HOFAM vak Organisatie & Management les 5

Strategic Thinking

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Strategic thinking means to take the long-term view and to see the big picture, including the organization and the competitive environment, and to consider how they fit together. Understanding the strategy concept, the levels of strategy, and strategy formulation versus implementation (‘how strategy is put into action’) is an important start toward strategic thinking.

Strategic Management

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− Set of decisions and actions used to implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals

− Responsibility = top managers and chief executive officer

Strategic Management

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Managers ask such questions as...

What changes and trends are occurring?

Who are our customers?

What products or services should we offer?

How can we offer these products or services most efficiently?

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− The plan of action that prescribes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining organizational goals

Strategies focus on:− Core competencies− Synergy− Creating value for customers

Purpose of Strategy

Three Levels of Strategy in Organizations

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Corporation

Finance R & D Manufacturing Marketing

Corporate-Level Strategy: W hat business are w e in?

Business-Level Strategy: H ow do w e com pete?

Functional-Level Strategy: H ow do w e support the business-level stra tegy?

ConsumerProducts Unit

BiotechnologyUnit

MediaUnit

Strategic Management Process

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Scan External Environment -

National, Global

Identify StrategicFactors -

Opportunities, Threats

Scan Internal Environment -

Core Competence, Synergy,

Value Creation

Identify Strategic Factors -Stengths,

Weaknesses

Define newMission, Goals,Grand Strategy

Evaluate CurrentMission, Goals,Grand Strategy

Formulate Strategy -Corporate,Business,Functional

Implement Strategy via changes in:Leadership

culture, Structure, HR,Information &

controlsystems

SW OT

SW OT

Portfolio Strategy

Mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage

BCG Matrix

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Five Forces Affecting Industry Competition

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PotentialNew Entrants

Threat ofSubstitute Products

Bargaining Powerof Buyers

Bargaining Powerof Suppliers

Rivalryamong

Com petitors- Internet expands market size, but creates new substitution threats

- Internet tends to increase the bargaining power of suppliers

- Internet reduces barriers to entry

Internet blurs differences amongcompetitors in an industry

- Internet shifts greater power to end consumers

General strategy choices

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Focus

U niqueness perceivedby the custom er Low cost position

Strategic Advantage

D ifferentia tion O vera ll costleadership

Particu larsegm ent

only

Industryw ide

Str

ateg

ic T

arg

et

Competitive Edge Through Competitive Strategies− Differentiation = attempt to distinguish products or

services from that of competitors

− Cost leadership = aggressively seeks efficient facilities, pursues cost reductions, and uses tight cost controls to produce products more efficiently than competitors

− Focus = concentrates on a specific regional market or buyer group

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Strategie in 3-D

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Drie benaderingen in strategievorming

(Van der Loo & Winter):

- Analytische benadering- Procesbenadering- Creatieve benadering