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Chapter 4
Learning Objectives
After studying this chapter, you should be able to do the following:
4-1. Describe the nature and role of an internal assessment in formulating strategies..
Internal values are more focused on strengths (strengths) and weaknesses (weaknesses) owned
by the company. Strategic management decided to improve the advantages of the company,
increase its strength so that it becomes a unique ability (special competence) for the company
in order to create competitive advantage.
Internal assessment involves the process of evaluating, assimilating, and evaluating information
on company operations. In addition, considering internal also involves various levels / divisions
that allow interaction between levels to be important. Every manager or employee is expected
to understand their role in the success of the organization.
A complete internal assessment is vital to help a firm formulate, implement, and evaluate
strategies to enable it to gain and sustain competitive advantages. For different types of
organizations, such as hospitals, universities, and government agencies, the functional business
areas different.

4-2. Discuss why organizational culture is so important in formulating strategies.


Every business entity has a unique organizational culture that impacts strategic-planning
activities. Organizational culture is “a pattern of behavior that has been developed by an
organization as it learns to cope with its problem of external adaptation and internal
integration, and that has worked well enough to be considered valid and to be taught to new
members as the correct way to perceive, think, and feel.”4 this definition emphasizes the
importance of matching external with internal factors in making strategic decisions.
Organizational culture captures the subtle, elusive, and largely unconscious forces that shape a
workplace. Remarkably resistant to change, culture can represent a major strength or weakness
for any firm. It can be an underlying reason for strengths or weaknesses in any of the major
business functions.
Cultural products include values, beliefs, rites, rituals, ceremonies, myths, stories, legends,
sagas, language, metaphors, symbols, folktales, and heroes and heroines. these products or
dimensions are levers that strategists can use to influence and direct strategy formulation,
implementation, and evaluation activities. An organization’s culture compares to an individual’s
personality in the sense that no two organizations have the same culture and no two individuals
have the same personality. Both culture and personality are enduring and can be warm,
aggressive, friendly, open, innovative, conservative, liberal, harsh, or likable. At Google and
Facebook, for example, the cultures are informal. Google employees are encouraged to wander
the halls on employee-sponsored scooters and brainstorm on public whiteboards provided
everywhere. Google's culture is very informal while P&G has a very formal and rigid
organizational culture. Organizational culture determines the business decisions to be taken
must be assessed in the internal assessment process. If the strategy taken can utilize the
strengths of the organization, such as high work ethics, then the implementation of the strategy
can be done easily.

4-3. Identify the basic functions (activities) that make up management and their relevance in
formulating strategies.
The functions of management consist of five basic activities: planning, organizing, motivating,
staffing, and controlling.
Function Description Stage of Strategic-
Management Process
When most important
Planning Planning consists of all those managerial Strategy Formulation

activities related to preparing for the future, such as


forecasting, establishing objectives, devising
strategies, and developing policies
Organizing Organizing includes all those managerial activities Strategy
that result in a structure of task and authority Implementation
relationships, such as organizational design, job
specialization, job descriptions, span of control,
coordination, job design, and job analysis.
Motivating Motivating involves efforts directed toward shaping Strategy
human behavior. Specific topics include leadership, Implementation
communication, work groups, behavior modification,
delegation of authority, job enrichment, job
satisfaction, needs fulfillment, organizational
change,

employee morale, and managerial morale.


Staffing Staffing refers to human resource (HR) activities, Strategy
such as wage and salary administration, employee Implementation
benefits, interviewing, hiring, firing, training,
management development, employee safety, equal
employment opportunity, and union relations.
Controlling Controlling refers to all those managerial activities Strategy Evaluation
directed toward ensuring that actual results are
consistent with planned results. Key areas of
concern include quality control, financial control,
sales control, inventory

control, expense control, analysis of variances,


rewards, and sanctions.
Their relevance in formulating strategies :
Check the internal list of management functions:
1. Does the company use the concept of strategy management?
2. Can the company's objectives be agreed and communicated well?
3. Do managers at each level of the hierarchy approve work effectively?
4. Does the manager delegate authorization well?
5. Is the organizational structure adequate?
6. Are the job descriptions and job specifications clear?
7. Are employee morale high?
8. Are employee turnover / participation and absenteeism low?
9. Have organizational and prize control arrangements been effective?

4-4. Identify the basic functions of marketing and their relevance in formulating strategies.
Marketing can determine the entire process carried out in creating and meeting customer
needs for goods and services.
The basic functions of marketing are as follows:
1. Customer analysis: customer surveys, customer information, marketing strategies,
customer profiles, market segmentation strategies.
2. Selling products / services: advertising, sales promotions, publications, personal sales,
sales force management, customer relations, distributor relationships.
3. Product and service planning: market test, brand position, warranty, packaging, product
choices, style / quality, quality, old product replacement, customer service
procurement.
4. Prices: determine prices based on consumers, governments, suppliers, distributors,
competitive prices.
5. Distribution: factories and warehouses, channel distribution, retail locations, sales
territories at the level of procurement, transportation, retailing, wholesale.
6. Marketing research: collecting data, collecting data, analyzing data.
7. Cost / benefit analysis: Expenditures, profits and profits.
Check internal list :
1. Is the market effectively segmented?
2. Is the company's position good enough than comparison?
3. Has the company's market lift increased?
4. Can the channel distribution be trusted and cost effective?
5. Is effective marketing?
6. Does the company approve the market?
7. Are the quality of products and services already good?
8. Are the company's products and services properly resolved?
9. Does the company have effective promotions, advertisements and publication strategies?
10. Is marketing, planning and promotion effective?
11. Does the marketing manager have the appropriate training and experience?
12. Are companies participating in the internet good enough to participate?

4-5. Discuss the nature and role of finance/accounting in formulating strategies.


Financial conditions are considered as the best measure in a company's competitive valuation
and attractiveness of all investors. Determining the strengths and weaknesses of the company
is very important to formulate an effective strategy. According to James Van Home, financial
accounting consists of three decisions, namely:
1. Investment decisions, also called capital budgeting, are the allocation and reallocation of
capital and resources for projects, products, assets, and divisions of an organization.
2. Financing decisions (financing decisions), i.e. determine the best capital structure for a
company and discuss various methods that a company can use to increase capital,
increase assets, sell assets, or a combination of the three)
3. Dividend decision (dividend decision), which determines the amount of funds
determined at the company compared to the amount issued to shareholders. This
decision deals with issues such as the percentage of profit returned to the number of
shares, the balance of dividend payments at all times, and share buyback or acquisition.
One way to measure a company's financial condition is to use financial ratios. Financial ratios
are calculated based on a company's income statement and balance sheet. Financial ratios can
be classified into five types, as follows:
a. Liquidity Ratios, measures the company's ability to repay short-term bonds that have
matured.
• Current Ratio
• Quick (or acid-test) ratio
b. Ratios leverage, measures how much a company is financed with debt.
• Debt-to-total-assets ratio
• Debt-to-equity ratio
• Long-term debt-to-equity ratio
• Times-interest-earned (or coverage) ratio
c. Activity Ratios, measures how effective a company is in using its resources.
• Inventory turnover
• Fixed assets turnover
• Total assets turnover
• Accounts receivable turnover
• Average collection period
d. Ratios' profitability measures the overall attractiveness of management as indicated by the
gains generated on sales and investments.
• Gross profit margin
• Operating profit margin
• Net profit margin
• Return on total assets (ROA)
• Return on stockholders' equity (ROE)
• Earnings per share (EPS)
• Price-earnings ratio
e. Growth Ratios, measures the company's ability to maintain its economic position in economic
and industrial growth.
• Sales
• Net income
• Earnings per share
• Dividends per share
Internal assessment checklist of financial / accounting functions :
1. Where is a financially strong and weak company as indicated by financial ratio analysis?
2. Can the company increase the short-term capital needed?
3. Can the company increase the long-term capital needed through debt and / or equity?
4. Does the company have sufficient working capital?
5. Are capital budgeting procedures effective?
6. Does the dividend payment policy make sense?
7. Does the company have a good relationship with investors and shareholders?
8. Are the company's financial managers experienced and trained?
9. Is the company's debt condition good?

4-6. Discuss the nature and role of production/operations in formulating strategies.


The production / operating function of a business consists of all activities that convert all inputs
into goods and services. Production / operations management is related to different inputs,
transformations, and outputs in industries and markets. According to Roger Schroeder,
production / operations management consists of five decision functions or areas, namely:
Process, for example: technology selection, facility layout, process flow analysis, facility
location, line balancing, process control, and traportation analysis. The distance between the
raw material to the production site and the customer is the main consideration.
1. Capacity, for example: forecasting, facility planning, overall planning, scheduling,
capacity planning, and queuing analysis. Utilization of facilities is a major consideration.
2. Inventories, for example: raw level materials, finished materials, and finished goods,
specifically consider what is needed, anytime, the amount purchased, and the materials
needed.
3. Workforce, for example: approved by trained, untrained, clerical, and managerial
employees with regard to job design, job measurement, fertility work, work standards,
and motivational techniques.
4. Quality, this decision is reached with the approval of high quality goods and services
needed by paying attention to quality control, sampling, testing, quality assurance, and
cost control.
Internal assessment checklist of production functions :
1. Are raw materials, parts, subassembly reliable and reasonable?
2. Are the facilities, equipment, machinery and offices in good condition?
3. Are regulatory policies and procedures approved effective?
4. Have the quality control policies and procedures been effective?
5. Are the facilities, resources and markets strategically located?
6. Does the company have technological competence?

4-7. Discuss the nature and role of research and development (R&D) in formulating strategies.
R&D activities are directed at developing new products before competitors do, improving
product quality and improving production processes so as to reduce costs and increase
efficiency.
The research and development functions are as follows:
1. Development of new products before being overtaken by competitors
2. Improve product quality
3. Improve the production process to reduce costs
4. These functions can be carried out internally or externally
Internal and External Research and Development (R&D)
The distribution of costs in R&D activities varies across companies and industries, but the total
R&D costs generally do not exceed initial production and marketing costs. The approaches
commonly used to determine the allocation of R&D budget are as follows:
1. Funding as many project proposals as possible
2. Using the percentage of sales method
3. Budgeting a number of R&D costs incurred by competitors
4. Decide how much new successful products are needed and work backwards to estimate the
R&D investment needed

The basic forms of research and development in an organization are as follows:


1. Internal R&D, where a company runs its own R&D department
2. Contract R&D or external R&D, where a company employs independent researchers or
independent agencies to develop specific products.

Internal assessment checklist of R&D functions :


1. Does the company have R&D facilities? Are the facilities adequate?
2. If R&D outside the company is used, are they cost-effective?
3. Are the organization's R&D personnel qualified?
4. Are R&D resources allocated effectively?
5. Are management and computer information systems adequate?
6. Has the communication between R&D and other organizational units been effective?
7. Is the product currently technologically competitive?

4-8. Discuss the nature and role of management information systems (MIS) in formulating
strategies.
This system collects all data related to internal strengths and key external forces which are then
integrated to support managerial decisions. The purpose of management information systems
is to improve the performance of a company by improving the quality of managerial decisions.
An effective information system must be able to collect, encode, store, unify, and present
information that can answer important operational and strategic questions.

