8-3.

Are functional strategies interdependent, or can they be formulated independently of

other functions?

 Functional strategies are organizational plans for marketing, human resources, research and
development, and other functional areas. It supports both corporate-level and business strategies.
I believe that functional strategies should be interdependent because a business after all reflects a
system of interdependent and interrelated parts. All the functional areas of a firm must work in
harmony and follow the set corporate strategy. Thus, functional strategies should be synchronized
with each other and be aligned with organizational strategies. For example, a research and
development strategy might be dependent on an investment or the hiring of new personnel to
support the implementation.

8-4. Do you believe that penetration pricing or skim pricing will be better at raising a
company’s or a business unit’s operating profit in the long run?

 When pricing a new product, a company or business unit can follow a marketing strategy of
skim pricing or penetration pricing. For new product pioneers, skim pricing offers the opportunity
to skim the cream from the top of the demand curve while the product is novel and competitors
are few. Penetration pricing offers the pioneer the opportunity to utilize the experience curve to
gain market share and dominate the industry. Skim pricing is purely a short-term phenomenon and
is used to gain high profits quickly in order to pay for expensive R&D and marketing costs before
new entrants engage in price competition. Therefore, it cannot be used to raise long-term operating
profits unless the firm follows a differentiation strategy of continually entering markets early
through exceptional R&D and exiting before the heavy hitting late movers such as IBM or Procter
& Gamble force margins down

8-5. Explain the new real-options approach used in conditions of high environmental
uncertainty.
 Real options theory begins by drawing an analogy between real options and financial options.
A financial option is a derivative security whose value is derived from the worth and characteristics
of another financial security, or the so-called underlying asset. By definition, a financial option
gives its holder the right, but not the obligation, to buy or sell the underlying asset at a specified
price (i.e., the exercise price) on or before a given date (i.e., the expiration date). Financial
economists Black and Scholes (1973) and Merton (1973) pioneered a formula for the valuation of
a financial option, and their methodology has opened up the subsequent research on the pricing of
financial assets and paved the way for the development of real options theory.

The complexity, interrelatedness, and interconnectedness of influential variables in the

environment call for segmenting the environment for the purpose of analysis (Fahey and
Narayanan 1986). The dimensions of uncertainty include the following:

1. Macro-environmental uncertainty: This is uncertainty in the organization’s general

environment, including political, regulatory, statutory, and economic conditions. This
uncertainty has the capacity to reduce an organization’s capability for mapping out and
pursuing strategic choices (Miller and Friesen 1984)

2. Competitive uncertainty: This is the inability to establish the intensity of competition in

the industry in the future, the relative powers of competitors, their future courses of action,
and strategies.

3. Market (and demand) uncertainty: This uncertainty stems from lack of clarity in the
dynamics of the market and their effects on the organization’s operations, and demand and
supply conditions in the industry.

4. Technology uncertainty: This is uncertainty pertaining to change in the industry’s

technological resources and capabilities. Technological uncertainty has the potential to
undermine an organization’s competitive base (Anderson and Tushman 1990).

8-6. When should a corporation or business unit consider outsourcing a function or an

activity?
Out sourcing is purchasing from someone else a product or service that had been previously
provided internally. Outsourcing is becoming an increasingly important part of strategic decision
making and an important way to increase efficiency and often quality An outsourcing arrangement
can be either "tactical" or "strategic." An outsourcing is tactical when it is driven by a desire to
solve a practical problem. For example, a company may find that its payroll clerk is not able to
process payroll changes, cheques, tax returns and make the required accounting entries on time.
The company concludes that although the payroll clerk is competent, there is too much work for a
single person. The company outsources the payroll process (including the clerk), and ends up with
all of the payroll work done on time and at a lower cost. As a result, it achieves a net gain in
operational efficiency. Similarly, if an organization outsources its IT infrastructure so it can save
five to 10 per cent on the cost of operating that function, the outsourcing is purely tactical.
"Strategic" outsourcing, on the other hand, is not driven by a problem-solving mentality. Instead,
it is structured so that it is aligned with the company's long term strategies. The changes that
organizations expect from strategic outsourcing vary and can include anything from (a) Achieving
a gain in competitive advantage (b) Spending more time on those activities that are truly central to
the success of the organization, (c) Repositioning the organization in the marketplace, or (d)
Achieving a dramatic increase in share price The top most reason to outsource a function is that
you have a worker shortage and you cannot hire specialists so you outsource to someone who has
the workforce with required skill set. Once you outsource some of the tedious tasks you own
workforce can focus on the more strategic issues giving you more time. The firms can also
outsource the functions that are not of core importance to the company like the support function
of payroll processing, data entry etc. You should definitely outsource if you find a company that
can do it for you at a lesser cost and at the same quantity. As the experienced workforce that can
improve the quality and reduce errors. If outsourcing can give you access to a better competitive
technology then outsource as this will give you an advantage and also add diversity of ideas. If
there is a high demand and you have to meet an order then outsourcing can help meet that deadline.
The most important thing is that if you are operating in a very risky environment then you can
share some of the risk with the other firm.

