David_PPT_Abbrev_Ch05-1a by huangyuarong

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									Chapter 5
Strategies in Action


     Strategic
    Management:
  Concepts & Cases
    11th Edition
    Fred David



                       Ch 5 -1
Long-Term Objectives

                 §Quantifiable
Objectives --
                 §Measurable
                 §Realistic
                 §Understandable
                 §Challenging
                 •Hierarchical
                 •Obtainable
                 •Congruent
                 •Time-line




                                   Ch 5 -2
Long-Term Objectives

Objectives --

§Hierarchical
§Obtainable
§Congruent
§Time-line



                       Ch 5 -3
Long-Term Objectives

           Varying Performance Measures
              by Organizational Level
Organizational
               Basis for Annual Bonus/Merit Pay
    Level
                 75% on long-term objectives
Corporate
                 25% on annual objectives
                 50% on long-term objectives
Division
                 50% on annual objectives
                 25% on long-term objectives
Function
                 75% on annual objectives
                                               Ch 5 -4
Financial vs. Strategic
Objectives
Financial Objectives
§Growth in revenues
§Growth in earnings
§Higher dividends
§Higher profit margins
§Higher earnings per share
§Improved cash flow

                             Ch 5 -5
The Balanced Scorecard


Robert Kaplan & David Norton --

§Strategy evaluation & control technique
§Balance financial measures with non-financial
measures
§Balance shareholder objectives with customer
& operational objectives



                                                 Ch 5 -6
Types of Strategies
                        Corp
A Large Company         Level


                   Division Level




                  Functional Level




                  Operational Level




                                      Ch 5 -7
Types of Strategies

                       Forward
                      Integration



   Vertical            Backward
 Integration          Integration
  Strategies


                       Horizontal
                      Integration




                                    Ch 5 -8
2003 Examples

Forward         Budget Rent-a-Car is Opening
Integration     car rental shops in Wal-Mart


Backward        Hotels, Inc. purchased a
Integration     furniture producer

                Federated Department Stores
Horizontal
                acquired May Department
Integration     Stores


                                           Ch 5 -9
Types of Strategies

                        Market
                      Penetration



 Intensive              Market
 Strategies           Development



                        Product
                      Development




                                    Ch 5 -10
2003 Examples

Market          Coca-Cola is spending millions
Penetration     to advertise Coca-Cola Zero

                Bank of America purchased a
Market
                9% stake in China Construction
Development     Bank

                Advanced Medical Optics is
Product
                using acquisition to obtain all
Development     medical aspects of eye care


                                             Ch 5 -11
Types of Strategies

                         Related
                      Diversification



Diversification
  Strategies



                        Unrelated
                      Diversification




                                        Ch 5 -12
2003 Examples
                  UPS acquired Overnite to
Related           diversify its packaging
Diversification   business into the trucking
                  business
                  Tupperware Corp. has entered
Unrelated
                  and is growing its skin and
Diversification
                  Beauty business through
                  BeautiControl

                  Viacom is selling non-core
Retrenchment
                  assets

                                               Ch 5 -13
Types of Strategies

                      Retrenchment




 Defensive             Divestiture
 Strategies



                       Liquidation




                                     Ch 5 -14
2003 Examples
                Goodyear Tire & Rubber Co.
Divestiture     sold its North American farm-
                tire business to Titan
                International
                Britain’s last major car
                manufacturer, MG Rover Group
Liquidation
                Ltd., liquidated in 2005 and laid
                off its 5,000 employees




                                             Ch 5 -15
Michael Porter’s Generic
Strategies

         Cost Leadership Strategies
          (Low-Cost & Best-Value)



          Differentiation Strategies


              Focus Strategies
            (Low-Cost Focus &
             Best-Value Focus)


                                       Ch 5 -16
Ch 5 -17
Ch 5 -18
Recent Mergers
   Acquiring Firm           Acquired Firm
IBM                   Ascential Software
Philip Morris         PT Hanjaya Mandala
                      Samp
U.S. Steel            National Steel Corp
Oracle                PeopleSoft
OSIM Int’l Ltd        Brookstone
Adobe Systems         Macromedia
US Airways            American West
United Parcel Service Overnight Corp.
                                            Ch 5 -19
First Mover Advantages



 §   Benefits a firm may achieve by entering a
     new market or developing a new product
     or service prior to rival firms




                                            Ch 5 -20
Outsourcing
Business-process outsourcing
(BPO)


 §   Companies taking over the functional
     operations of other firms




                                            Ch 5 -21

								
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