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Exhibit 511
INDUSTRY ATTRACTIVENESS
BUSINESS STRENGTH
Organizational Strategies occur on 3 levels: Grand, Business, and Functional A. Grand level strategies: - 1. Growth (a. concentration; b. diversification) - 2. Retrenchment - 3. Stability (status quo) - 4. Combination (multiple strategies)
Growth or expansion
Redefinition of business Efficiency Utilisation of resources motivation
When to follow
Options for expansion Future demand and costs Technological changes Competitors Supply and demand
Diversification
Synergy Spread risks Utilization dominant
benefits
Combined operations Coordination Information relationships
2. Retrenchment
i. Turnaround downsizing existing company/divisions ii. Divestiture selling off existing divisions/subdivisions iii. Liquidation Chapter 11 bankruptcy
Approach of turnaround
Change of top management Market/ customer Revenue generating strategy Cost cutting Asset reduction
Y disinvestment
Part seling Better utilization Write off hidden loses Size Product portfolio Simplify Manage crisis
3. Stability - maintain status quo (e.g. continuous improvement) 4. Combination multiple use of strategies
Stability
Status quo Incremental improvements No redefinition of business Retention of core competencies Fear of loss of control
ii. differentiation (Volvo/Mercedes) iii. focus (Pennys/Pea in a Pod) 2. Adaptive business level strategies:
a. prospecting b. defending c. analyzing
Concentrated growth
Vertical integration Concentric diversification
I
Concentric diversification Conglomerate diversification Joint ventures
II
Turnaround or retrenchment Concentric diversification Conglomerate diversification Divestiture Liquidation
IV III
Maximize Strengths
SHARED VALUES
STAFF
SYSTEMS
STYLE
Seven S Model
1. 2.
3. 4.
5.
6.
7.
Strategy Plan or course of action leading to the allocation of firms resources to reach identified goals. Structure The ways people and tasks relate to each other. The basic grouping of reporting relationships and activities. The way separate entities of an organization are linked. Shared Values The significant meanings or guiding concepts that give purpose and meaning to the organization. Systems Formal processes and procedures, including management control systems, performance measurement and reward systems, and planning and budgeting systems, and the ways people relate to them. Skills Organizational competencies, including the abilities of individuals as well as management practices, technological abilities, and other capabilities that reside in the organization. Style The leadership style of management and the overall operating style of the organization. A reflection of the norms people act upon and how they work and interact with each other, vendors, and customers. Staff Recruitment, selection, development, socialization, and advancement of people in the organization.