Internal assessment checklist of management information system functions :


1. Do all managers in the company use information systems in making decisions?
2. Is there a chief information officer or information systems director position in the company?
3. Is the data in the information system updated regularly?
4. Do all managers from all functional areas in the company contribute to the information
system?
5. Is there an effective password to enter the company's information system?
6. Are the strategists in the company familiar with the company's competitor information
systems?
7. Is the user-friendly information system?
8. Do all information system users understand the competitive advantage provided by
information for the company?
9. Has a computer training workshop been provided for information system users?
10. Has the company's information system been continuously improved in content and user-
friendliness?

4-9. Explain value chain analysis and its relevance in formulating strategies.
According to Porter, a business can be displayed with a value chain, where total revenue is
calculated from the total costs incurred to develop and market products or services that
produce value. Value Chain Analysis (VCA) is a process in which a company determines costs
associated with organizational activities ranging from buying raw materials, producing goods, to
marketing it. VCAs need help where there are low profits and costs along the value chain from
raw materials to customer service activities.
Companies can compare or benchmark their value chains with competition in the industry.
Excellence in certain areas of value chain analysis can help companies

4-10. Develop and use an Internal Factor Evaluation (IFE) Matrix.


Internal Factor Evaluation (IFE Matrix), used to study the company's internal factors
related to strengths and weaknesses that are considered important. Data and information on
the company's internal aspects can be extracted from several functional companies, for
example from aspects of management, finance, human resources, marketing, information
systems, production and operations.
The steps for developing an IFE matrix are as follows:
1. Make a list of internal key factors
2. Set weights from 0.0-1.0
3. Set grades 1 to 4 for each factor
4. Multiply the weights by rating
5. Add up the weighted score
Conclusion
Chapter Summary Management, marketing, finance / accounting, production / operations,
R&D, and MIS represent the core operations of most businesses and the sources of competitive
advantages. A strategic management audit of a firm's internal operations is vital to
organizational health. Many companies still prefer to be solely solely on their bottom-line
performance. However, it is essential that strategists identify and evaluate internal strengths
and weaknesses to effectively formulate and choose among alternative strategies. the Internal
Factor Evaluation Matrix, coupled with the Competitive Profile Matrix, the External Factor
Evaluation Matrix, and clear statements of vision and mission provide the basic information
needed to successfully formulate competitive strategies. the process of performing an internal
audit represents an opportunity for managers and employees throughout the organization to
participate in determining the future of the firm. Involvement in the process can energize and
mobilize managers and employees. Understanding both external and internal factors and
relationships among them (see SWOt analysis in Chapter 6) is the key to effective strategy
formulation. Because both external and internal factors continually change, strategists seek to
identify and take advantage of positive changes and buffers against negative changes in
continuing efforts to gain and sustain a firm's competitive advantage. this is the essence and
challenge of strategic management, and of survival times of the firm hinges on this work.
David, Fred R. 2011. Strategic Management-Concept and Case. Pearson International
David Fred R., Manajemen Strategis Konsep edisi12, Penerbit Salemba Empat, 2009.

Chapter 5
LEARNING OBJECTIVES
5-1. Identify and discuss eight characteristics of objectives and ten benefits of having clear
objectives.
Eight Desired Characteristics of Objectives :
1. Quantitative
2. Measurable
3. Realistic
4. Understandable
5. Challenging
6. Hierarchical
7. Obtainable
8. Congruent across departments
Ten Benefits of Having Clear Objectives :
1. Provide direction by revealing expectations
2. Allow synergy
3. Assist in evaluation by serving as standards
4. Establish priorities
5. Reduce uncertainty
6. Minimize conflicts
7. Stimulate exertion
8. Aid in allocation of resources
9. Aid in design of jobs
10. Provide basis for consistent decision making

5-2. Define and give an example of eleven types of strategies.


Strategy Definition example
Forward Integration Gaining ownership or increased Amazon began rapid delivery
control over distributors or retailers services in some U.S. cities.
Backward Integration Seeking ownership or increased Starbucks purchased a coffee
control of a firm’s suppliers farm.
Horizontal Integration Seeking ownership or increased BB&T acquired Susquehanna
control over competitors Bancshares.
Market Penetration Seeking increased market share for Under Armour signed tennis
present products or services in champion Andy Murray to a
present markets through greater 4-year, $23 million marketing
marketing efforts deal.
Market Development  Introducing present products or Gap opened its first five
services into new geographic area stores in China.
Product Development Seeking increased sales by improving Amazon just began offering
present products or services or its own line of baby diapers
developing new ones and wipes.
Related Adding new but related products or Facebook acquired the text-
Diversification services messaging firm WhatsApp for
$19 billion.
Unrelated Adding new, unrelated products or Kroger and Whole Foods
Diversification services Market are cooking meals,
becoming restaurants.
Retrenchment Regrouping through cost and asset Staples closed 250 stores and
reduction to reverse declining sales reduced by 50% the size of
and profit other stores.
Divestiture Selling a division or part of an Sears Holdings divested its
organization Land’s End division to Sears’
shareholders.
Liquidation Selling all of a company’s assets, in The Trump Taj Mahal in
parts, for their tangible worth Atlantic City, New Jersey,
faces liquidation.

5-3. Identify and discuss the three types of “Integration Strategies.”


Forward integration and backward integration are sometimes collectively referred to as vertical
integration. Vertical integration strategies allow a firm to gain control over distributors and
suppli- ers, whereas horizontal integration refers to gaining ownership and/or control over
competitors. Vertical and horizontal actions by firms are broadly referred to as integration
strategies.
● Large company :
Corporate Level—chief executive officer
Division Level—division president or executive vice president
Functional Level—finance, marketing, R&D, manufacturing, information systems, and human
resource managers
Operational Level—plant managers, sales managers, production and department managers
● Small company :
Company Level—owner or president
Functional Level— finance, marketing, R&D, manufacturing, information systems, and human
resource managers
Operational Level—plant managers, sales managers, production and department managers
A. Forward integration
involves gaining ownership or increased control over distributors or retail- ers. Increasing
numbers of manufacturers (suppliers) are pursuing a forward integration strategy by
establishing websites to sell their products directly to consumers.
The following six guidelines indicate when forward integration may be an especially effective
strategy:
1. An organization’s present distributors are especially expensive, unreliable, or incapable of
meeting the firm’s distribution needs.
2. The availability of quality distributors is so limited as to offer a competitive advantage to
those firms that promote forward integration.
3. An organization competes in an industry that is growing and is expected to continue to grow
markedly; this is a factor because forward integration reduces an organization’s ability to
diversify if its basic industry falters.
4. An organization has both the capital and human resources needed to manage the new busi-
ness of distributing its own products.
5. The advantages of stable production are particularly high; this is a consideration because an
organization can increase the predictability of the demand for its output through forward
integration.
6. Present distributors or retailers have high profit margins; this situation suggests that a
company could profitably distribute its own products and price them more competitively by
integrating forward.
B. Backward integration
is a strategy of seeking ownership or increased control of a firm’s suppliers. This strategy can be
especially appropriate when a firm’s current suppliers are unreliable, too costly, or cannot meet
the firm’s needs.
Seven guidelines when backward integration may be an especially effective strategy are:5
1. An organization’s present suppliers are especially expensive, unreliable, or incapable of
meeting the firm’s needs for parts, components, assemblies, or raw materials.
2. The number of suppliers is small and the number of competitors is large.
3. An organization competes in an industry that is growing rapidly; this is a factor because
integrative-type strategies (forward, backward, and horizontal) reduce an organization’s
ability to diversify in a declining industry.
4. An organization has both capital and human resources to manage the new business of sup-
plying its own raw materials.
5. The advantages of stable prices are particularly important; this is a factor because an orga-
nization can stabilize the cost of its raw materials and the associated price of its product(s)
through backward integration.
6. Present suppliers have high profit margins, which suggest that the business of supplying
products or services in a given industry is a worthwhile venture.
7. An organization needs to quickly acquire a needed resource.
C. Horizontal Intergration
The following five guidelines indicate when horizontal integration may be an especially effective
strategy:
1. An organization can gain monopolistic characteristics in a particular area or region without
being challenged by the federal government for “tending substantially” to reduce competition.
2. An organization competes in a growing industry.
3. Increased economies of scale provide major competitive advantages.
4. An organization has both the capital and human talent needed to successfully manage an
acquiring firm is more likely to understand the business of the target.
expanded organization.
5. Competitors are faltering as a result of a lack of managerial expertise or a need for particular
resources that an organization possesses; note that horizontal integration would not be
appropriate if competitors are doing poorly because in that case overall industry sales are
declining.

