K E T W I T H Q U I C K A N D I N N O V AT I V E C H A N G E T O G A I N A D V A N TA G E
OVER COMPETITORS
Business Unit Strategy
Speed
- Least understood critical success factor
- Pace of progress that a company displays in responding to current or
anticipated business needs
- 4 sources of pressure to speed: customers, need for creating a new basis
for competitive advantage, competitive pressures, and idustry shifts
- Requirements of Speed: refocusing the business mission, creating a
speed-compatible culture, upgrading communication, refocusing
business process reengineering, and committing to new performance
metrics
- Methods to Speed: streamlining operations, upgrading technology, and
forming partnerships (Ford Motor Company with GM and
DaimlerChrysler)
Innovation
- Value creation greatly depends on innovation
- “MillerCoors will have more flexibility and resources for brandbuilding initiatives and increased levels of innovation in taste,
product attributes and packaging”
- Disruptive innovation: launching new products that are not as good
as existing products but are cheaper (IMB personal computer
disrupted the minicomputer)
- Sustaining innovation: focuses on “better” products
- Creating a culture of innovation that time and effort
- Innovation does not always create profitable performance
1. Products must be truly innovative
2. Innovative products must be commercialized once one the market
3. Products must be introduced into the market in a timely manner
- To improve performance through innovation: plan synergy between
strategy and innovation, and involve customers early and often
CHAPTER 8
Global Strategy Formulation
Globalization is needed and important because some countries or regions of
the world are more efficient that others in producing particular goods
Ex: Australia-Mining and US-Agriculture
- In the absence of natural comparative advantages industrial clustering occurs
-
Factor conditions match a countries endowments to the characteristics and
requirements of the industry
Include: climate, minerals, skill levels, capital, infrastructure, etc.
- Demand Conditions demand in home country
- The presence of related and supporting industries
- Competitiveness- the more domestic competition, the more successful firms
will likely be competing globally
-
-
Molson Coors operates in the United States, United Kingdom, and Canada
Industry Globalization Drivers
1.) Market Drivers: Evolution of customer needs, Global
Channels and Transferability
There is an important need to meet customers expectations,
Hamburgers in India
2.) Economic Drivers: Nature of the industry, Economies of
scale/ location, Differences in country costs
3.)Competitive Drivers: Interdependence between countries/
regions and globalization of competitors
4.)Government Drivers: trade barriers, regulatory climate, and
technology/standards
 Global opportunity- went global because there was a need to





grow
Target Markets- focused on most attractive markets such as the
Americas for the first 5 years
Mode of Entry- Acquisition, Start-Up, and Joint Venture
Local Adaptation- China, smaller satellite stores fit better with
local needs
Local Competition- launching a frontal attack on the incumbent,
took over (Woolco) a weak player
Gains and Setbacks- Not all global moves were successful but
overseas was the only place with markets that offer Wal-Mart the
room it needs to grow
Economies of scale and scope
Economies of scale- unit cost of performing an activity decreases as
the scale of the activity increases
Economies of scope- when the unit of cost of an activity falls because
the asset used is shared with some other activity
Core
 Most valuable customers
 Most valuable products
 Most important channels
 Their distinctive capabilities
Defining core is important because there is a tendency to
under exploit the full potential.
There is increasing returns to leadership instead of a linear
relationship
Molson Coors started defined cost reduction as part of the
core. Saving 178 million in 2007
Growth strategies
Build Buy or Bond
-Organic or internal growth
-growth through acquisitions
-growth through alliance-based initiatives
MillerCoors alliance started in order to compete with
Anheuser Busch
 Concentrated growth- a corporation that continues
to direct its resources to the profitable growth of a
single product category in a well defined market
 Vertical integration- if Coors were to buy farms to
grow hops
 Horizontal integration- if Coors started making
and selling Koozies also if they set up a wider
number of plants
 Diversification strategies- were good at making
beer we would be good at making cars
Diversification implementation
 Mergers and Acquisitions
 Cooperative Strategies- joint ventures, strategic
alliances and other
Why would you do this
- Risk sharing
- Funding limitations
- Market access
- Technology access
Disinvestments
 Sell offs
 Spin offs
 And liquidations
Managing a portfolio
 Early perspective: structure follows strategy
and set up the company to follow strategy
 BCG approach
-growth/share
matrix
-build
 General electric business screen
-uses long term industry attractiveness
 MACS Matrix
-recognizes that a
corporations ability
to extract value from
a business unit
should be
benchmarked
Life cycle matrix
Plots business on stage of industry's evolution and strength of
company’s competitive position
How to decide
 Deciding on an overall, theoretically consistent,
quantitative methodology for evaluating a complex
corporate strategy proposal involving multiple
options is not a simple undertaking.
 How to run a company will always require keen
managerial insight, intuition, and creativity.