Académique Documents
Professionnel Documents
Culture Documents
Introducing Strategic
Management
OBJECTIVES
Sears
launches
catalog
business
Takes control of
production and
distribution
Rapid growth,
driven by endbased locations
and companycontrolled factories
Experts believe
Sears way was
the only way to
compete The
paragon of
retailers
Financial
trouble; sells off
all non-retail
businesses
Acquired
by KMart
1970
1891
1924
Moves into on-premise
retailing/General Robert
Wood takes over
1960
1980
1990
2000 2005
Dizzying
growth
1962 1970
1980
30 stores located in
one-horse towns which
everybody else was
ignoring; Sam Walton
A Firms performance
is directly
related to the
quality of its
strategy and
its competency in implementing it
2000
Invests $500 million in
inventory management
technology
Sears
Wal-Mart
Year founded
1891
1962
Stores 1980
Stores 2004
864
2026
Revenues 1980
Revenues 2004
$25,194 million
$36,100 million
USD 1 billion
USD 200.2 billion
600
5289
$1,643 million
$285,222 million
Implementing a good
strategy is at least as
important as creating
one, yet many
managers give too
little thought to
implementation
To succeed,
the formulation
of a good strategy
and its implementation should be
inextricably
connected
Firms and
industries are
dynamic in
nature
Strategic leadership
is responsible for
making
substantive resource
allocation decisions
and
STRATEGY
Tactical details
Internal
External
Strategy
Vision and
mission
Fundamental
organizational
purpose
Organizational
values
Arenas
Vehicles
Differentiators
Staging
Economic logic
Implementation
levers
and
Strategic
leadership
Strategy:
The process
of deciding
what to do
Compete as
discount retailer
in rural markets
WAL-MART EXAMPLE
Leverage inventory
and sourcing systems
to be low-cost leader
Implementation:
The process of
performing all the
activities necessary
to do what has been
planned
Invest heavily in
organizational structure,
systems, and processes
10
By 1984, 95%
of Intel revenue
came from the
microprocessor
segment
Unplanned
experimental
venture to make
microprocessors
for Busicom, a
Japanese
calculator maker
11
Arenas
Staging
Staging
Economic logic
Economic
logic
Vehicles
Vehicles
Internal development?
Joint ventures?
Licensing/franchising?
Experimentation?
Acquisitions?
Differentiators
Differentiators
Image?
Customization?
Price?
Styling?
Product reliability?
Speed to market?
12
Market valuation
13
Arenas
Vehicles
Objective
To bring
humanity
back to air
travel
14
15
IMPORTANCE OF EXECUTION
16
Intended
Strategy
Organizational structure
Systems and processes
People and rewards
Realized
and
Emergent
Strategies
Strategic leadership
17
IMPLEMENTATION LEVERS
Implementation
levers
Description
Organizational
structure
Systems and
processes
People and
rewards
The people and rewards lever points to the importance of using all
organization members to implement a strategy. Competitive advantage
is generally tied to your human resources. Successful implementation
depends on having the right people and then developing and training
them in ways that support the firms strategy. In addition, rewards how
you pay your people can accelerate the implementation of your
strategy or undermine it
18
COMPETITIVE ADVANTAGE
Competitive
Advantage: a
Firms ability to
create value in a
way that its
rivals cannot
Key question:
how do Firms
create sustained
above-average
returns?
19
Internal
Often called the resource
view, contends that firms
are heterogeneous
bundles of resources and
capabilities and firms with
superior resources and
capabilities enjoy
competitive advantage
over other firms. This
advantage makes it
relatively easier to achieve
consistently higher levels
of performance
External
Also called the positional
view, contends that
variations in a firms
competitive advantage and
performance are primarily
a function of industry
attractiveness. Companies
should therefore either (1)
position themselves to
compete in attractive
industries or (2) adopt
strategies that will make
their current industries
more attractive
Dynamic
Suggests that in dynamic,
rapidly changing markets,
a firms current market
position is not an accurate
prediction of future
performance. Instead, we
look at the past for clues
about how the firm arrived
at its current position and
to future trends both
internal and external in
an effort to predict the
future landscape
20
SUMMARY
21
REVIEW QUESTIONS
22
GROUP ACTIVITY
23
GROUP ACTIVITY
24