16 strategy types

• Back w a r d i n t e g r a t i o n
•Horizontal Integration
•Forward integration
•Market Penetration
•Product Development
•Market Development
•Related Diversification
•Horizontal Diversification
•Conglomerate Diversification
•Reorganización
•Desinvest
•Liquidation

2
•Cost Leadership
•Differentiation
•CostFocus
• Differentiation F o c u s

Strategy requires innovation

Create competitive advantage
"The company should innovate " X

Types

Strategies

I
12 actions Mix 2 it's
or more
although
4 options of alignment (Porter) highly risky
5 degrees of interaction -

No
company
can
Resources and

afford
combined
strategy skills diluted
to
apply when different
are

all
strategies .
divisions follow Competitors gain an

Find Priorities different strategies advantage

Choose between
Strategies
· Debt :
 Integration strategies

Gain control over suppliers competitors and distributors

S
Backward >
-

Ownership ,
control over
suppliers

Horizontal >
-

Ownership ,
control over competitors

Forward >
-

Ownership ,
control over Distributors fellers or retailers

Integration strategies decrease a company's ability to diversify in a declining industry

Intensive strategies

Requires intensive efforts to impact the competitive position of a company in relation t° existing products

Market penetration Increase market share

-
,
through marketing
Market development & New products services or in
geographic areas

Product development Increase

& improving sales products , or
creating new
&

Diversification strategies,

Not to depend on a single industry, it's hard to manage different companies

Concentric diversification Adding &

new but related
products or services

Horizontal diversification Adding ?

new but unrelated products or services

Conglomerate I Regrouping through cost and asset reaction to reverse

declining profits

Defensive strategies
Cost reduction Regrouping though
& asset reduction to stop profits
,

declining
Divestiture - Sale part of a
of the
company
Liquidation - sale
company's of
pats assets in

Porter's generic strategies

Big companies use the first two, small the last one
Cost leadership Manufacturing standard products at
?
a lour cost

Differentiation Unique products

& services on whatever price

Focus Satisfy
- an small group of cust
 Similar words different meanings

* Strategic
* Maquiavelic
* Plans
# Planning
* Strategic Planning
* Strategic Thinking,
* Strategic Planning &
# Strategic Management
* Scope
* Strategy & Tactics

Strategic: - Short and Long term

having to do with strategy, have an strategic plan for a business unit
everything
- Not is

Great significance or importance strategic

Maquavelic
Resources Allocated then employed to
& ,
execute a
strategy ,
realize the end in the view

The ends & Strategic thinking separate ,

from
settling on the Strategy
The end justifies the means & Niccolo Machiavelli

Plans and planing -

Ends & what to is be achieved

Means -how it is to be achieved

Plans of action
Means -> Programs steps (long
,
action
,
or Short term)

Ends >
-

Goals aims targets [Broad (In the

,
,
,
future) , Nearby (well defined)]
Plan allocation of resources
"Plan atack defense"
"disadvantage to the
"
or
,

every
Planning preparing a plan * specify the ends and means & Gautt
Graphic
Intended outcomes Cends'
Outcomes to be achieved Creans)
Based on studies or own knowledge
Milestone ↑ time

Resources Money
-
D
Strategic planning defined set of activities
Context for managing (mission and Corporate strategy)
Financial and non financial goals Land objectives)
Portfolio-D
Allocating resources with strategy managing the business as an investment
Monitoring results
,

Land
adjust)
Communicating
how

Priorities

5s
& 3- 5
t
of
breakthrough -
objectives

what

1) mission and vision

2) stakeholder's analysis
3) swot
4) distinctive competences
S) playing scenarios
6) situational analyses
7) financial and operational performance audits
 A great deal of strategic thinking must go into developing
a strategic plan and, once developed, a great deal of
strategic management is required to bring its aims to
fruition.