5-4. Give specific guidelines when market penetration, market development, and product
development are especially effective strategies.
A. Market penetration
Market penetration strategy seeks to increase market share for present products or services in
present markets through greater marketing efforts. This strategy is widely used alone and in
combination with other strategies. Market penetration includes increasing the number of
salespersons, increasing advertising expenditures, offering extensive sales promotion items, or
increasing publicity efforts. For example, Anheuser annually purchases several $4.5+ million,
30-second advertising slots during the Super Bowl.
The following five guidelines indicate when market penetration may be an especially effec- tive
strategy:
1. Current markets are not saturated with a particular product or service.
2. The usage rate of present customers could be increased significantly.
3. The market shares of major competitors have been declining while total industry sales have
been increasing.
4. The correlation between dollar sales and dollar marketing expenditures historically has
been high.
5. Increased economies of scale provide major competitive advantages.
B. Market Development
Market development involves introducing present products or services into new geographic
areas. For example, Whirlpool recently acquired Indesit, an Italian company that sells appli-
ances, in order to double Whirlpool’s size in Europe, where the company has struggled to com-
pete against Electrolux AB of Sweden, LG Electronics Inc. of South Korea, and Haier Group of
China. Indesit had 13 percent of the major appliance market share in eastern Europe and
Whirlpool had 5 percent, so now 18 percent of the major appliances sold in eastern Europe are
Whirlpool. In western Europe, the Indesit acquisition gave Whirlpool a 17 percent market share
behind the leader, BSH Bosch & Siemens Hausgerate GmbH’s 20 percent.
The largest online video-streaming company, Netflix, recently launched it services into France,
Germany, Belgium, and Switzerland, as well as eastern and southern Europe, and expects to be
a global service provider by 2018. Netflix’s major rival in Europe is Vivendi SA’s pay-TV unit
Canal Plus that offers Netflix-like services through its Canal Play services.
These six guidelines indicate when market development may be an especially effective strategy:
1. New channels of distribution are available that are reliable, inexpensive, and of good quality.
2. An organization is successful at what it does.
3. New untapped or unsaturated markets exist.
4. An organization has the needed capital and human resources to manage expanded
operations.
5. An organization has excess production capacity.
6. An organization’s basic industry is rapidly becoming global in scope.
C. Product Development
Product development is a strategy that seeks increased sales by improving or modifying present
products or services. Product development usually entails large research and develop- ment
expenditures. Walt Disney Company recently developed a Disney Baby line of products and
services that it expects to become a powerful baby brand for customers ages 0 to 2. Bob
Chapek, president of Disney Consumer Products, stated, “This gives Disney the opportunity to
reach out to moms when magical moments begin; there is no more special occasion than the
birth of a baby.”
These following five guidelines indicate when product development may be an especially
effective strategy to pursue :
1. An organization has successful products that are in the maturity stage of the product life
cycle; the idea here is to attract satisfied customers to try new (improved) products as a result
of their positive experience with the organization’s present products or services.
2. An organization competes in an industry that is characterized by rapid technological
developments.
3. Major competitors offer better-quality products at comparable prices.
4. An organization competes in a high-growth industry.
5. An organization has especially strong research and development capabilities
5-5. Explain when diversification is an effective business strategy.
Diversification Strategies
The two general types of diversification strategies are related diversification and unrelated
diversification. Businesses are said to be related when their value chains possess competitively
valuable cross-business strategic fits; businesses are said to be unrelated when their value
chains
Most com-
• Transferring competitively valuable expertise, technological know-how, or other capabili- ties
from one business to another
• Combining the related activities of separate businesses into a single operation to achieve
lower costs
• Exploiting common use of a well-known brand name
• Cross-business collaboration to create competitively valuable resource strengths and
capabilities12
A. Related Diversification
Alcoa recently diversified further into the jet-engine parts industry by acquiring Firth Rixson Ltd.
for nearly $3 billion. The move away from total reliance on aluminum puts Alcoa in position to
become a major player in the aerospace jet-engine market. Jet engines utilize a lot of alumi-
num but still this strategy is best classified as related diversification rather than forward integra-
tion due to the new high-tech competencies required.
Products.
1. New, but related, products could be offered at highly competitive prices.
2. New, but related, products have seasonal sales levels that counterbalance an
organization’s
3. existing peaks and valleys.
4. An organization’s products are currently in the declining stage of the product’s life cycle.
5. An organization has a strong management team.
B. Unrelated Diversification
Privately held Mars Inc., best known for its M&M chocolates and its Mars and Snickers candy
bars, recently became the world’s largest pet-food company, purchasing 80 percent of Procter
& Gamble’s pet-food brands for $2.9 billion, to go with its own Whiskas, Pedigree, and Royal
Canin pet brands. Mars has over 25 percent market share in the global pet-food industry,
slightly ahead of Nestle S.A., which owns Purina and Friskies.
The guidelines for when related diversification may be an effective strategy are as follows.
1. An organization competes in a no-growth or a slow-growth industry.
2. Adding new, but related, products would significantly enhance the sales of current
Given below are 10 guidelines when unrelated diversification may be an especially effective:
1. Revenues derived from an organization’s current products or services would increase
significantly by adding the new, unrelated products.
2. An organization competes in a highly competitive or a no-growth industry, as indicated by
low industry profit margins and returns.
3. An organization’s present channels of distribution can be used to market the new products to
current customers.
4. New products have countercyclical sales patterns compared to an organization’s present
products.
5. An organization’s basic industry is experiencing declining annual sales and profits.
6. An organization has the capital and managerial talent needed to compete successfully in a
new industry.
7. An organization has the opportunity to purchase an unrelated business that is an attractive
investment opportunity.
8. Financial synergy exists between the acquired and acquiring firm. (Note that a key difference
between related and unrelated diversification is that the former should be based on some
commonality in markets, products, or technology, whereas the latter is based more on profit
considerations.)
9. Existing markets for an organization’s present products are saturated.
10. Antitrust action could be charged against an organization that historically has concentrated
on a single industry.

5.6 List guidelines for when retrenchment, divestiture, and liquidation are especially effective
strategies.
a. Some companies use technology to facilitate divestment expositions of several
divisions. They post information about which division they want to sell on their
official website so they can be seen by other companies who are interested in
buying the division. For example, Alcoa has established an online showroom to
display the business units they sell. Through online communication, Alcoa has
reduced the cost of financing business zones in lodging, transportation companies
and meeting rooms.
b. Liquidation Component
Engle and Lange stated that liquidity has three basic components that are interrelated with
one another in order to maintain the level of liquidity and economic stability of a
company or organization, namely density, depth, and resilience.Density, which is a
hole that occurs in the price agreed with the typical price of an item.Depth, is the
amount or volume of products sold and purchased at a certain price level.Resilience,
is the speed of price changes towards efficient prices after ongoing price
irregularities or instability.

5-7 Identify and discuss Porter’s five generic strategies.

According to Porter, strategies allow organizations to gain competitive


advantage from three different bases: cost leadership, differentiation, and focus.
Porter calls these bases generic strategies. Cost leadership emphasizes producing
standardized products at a low per-unit cost for consumers who are price sensitive.
Two alternative types of cost leadership strategies can be defined. Type 1 is a low-cost
strategy that offers products or services to a wide range of customers at the lowest
price available on the market. Type 2 is a best-value strategy that offers products or
services
to a wide range of customers at the best price-value available on the market. The
best-value strategy aims to offer customers a range of products or services at the
lowest price available compared to a rival’s products with similar attributes. Both Type
1 and Type 2 strategies target a large market. Porter’s Type 3 generic strategy is
differentiation, a strategy aimed at producing products and services considered unique
to the industry and directed at consumers who are relatively price insensitive. Focus
means producing products and services that fulfill the needs of small groups of
consumers. Two alternative types of focus strategies are Type 4 and Type 5. Type
4 is a lowcost focus strategy that offers products or services to a small range (niche
group) of customers at the lowest price available on the market ( David Fredman R.
strategic managemen. 2016 – 144)
5.8 Compare (a) cooperation among competitors, (b) joint venture and partnering, and(c)
merger/acquisition as key means for achieving strategies
a. Cooperation among competitor
Strategies that stress cooperation among competitors are being used more. For
collaboration between competitors to succeed, both firms must contribute
something distinctive, such as technology, distribution, basic research, or
manufacturing capacity. But a major risk is that unintended transfers of important
skills or technology may occur at organizational levels below where the deal was
signed.23 Information not covered in the formal agreement often gets traded in the
day-to-day interactions and dealings of engineers, marketers, and product
developers. Firms often give away too much information to rival firms when
operating under cooperative agreements! Tighter formal agreements are needed.
b. joint venture and partnering
Joint venture is a popular strategy that occurs when two or more companies form a
temporary partnership or consortium for the purpose of capitalizing on some
opportunity. Often, the two or more sponsoring firms form a separate organization
and have shared equity ownership in the new entity.
c. Merger and acquisition are two commonly used ways to pursue strategies. A merger
occurs when two
organizations of about equal size unite to form one enterprise. An acquisition occurs when a
large
organization purchases (acquires) a smaller firm or vice versa. If a merger or acquisition is
not desired
by both parties, it is called a hostile takeover, as opposed to a friendly merger. Most
mergers are
friendly, but the number of hostile takeovers is on the rise. Not all mergers are effective and
successful.
5-9 Discuss tactics to facilitate strategies, such as (a) being a first mover, (b) outsourcing, and (c)
reshoring.
a. First mover advantages refer to the benefits a firm may achieve by entering a new
market or
developing a new product or service prior to rival firms. As indicated in Table 5-7, some
advantages
of being a first mover include securing access to rare resources, gaining new knowledge of
key factors and issues, and carving out market share and a position that is easy to
defend and costly for rival firms to overtake. First mover advantages are analogous
to taking the high ground first, which puts one in an excellent strategic position to
launch aggressive campaigns and to defend territory. Being the first mover can be an
excellent strategy when such actions (1) build a firm’s image and reputation with
buyers; (2) produce cost advantages over rivals in terms of new technologies, new
components, new distribution channels, and so on; (3) create strongly loyal
customers, and (4) make imitation or duplication by a rival difficult or unlikely.

5-10 Explain how strategic planning differs in for-profit, not-for-profit, and small firms.

a. Piggybacking trategic Invented by R. P. Nielsen, the term key piggybacking refers to


the development of a new activity for nonprofits that will generate the funds
needed to cover the difference between revenue and expenditure. Specifically, the
new activity is in some ways related to the mission of the nonprofit organization, but
the aim is to help subsidize key service programs. In the use of portfolio analysis
done in reverse, top management invests in a new business, that is, a safe money
cow to fund its shining, question mark, and hound business that is in dire need of
cash cash.
b. that all work is carried out effectively and efficiently, with the use of an efficient and
appropriate budget, so that profits are obtained in the form of no waste.
c. There is no definitive model for small business growth strategies. Each business
formulates its own model that has the potential to work for a particular business. No
matter which model you choose, the important components of the strategic plan
remain the same. These components include

Conclusion

This Strategy in Action Chapter implements strategic management with the latest
examples. Long-Term Objectives Long-term goals describe the desired results after performing
various strategies, usually with a period of 25 years. The Nature of Long-Term Objectives
Objectives must be quantitative, measurable, understandable, challenging, hierarchical, but can
be achieved and congruent between units in the objective organization must also be associated
with the timeline. Objective example: sales growth, social responsibility. Objectives that are
clearly established have many benefits such as: direction, synergy, prioritization, reducing
uncertainty and conflict, as well as better allocation of resources and job design. It is the
objective that becomes the standard for evaluation, including managerial performance. Long-
term objectives are needed for every level in the organization: corporate, division and
functional. Arthur D. Little argues that incentives should be based also on individual
contributions in long-term objectives and strategies, in addition to annual objectives. Because,
without long-term objectives an organization will run without direction to an unknown end.
Success is very rare because of chance, but is the result of hard work directed at certain
objectives.

Financial versus Strategic Objectives Two types of objectives that generally exist in
organizations are financial and strategic objectives. Financial objectives are usually associated
with higher revenue growth, earnings, dividends and profit margins, etc .; while strategic
objectives include an increase in market share, shorter delivery time than rivals, lower costs
than rivals, wider geographical coverage of rivals, etc. Although financial objectives are
important in a company, sometimes trade-offs occur between the objectives. For example, a
company can achieve better cash flow by increasing prices.

Can later find out :

1. Identify and discuss eight characteristics of objectives and ten benefits of having
clear objectives.
2. Identify and discuss the three types of Integration Strategies
3. Define and give an example of eleven types of strategies.
4. Specific guidelines when market penetration, market development, and product
development are especially effective strategies.
5. Explain when diversification is an effective business strategy.
6. Guidelines for when retrenchment, divestiture, and liquidation are especially
effective strategies.
7. Identify and discuss Porter’s five generic strategies.
8. Compare (a) cooperation among competitors, (b) joint venture and partnering,
and(c) merger/acquisition as key means for achieving strategies
9. Discuss tactics to facilitate strategies, such as (a) being a first mover, (b)
outsourcing, and (c) reshoring.
10. Explain how strategic planning differs in for-profit, not-for-profit, and small firms.

Book Title : Strategic Management: A Competitive Advantage Approach, Concepts 

Fiscal Year : 2016

Author :  Fred R. David, Forest R. David

Chapter 6

strategy analysis and choice

6-1 . Describe the strategy analysis and choice process.

System examination and decision look to decide elective strategies that could best empower
the firm to accomplish its crucial goals. The association's current systems, targets, vision, and
crucial, with the outside and inside review data, give a premise to producing and assessing
practical elective procedures.

Fred R. David dan Forest. R. David. 2017. Strategic Management. Hal. 168

6-2 . Diagram and explain the three-stage strategy-formulation analytical framework.

