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Strategy Formulation: Functional Strategy and Strategic Choice

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65 views13 pages

Strategy Formulation: Functional Strategy and Strategic Choice

Slides on linear programming

Uploaded by

Arif Ali
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Chapter 7

Strategy Formulation:
Functional Strategy and
Strategic Choice
Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian
Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-1
Functional Strategy
 Functional Strategy:
 The approach a functional area takes to
achieve organizational and business unit
objectives and strategies by maximizing
resource productivity.

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-2
Functional Strategy
 Core competency:
 Something that a corporation can do
exceedingly well – a key strength
 Can be a core capability
 Includes a number of constituent skills

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-3
Functional Strategy
 Distinctive competencies:
 Firm can gain access to distinctive
competencies in 4 ways:
1. Asset endowment
2. Acquisition
3. Share with another business unit
4. Built and accumulated

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-4
Functional Strategy
 Sourcing Decision:
 Outsourcing
 Purchasing from someone else a product or service that had
been previously provided internally.
 Frequently outsourced activities
 General and administrative
 Human resources
 Transportation and distribution
 Information systems
 Manufacturing
 Marketing
 Finance and accounting

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-5
Marketing Strategy
 An organization’s choices on product,
pricing, promotion and distribution
intended to achieve organizational
objectives.

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-6
Marketing Strategy
 Product Development strategy –
Develop new products for existing
markets
Develop new products for new markets

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-7
Financial Strategy
 Financial strategy –
Examines the financial implications of
corporate and business-level strategic
options and identifies the best financial
course of action.
Maximizes financial value of the firm

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-8
Types of Financial Strategy
 Leveraged buy out (LBO) –
Company is acquired financed largely
by debt.
 Debt paid by acquired company’s operations
or sale of assets

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-9
R&D Strategy
 Deals with product and process innovation
and improvement
 Choice:
 Technological leader
 Technological follower

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-10
Purchasing Strategy
 Obtaining raw materials, parts and
supplies
 Basic Purchasing Choices:
Multiple sourcing
Sole sourcing
Parallel sourcing

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-11
Logistics Strategy
 The way inputs enter, and products
leave, the manufacturing process
 Three current trends:
1. Centralization
2. Outsourcing
3. Use of the Internet

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-12
HRM Strategy
 Addresses issues of:

 Skilled employees
 Low-skilled employees
 High pay
 Low pay
 Cross trained
 Repetitive tasks
 Self-managing
 High turnover
teams

Concepts in‫ﴀ ﴀﴀ‬Strategic Management, Canadian


Edition
Copyright © 2005 Pearson Education Canada Inc. Wheelen, Hunger, Wicks 7-13

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