gms Lecture 6: Chapter-7

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Friday, March 13, 2015
TitleChapter 7 - Strategy and Strategic Management
GMS 200
What is a strategy?
a strategy us a comprehensive action plan that identifies long-tern direction for an organization
and guides resource utilization to accomplish goals with sustainable competitive advantage
Strategic management is the process of formulating and implementing strategies to
accomplish long-term goals and sustain competitive advantage
strategy formulation is the process of creating strategy. It involves assessing existing
strategies,organization, and environment to develop new strategies capable of delivering future
competitive advantage
strategy implementation is the process of allocating resources and putting strategies into
action
strategic analysis, first step of the strategic management process, is the process of
analyzing the organization, the environment, and the organization’s competitive
position and current strategies.
Competitive advantage
competitive advantage refers to operating with an attribute that allows an
organization to outperform its rivals
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Friday, March 13, 2015
Typical sources of competitive advantage include:
cost and quality
knowledge and speed
barriers to entry
financial resources
a sustainable competitive advantage - difficult for competitors to imitate.
Strategic intent
all organization energies are directed toward a unifying and compelling target or goal.
Three levels of strategy
corporate strategy, business strategy, and functional strategy
corporate strategy directs the organization as a whole towards sustainable
competitive advantage
“in what industries and markets should we compete?”
acquisitions, new business development, divestitures.
Business strategy - strategic direction for a single business unit or product line
“ how are we going to compete for customers in this industry and market?”
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Friday, March 13, 2015
Strategic business unit (SBU) - a component that operates with a separate mission
within a larger business enterprise (general Electric)
Product/service mix, facilities locations, new technologies, etc.
Functional strategy guides the use of resources to implement business strategy; this
level of strategy focuses on activities within a specific functional area of operations.
“how can we best utilize resources to implement our business strategy?”
operating efficiency
product or service quality
customer service, or
innovativeness
Mission and values
mission - reason for existence
stakeholders - the individuals and groups who are directly affected by the organization and its
strategic accomplishments
strategic constituencies analysis - review the interests of each stakeholder along with the
organization’s record in responding to their interests
core values - broad belies about what is or is not appropriate
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