Type of startigies

Topics: Vertical integration, Strategic management, Monopoly Pages: 35 (2294 words) Published: April 22, 2014
Chapter 5
Strategies in Action

A journey of a
thousand miles
begins with a single
step

Copyright 2005 Prentice Hall

中國諺語
Ch 5 -1

Chapter Outline
Long-Term Objectives

Types of Strategies

Integration Strategies

Copyright 2005 Prentice Hall

Ch 5 -2

Chapter Outline (cont’d)
Intensive Strategies

Diversification Strategies

Defensive Strategies

Copyright 2005 Prentice Hall

Ch 5 -3

Chapter Outline (cont’d)
Michael Porter’s Generic Strategies

Means for Achieving Strategies

First Mover Advantages

Copyright 2005 Prentice Hall

Ch 5 -4

Chapter Outline (cont’d)
Outsourcing

Strategic Management in Nonprofit &
Governmental Organizations

Strategic Management in Small Firms

Copyright 2005 Prentice Hall

Ch 5 -5

Strategies in Action

Companies Embrace Strategic Planning

-- Quest for higher revenues
-- Quest for higher profits

Copyright 2005 Prentice Hall

Ch 5 -6

Long-Term Objectives






Long-term objectives represent the results
expected from pursuing certain strategies.
Strategies represent actions to accomplish
long-term objectives.
The time frame for objectives and
strategies should be consistent, usually
from two to five years

Copyright 2005 Prentice Hall

Ch 5 -7

Long-Term Objectives (Characteristics)
Quantifiable

Measurable
Realistic

Congruent
across
departments
Time-line

Understandable

Challenging
Hierarchical
Obtainable

Copyright 2005 Prentice Hall

Ch 5 -8

Long Term Objectives (Examples)










Growth in assets
Growth in sales
Profitability
Market share
Earnings per share
Degree and nature of diversification
Degree and nature of vertical integration
Social responsibility

Copyright 2005 Prentice Hall

Ch 5 -9

Financial vs. Strategic
Objectives
Financial Objectives
Growth in revenues
Growth in earnings
Higher dividends
Higher profit margins
Greater return on investment (ROI)
Higher Earnings per Share (EPS)
Improved cash flow
Rising stock price
Copyright 2005 Prentice Hall

Ch 5 -10

Financial vs. Strategic
Objectives
Strategic Objectives
Larger market share
Quicker on-time delivery than rivals

Quicker design-to-market times than rivals
Lower costs than rivals
Higher product quality than rivals

Wider geographic coverage than rivals
Copyright 2005 Prentice Hall

Ch 5 -11

Financial vs. Strategic
Objectives
Trade-Off
Maximize short-term financial objectives – harm
long-term strategic objectives
Pursue increased market share at the expense
of short-term profitability
Improve financial position in the short run
through higher prices may, for example,
jeopardize long-term market share.

Copyright 2005 Prentice Hall

Ch 5 -12

Long Term Objectives (Benefits)












provide direction
allow synergy
aid in evaluation
establish priorities
reduce uncertainty
minimize conflicts
stimulate exertion
aid in both the allocation of resources and the design of
jobs
provide standards for evaluation

Copyright 2005 Prentice Hall

Ch 5 -13

Long-Term Objectives
Objectives Necessary -Corporate Level
Divisional Level
Functional Level

Copyright 2005 Prentice Hall

Ch 5 -14

Long-Term Objectives
Varying Performance Measures
by Organizational Level
Organizational
Level

Corporate
Division

Function

Basis for Annual Bonus/Merit Pay

75% on long-term objectives
25% on annual objectives
50% on long-term objectives
50% on annual objectives
25% on long-term objectives
75% on annual objectives

Copyright 2005 Prentice Hall

Ch 5 -15

Long-Term Objectives
Strategists Should Avoid -Managing by Extrapolation
Managing by Crisis
Managing by Subjectives
Managing by Hope

Copyright 2005 Prentice Hall

Ch 5 -16

Believe it or not !


Without long-term objectives, an organization would drift
aimlessly toward...
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