Strategic Management

Functional Strategies

Learning Outline
Different Functions The role of functional strategies Strategies to consider Key points

Functional strategies are not Organizational strategies Need to implement functional strategies and coordinate between functions

Definition

Functional strategies (or operational strategies) are the short-term goal-directed decisions and actions of the organizations various functional areas. Different from:

Business strategy
How do we win?

Corporate Strategy
What do we do?

SWOT Analysis
Threat

Weakness

Strength

Organization

Opportunity

Different functions
Production operations Marketing Human Resources Research and Development Information Systems Financial

Production and Operations

Current strategies
Just in time Inventory management Materials replacement Project management

Production and Operations

Production process Capacity Location Work design Lay-out

Marketing

Types of strategies

Segmentation Target market Differentiation 4 Ps

Product, price, promotion, place (channel)

Current strategies

Relationship marketing Database marketing

HR Strategy

High Performance Work Team

Self-directed Job rotation Problem solving Contingent pay

Work flow Staffing

HR Strategy

Employee separation (retrenchment) Performance appraisal Training and development Compensation Employee and labor relations Current strategies

People first High Tech resource

R&D and IS

R&D
R&D emphasis R&D timing Product and development

IS
Technology Types of systems

Financial

Evaluation Forecasting, planning, budgeting Financial mix Other decisions

Capital budget Stock dividend Cash flow Working capital Loans or leases

Implementation and Evaluation

Action! Processes, Activities, Budgets, Structure and Culture Each function is specific in scope but broad in focus Specific performance evaluation

Qualitative Quantitative Benchmarking

Take Aways
SWOT Analysis Functional strategies should work together to achieve business and corporate strategies