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Strategy Formulation and Implementation

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Purple Bunny

on 28 August 2013

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Transcript of Strategy Formulation and Implementation

Strategy Formulation and Implementation
Business Level Strategy
( Competitive Strategy )
- the focus is on how to compete successfully in each line of business the company has chosen to engage with

" Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value" - Michael Porter
Functional Level Strategies
- short term activities that each functional area within a company will carry out
Strategy Implementation
is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives
Strategy Formulation
Second phase of the strategic management process
4 Primary Steps
in
Strategic Formulation
3 Aspects of
Strategy Formulation
1. Corporate Level Strategy

2. Business Level Strategy

3. Functional Level Strategy
Nazario V. Buenavista
1. Reviewing
current objectives and strategies
2. Identifying
rich range of strategic alternatives
3. Evaluating
the advantages and disadvantages
of the alternatives
4. Deciding
on the alternatives
Corporate level Strategy
concerned with broad decisions about the total organization's scope and direction

consider what changes should be made in the objective and strategy for achieving it, the lines of business we are in, nd how these lines of business fit together
3 Components of Corporate Level Strategy
Growth or directional strategy
Portfolio
strategy
Parenting
Strategy
Two Categories:
1. Concentration

2. Diversification
Concentration within existing Strategies
1. Vertical Integration
- forward or backward integration
- good if the company has strong competitive position

2. Horizontal Growth
- expanding the company's existing products into other locations
- increasing the range of products/services offered
Diversification
into other line of business
Concentric
Diversification
-related

- a company expanding into a related industry

- one having synergy with the company's existing lines of business
Congelomerate
Diversification
-unrelated

- to seek more attractive opportunities for growth
Portfolio Strategy
Purposes:

1. To help the company understand and consider changes in its portfolio of business

2. To think about allocation of resources among th different business elements

Two Primary Portfolio Models
1. BCG Growth Share Matrix Model

2. GE Business Screen
Parenting Strategy
- relevant for multi-business company

- concerned with how to allocate resources and manage capabilities and activities across the portfolio of businesses
Corporate Level Strategy
Business Level Strategy
Porter's Four Generic Competitive Strategies
1. Overall Price ( Cost)
Leadership
2. Differentiation
3. Price ( Cost) Focus
4. Differentiation Focus
Basic Characteristics
1. Shorter time horizon

2. Greater Specificity

3. Primary involvement of operating managers
Major functional Areas
marketing
finance
production/operations
human resources management
Strategy
Implementation
An organizational control system is also required. This control system equips managers with motivational incentives for employees as well as feedback on employees and organizational performance.
Following are the main steps in implementing a strategy:

Developing an organization having potential of carrying out strategy successfully.
Disbursement of abundant resources to strategy-essential activities.
Creating strategy-encouraging policies.
Employing best policies and programs for constant improvement.
Linking reward structure to accomplishment of results.
Making use of strategic leadership.
Thank you
and enjoy eating!
Full transcript