2net pts

3 Levels of strategy and

Planning are accepted

Enterprise Level Business Unit Level Functional Level

L Global Local People

Strategy and tactics

How a given end is to be attained
Strategy and tactics get together ends and means
How Locations
-p
Money
tangible
, Reputation
intangible
,
team talents
intangible tangible

Tactics, then, is
concerned with the
employment * Strategy is concerned
of resources already with the
Deployment of
deployed. Resources

Definitions of strategy

Robert “the pattern of objectives, purposes or goals and

N
Anthony
major policies and plans for achieving these
goals stated in such a way as to define what
business the company is or is to be in and the
kind of company it is or is to be.
Kenneth Andrews The pattern of decisions in a company that
determines and reveals its objectives,
purposes or goals, produces the principal
policies and plans for achieving those goals,
and defines the range of businesses the
company is to pursue, the kind of economic
and human organization it is or intends to
be, and the nature of the economic and non-
economic contribution it intends to make to
its shareholders, employees, customers, and
communities.
Michael Porter
a broad formula for how a
Competitive Strategy business is going to compete,
what its goals should be, and
what policies will be needed
to carry out those goals.

Henry Mintzberg A Plan,

SP's of
strategy A Pattern,
A Position,
A Perspective
A ploy,
a maneuver intended to outwit a competitor.

Sentence
However, strategy can fail and, Strategy is
when it does, tactics dominate the
action (just when it fails).
Execution becomes strategy.
 Extern al factor
factor
external s
External audit >
Identify trends beyond the control of a firm > Opportunities and threats
V

S Affect products, services, markets Take advantage of them

&
Changes consumer demands
7 Affects type of products
> Affect both suppliers and distributors.

Competitive forces Y
Economical
>
Political
>
Technological
>
Social

Create a finite list of opportunities > Identifying key variables that offer actionable responses
Y

Bet ween 10 and 20 factors 7 Should be communicated and distributed widely in the organization

Analysis of the market influences >

To create a strategy about a new market
P Politics 2

e Economy
Need to know the specific forces that participate in that market
s Society

t Technology

e Environment

l Law

* Identify external forces to design strategies to achieve long- term objectives

-

Should applicable to all competing firms in the strategic sector

Process: 3
Must involve as many managers/ employees as possible X Create understanding and commitment
> Gather information about trends 3
Monitor various sources
Timely strategic information
> Evaluate information > Do meetings to identify opportunities and threats
>
Do a prioritized list by ranking factors

Critical factor & Most important structure

2

Like relationships with suppliers and distributors

 Politicl, govermental and legal forces > Represent key opportunities and threats

Economic forces 3 Have a direct impact on the potential attractivness of various strategys
Dollar value - can be an opportunity or a threat

Social, cultural, demographic and > Shape the way people live, work, produce, and consume
environmental forces

Technological forces > Technological advancements affect organizations products, ser vices, markets and
competitive positions

7
They can create a new competitive advantages that are more powerful than existing
advantages

* Supply value chain > When competition is intense it can mean their supply chain is similar

Porters Five-Force model can indicate if competition in an industry can make an acceptable profit
> Key aspects of competitive forces that can impact the firm
>
How strong each element is for the firm
T
Decide if the collective strength of the elements, are worth the firm entering a market

Rivalry
9) Rivalry among competing firms is usually the most powerful of the five competitive forces
2) Intensity of rivalry tends to increase in certain situations
3) As rivalry among competing firms intensifies, industry profits decline

Threats of new entrants

a] Whener new firms can enter easily to an industry, the intensity of competitiveness increases
Barriers of entry
2) Identify potential new firms enegring the market, new rival firms trategies, and try to counterattack
to capitalize strengths and opportunities

Threat of substitute products

4) The oresence of them creates a ceiling on the price that can be charged before consumers switch to a
substitute product
2) This magnitude of threat can be seen in ivals plans for expanding production capacity, as well as by their
sales and profit growth
Bargainign power of suppliers
9) Affects the intensity of competition
2) In the best interest of both - they assit each other

Enhancing long-term profitability for all, concerned

> Firms may pursue a backward integration strategy to gain control or ownership of suppliers
&
Effective when suppliers are unreliable, too costly, or not capable of meeting a firms needs
3) Sellers are forging strategic partnerships

Bargaining power of buyers

a) Happens when customers are concentrated - their bargaining power represents a major force,
affecting the intensity of competition in an industry

2) Can be the most important force affecting competitive advantage

Research tools & Unpublished sources - customer sur veys

> Published sources- journals
> Formal information
>
Laws
& EMIS