STAGE 1: THE INPUT STAGE

External Factor Evaluation (EFE) Matrix

Competitive Profile Matrix (CPM)

Matrix Internal Factor Evaluation (IFE) Matrix

STAGE 2: THE MATCHING STAGE


Strengths-WeaknessesOpportunities-Threats (SWOT) Matrix

Strategic Position and Action Evaluation (SPACE) Matrix

Boston Consulting Group (BCG) Matrix

Internal-External (IE) Matrix

Grand Strategy Matrix

STAGE 3: THE DECISION STAGE

Quantitative Strategic Planning Matrix (QSPM)

The Input Stage

Methodology for building up an EFE Grid, an IFE Network, and a CPM were introduced in Parts 3
and 4. Data got from the EFE Network, IFE Grid, and CPM gives fundamental info data to the
coordinating and choice stage lattices depicted right now. The info apparatuses expect
strategists to evaluate subjectivity during beginning periods of the strategyformulation
procedure. Settling on little choices in the info frameworks with respect to the overall
significance of outer and inner elements permits strategists to all the more adequately produce,
organize, assess, and select among elective procedures. Great instinctive judgment is constantly
required in deciding fitting loads and evaluations, yet remember that a rating of 3, for instance,
is scientifically 50 percent more significant than with a rating of 2, so little contrasts matter

The Matching Stage

Procedure is now and then characterized as the match an association makes between its inside
assets and abilities and the chances and dangers made by its outer factors.2 The coordinating
phase of the system detailing structure comprises of five strategies that can be utilized in any
succession: the SWOT Grid, the SPACE Network, the BCG Framework, the IE Lattice, and the
Fabulous Methodology Framework. These instruments depend on data got from the
information stage to coordinate outer chances and dangers with inward qualities and
shortcomings. Coordinating outer and inner key elements is the basic for successfully producing
doable elective procedures. For instance, a firm with abundance working capital (an inner
quality) could exploit the mobile phone industry's 20 percent yearly development rate (an
outside circumstance) by procuring Cellfone, Inc. This model depicts basic coordinated
coordinating. Much of the time, outside and interior connections are increasingly mind
boggling, and the coordinating requires numerous arrangements for every methodology
produced. Fruitful coordinating of key outside and inner variables relies upon those basic key
elements being explicit, significant, and divisional to the degree conceivable.

The Decision Stage

As demonstrated above, members could separately rate techniques on a 1-to-4 scale as to


allure, and afterward whole the evaluations from all members, with the goal that an organized
rundown of as well as could be expected be accomplished. Notwithstanding, the QSPM,
portrayed later right now, an increasingly hearty strategy to decide the general engaging quality
of elective methodologies.

Fred R. David dan Forest. R. David. 2017. Strategic Management. Hal. 168

6-3 Diagram and explain the Strength-Weakness-Opportunities-Threats (SWOT) Matrix

Matriks Strengths-Weaknesses-Opportunities-Threats (SWOT) adalah alat pencocokan


penting yang membantu manajer mengembangkan empat jenis strategi: strategi SO (peluang-
peluang), strategi WO (peluang-peluang), strategi ST (kekuatan-ancaman), dan strategi WT
(kelemahan-ancaman).

Strength Weakness
Opportunities Strategi SO menggunakan kekuatan Strategi WO bertujuan
internal perusahaan untuk memperbaiki kelemahan internal
mengambil keuntungan dari peluang dengan memanfaatkan peluang
eksternal. eksternal.
Threats Strategi ST menggunakan kekuatan Strategi WT adalah taktik
perusahaan untuk menghindari atau defensif yang diarahkan untuk
mengurangi dampak ancaman mengurangi kelemahan internal
eksternal. dan menghindari ancaman
eksternal.

Proses membangun Matriks SWOT dapat diringkas dalam delapan langkah, sebagai berikut: :

1. Sebutkan peluang eksternal utama perusahaan.


2. Sebutkan ancaman eksternal utama perusahaan.
3. Sebutkan kekuatan internal utama perusahaan.
4. Sebutkan kelemahan internal utama perusahaan.
5. Cocokkan kekuatan internal dengan peluang eksternal, dan catat strategi SO yang
dihasilkandi sel yang sesuai.
6. Cocokkan kelemahan internal dengan peluang eksternal, dan catat strategi WO yang
dihasilkan.
7. Sesuaikan kekuatan internal dengan ancaman eksternal, dan catat strategi ST yang
dihasilkan.
8. Cocokkan kelemahan internal dengan ancaman eksternal, dan catat strategi WT yang
dihasilkan.

Fred R. David dan Forest. R. David. 2017. Strategic Management. Hal. 171-174

6-4 Diagram and explain the Strategic Position and Action Evaluation (SPACE) Matrix

Matriks Posisi Strategis dan Evaluasi Tindakan (SPACE), alat pencocokan Tahap 2 penting
lainnya, diilustrasikan pada Gambar dibawah. Kerangka kerja empat kuadrannya menunjukkan
apakah strategi agresif, konservatif, defensif, atau kompetitif paling tepat untuk organisasi
tertentu. Sumbu dari Matriks SPACE mewakili dua dimensi internal (posisi keuangan [FP] dan
posisi kompetitif [CP]) dan dua dimensi eksternal (posisi stabilitas [SP] dan posisi industri [IP]).
Keempat faktor ini mungkin merupakan penentu paling penting dari posisi strategis
keseluruhan organisasi. Sangat membantu di sini untuk menguraikan perbedaan antara sumbu
SP dan IP. Istilah SP mengacu pada volatilitas laba dan pendapatan untuk perusahaan di industri
tertentu. Dengan demikian, volatilitas SP didasarkan pada dampak yang diharapkan dari
perubahan faktor-faktor eksternal inti seperti teknologi, ekonomi, demografi, musiman, dan
sebagainya. Semakin tinggi frekuensi dan besarnya perubahan dalam industri tertentu, semakin
tidak stabilnya SP tersebut. Suatu industri bisa stabil atau tidak stabil pada SP, namun tinggi
atau rendah pada IP.

FP

Conservative Aggresive

CP IP
Defensive Competitive

SP

Proses pengembangan Matriks SPACE dapat diringkas dalam enam langkah, sebagai berikut:

1. Pilih satu set variabel untuk menentukan posisi keuangan (FP), posisi kompetitif (CP),
posisi stabil (SP), dan posisi industri (IP).
2. Tetapkan nilai numerik mulai dari +1 (terburuk) hingga +7 (terbaik) untuk masing-
masing variabel yang membentuk dimensi FP dan IP. Tetapkan nilai numerik mulai dari –
1 (terbaik) hingga –7 (terburuk) untuk masing-masing variabel yang membentuk dimensi
SP dan CP. Pada sumbu FP dan CP, buat perbandingan dengan pesaing. Pada sumbu IP
dan SP, buat perbandingan dengan industri lain. Pada sumbu SP, ketahuilah bahwa –7
menunjukkan kondisi industri yang sangat tidak stabil, sedangkan –1 menunjukkan
sangat stabil.
3. Hitung skor rata-rata untuk FP, CP, IP, dan SP dengan menjumlahkan nilai yang diberikan
pada variabel masing-masing dimensi dan kemudian dengan membaginya dengan
jumlah variabel yang termasuk dalam dimensi masing-masing.
4. Plot skor rata-rata untuk FP, IP, SP, dan CP pada sumbu yang sesuai dalam Matriks
SPACE.
5. Tambahkan dua skor pada sumbu x dan plot titik yang dihasilkan pada X. Tambahkan
dua skor padasumbu y dan plot titik yang dihasilkan pada Y. Plot persimpangan
koordinat baru (x, y).
6. Gambar vektor arah dari asal SPACE Matrix (0,0) hingga yang baru (x, y) koordinat.
Vektor itu, yang terletak di kuadran tertentu, mengungkapkan strategi khusus yang
harus dipertimbangkan organisasi.

Fred R. David dan Forest. R. David. 2017. Strategic Management. Hal.174-178

6-5

Boston Consulting Group (BCG) Matrix

Pengertian dari boston consulting group


Boston Consulting Group (BCG) adalah perusahaan konsultan manajemen global,
didirikan oleh Bruce Henderson padav tahun 1963.Boston Consulting Group (BCG) adalah
perusahaan konsultan manajemen global, didirikan oleh Bruce Henderson padav tahun 1963.
Memiliki 69 kantor di 40 negara, dan CEO sekarang adalah Hans-Paul Biirkner. BCG umumnya
digolongkan sebagai salah satu pengurus “paling bergengsi” konsultan perusahaan dalam
industri itu.

Pengertian dari matriks boston consulting group(BCG)


Pada tahun 1968, BCG menciptakan BCG “Growth-Share Matrix”, sebuah grafik
sederhana untuk membantu perusahaan besar dalam menentukan bagaimana mengalokasikan
kas antara unit-unit bisnis mereka. Korporasi akan mengkategorikan unit usaha sebagai
“Bintang”, “Kas Sapi”, “Pertanyaan Marks”, dan “Anjing” (awalnya “Piaraan”), kemudian
mengalokasikan kas yang sesuai, memindahkan uang dari “sapi perah” menuju “bintang” dan
tanda tanya yang memiliki tingkat pertumbuhan pasar yang lebih tinggi potensial.

Matriks BCG adalah perangkat strategi untuk memberi pedoman pada keputusan alokasi
sumber daya berdasarkan pangsa pasar dan pertumbuhan UBS. Matriks BCG merupakan empat
kelompok bisnis, yaitu :

1. DOG
Pada posisi ini tingkat pertumbuhan suatu produk masih sangat rendah dan market sharenya
juga masih rendah. Pada posisi ini harus segera mengambil tindakan, kalau tidak secepatnya
mengambil tindakan maka suatu perusahaan akan mengalami kebangkrutan.
2. Question
Pada quadrant ini, product yang ditawarkan walau masih mempunyai market share rendah, tapi
demannya udah kelihatan banyak. sehingga market growthnya tinggi.
3. Star
Kalau sudah sampai di posisi star dimana market share sudah dominan, tapi growth masih
banyak, advertising bisa seperlunya saja, penambahan fitur minor bisa dilakukan, kerjasama
dengan club juga bisa digiaatkan lagi dalam promosi.
4. Cash Cow
Pada posisi ini perusahaan sudah mempunyai market share yang tinggi dan growth yang cukup
baik, untuk mempertahankan produk perusahaan dapat menjaga satabilitas dari tingkat
pemasaran produk dan harga.
Kelebihan dari matriks BCG:
Matriks BCG adalah salah satu alat pembuat keputusan yang paling mudah. “Hanya
dengan membaca grafiknya, orang akan dapat dengan mudah melihat di posisi manakah
perusahaan mereka berada”. Matriks ini memusatkan perhatian pada arus kas, karakteristik
investasi, dan kebutuhan berbagai divisi organisasi. Divisi dapat berubah dari waktu ke waktu:
anjing menjadi tanda tanya, tanda tanya menjadi bintang, bintang menjadi sapi perah, dan sapi
perah menjadi anjing. Namun yang jarang terjadi adalah perubahan yang searah jarum jam

Kekurangan dari matriks BCG:


Hanya menggunakan dua dimensi yaitu pangsa pasar relative dan tingkat pertumbuhan
pasar.
1. Kemungkinan sulit mendapatkan data pangsa pasar maupun tingkat pertumbuhan pasar.
Terlalu menyederhanakan banyak bisnis karena memandang semua bisnis sebagai bintang, sapi
perah, 2. anjing atau tanda tanya.
Dalam metode ini, diasumsikan bahwa setiap unit bisnis tidak tergantung pada unit bisnis lain,
padahal dalam beberapa kasus, unit bisnis “anjing” bisa membantu unit bisnis lain untuk
memperoleh keunggulan kompetitif.
3. Matriks ini tidak menggambarkan apakah berbagai divisi atau industri mereka bertumbuh
sepanjang waktu, sehingga matriks ini tidak memiliki karakteristik waktu, sehingga terdapat
variabel lain yang penting seperti ukuran pasar dan keunggulan kompetitif.
4. Matriks sangat bergantung pada luasnya definisi pasar. Suatu unit bisnis dapat mendominasi
pada pasar yang kecil, tetapi memiliki pangsa pasar sangat rendah dalam industri secara
keseluruhan. Dalam kasus seperti itu, definisi dari pasar dapat membuat perbedaan antara
“anjing” dan “sapi perah”.

