Corporate Strategy and Business Management: A Comprehensive Guide

Competitive strategy-how to compete more effectively

Functional strategy-how to use and apply R&C

Strategic Business Units (SBU)-homogenous activities with similar strategy

ABC (academic, Business, consultant)-creates greater wealth of knowledge- not easy to organize

Approaches to S.M-RATIONAL(deliberate)-economics basis, perspective, appropriate when cost of failure is high. ORGANIZATIONAL(emergent)-descriptive,strategic decision-making process, appropriate when slow and gradual creation of capabilities. HOLISTIC-in the middle.Use both types.

Mission types. GENERAL-large amount of freedom in future development. SPECIFIC-focuses organizational efforts. restricts develop possibilities. EXPLICIT-clear and easy. IMPLICIT-becomes part of employees mindset.

Organizational eq- negotiation and adjustment between stakeholders–>equili.

MECH. OF MANAGE. CONTROL(corp. governance) 1.INTERNAL a)direct supervision b)incentive schemes. 2.EXTERNAL(disciplinary power of markets a)market for corporate control-investors might purchase firm and replace b)capital market-shareholders remove managers c)labor market top managem-values knowledge d)markets for goods and services-firm wont survive if managers dont act correctly. CORPORATIVE VALUES-firm relates to stakeholders. 1)Social responsability (classic/current) 2)business ethics-moral fundaments between firms and social agents (minimal ethics/high ethic)

Analyse general environ.(factors affecting performance)-define limits,factors (PESTEL), develop environ strategic profile (LIKERT scale). INDUSTRY CONCEPT- 2 firms similar products. 2 criteria: tech-supply side and market-demand side-problem if both equal. ANALYSIS OF INDUSTRY STRUCTURE. Classic-structure-behavior-profit. 5 forces- induty competitors, suppliers,substitutes,buyers,potential entrants. SEGMENTATION. a)classical-based on charact of prod.b)strategic groups-similar strategy.ident-build-analyz

Internal analysis-identify strength+weakness. VALUE CHAIN-breakdown of firm into key operations. includes suppliers and customers.Objective: identify sources of CA(horizontal-interrelations between business activities and vertical- interrelations between system value). 2 types of obtaining CA (optimization-best performing 1 activity/coordination-high degree of C makes them more efficient). DISAGGREGATION-possible of finding new sources CA. R&C-to establish potential of CA. RESOURCES(tang,intan)CAPABILITY is firm skill. (Functional/cultural). SUSTAINING CA- durable, transfer, imitability,sustainability, complementability.

CA TYPES-overall cost leadership(quality, efficiency, innov) vs differentiation. LUCK-answer external changes/internally(owning and using valuble R&C). SUSTAINING CA- imitation barries,competitor cap,industry dynamism. SOURCES OF COST ADV-learning effect,experience effect. RISKS-constant cost monitoring, too much use of experience effect,subs products, inflation costs. RISK OF ADV DIFFER- cost too high. STRATEGY CLOCK- buy depends on price and value added perceived.

Scope is influenced by mission, objectives,environment and R&C.Scope can broad or narrow 1.S of functions-explains diverity of customers needs. 2.S of customers-idenitfies target group. 3.S of tech-way to manufacture product. EXPANSION STRAT-firm enlargement with similat tech, finan and commercial resources. PENETRATION-prod and mark increasing sales. No scope changes, involves growth.Leads to economies of scale. Appropriate que firm is expanding quickly. PRODUCT DEVELOP-remain in current market. develop product with new/different charac.and customer needs.Image innovation. Appropriate with short prduct life-cycle. MARKET DEVELOP-traditional prod into new markets…… DIVERSIFICATION-new products and new markets to existing ones. Change in scope.This is to reduce risk, change market, RC surplus. RELATED DIV- similar dis channels, market, RC and tech.Can be constrained around same strategy or linked to last oneReinforces competitive position.Risks-coordination, compromising, inflexibility(dependen) UNRELATED-no relationship between business. Difficult to create synergies. Objective:reduce risk, higher earnings,better allocation of resources, management targets. Risk-interest dispersion, entry barriers…………VERTICAL INTEGRATION-entry into activities related to full production cycle of product. Backstream (new bachward business) downstream(new forward business). Reasons- cost cutting and stronger strategic position. Risk-industry exit barriers, lack of flex, less innvation………..RESTRUCTURING-modification of scope. Improves profitability by creating value. a) BUSINESS RESTRUCTURING-one of businesses does not live up to expectations in performance. Two options-restucture/withdrawl. b)PORTFOLIO RES-whole firm posts poor results (sale strategy(recover invest), Harvest strategy(stop invest), Winding-up strategy(end operations))

Internal develop- firm invests in its own-increasing size,staff,assets (organic/natural) EXTERNAL-one firm purchases,invests,associates with another. Fast but costly. ACQUISITIONS-LBO,standard contract,public takeover. M&A-choose firm target (determine value, set price, determine finance method) 2. organizational/cultural intergration-problems arising 3. Operations integration (integ of production systems and firms joining) 4. Competition or anti-trust laws….. COOPERATION-reinforce CA, interdependence. RISK-undermine CA position, less independece. CONTRACTUAL(LT contracts, franchise, license, subcontracting, consotrium)…..SHAREHOLDER(joint venture, minority shareholding)

Internationalize-reduce costs, new resources, reduce risk, exploit RC.