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COMM 401Strategy & Competition

Introduction(Ch 1 & 2)

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Noor Shawwa

Personal Information Cards

Name:

ID #:

e-mail: Telephone:

Major:

Please return this card to me with aphotograph next week!

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Noor Shawwa

Defining Strategy

Strategy is the great work of organization. In situations

of life and death, it is the Tao of survival or extinction.Its study cannot be neglected.

Sun Tzu, The Art of War

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Defining Strategy

Strategy is the pattern of objectives, purposes, orgoals and the major policies and plans for achievingthese goals, stated in such a way as to define what

business the company is in or is to be in and the kindof company it is or is to be.

Kenneth Andrews,

The Concept of Corporate Strategy

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Strategic Management

The strategic management process is the full set ofcommitments, decisions, and actions required for afirm to achieve strategic competitiveness and earn

above-average returns

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The Strategic Management Process

Chapter 5Bus. - Level

Strategy

Chapter 6Competitive

Dynamics

Chapter 7Corp. - Level

Strategy

Chapter 9International

Strategy

Chapter 10CooperativeStrategies

Chapter 8Acquisitions &Restructuring

Chapter 11

Corporate

Governance

Chapter 12Structure

& Control

Chapter 13Strategic

Leadership

Chapter 14Entrepreneurship

& Innovation

Strategic

Inputs

Strategic

Actions

Strategic

Outcomes

Chapter 4Internal

Environment

Chapter 3External

Environment Strat. Intent

Strat. Mission

TheStrategic .Management .

ProcessStrategy Formulation Strategy Implementation

StrategicCompetitiveness

Chapter 1

Above AverageReturns

Chapter 2 Feedback

StrategicCompetitiveness

Chapter 1

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Strategic Management Process

EXTERNAL ANALYSIS(Chapter 3)

INTERNAL ANALYSIS(Chapter 4)

OpportunitiesThreats

Key Success Factors

StrengthsWeaknessesCompetences

STRATEGIC INTENT

Corporate Strategy(Chapters 7-8-10)

Business Strategy(Ch.5)

Functional Strategies

F M O IT HR

FORMULATION FORMULATION

Corporate Governance (Ch. 11)

Organizational Structure and ControlsStrategic Leadership

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Strategic - Purpose

Primary purpose of the strategic management process is toenable firms to achieve strategic competitiveness and earnabove-average returns

Strategic competitiveness: achieved when a firm

successfully formulates & implements a value-creatingstrategy

When competitors are unable to duplicate your value-creatingstrategy, you achieve a sustainable competitive advantage

As long as a firm can sustain/maintain a competitive

advantage, it will earn above average returns returns thatexceed what investors expect to earn from other investmentswith equivalent risk (long-term, companies must maintain atleast average returns to survive)

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Strategic Management Process

Strategic management process: a framework to assist firmsachieve & maintain strategic competitiveness

Strategic inputs: information from internal & external

environment, used to develop firms strategic intent & strategicmission

Strategic actions: strategies that are formulated, developed,and implemented -- guided by strategic intent & strategicmission

Strategic outcomes desired: strategic competitiveness &above average return -- results of successful implementationof value-creating strategies that competitor cannot duplicate

Feedback: links the elements and allows firm to adjust/reviseinputs & actions to achieve desired strategic outcomes

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Mintzbergs Strategy as a Pattern

IntendedStrategies

RealizedStrategies

DeliberateStrategies

EmergentStrategies

Thus, strategy can emerge from a Patternin the stream of decisions or actions

UnrealizedStrategies

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Deliberate Strategies

Force managers to look ahead periodically;

Require rigorous communications about goals andresource allocations;

Stimulate longer-term analyses than would otherwise bemade;

Provide the company with a sense of direction;

Provide an information framework for the future;

Provide detailed budgets;

Generate a basis for evaluating short-term plans; Protect long-term investments, such as R&D.

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Emergent Strategies

A corporations strategy is rarely written down in one place;

Intuition rather than rational analysis often plays a largerole in crafting strategy;

Bargaining and politics in organizations do not stop at theend of the planning cycle;

All people, strategic planners included, are regularlyconfronted with their own cognitive limitations;

New internal & external events are continuously beingassimilated into the corporate strategy;

Emergent strategies allow companies flexibility.

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Corporate Mission somedefinitions

The missionof a company is what the company is trying toachieve over the medium to long term as formally declaredin its mission statement (Charles Hill & Gareth Jones).

A firms missionis its fundamental purposes and long-termobjectives (Jay Barney).

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Some definitions (continued)

The strategic missionis a statement of a firms uniquepurpose and the scope of its operations in product andmarket terms (Michael Hitt, Duane Ireland, RobertHoskisson, Glenn Rowe, and Jerry Sheppard).

A strategically relevant mission statement incorporatesthree elements (Derek Abell, used in Thompson &Strickland):

1. Customer needs, or what is being satisfied.2. Customer groups, or who is being satisfied.

3. Company activities, or how those needs are satisfied.

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Sample Mission Statement:Apple

Apple Computer, Inc., ignited the personal computerrevolution in the 1970s with the Apple II, andreinvented the personal computer in the 1980s with

the Macintosh. Apple is now committed to its originalmission to bring the best personal computingproducts and support to students, educators,designers, scientists, engineers, business persons and

consumers in over 140 countries around the world.

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Sample Mission Statement:Apple

Apple ignited the personal computer revolution in the1970s with the Apple II and reinvented the personalcomputer in the 1980s with the Macintosh. Today,

Apple continues to lead the industry in innovation withits award-winning desktop and notebook computers,OS X operating system, and iLife and professionalapplications. Apple is also spearheading the digital

music revolution with its iPod portable music playersand iTunes online music store.

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Sample Mission Statement: 3M

We are committed to:

Satisfying our customers with superior quality and value;

Providing investors with an attractive return through

sustained, high-quality growth; Respecting our social and physical environment;

Being a company that employees are proud to be a partof.

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Missions: Narrow or Broad? (1)

Few businesses fail because they are focused on a sharplytargeted market opportunity, but many fail or do badlybecause managements attention is divided and resources

are scattered across too many areas

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Missions: Narrow or Broad? (2)

Narrow mission:

Gives employees a better sense of direction;

Is easier to understand for all other stakeholders;

Focuses managerial time and attention on a fewconcrete tasks and responsibilities;

Is easier to implement and/or realize

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Missions: Narrow or Broad? (3)

Broad mission:

Is often more robust against internal and externalchanges;

Need not be updated as frequently as narrow missions(March of Dimes: Established in 1938 to save

Americas youth from Polio. Now: To improve the

health of babies by preventing birth defects and infantmortality)

Are often more heroic and inspiring

Allow organizations to seize new opportunities withoutrestraint

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Strategic vision

A mission highlights the boundaries of the companys currentbusiness activities

A vision prepares a company for the futureby providing ananswer to the following questions:

What changes are occurring in our markets today? What new or different customer needs should we start satisfying? What buyer segments should we focus on? What new geographical markets should we cover What should the companys business makeup look like in five

years?

Hence, missions describe the status quo, visions are imagesof (a) how the companys environment will evolve in the future,and (b) what changes should be made inside the company topreserve the companys fitwith its environment how to makesure that the company keeps on playing a vital role in society.