The GE Business Screen

INDUSTRY ATTRACTIVENESS High 1. Market Growth 2. Market Size Medium 3. Capital Requirements 4. Competitive Intensity Low Winner Winner Profit Producer Good Winner Average Business Loser Medium Question Mark Loser Loser Poor

COMPETITIVE POSITION 1. Market Share 2. Technological Know-How 3. Product Quality 2. Service network 5. Price Competitiveness 6. Operating Costs.

Source : From strategy Formulation, Analytical Concepts, 1st edition by Hofer. Copyright 1978. Reprinted with permission of South-Western, a division of Thomson Learning: www.thomsonrights.com.

BCG Matrix

25
20 High Industry Growth Rate 15

Stars

Question Marks

5
2 0 5.0 High

Cash Cows

Dogs

4.0

0.7 0.5 Low Relative Market Share

3.0

1.0

0.2

0.1

Source :

Perspectives, No.66, The Product Portfolio. Adapted with permission from the Group,Inc., 1970. All rights reserved.

Boston Consulting

How Business Level Strategy Influences Performance

A Favorable Market Position

Business Level Strategy Decision and Actions to Achieve

Competitive Advantage

Performance (Profitability)

Unique Internal Capabilities

Feedback

Primary and Support Activities In Value Chain

Procurement Primary Activities And Inbound Logistics

Engineering (Product and Process Design)

Production/ Operations

Marketing, Sales and Distribution (Outbound Logistics)

Service

Profit Margin

Product/Process R&D

Support Activities

Human Resources Function

Company Infrastructure (Organizational Structure, General Administration)

Path Leading to Competitive Advantage: Resource-Based View

Non strategic Capability
No

Tangible and Intangible Resources (Stocks of inputs)

Capabilities (what a firm does And can do with Its resources)

Are they Valuable, Scare, Relevant

Distinctive Competency
Yes

Competitive Advantage

Is it Nonimitable Nonsubstitutable Nontransferable

Yes

Sustainable Competitive Advantage

No

Nonsustainable Competitive Advantage

STRATEGIC GROUPS IN THE AUTOMOTIVE INDUSTRY

High

Ferrari Porsche

Mercedes BMW Lexus

Price

GM Ford Chrysler Toyota Honda Hyundai Kia

Low

Low

Breadth of Product Line

High

Mercedes and Chrysler (part of Daimler Chrysler) are Separated for purposes of illustration.
Source : Adapted from G.G. Dess and G.T. Lumpkin, Strategic Management: Creating Competitive Advantages (New York: McGraw Hill, 2002), p.63.Reprinted by permission of The McGraw-Hill Companies.

The Strategic Management Process

External Environment Macro Environment Industry Environment Chapter 3 MISSION What the does now and wants to do In the Future Chapter 2
SITUATION ANALYSIS Assessment of Competitive Opportunities And threats Against Company Competencies And advantages INTERNAL ENVIRONMENT STRATEGIC CHOICE Business-level strategy Corporate-level strategy International strategy Functional-level Strategy Chapter 5,6,7, and 8 STRATEGY IMPLEMENTATION

Organizing tasks and Allocating resources Chapter 9

EVALUATING PERFORMANCE Formulating Performance Standards, Measurement Mechanisms, and Measuring performance Chapter 10

Resources, capabilities Formal structure and Culture Chapter 4

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