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By Prof.

Ashok Aima
Corporate Competitive Strategy

Product Supply Chain Marketing


Development or Operations and Sales
Strategy Strategy Strategy

Information Technology Strategy

Finance Strategy

Human Resources Strategy


 The mission of the organization
 defines its purpose, i.e., what it contributes to society
 states the rationale for its existence
 provides boundaries and focus
 defines the concept(s) around which the company can rally

 Functional areas and business processes define their


missions such that they support the overall corporate
mission in a cooperative and synergistic manner.
 Merck: The mission of Merck is to provide society with superior
products and services-innovations and solutions that improve
the quality of life and satisfy customer needs-to provide
employees with meaningful work and advancement
opportunities and investors with a superior rate of return.
 FedEx: FedEx is committed to our People-Service-Profit
philosophy. We will produce outstanding financial returns by
providing totally reliable, competitively superior, global air-
ground transportation of high-priority goods and documents that
require rapid, time-certain delivery. Equally important, positive
control of each package will be maintained utilizing real time
electronic tracking and tracing systems. A complete record of
each shipment and delivery will be presented with our request
for payment. We will be helpful, courteous, and professional for
each other, and the public. We will strive to have a completely
satisfied customer at the end of each transaction.
Responsiveness (Reliability; Quickness; Flexibility;
e.g., Dell, Overnight Delivery Services)

Competitive Advantage through which


the company market share is attracted

Cost Leadership (Price;


e.g., Deccan airlines, Tata
Nano)

Differentiation (Quality; Uniqueness;


e.g., Luxury cars, Fashion Industry,
Brand Name Drugs, sonny mc Donald's, Raymond)
 Corporate Strategy: The organization’s positioning in terms of
 responsiveness,
 cost leadership and
 product differentiation
requirements, i.e., the sought competitive advantage(s).

 The corporate strategy dictates the detailed strategies for each


functional area (i.e., Operations, Finance, Marketing) but it is also
affected by those areas.

 Collectively, all these strategies seek to exploit (external)


opportunities and (internal) strengths, neutralize (external)
threats, and address (internal) weaknesses
 External
 Emerging strengths and weaknesses of competitors =>
new threats and opportunities, respectively
 New industry entrants
 Development of substitute products
 Development of new technologies
 Legal developments (e.g., environmental concerns and
regulations)
 Economic and political developments (e.g., new
international agreements, political crises)

 Internal
 Company politics and restructuring
 Modified relationships with customers and suppliers
 Product Life Cycle
Introduction Growth Maturity Decline
• Best period to •Practical to •Poor time to •Cost control
increase market change price change image, critical
share price or quality
or quality
•R&D image •Competitive
engineering •Strengthen costs become
critical critical Sales
niche
•Defend market
position
Time
• Frequent •Forecasting •Standardization •Little product
product and critical - minor product differentiation
process •Products and changes •Overcapacity
changes process •Optimum in the industry
•Short reliability capacity •Reduce
production runs •Increase •Process stability capacity and
•High capacity •Long production eventually
production •Shift towards runs prune line to
costs product focus eliminate items
•Limited •Enhance not returning
Responsive
Supply Chain

of c
Responsiveness n e gi
Spectrum Zo rate t
St Fi

Efficient
Supply Chain
Certain Implied Uncertain
Demand Uncertainty Demand
Spectrum

Implied Demand Uncertainty: The uncertainty that exists due to the portion of
Demand that the supply chain is required to meet.
Responsiveness

Cost Leadership

Differentiation
 Dell’s competitive advantage: Provide
customized PC configurations, with short delivery
times and affordable prices.
 Dell’s success in PC market:
 Focused on strategic partnerships: suppliers down
from 200 to 47
 Suppliers maintain nearby ship points; delivery
time 15 minutes to 1 hour
 Suppliers own inventory until used in production
 Demand pull throughout value chain –
“information for inventory” substitution
 Demand forecasting is critical – changes are
shared immediately within Dell and with supply
base
 Customers frequently steered to “recommended
configurations” with high availability to balance
supply and demand
 External logistics supplier used to manage inbound
supply chain
Customer Customer
PULL

Virtual Integration
Distribution
Channels
PULL
Dell
PUSH
Manufacturer

Suppliers
PUSH
Suppliers

Typical PC Supply Chain Dell Supply Chain


(Compaq, HP, IBM, etc.)
 The commoditization of the PC industry
 Standardized and interchangeable components
 Emergence of reliable manufacturing service providers
 Recent advances in Supply Chain Management
 Information Technology (IT) platforms that allow the
effective and efficient information exchange and
coordination across the entire supply chain
 3rd party logistics service providers
 Emerging emphasis on virtual rather than vertical
company integration
Corporate Strategy

Supply Chain Strategy

Efficiency Responsiveness

Market
Facilities Inventory Transportation Information
Segmentation
 Increasing variety of products
 Decreasing product life cycles
 Increasingly demanding customers
 Fragmentation of Supply Chain Ownership: vertical
vs. virtual integration
 Globalization and Market Segmentation
 “Closed Loop” SC

Production Distribution Consumption Retrieval

Disassembly/Reverse Logistics and


Disposal
ReprocessingRe-manufacturing network