Chapter 1McGraw-Hill/Irwin
Copyright
Crafting a Strategy
Linking Strategy With Ethics
McGraw-Hill/Irwin
Copyright
Defines current business activities
Conveys
A company’s mission is not to make a profit !
The real mission is always—“What will we do
to make a profit?”
McGraw-Hill/Irwin
Copyright
A good business definition incorporates three factors
Customer needs -- What is being satisfied
Customer groups -- Who is being satisfied
*
McGraw-Hill/Irwin
Copyright
Charts a company’s future strategic course
Defines the business makeup for 5 years (or more)
Specifies future technology-product-customer focus
*
McGraw-Hill/Irwin
Copyright
a Single-Business Company
McGraw-Hill/Irwin
Copyright
Corporate
Strategy
a Diversified Company
McGraw-Hill/Irwin
Copyright
a Diversified Company
McGraw-Hill/Irwin
Copyright
Actions to boost performance of individual businesses
Capturing valuable cross-business strategic fits that result in 1 + 1 = 3 effects!
Establishing investment
McGraw-Hill/Irwin
Copyright
a Single-Business Company’s Strategy
Efforts to build
Responses to
McGraw-Hill/Irwin
Copyright
Game plan for a strategically-relevant function, activity, or business process
Details how key activities will be managed
Provide support for business strategy
Specify how functional objectives are to be achieved
*
McGraw-Hill/Irwin
Copyright
Add detail to business and functional strategies
*
McGraw-Hill/Irwin
Copyright
Objectives, and Strategies
McGraw-Hill/Irwin
Copyright
Choice of Company Strategy
Company’s Strategic Situation
Competitive conditions and industry attractiveness
Company opportunities and threats to company’s well-being
Resource strengths, capabilities, and weaknesses
Influences of key executives
Identify and evaluate alternatives
*
McGraw-Hill/Irwin
Copyright
Glare of investigative reporting
Health and nutrition concerns
Sexual harassment
Corporate downsizing
Rising/falling interest rates
Trade restrictions, tariffs, and import quotas
*
McGraw-Hill/Irwin
Copyright
Fresh moves of rival competitors
Changes in industry’s
New technological developments
McGraw-Hill/Irwin
Copyright
Company Strengths, Competencies, and Competitive Capabilities
A company must have or be able to acquire the resources, competencies, and competitive capabilities needed to execute the chosen strategy
*
McGraw-Hill/Irwin
Copyright
Owners/shareholders – Rightfully expect some form of return on their investment
Employees - Rightfully expect respect for their worth and devoting their energies to firm
Customers - Rightfully expect a seller to provide them with a reliable, safe product or service