KELOMPOK 1

Arip Saripudin Aris Firdiansyah Diananda F.P. Rendy Koestiawan Sri Handayani

UNDERSTANDING STRATEGIES

Management control systems are tools to implement strategies, while strategies are plans to achieve organization goals.

GOALS

Corporate goals are determined by the CEO of the corporation, with the advice of the other members of senior management.
Profitability refers to profits in the long run, rather than in the current quarter or year Revenue Expense = Revenues = Return on Investment Revenues Investment Maximizing Shareholder Value the meaning probably refers to the market price of the corporations stock. Finding the maximum amount that a company can earn Managers want to behave ethically and most feel an obligation to other stakeholders and shareholders

GOALS

Risk Pursuit of profitability is affected by managements willingness to take risk with upper limit and primary responsibility to preserve the companys assets. Multiple Stakeholder Approach Ideally, management control system should identify the goals of multiple stakeholder (shareholders, customers, employees, suppliers and communities) and develop scorecards to track performance.

THE CONCEPT OF STRATEGY

A strategy describes the general direction in which an organization plans to move to attain its goals. A firm develops its strategies by matching its core competencies with industry opportunities. Strategy formulation is a process that senior executive use to evaluate a companys strengths and weaknesses in light of the opportunities and threats present in the environment and then to decide on strategies that fit the companys core competencies with environment opportunities.

STRATEGY FORMULATION
Environmental Analysis Competitor Customer Supplier Regulatory Social/Political Internal Analysis Technology know-how Manufacturing know-how Marketing know-how Distribution know-how Logistics know-how

Opportunities and threats

Strengths and weaknesses

Identify opportunities

Identify core competencies

Fix internal competencies with external opportunities

Firms strategies

LEVEL OF STRATEGY

Corporate-level strategy
is about being in the right mix of businesses. The issues are the definition of businesses in which the firm will participate and the deployment of resources among those businesses. in terms of their corporate-level strategy, companies can be classified into 3 categories : A single industry firm operates in one line of business A related diversified firm operates in several industries and the benefit from a common set of core competencies businesses units

An unrelated businesses firm operates in businesses that are not related to one another Research has shown that, on average, related diversified firms performs the best, single industry firms perform next best and unrelated diversified firms do not perform well over the long term1

Richard P. Rumself, Strategy and Economic Performance (Boston: Division of Research, Harvard Business School,1974),pp. 128-42

Corporate-Level Strategies: Summary of Three Generic Strategies

Type of corporate strategy Pictorial representation of strategy Single industry firm Related diversified firm Unrelated diversified firm

Identifying features

Competes in only one industry McDonalds Corporation Perdue Farms Iowa Beef Wrigley Crown, Cork & Seal Maytag Texas Air Ford Motor NuCor

Sharing of core competencies across businesses Procter & Gamble Emerson Electric Corning Glass Johnson & Johnson Phillip Morris Dow-Corning Du Pont General Foods Gillette Texas Instruments AT&T

Totally autonomous businesses very different markets ITT Textron LTV Litton Rockwell General Electric

Examples

LEVEL OF STRATEGY

Business Unit Strategies

Deal with how to create and maintain competitive advantage in each of the industries in which company has chosen to participate. Revenues are generated and costs are incurred in the business unit.

The strategy of a business unit depends on :

its mission what are its overall objectives? its competitive advantage how should the business unit compete in its industry to accomplish its mission?

Richard P. Rumself, Strategy and Economic Performance (Boston: Division of Research, Harvard Business School,1974),pp. 128-42

BUSINESS UNIT MISSION

Two of the most widely used planning models are : 1. Boston Consulting Groups two-by-two growthshare matrix 2. General Electric Company/McKinsey & Companys three-by-three industry attractiveness-business strength matrix

Richard P. Rumself, Strategy and Economic Performance (Boston: Division of Research, Harvard Business School,1974),pp. 128-42

The BCG Model

BCG model views industry growth rate as an indicator of relative industry attractiveness and relative market share as an indicator of the relative competitive position of a business unit within a given industry Cost per unit decreases predictably with the number of units produced over time (cumulative experience)

STARS (high growth, high market share) QUESTION MARKS (high growth, low market share) CASH COWS (low growth, high market share) BCG DOGS (low growth, low market share)

The BCG Model

Hold

Build

Harvest

Divest

STARS (high growth, high market share) QUESTION MARKS (high growth, low market share) CASH COWS (low growth, high market share) DOGS (low growth, low market share)

Case Summary
The networking industrys coming of age coincided with the PC revolution in the early 80s Evolving need of sending email and sharing resource from a set of PC to network to network Speed-smart, reliability and quality service are primer indicator of internetworking product

Case Summary
Four different internetworking media based on speed or bandwidth :
Twisted pair : large installed base, handle only analog signals, need signal conversion process, limited bandwidth (56Kbps). Coaxial cable : large installed base, bandwidth 20x the speed of modem Fiber optic cable : The most expensive, fastest n reliable, but has a bottleneck in conversion process. Wireless Technologies : Data transferred through the atmosphere

Problem Statement & Solution

What Need Do Internetworking Product Fulfill ??
Demand grew for a way to share information from network to network, irrespective of manufacturer.

Problem Statement & Solution(Cont.)

What Do I Need to Know about These Gadget?? Significant Level of expertise is required to design a network or customize and configure an internetworking product, quality service is also a critical differentiator.