6-6
intrernal dan external matrix

pengertian dari matriks (IE)


Matriks internal eksternal ini dikembangkan dari model General Electric (GE-Model).
Parameter yang digunakan meliputi parameter kekuatan internal perusahaan dan pengaruh
eksternal yang dihadapi. Tujuan penggunaan model ini adalah untuk memperoleh strategi
bisnis di tingkat korporat yang lebih detail. Diagram tersebut dapat mengidentifikasikan 9 sel
strategi perusahaan, tetapi pada prinsipnya kesembilan sel itu dapat dikelompokkan menjadi
tiga strategi utama, yaitu:
1. Growth strategy: merupakan pertumbuhan perusahaan itu sendiri (sel 1, 2, dan 5) atau
upaya diversifikasi (sel 7 dan 8).
2. Stability strategy: yaitu strategi yang diterapkan tanpa mengubah arah strategi yang telah
diterapkan.
3. Retrencment strategy: yaitu usaha memperkecil atau mengurangi usaha yang dilakukan
perusahaan.
1. Strategi Pertumbuhan (Growth Strategy) Didesain untuk mencapai pertumbuhan, baik dalam
penjualan, aset, profit, maupun kombinasi dari ketiganya. Hal ini dapat dicapai dengan cara
menurunkan harga, mengembangkan produk baru, menambah kualitas produk atau jasa, atau
meningkatkan akses ke pasar yang lebih luas. Usaha yang dapat dilakukan adalah dengan cara
meminimalkan biaya (minimize cost) sehingga dapat meningkatkan profit. Cara ini merupakan
strategi terpenting apabila kondisi perusahaan tersebut berada dalam pertumbuhan yang cepat
dan terdapat kecenderungan pesaing untuk melakukan perang harga dalam usaha untuk
meningkatkan pangsa pasar. Dengan demikian, perusahaan yang belum mencapai critical mass
(mendapat profit dari large-scale production) akan mengalami kekalahan, kecuali jika
perusahaan ini dapat memfokuskan diri pada pasar tertentu yang menguntungkan. Itulah
sebabnya Motorola dapat terus me-langsungkan bisnisnya dengan mengembangkan telepon
selular, dan posisinya sekarang adalah sebagai market leader.
2. Strategi Pertumbuhan melalui Konsentrasi dan Diversifikasi Ada dua strategi dasar dari
pertumbuhan pada tingkat korporat, yaitu konsentrasi pada satu industri atau diversifikasi ke
industri lain. Berdasarkan hasil penelitian, perusahaan yang memiliki kinerja yang baik
cenderung mengadakan konsentrasi, sedangkan perusahaan yang relatif kurang memiliki
kinerja yang baik cenderung mengadakan diversifikasi agar dapat meningkatkan kinerjanya. Jika
perusahaan tersebut memilih strategi konsentrasi, dia dapat tumbuh melalui integrasi
(integration) horizontal maupun vertikal, baik secara internal melalui sumber dayanya sendiri
atau secara eksternal dengan menggunakan sumber daya dari luar. perusahaan tersebut
memilih strategi diversifikasi, dia dapat tumbuh melalui konsentrasi atau diversifikasi
konglomerat, baik secara internal melalui pengembangan produk baru, maupun eksternal
melalui akuisisi. Contoh strategi pertumbuhan adalah sel 1, 2, 5, 7, dan 8.
3. Konsentrasi melalui Integrasi Vertikal (Sel 1) Pertumbuhan melalui konsentrasi dapat dicapai
melalui integrasi vertikal dengan cara backward integration (mengambil alih fungsi supplier)
atau dengan cara forward integration (mengambil alih fungsi distributor). Hal ini merupakan
strategi utama untuk perusahaan yang memiliki posisi kompetitif pasar yang kuat (high market
share) dalam industri yang berdaya tarik tinggi. Agar dapat meningkatkan kekuatan bisnisnya
atau posisi kompetitifnya, perusahaan ini harus melaksanakan upaya meminimalkan biaya dan
operasi yang tidak efisien untuk mengontrol kualitas serta distribusi produk. Integrasi vertikal
dapat dicapai baik melalui sumber daya internal maupun eksternal. Henry Ford, misalnya,
menggunakan sumber daya internal untuk membangun pabriknya di luar Detroit. la
mengintegrasikan proses manufaktur, mulai dari masukan berupa biji besi sampai keluaran
berupa produk mobil. Sebaliknya, Du Pont, sebuah perusahaan kimia raksasa, jalur eksternal
untuk integrasi vertikal ke belakang (backward vorrical integration) dengan cara mengambil alih
Conoco untuk memenuhi kebutuhan minyak yang diperlukan dalam memproduksi produk
sintetis Du Pont. Integrasi vertikal pada umumnya terdapat dalam industri perminyakan, kimia
dasar, mobil, serta produk yang memanfaatkan hasil hutan. Sebagaimana ditunjukkan dalam
tabel di atas, beberapa keuntungan dari integrasi vertikal ini adalah turunnya biaya serta
meningkatnya koordinasi dan kontrol. Hal ini merupakan cara terbaik bagi perusahaan yang
kuat dalam rangka meningkatkan competitive advantage di dalam industri yang atraktif.
4. Konsentrasi melalul integrasi Horizontal (Sel 2 dan 5) Strategi pertumbuhan melalui integrasi
horizontal adalah suatu kegiatan untuk memperluas perusahaan dengan cara membangun di
lokasi yang lain, dan meningkatkan jenis produk serta jasa. Jika, perusahaan tersebut berada
dalam industri yang sangat atraktif (sel 2), tujuannya adalah untuk meningkatkan penjualan dan
profit, dengan cara memanfaatkan keuntungan economics of scale baik dalam produksi
maupun pemasaran. Sementara jika perusahaan ini berada dalam moderate attractive industry,
strategi yang diterapkan adalah konsolidasi (sel 5). Tujuannya relatif lebih defensif, yaitu
menghindari kehilangan penjualan dan kehilangan profit. Perusahaan yang berada di sel ini
dapat memperluas pasar, fasilitas produksi, dan teknologi melalui pengembangan internal
maupun eksternal melalui akuisisi atau joint ventures dengan perusahaan lain dalam industri
yang sama. Contohnya, American Airlines pada tahun 1990 memilih strategi integrasi horizontal
melalui pembentukan Asian Division (Pan American Airlines). Maytag corporation juga memilih
integrasi horizontal dengan cara akuisisi.
5. Diversifikasi Konsentris (sel 7) Strategi pertumbuhan melalui diversifikasi umumnya
dilaksanakan oleh perusahaan yang memiliki kondisi competitive position sangat kuat, tetapi
nilai daya tarik industrinya sangat rendah. Perusahaan tersebut berusaha memanfaatkan
kekuatannya untuk membuat produk baru secara efisien karena perusahaan ini sudah memiliki
kemampuan manufaktur dan pemasaran yang baik. Prinsipnya adalah untuk menciptakan
sinergi (2 + 2 = 5) dengan harapan bahwa dua bisnis secara bersama-sama dapat menciptakan
lebih banyak profit daripada jika melakukannya sendiri-sendiri.
6. Diversifikasi Konglomerat (Sel 8) Strategi pertumbuhan melalui kegiatan bisnis yang tidak saling
berhubungan dapat dilakukan jika perusahaan menghadapi competitive position yang tidak
begitu kuat (average) dan nilai daya tarik industrinya sangat rendah.

Kedua faktor tersebut memaksa perusahaan itu melakukan usahanya ke dalam perusahaan lain.
Tetapi, pada saat perusahaan tersebut mencapai tahap matang, perusahaan yang hanya
memiliki competitive position rata-rata cenderung akan menurun kinerjanya. Untuk itu strategi
diversifikasi konglomerat sangat diperlukan. Tekanan strategi ini lebih pada sinergi finansial
daripada product market sinergy (seperti yang tardapat pada strategi diversifikasi konsentris).

Matriks Space
Selanjutnya setelah menggunakan model analisis Matriks IE, perusahaan itu dapat
menggunakan Matriks Space untuk mempertajam analisisnya.Tujuannya adalah agar
perusahaan itu dapat melihat posisinya dein arah perkembangan selanjutnya. Berdasarkan
Matriks Space, analisis tersebut dapat memperlihatkan dengan jelas garis vektor yang bersifat
positip baik untuk Kekuatan Keuangan (KU) maupun Kekuatan Industri (K1). Hal ini
menunjukkan bahwa perusahaan itu secara finansial telatif cukup kuat sehingga dia dapat
mendayagunakan keuntungan kompetitifnya secara optimal melalui tindakan yang cukup
agresif untuk merebut pasar.

6-7 Diagram and explain the Grand Strategy Matrix.

Grand strategy matrix is the instrument for creating alternative and different strategies for the
organization. All companies and divisions can be positioned in one of the Grand Strategy
Matrix's four strategy quadrants. The Grand Strategy Matrix is based on two dimensions:
competitive position and market growth

a) Quadrant 1 – Strong competitive position & Fast market growth


Companies that are located in this first quadrant of the Grand Strategy Matrix usually have an
excellent strategic position. Apart from active and fast growth in the market, they also
have a strong position relative to the competition. Compared to Ansoff’s growth matrix,
such companies would do very well to proceed to market penetration, market
development, and product development. Market penetration is about using expansion
to position oneself even better on the market. For example, by opening new
subsidiaries with the same assortment. Using market development, these companies
will be able to aim at other markets and/or target audiences, increasing their reach.
b) Quadrant 2 – Weak competitive position & Fast market growth
For companies in this second Grand Strategy Matrix quadrant, it’s a good idea to seriously
evaluate the current approach. Although their growth may be strong and large, their
competitive position is weakening and they are under threat of being pushed out of
the market by other companies. They are not able to compete effectively. Apart from
the market development, market penetration, and product development mentioned
in the previous quadrant, horizontal integration is also highly suitable as a useful
strategy in the second quadrant. Because the market is growing fast, an intensive
horizontal integration strategy helps, in which companies concentrate on attracting
activities that form a nice addition to their current core business.

c) Quadrant 3 – Weak competitive position & Slow market growth

This is the least favourite quadrant of the Grand Strategy Matrix. For companies,
after all, it means that are faced with vicious competition on the one hand and with a
market growth that’s faltering on the other hand. Only drastic measures,
adjustments, and changes will be able to save such companies and prevent further
demise or impending liquidation.

d) Quadrant 4 – Strong competitive position & Slow market growth


A strong competitive position is very enjoyable to companies. The slow market
growth offers options for finding creative solutions and creating a new market for
products and services. Diversification, such as mentioned in Ansoff’s growth matrix, is
a good option. Offering new products and/or services on a new market leads to an
increase in market growth. Nonetheless, this comes at the cost of a considerable
investment. Companies in this Grand Strategy Matrix quadrant usually have the
capacity and the means for this.

