Beruflich Dokumente
Kultur Dokumente
Sreenath B.
Strategy
• Strategy :- the specific pattern of decisions and actions
that mangers take to sue core competences to achieve a
competitive advantage and outperform competitors.
An organization develops a strategy to increase the value it
can create for stakeholders.
Through strategy, organization try to develop core
competences to gain competitive advantage
1. Ability to 2. An
allows an
obtain scarce organizational
resources organization strategy
to create
which enable
4. A the organization 3.Core
competitive to create competence
advantage
Sources of Core Competences
• Specialized Resources :-
– Functional resources :- the skills possessed by
an organization’s functional personnel
– Organizational Resources :- the attributes that
give an organization a competitive advantage
such as the skills of the top-management team
or possession of valuable and scare resources.
Sales & marketing •Increased demand & lower •Targeting of customer groups
production costs •Tailoring products to
customers
•Promoting brand names
Differentiation YES
• Low-cost organizations
– Develop functions that reflect organization’s value for economy.
– Eg:- Nucor, a leading low-cost steel manufacturer. The ceo Ken
Iverson operated the company in a frugal way. Top managers
followed the same path and spend less on luxury.
Cont’d
• Differentiator Organizations:-
– Product development or marketing is at the centre stage.
– Innovation, quality, excellence and uniqueness are the
cultural values that are given importance.
– Eg:- Jet and Sahara encountered cultural clashes when they
where about to merger.
Core Domain
Forward
Vertical Unrelated
integration diversification
Output Unrelated
Domains Domains
Input Domains Related Domains
(eg:- sugar plantations, (eg:- Snack foods, Candy
bottle makers) maker )
Core Domain
Soft Drinks
Output domains
Unrelated domains
(eg:- bottling and trucking
(eg:- Department stores,
companies that distributes
financial networks, cable
soft drinks; fast food
companies)
restaurants)
Related Diversification
The entry into a new domain that is related in some way
to an organization’s domain
CEO
Corporate
Headquarters
Staff
A B C D E F G H I
DivisionDivisionDivisionDivisionDivisionDivisionDivisionDivisionDivision
Corporate-level Strategy and
Structure
• Structures for Related Diversification:-
An organization pursuing a strategy of related
diversification tries to obtain value by sharing
resources or by transferring functional skills
from one division to another—processes that
require a great amount of coordination and
integration.
Corporate-level Strategy and
Culture
• Cultural values and the common norms, rules
and goals that reflect those values can
greatly facilitate the management of a
corporate strategy.
A company that makes and sells the same products in many different
countries often groups its overseas divisions into world regions to
simplify the coordination of products across countries.
Strategy-Structure Relationships in the
International Environment
Vertical Differentiation Low Need for Coordination High
Choices`
Levels in the hierarchy Relatively flat Relatively tall Relatively tall Relatively flat
Centralization of authority Decentralized Core competences Centralized Simultaneously
centralize, others centralized and
decentralized decentralized
Horizontal Differentiation Global geographic Global product Global product Global matrix or
structure group structure group structure “matrix in the mind”
Integration
Need for integrating Low Medium High
Medium
mechanisms such as task
forces and integrating roles
Corporate
Headquarters
(Located in Sweden)
Functional Activities
Implementing international
strategy
• International strategy, based on R&D and
marketing being centralized at home and
all the other value-creation functions to be
decentralized to national unit.
• For coordinating the flow of different
products across different countries, many
companies use a global product group
structure and create product group
headquarters.
Implementing international strategy
Corporate
Headquarters
(located in the U.S)
Product Groups
Domestic & Foreign Division
Implementing global strategy