8-7. How does a business evaluate its strategic choices?

When a company defines its strategy through policies, this will involve a discussion of how the
company will the meet the goals going forward. The policies describe what company management
and employees should and should not do in order to help the corporation achieve its goals. These
policies cannot just give lip service to the goals, they need to be an explicit statement of the
company's strategy and provide direction to the company's staff.
New policies need to be specific. For example, "Will provide our shareholders with a fair return"
is too general to act upon, because the company has not defined what constitutes fair return and
how the company intends to achieve it.
When companies decide upon a particular business strategy, there are few risks involved.
Companies that have no clarity nor any real understanding of goals versus policies risk the goals
becoming platitudes that are recorded as a supposed strategy. Instead of the goals and policies that
become words that don't do anything to achieve consensus on the company, actions clarify the way
forward. Some companies use the goal of becoming bigger without a strategy that considers how
current management will handle a larger operation, or if bigger makes real economic sense for the
company.

 Faktor-faktor Kunci dalam Penyusunan Strategi Bisnis

1. Pertimbangan Regulasi dan Kebijakan Pemerintah

2. Kondisi Persaingan dan Daya Tarik Industri Secara Keseluruhan

3. Peluang Pasar dan Ancaman Eksternal Perusahaan

4. Kekuatan Sumber Daya Perusahaan, Kompetensi, dan Kemampuan Kompetitif

5. Ambisi Pribadi, Filsafat Perusahaan, dan Kepercayaan Etis Manajer

6. Pengaruh Shared Values dan Company Culture dalam Strategi

7. Menguji Strategi Bisnis Terbaik

Strategic Practice Excercise

1. What is the problem Solidere faces?
 Politik di negara lebanon selalu berubah. Lebanon merupakan salah satu destinasi badai musim
semi tersebut. Puluhan ribu warga memadati jantung kota Beirut melakukan protes terhadap para
elite politik. Mereka menghendaki perubahan sistem politik karena sistem yang dianut selama ini
telah menyebabkan Lebanon berada pada titik nadir krisis ekonomi. Para elite politik selama ini
gagal melakukan reformasi ekonomi. Kekuasaan yang cenderung dibagi secara merata itu tidak
mampu membuat check and balance system. Para elite politik dari berbagai faksi terlihat berjarak
dengan warga. Mereka yang mempunyai kedekatan secara politik dengan tiga kelompok besar itu
yang hanya bisa mendapatkan akses ekonomi dan politik. Sementara generasi baru yang lahir dan
tumbuh dalam kultur yang independen tidak mempunyai akses yang sama.
Di negara lain, ketenangan politik ini benar-benar menstabilkan ekonomi dan pertumbuhan
ekonomi, Mendorong berita tentang potensi pembentukan pemerintahan baru, pada satu titik,
mendorong Beirut Stock Exchange (BSE) lebih tinggi dengan saham Solidere A dan B masing-
masing naik 7,87 persen dan 6,18 persen. Investor, baik lokal maupun asing, tampak optimis.
Karena dampak menguntungkan dari kenaikan ini menyebabkan lebih banyak penjualan

2. Should Solidere adopt a marketing strategy? Why? Why not?

 perlu, karena Lebanon perlu menjadwalkan deklarasikan ekonomi negaranya dalam keadaan
darurat untuk memperoleh pangsa pasar dari pesaing seperti strategi meningkatkan omset apotek
dari luar negara Lebanon.. Pemerintah Lebanon juga berencana mempercepat reformasi sebagai
upaya untuk menyelamatkan perekonomian yang tengah goyang. Dan untuk mewujudkannya,
lebanon

3. If you were part of the decision-making team in Solidere, which functional level strategy would
you adopt to improve the position of Solidere?

 menerapkan Strategi fungsional berupa:

1. Strategi produksi, strategi untuk menetapkan apa yang menjadi produk unggulan untuk
menambah kekayaan negara Lebanon.
2. Strategi pemasaran, strategi ini untuk menetapkan pangsa pasar mana yang akan digarap
dan bagaimana cara mendapatkan keuntungan investor bagi negara Lebanon.
3. Strategi promosi, strategi ini merupakan kelanjutan dari pemasaran dan produksi, dimana
promosi apa yang akan dihendak diluncurkan.
4. Strategi sumber daya manusia (SDM),merupakan strategi yang penting dan harus
mencakup seluruh fungsi manajemen dalam mengelola pemasukan atau pengeluaran
anggaran negara Lebanon.