6-8 Diagram and explain the Quantitative Strategic Planning Matrix (QSPM).
Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management approach
for evaluating possible strategies. Quantitative Strategic Planning Matrix or
a QSPM provides an analytical method for comparing feasible alternative actions.
1. Internal Factors
To get started on the process of constructing a QSPM, you are first going to develop a
list of strengths and weaknesses from within your organization. What is it that
you have within your organization which puts you in a position of advantage?
What is it that you feel you are missing? Filling out a few points under both the
strengths and weaknesses category will give you a great start to your matrix.
Remember, as this point, you are only dealing with considerations inside of your
organization.
2. External Factors
In much the same way, you are now going to look outside your organization for
opportunities and threats which exist in the market. Possible opportunities
include a new market which is expanding, or the struggles of a competitor. On
the other hand, threats can include strong competition or decreasing market
prices.
3. Strategy Alternatives
With all of your strengths, weaknesses, opportunities, and threats identified, it is now
time to get into the process of outlining strategies. These are the strategies that
you are going to be choosing from, with the help of the completed matrix. All of
the strategies you wish to consider should be listed across the top of your
matrix. You will obviously need to have at least two options in play, but you can
have many more than that if you so choose.
4. Weighting the Factors
For each internal and external factor which you have included in your matrix, you will
need to assign a weight. The weights are going to assign a perceived importance
to each of the factors, so you will need to take time to think through how much
influence each factor is expected to have in practical application. The weights of
your internal factors should add up to 100%, as should the weights from your
external factors. Expect to spend a bit of time on this step until you are happy
with the weighting distribution you have established. When finished, you should
have weights under each of your proposed strategy alternatives. Since different
strategies are going to place different importance on your various factors, it
makes sense to have unique weights for each alternative.
5. Attractiveness Scores
Just as you did with the weights, you are now going to assign attractiveness scores for
each factor, both internal and external. These scores are going to be on a scale
from 1 to 4, where a 1 is equal to not attractive and a 4 is equal to highly
attractive. If the factor in question will have no effect on the choice you are
making, you can rate the attractiveness score as a zero. Go through the entire
matrix you have created until all of your factors have both a weight and an
attractiveness score.
6. Do the Math
To finish up the QSPM process, you are going to do the math required to settle on final
scores for all of your alternatives. This math is quite simple – you are going to
multiply the weight by the attractiveness score, and you are then going to add
those scores up within each column. With your math complete, you can now
compare the totals for each alternative which was included in the matrix. The
highest total score should be seen as the best overall option.

6-9 Discuss the role of organizational culture of strategic analysis and choice
Based on symbolic perspective, Then the form of organizational culture can be seen
through the process exchanges that occur in organizational processes.
Strategy management is basically efforts to create stabilityand regularity by making
planning that is based in the external and internal situation of the organization. If
organization using cultural form clan culture then it is estimated the manager
willtend to pay less attention planning includes strategic management.
External Internal Matrix is a model developed from the General Electric model, the
parameters used are using internal and internal strength parameters related to the
company. The purpose of using this model is to obtain a more detailed business-
level business strategy.
Identification of 9 cell strategy companies, according to Rangkuti (2001, p42) in principle,
the nine cells can be grouped into three main strategies, namely:

1. Growth strategy: is the growth of the company itself (cells 1, 2, and 5) or


diversification efforts (cells 7 and 8)
2. Stability strategy: the strategy implemented without changing the direction of
the strategy that has been applied.
3. Retrencment strategy: i.e. efforts to minimize or reduce the business of the
company.
To obtain a more detailed explanation of the nine strategies found in the nine IE matrix
cells, it can be explained as follows Rangkuti (2001, pp42-46):

Strategi pertumbuhan (Growth strategy)

Designed to achieve growth, whether in sales, assets or profits, or a combination of the


three. This can be achieved by lowering prices, developing new products, increasing the
quality of products or services, or increasing access to a wider market. The business that
can be done is by minimizing costs (minimizing costs) so as to increase profits. This
method is the most important strategy if the condition of the company is in rapid
growth and there is a tendency for competitors to wage price war in an effort to
increase market share. Thus, companies that have not yet reached critical mass (gaining
profits from large-scale production) will experience defeat, unless this company can
focus on certain profitable markets.

Growth strategies through concentration and diversification.

If a company chooses a concentration strategy, it can grow through horizontal and


vertical integration, both internally through its own resources or externally by using
external resources.

If the company chooses a diversification strategy, the company can grow through
concentration or diversification of conglomerates both internally through the
development of new products, and externally through acquisitions.

Concentration through vertical integration.

Growth through concentration can be achieved through vertical integration by backward


integration (taking over the supplier's function) or by forward integration (taking over
the distributor's function). This is the main strategy for companies that have a strong
market competitive position (high market share) in high-attraction industries.
Concentration through horizontal integration.

Growth strategy through horizontal strategy is an activity to expand the company by


building in other locations, and increasing the types of products and services.

Concentric diversification.

Growth strategies through diversification are generally implemented by companies that


have very strong competitive positions but whose industrial attractiveness is very low.
The company tries to use its power to make new products efficiently because the
company already has good manufacturing and marketing capabilities.

6-10 Identify and discuss important political considrations in strategy analysis and choice

Strategy analysis and selection largely involve subjective decision making based on objective
information. Important concepts that can help strategy makers generate alternatives
that make sense to evaluate these alternatives and choose specific actions. Behavioral
aspects of the strategy are described, including political, cultural, ethical and ethical
considerations. responsible.

Figure 2.5 IE Matrix (David, 2011, p221) According to David (2011, p221), the IE matrix
divides divisiorganisasi into 9 cells. The IE matrix is based on 2 dimensions,
namely: the dimension of the number of IFE values that are weighted on the X
axis and the dimension of the number of EFE values weighted on the Y axis. On
the X axis, the sum of IFE values is weighted and 1.0-1.99 and 1.0-1.99 are
considered low, the total A weighted IFE between 2.0-2.99 is considered
medium, and the sum of the weighted values between 3.0-4.0 is considered
high. Likewise the Y axis is based on the total weighted value and EFE. The IE
Matrix is divided into 3 main areas that have different strategic implications. In
cells I, II, and IV can be described as growing and developing. The suitable
strategy is an intensive strategy that consists of market penetration strategies.

6-11 Discuss the role of a a board of directors (governance) in strategic planning


A board of directors is a group of individuals elected by the ownership of a corporation
to have oversight and guidance over management and to look out for
shareholders’ interests. The act of oversight and direction is referred to as
governance. The National Association of Corporate Directors defines governance
as “the characteristic of ensuring that long-term strategic objec- tives and plans
are established and that the proper management structure is in place to achieve
those objectives, while at the same time making sure that the structure functions
to maintain the corporation’s integrity, reputation, and responsibility to its
various constituencies.” Boards are held accountable for the entire performance
of an organization. Boards of directors are increas- ingly sued by shareholders for
mismanaging their interests. New accounting rules in the United States and
Europe now enhance corporate-governance codes and require much more
extensive financial disclosure among publicly held firms. The roles and duties of a
board of directors can be divided into four broad categories, as indicated in
Table 6-7.
Shareholders are increasingly wary of boards of directors. Most directors globally have
ended their image as rubber-stamping friends of CEOs. Boards are more
autonomous than
Table 6-7 Board of Director Duties and Responsibilities 2. ADHERENCE TO LEGAL
PRESCRIPTIONS
1. Keep abreast of new laws.
2. Ensure the entire organization fulfils legal prescriptions.
3. Pass bylaws and related resolutions.
4. Select new directors.
5. Approve capital budgets.
6. Authorize borrowing, new stock issues, bonds, and so on.
3. CONSIDERATION OF STAKEHOLDERS’ INTERESTS
1. Monitor product quality.
2. Facilitate upward progression in employee quality of work life.
3. Review labor policies and practices.
4. Improve the customer climate.
5. Keep community relations at the highest level.
6. Use influence to better governmental, professional association, and educational
contacts.
7. Maintain good public image.
4. ADVANCEMENT OF STOCKHOLDERS’ RIGHTS
1. Preserve stockholders’ equity.
2. Stimulate corporate growth so that the firm will survive and flourish.
3. Guard against equity dilution.
4. Ensure equitable stockholder representation.
5. Inform stockholders through letters, reports, and meetings.
6. Declare proper dividends.
7. Guarantee corporate survival.
ever and continually mindful of and responsive to legal and institutional-investor
scrutiny. Boards are more cognizant of auditing and compliance issues and more
reluctant to approve excessive compensation and perks. Boards stay much more
abreast today of public scan- dals that attract shareholder and media attention.
Increasingly, boards of directors monitor and review executive performance
carefully without favoritism to executives, representing shareholders rather than
the CEO. Boards are more proactive today, whereas in years past they were
often merely reactive. These are all reasons why the chair of the board of direc-
tors should not also serve as the firm’s CEO. In North America, the number of
new incoming CEOs that also serve as Chair of the Board has declined to about
10 percent today from about 50 percent in 2001. Academic Research Capsule 6-2
reveals “how many” board of director members are ideal.
Until recently, individuals serving on boards of directors did most of their work sitting
around polished mahogany tables. However, Hewlett-Packard’s directors, among
many others, now log on to their own special board website twice a week and
conduct business based on extensive confidential briefing information posted
there by the firm’s top management team. Then the board members meet face-
to-face fully informed every two months to discuss the big- gest issues facing the
firm. New board involvement policies are aimed at curtailing lawsuits against
board members.
Today, boards of directors are composed mostly of outsiders who are becoming more
involved in organizations’ strategic management. The trend in the United States
is toward much greater board member accountability with smaller boards, now
averaging 12 members rather than 18 as they did a few years ago. BusinessWeek
recently evaluated the boards of most large U.S. companies and provided the
following “principles of good governance”:
1. Never have more than two of the firm’s executives (current or past) on the
board.
2. Never allow a firm’s executives to serve on the board’s audit, compensation, or
nominating committee.
3. Require all board members to own a large amount of the firm’s equity.
4. Require all board members to attend at least 75 percent of all meetings.
5. Require the board to meet annually to evaluate its own performance, without
the CEO, COO, or top management in attendance.
6. Never allow the CEO to be chairperson of the board.
7. Never allow interlocking directorships (where a director or CEO sits on another
director’s
board).
Jeff Sonnerfeld, associate dean of the Yale School of Management, comments, “Boards
of directors are now rolling up their sleeves and becoming much more closely
involved with man- agement decision making.” Company CEOs and boards are
required to personally certify finan- cial statements; company loans to company
executives and directors are illegal; and there is faster reporting of insider stock
transactions. Just as directors place more emphasis on staying informed about
an organization’s health and operations, they are also taking a more active role
in ensuring that publicly issued documents are accurate representations of a
firm’s status. Failure to accept responsibility for auditing or evaluating a firm’s
strategy is considered a serious breach of a direc- tor’s duties. Legal suits are
becoming more common against directors for fraud, omissions, inac- curate
disclosures, lack of due diligence, and culpable ignorance about a firm’s
operations.

