Documente Academic
Documente Profesional
Documente Cultură
Formulating Long-Term
Objectives and Grand
Strategies
Prof. Niki Lukviarman, SE, MBA, DBA, Akuntan
Topic Outline
Long-Term Objectives
Generic Strategies
Grand Strategies
Corporate Combinations
Selection of Long-Term Objectives & Grand
Strategy Sets
Sequence of Objectives & Strategy Selection
Profitability
Productivity
Competitive position
Employee development
Employee relations
Technological leadership
Public responsibility
Understandable
Acceptable
Criteria used
in preparing
objectives
Suitable
Flexible
Measurable
Motivating
Financial performance
Customer knowledge
Internal business processes
Learning and growth
Vision
and
Strategy
Internal
Business
Process
To satisfy our
shareholders
and customers,
what business
processes must
we excel at?
Differentiation Strategies
Focus Strategies
Ch 5 -8
Ch 5 -9
Generic Strategies
Cost Leadership
(Type 1 and Type 2)
Ch 5 -10
Cost Leadership
Ways of ensuring total costs across value
chain are lower than competitors total
costs
1.
2.
Ch 5 -11
Cost Leadership
Can be especially effective when:
1.
2.
3.
4.
5.
6.
7.
Ch 5 -12
Generic Strategies
Low Cost Producer Advantage
Ch 5 -13
Generic Strategies
Differentiation (Type 3)
Greater product flexibility
Greater compatibility
Lower costs
Improved service
Greater convenience
More features
Copyright 2007 Prentice Hall
Ch 5 -14
Differentiation
Can be especially effective when:
1.
2.
3.
4.
Ch 5 -15
Generic Strategies
Focused Strategies (Type 4 & 5)
Industry segment of sufficient size
Good growth potential
Not crucial to success of major competitors
Ch 5 -16
Focused Strategy
Can be especially effective when:
1.
2.
3.
4.
5.
Ch 5 -17
Ch 5 -18
Overall Cost
Leadership
Common
Organizational
Requirements
Common
Organizational
Requirements
Differentiation
Product engineering
Creative flare
Strong capability in basic research
Corporate reputation for quality or
technological leadership
Unique combination of skills
Strong cooperation from channels
Strong marketing abilities
Strong coordination
among functions in
R&D, product
development, and
marketing
Subjective measurement
and incentives instead of
quantitative measures
Amenities to attract highly
skilled labor, scientists, or
creative people
Focus
Combination of above
policies directed at the
particular strategic target
Risks of
Differentiation
Risks of Focus
Differentiation is not
sustained
Competitors imitate
Bases for differentiation
become less important to
buyers
Cost proximity is lost
Differentiation focusers
achieve greater
differentiation in segments
Focus strategy is
imitated
Target segment becomes
unattractive
Structure erodes
Demand disappears
Broadly target
competitors overwhelm
segments
Segments differences
from others narrow
Advantages of broad
line increase
Concentrated growth
Market development
Product development
Innovation
Horizontal integration
Vertical integration
Concentric
diversification
Conglomerate
diversification
Turnaround
Divestiture
Liquidation
Bankruptcy
Joint ventures
Strategic alliances
Consortia
Characteristics of a Concentrated
Growth Strategy
Conditions Favoring a
Concentrated Growth Strategy
Market development
Product development
2.
3.
2.
2.
3.
Innovation Strategy
Involves creating a new product life
cycle, thereby making similar existing
products obsolete
Example:
Vertical and Horizontal Integrations
Textile producer
Textile producer
Shirt manufacturer
Shirt manufacturer
Clothing store
Clothing store
Diversification Strategies
Concentric Diversification
Turnaround Strategy
Involves a concerted effort over a period
of time to fortify a firms distinctive
competencies, returning it to profitability
Turnaround Strategy
A turnaround strategy is done
through
Cost reduction
Asset reduction
Retrenchment
Recovery response
Liquidation Strategy
Involves selling parts of a firm, usually for its tangible
asset value and not as a going concern
Two approaches
Strategic Alliance
Involves creating a partnership between two or more
companies that contribute skills and expertise to a
cooperative project