MGMT20001 Lecture 11: MGMT20001 Notes - Lecture 11

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copperspider388

7 Jun 2018

School

University of Melbourne

Department

Management

Course

MGMT20001

Professor

Victoria Roberts

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L11:StrategyandStructure

Strategy:determinationofbasiclongtermgoalsandobjectivesofanenterprise.Adoptionof

coursesofactionandallocationofresourcesnecessaryforcarryingoutthesegoals.

Aseriesofconsistentdecisionsabout:

1. Objective=ends(marketshare,growth,profitability)

2. Scope=domain(customer,geography)

3. Competitiveadvantage=means(valueproposition,process)

Toachieveandsustainsuperiorperformance



Planned(deliberate)approach:

 Porter’sfiveforces&competitivestrategies

 MilesandSnow’sthreetypesofstrategy

Evolutionary/emergentapproach

 Adaptive(unanticipatedactions)



Porter’sfiveforces



Porter’scompetitivestrategies

 Organisationsneedtomakeastrategicchoiceinordertomaintainacompetitive

advantage

 Firmsmusteitherseekto

 Offerlowpricesthroughcostleadership

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 Offermorevaluethroughdifferentiation

 Targetoneparticularcustomersegmentthroughfocus 

 Avoidbeing“stuckinthemiddle”

Competitivestrategies:

1. Costleader

a. Lowcostproducer

b. Emphasisonefficiency

c. Highvolume,lowmargin

d. Standardisedproducts

2. Differentiation

a. Uniqueinitsindustryinwaysthatarewidelyvaluedbycustomers

b. Offersbenefitsorattributesthatareofsuperiorvalueenoughtojustifya

premiumprice

c. Highmargins(notalwayslowvolume)

d. Priceelasticitytendstobereduced(lessreactiontopricechanges)



StrategictypesMiles&Snow

Strategic‘types’basedonrateofchangeofproductsormarkets:

 Defender:producelimitedsetofproductsdirectedatanarrowsegmentofthetotal

potentialmarket.Stableenvironment.Goals:stabilityandefficiency

 Prospector:findandexploitnewproductandmarketopportunities.Changing

environment.Goals:flexibility.

 Analyser:moveintonewproductsormarketsonlyaftertheirviabilityhasbeenproven.

Stable&changingenvironment.Goals:stability&flexibility.

 Reactor:followinconsistentandunstablepatterns.Anyenvironment.Goals:responsive.

Plannedandemergentstrategy(Mintzberg)

Planned

Emergent

strategyshouldfollowastrictplan

Strategicchangeisdeliberate

Processislinear

Formulationandimplementationare

separate

Decisionsareresultofrational

analysis

Strategicdecisionsaretakenattop

strategicchangeevolvesinpractice

Processisiterative

Formulationandimplementationare

entwined

Decisionsareresultofintuition,

opportunism,reflection(i.e.bounded

rationality)

Strategicdecisionstakenalloverthe

organization

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MGMT20001 Lecture 11: MGMT20001 Notes - Lecture 11

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