Chapter 7

7-1 . Describe the transition from formulating to implementing strategies?


As illustrated with white shading. Successful strategy formulation does not
guarantee successful strategy implementation. It is always more difficult to do
something (strategy implementation) than to say you are going to do it (strategy
formulation)! although inextricably linked, strategy implementation is fundamentally
different from strategy formulation. The transition from strategy formulation to strategy
implementation requires a shift in responsibility from strategists to divisional and
functional managers. Implementation problems can arise because of this shift in
responsibility, especially if strategy-formulation decisions come as a surprise to middle-
and lower-level managers. managers and employees are motivated more by perceived
self-interests than by organizational interests, unless the two coincide. this is a primary
reason why divisional and functional managers should be involved as much as possible
in both strategy-formulation and strategy implementation activities. (Fred & Forest R.
David, Strategic Management 2015 - 206)
As showed with white concealing. Fruitful procedure plan doesn't ensure
effective technique execution. It is in every case increasingly hard to accomplish
something (system usage) than to state you will do it ( technique detailing)! albeit
inseparably connected, technique usage is in a general sense not the same as procedure
plan. The change from methodology plan to procedure usage requires a move in duty
from strategists to divisional and practical administrators. Usage issues can emerge due
to this move in duty, particularly if procedure detailing choices come as an astonishment
to center and lower-level administrators. supervisors and workers are inspired more by
apparent personal matters than by hierarchical interests, except if the two correspond.
this is an essential motivation behind why divisional and practical directors ought to be
included however much as could be expected in both system plan and methodology
execution exercises.

Kesimpulan: Perumusan strategi yang berhasil tidak menjamin keberhasilan


implementasi strategi. Itu selalu lebih sulit untuk melakukan sesuatu (implementasi
strategi) daripada mengatakan Anda akan melakukannya (perumusan strategi)!
meskipun terkait erat, implementasi strategi pada dasarnya berbeda dari perumusan
strategi. Transisi dari perumusan strategi ke implementasi strategi membutuhkan
pergeseran tanggung jawab dari ahli strategi ke manajer divisi dan fungsional.

7-2 . Discuss five reasons why annual objectives are essential for effective strategy?
Annual objectives are desired milestones an organization needs to achieve to ensure successful
strategy implementation. annual objectives are essential for strategy implementation for five
primary reasons:
1. they represent the basis for allocating resources.
2. they are a primary mechanism for evaluating managers.
3. they enable effective monitoring of progress toward achieving long-term objectives.
4. they establish organizational, divisional, and departmental priorities.
5. they are essential for keeping a strategic plan on track.
annual objectives serve as guidelines for action, directing and channeling efforts
and activitiesof organization members. they provide a source of legitimacy in an
enterprise byjustifying activities to stakeholders. they serve as standards of
performance. they serveas an important source of employee motivation and
identification. they give incentives formanagers and employees to perform. they provide
a basis for organizational design. (Fred & Forest R. David, Strategic Management 2015 -
208)

Yearly destinations are wanted achievements an association needs to accomplish to


guarantee effective system execution. yearly goals are fundamental for system usage for
five essential reasons:
1. they speak to the reason for assigning assets.
2. they are an essential instrument for assessing supervisors.
3.they empower compelling checking of progress toward accomplishing long haul destinations.
4. they set up authoritative, divisional, and departmental needs.
5. they are basic for keeping a key arrangement on target.
yearly goals fill in as rules for activity, coordinating and diverting endeavors and exercises of
association individuals. they give a wellspring of authenticity in an endeavor by
legitimizing exercises to partners. they fill in as norms of execution. they fill in as a
significant wellspring of representative inspiration and recognizable proof. they give
impetuses for supervisors and representatives to perform. they give a premise to
hierarchical plan.
Kesimpulan : Tujuan tahunan berfungsi sebagai pedoman untuk tindakan, mengarahkan
dan menyalurkan upaya dan kegiatan anggota organisasi. mereka memberikan sumber
legitimasi dalam suatu perusahaan dengan membenarkan kegiatan kepada para
pemangku kepentingan. mereka berfungsi sebagai standar kinerja. mereka berfungsi
sebagai sumber penting motivasi dan identifikasi karyawan.

7-3 . Identify and discuss six reasons why policies are essential for effective strategy?
Policies facilitate solving recurring problems and guide the implementation of
strategy. policies are essential instruments for strategy implementation, for at least six reasons:
1. policies set boundaries, constraints, and limits on the kinds of administrative actions
that
can be taken to reward and sanction behavior.
2. policies let both employees and managers know what is expected of them, thereby
increasing the likelihood that strategies will be implemented successfully.
3. policies provide a basis for management control and allow coordination across
organizational units.
4. policies reduce the amount of time managers spend making decisions. policies also
clarify
what work is to be done and by whom.
5. policies promote delegation of decision making to appropriate managerial levels
where
various problems usually arise.
6. policies clarify what can and cannot be done in pursuit of an organization’s
objectives.
Some policies apply to a single department (“employees in this department
musttake at least one training and development course each year”). Whatever their
scope and form, policies serve as a mechanism for implementing strategies and
obtaining objectives. Policies should be stated in writing whenever possible. they
represent the means for carrying out strategic decisions. Sometimes policies can be
controversial. (Fred & Forest R. David, Strategic Management 2015 - 211)

Strategies encourage taking care of repeating issues and guide the usage of system.
strategies are fundamental instruments for procedure usage, for at any rate six reasons:

1.policies set limits, limitations, and cutoff points on the sorts of authoritative activities
that can be taken to reward and assent conduct.

2.policies let the two representatives and directors realize what is anticipated from
them, in this manner improving the probability that methodologies will be executed
effectively.

3.policies give a premise to the board control and permit coordination across
authoritative units.

4.policies lessen the measure of time chiefs spend deciding. approaches additionally
explain what work is to be done and by whom.

5.policies advance designation of dynamic to fitting administrative levels wheredifferent


issues generally emerge.

6. policies explain what should and can't be possible in quest for an association's
targets.

A few arrangements apply to a solitary division ("workers right now take in any event
one preparing and improvement course every year"). Whatever their extension and
structure, approaches fill in as a system for actualizing procedures and getting
destinations. Arrangements ought to be expressed recorded as a hard copy at whatever
point conceivable. they speak to the methods for doing vital choices. At times
arrangements can be disputable.

Kesimpulan : Apa pun ruang lingkup dan bentuknya, kebijakan berfungsi sebagai
mekanisme untuk menerapkan strategi dan mendapatkan tujuan. Kebijakan harus
dinyatakan secara tertulis jika memungkinkan. mereka mewakili sarana untuk
melaksanakan keputusan strategis.

7-4 . Explain the role of resource allocation and managing conflict in strategy?
all organizations have at least four types of resources (or assets) that can be used to achieve
desired objectives:
1. financial resources,
2. physical resources,
3. human resources, and
4. technological resources. Resource allocation can be defined as distributing an
organization’s
“assets” across products, regions, and segments according to priorities established by annual
objectives. allocating resources is a vital strategy-implementation activity. Strategic
management itself is sometimes referred to as a “resource allocation process.”
Honest differences of opinion, turf protection, and competition for limited
resources can inevitably lead to conflict. Conflict can be defined as a disagreement
between two or more parties on one or more issues. establishing annual objectives can
lead to conflict because individuals have different expectations, perceptions, schedules,
pressures, obligations, and personalities. Conflict must be managed for strategy
implementation to be successful. managing conflict is a strategic issue in most, if not all,
organizations. trade-offs are necessary because no firm has sufficient resources to
pursue all strategies that would benefit the firm. Conflict is not always bad. an absence
of conflict can signal indifference and apathy. Conflict can serve to energize opposing
groups into action and may help managers identify problems. general george patton
once said, “If everyone is thinking alike, then somebody isn’t thinking.”. (Fred & Forest
R. David, Strategic Management 2015 - 211)

all associations have in any event four sorts of assets (or resources) that can be utilized to
accomplish wanted goals:
1. financial assets,
2. physical assets,
3. human assets, and
4. technological assets. Asset portion can be characterized as conveying an association's
"resources" across items, districts, and portions as per needs settled by yearly goals.
apportioning assets is an indispensable methodology execution action. Vital
administration itself is some of the time alluded to as an "asset distribution process."
Legit contrasts of assessment, turf security, and rivalry for restricted assets can
unavoidably prompt clash. Strife can be characterized as a difference between at least
two gatherings on at least one issues. setting up yearly targets can prompt clash since
people have various desires, recognitions, plans, weights, commitments, and characters.
Struggle must be overseen for system usage to be fruitful. overseeing struggle is a vital
issue in most, if not all, associations. exchange offs are essential in light of the fact that
no firm has adequate assets to seek after all procedures that would profit the firm.
Struggle isn't in every case terrible. a nonattendance of contention can flag lack of
concern and unresponsiveness. Strife can serve to stimulate contradicting bunches
without hesitation and may assist supervisors with distinguishing issues. general george
patton once stated, "On the off chance that everybody is thinking the same, at that
point someone isn't thinking.".

Kesimpulan : Mengalokasikan sumber daya adalah kegiatan implementasi strategi yang


vital. Manajemen strategis itu sendiri kadang-kadang disebut sebagai "proses alokasi
sumber daya."
Perbedaan pendapat yang jujur, perlindungan wilayah, dan persaingan untuk sumber daya yang
terbatas pasti dapat menyebabkan konflik. Konflik dapat didefinisikan sebagai pertikaian
antara dua atau lebih pihak mengenai satu atau lebih masalah. menetapkan tujuan
tahunan dapat menyebabkan konflik karena individu memiliki harapan, persepsi, jadwal,
tekanan, kewajiban, dan kepribadian yang berbeda. Konflik harus dikelola agar
implementasi strategi berhasil. mengelola konflik adalah masalah strategis di sebagian
besar, jika tidak semua, organisasi.
7-5 . Discuss the need to match a firm’s structure with its strategy.?
Changes in strategy often require changes in the way an organization is structured, for two
major reasons. First, structure largely dictates how objectives and policies will be established.
For example, objectives and policies established under a geographic organizational structure
are to emphasize short-term profits or long-term growth
1. to emphasize profit margin or market share
2. to emphasize market development or market penetration
3. to lay off or furlough
4. to seek growth or stability
5. to take high risk or low risk.
The second major reason why changes in strategy often require changes in
structure is thatstructure dictates how resources will be allocated. If an organization’s
structure is based on customer groups, then resources will be allocated in that manner.
alfred Chandler promoted the notion that “changes in strategy lead to changes in
organizational structure.” Structure should be designed to facilitate the strategic pursuit
of a firm and, therefore, follow strategy. Without a strategy or reasons for being
(mission), companies find it difficult to design an effective structure. there is no one
optimal organizational design or structure for a given strategy or type of organization.
For example, consumer goods companies tend to emulate the divisional structure-by-
product form of organization. Small firms tend to be functionally structured
(centralized). medium-sized firms tend to be divisionally structured (decentralized).
large firms tend to use a strategic business unit (SBU) structure or matrix structure.
When a firm changes its strategy, the existing organizational structure may become
ineffective. (Fred & Forest R. David, Strategic Management 2015 - 213)

Changes in technique frequently require changes in the manner in which an association


is organized, for two significant reasons. To begin with, structure to a great extent
directs how destinations and strategies will be built up.
For instance, destinations and approaches built up under a geographic hierarchical
structure are to stress momentary benefits or long haul development

1. to underscore overall revenue or piece of the pie

2. to underscore showcase improvement or market infiltration

3. to lay off or leave

4. to look for development or security

5. to face high challenge or okay.

The subsequent significant motivation behind why changes in methodology frequently


require changes in structure is that structure directs how assets will be assigned. On the
off chance that an association's structure depends on client gatherings, at that point
assets will be dispensed as such. alfred Chandler advanced the idea that "adjustments in
methodology lead to changes in hierarchical structure." Structure ought to be intended
to encourage the vital quest for a firm and, along these lines, follow technique. Without
a procedure or explanations behind being (crucial), think that its hard to plan a
compelling structure. there is nobody ideal authoritative plan or structure for a given
technique or sort of association. For instance, customer merchandise organizations will
in general copy the divisional structure-side-effect type of association. Little firms will in
general be practically organized (brought together). medium-sized firms will in general
be divisionally organized (decentralized). enormous firms will in general utilize a key
specialty unit (SBU) structure or network structure. At the point when a firm changes its
methodology, the current hierarchical structure may get ineffectual.

Kesimpulan : Alasan utama kedua mengapa perubahan dalam strategi sering


membutuhkan perubahan dalam struktur adalah bahwa struktur menentukan
bagaimana sumber daya akan dialokasikan. Jika struktur organisasi didasarkan pada
kelompok pelanggan, maka sumber daya akan dialokasikan dengan cara itu. alfred
Chandler mempromosikan gagasan bahwa "perubahan dalam strategi menyebabkan
perubahan dalam struktur organisasi." Struktur harus dirancang untuk memfasilitasi
pengejaran strategis perusahaan dan, karenanya, mengikuti strategi.

7-6 . Identify, diagram, and discuss seven different types of organizational structure ?
There are seven basic types of organizational structure:
(1) functional,
(2) divisional by geographic area,
(3) divisional by product,
(4) divisional by customer,
(5) divisional by process,
(6) strategic business unit (SBU), and
(7) matrix.
a functional structure groups tasks and activities by business function, such as
production and operations, marketing, finance and accounting, research and
development, and management information systems, the divisional structure can be
organized in one of four ways: (1) by geographic area, (2) by product or service, (3) by
customer, or (4) by process, In multidivisional organizations, an SBU structure can
greatly facilitate strategy-implementation efforts. Conagra has put its many divisions
into two primary SBUs: (1) consumer foods and (2) private brands and commercial
foods, a matrix structure is the most complex of all designs because it depends on both
vertical and horizontal flows of authority and communication (hence the term matrix), a
matrix structure can result in higher overhead because it creates more management
positions. (Fred & Forest R. David, Strategic Management 2015 - 214)

There are seven essential kinds of authoritative structure:

(1) utilitarian,

(2) divisional by geographic zone,


(3) divisional result,

(4) divisional by client,

(5) divisional by process,

(6) vital specialty unit (SBU), and

(7) lattice.

a useful structure bunches errands and exercises by business work, for example, creation and
tasks, advertising, fund and bookkeeping, innovative work, and the board data
frameworks, the divisional structure can be sorted out in one of four different ways: (1)
by geographic region, (2) result or administration, (3) by client, or (4) by process, In
multidivisional associations, a SBU structure can significantly encourage system usage
endeavors. Conagra has placed its numerous divisions into two essential SBUs: (1)
purchaser nourishments and (2) private brands and business nourishments, a grid
structure is the most unpredictable of all plans since it relies upon both vertical and flat
progressions of power and correspondence (thus the term framework), a lattice
structure can bring about higher overhead since it makes greater administration
positions.
Kesimpulan :
Terdapat 7 yang menjadi jenis dasar struktur organisasi yaitu fungsional,pembagian menurut
wilayah geografis, divisi dengan produk, divisi oleh pelanggan, divisi dengan proses, unit
bisnis strategis (SBU), dan matriks. Yang dimana ketujuh dasar struktur organisasi ini
menjadi hal terpenting dalam membuat struktur organisasi pada perusahaan.

7-7 . Identify and discuss fifteen dos and don'ts in constructing organizational charts ?
1. Instead of chairman of the board, make it chairperson of the board.
2. make sure the board of directors reveals diversity in race, ethnicity, gender, and age.
3. make sure the chair of the board is not also the Ceo or president of the company.
4. make sure the Ceo of the firm does not also carry the title president.
5. reserve the title president for the division heads of the firm.
6. make sure the firm has a Coo.
7. make sure only presidents of divisions report to the Coo.
8. make sure functional executives such as CFo, CIo, Cmo, CSo, r&D, Clo, Cto, and Hrm report to
the Ceo, not the Coo.
9. make sure every executive has one boss, so lines in the chart should be drawn accordingly,
assuring unity of command.
10. make sure span of control is reasonable, probably no more than 10 persons reporting to any
other person.
11. make sure diversity in race, ethnicity, gender, and age is well represented among corporate
executives.
12. avoid a functional type structure for all but the smallest firms.
13. Decentralize, using some form of divisional structure, whenever possible.
14. Use an SBU type structure for large, multidivisional firms.
15. make sure executive titles match product names as best possible in division-by-product and
SBU-designated firms.
Don’t use the title president for the top person; use it for the division top
managers if there are divisions within the firm. also, do not use the title president for
functional business executives. they should have the title chief, or vice president, or
manager, or officer, such as “Chief Information officer,” or “Vp of Human resources.”
Furthermore, do not recommend a dual title (such as CEO and president) for just one
executive. Do not let a single individual be both chairman of the board and Ceo of a
company. (Fred & Forest R. David, Strategic Management 2015 - 219)

1. Rather than executive of the board, make it administrator of the board.


2. ensure the governing body uncovers decent variety in race, ethnicity, sexual orientation, and
age.

3. ensure the seat of the board isn't likewise the Ceo or leader of the organization.

4. ensure the Ceo of the firm doesn't likewise convey the title president.

5. save the title president for the division leaders of the firm.

6. ensure the firm has a Coo.

7. ensure just leaders of divisions report to the Coo.

8. ensure utilitarian officials, for example, CFo, CIo, Cmo, CSo, r&D, Clo, Cto, and Hrm report to
the Ceo, not the Coo.

9. ensure each official has one chief, so lines in the graph ought to be drawn in like manner,
guaranteeing solidarity of order.

10. ensure range of control is sensible, presumably close to 10 people answering to some other
individual.

11. ensure assorted variety in race, ethnicity, sexual orientation, and age is all around spoke to
among corporate administrators.

12. dodge a useful sort structure for everything except the littlest firms.

13. Decentralize, utilizing some type of divisional structure, at whatever point conceivable.
14. Utilize a SBU type structure for huge, multidivisional firms.

15. ensure official titles coordinate item names as most ideal in division-side-effect and SBU-
assigned firms.

Try not to utilize the title president for the top individual; use it for the division top directors if there
are divisions inside the firm. likewise, don't utilize the title president for practical business
officials. they ought to have the title boss, or VP, or administrator, or official, for example, "Boss
Information official," or "Vp of Human assets." Furthermore, don't prescribe a double title, (for
example, CEO and president) for only one official. Try not to leave a solitary individual alone
both executive of the load up and Ceo of an organization.
Kesimpulan : ada beberapa dos dasar dan tidak berkaitan dengan merancang atau membangun bagan
organisasi, terutama untuk perusahaan menengah hingga besar. Pertama-tama, pesan untuk
CEO eksekutif puncak perusahaan. Jangan menggunakan gelar presiden untuk orang utama;
menggunakannya untuk manajer puncak divisi jika ada divisi dalam perusahaan. juga, jangan
gunakan gelar presiden untuk eksekutif bisnis fungsional.mereka harus memiliki kepala jabatan,
atau wakil presiden, atau manajer, atau Petugas, seperti "Petugas Informasi Kepala," atau
"Wakil Direktur Sumber Daya Manusia." Selanjutnya, jangan merekomendasikan gelar ganda
(seperti CEO dan presiden) hanya untuk satu eksekutif. Jangan biarkan seorang individu
menjadi ketua dewan direksi dan CEO perusahaan

7-8 . Discuss four strategic production/operations issues vital for successful strategy
implementation
Four production/operations issues :
(1) restructuring/reengineering,
(2) managing resistance to change,
(3) deciding where/how to produce goods, and
(4) managing an eSop—are especially important for successful strategy implementation and are
therefore discussed next. (Fred & Forest R. David, Strategic Management 2015 - 222)
Four creation/tasks issues :

(1) rebuilding/reengineering,

(2) overseeing protection from change,

(3) choosing where/how to deliver products, and

(4) dealing with an eSop—are particularly significant for effective methodology execution and
are in this manner talked about straightaway.

Kesimpulan :

Restrukturisasi melibatkan pengurangan ukuran perusahaan dalam hal jumlah karyawan,


jumlah divisi atau unit, dan jumlah level hierarki di struktur organisasi perusahaan, manfaat
utama yang dicari dari restrukturisasi adalah pengurangan biaya.Tapi kelemahan dari
restrukturisasi dapat dikurangi dengan komitmen, kreativitas, dan inovasi karyawan yang
menyertai ketidakpastian dan trauma yang terkait dengan PHK karyawan yang tertunda dan
aktual, Perlawanan terhadap perubahan mungkin menjadi ancaman tunggal terbesar bagi
keberhasilan implementasi strategi. resistensi secara teratur terjadi dalam organisasi dalam
bentuk sabotase mesin produksi, ketidakhadiran, mengajukan keluhan yang tidak berdasar, dan
keengganan untuk bekerja sama.

7-9 . Discuss seven strategic human resource issues vital for successful strategy
implementation.
Seven human resource issues are discussed further
in this section, as follows:
(1) linking performance and pay to strategy,
(2) balancing work lifewith home life,
(3) developing a diverse work force,
(4) using caution in hiring a rival’s employees,
(5) creating a strategy-supportive culture,
(6) using caution in monitoring employees’ social
media, and

(7) developing a corporate wellness program (Fred & Forest R. David, Strategic Management
2015 - 225)

Seven human asset issues are talked about further

right now, follows:

(1) connecting execution and pay to methodology,

(2) adjusting work lifewith home life,

(3) building up a different work power,

(4) utilizing alert in contracting an opponent's workers,

(5) making a methodology steady culture,

(6) utilizing alert in observing representatives' social

media, and

(7) building up a corporate health program


Kesimpulan :

Menghubungkan Kinerja dan Bayar ke Strategi, sistem kompensasi organisasi perlu diselaraskan
dengan hasil strategis, sistem bonus ganda berdasarkan tujuan tahunan dan jangka panjang
dapat membantu dalam menghubungkan kinerja dan membayar untuk strategi, Penting bahwa
bonus tidak hanya didasarkan pada hasil jangka pendek, karena itu sebuah sistem mengabaikan
strategi dan tujuan perusahaan jangka panjang,