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    SPM CH 02 - Introd To Strategy

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    Helmy Fitria Sagita
    The document provides an introduction to corporate strategy. It discusses that corporate goals are determined by senior management and the board of directors, with the main goals being profitability, maximizing shareholder value, and balancing risk. It also notes that strategy fulfills the goals of multiple stakeholders. Strategy is defined as the general direction an organization plans to move to attain its goals. Strategy formulation involves analyzing the environment, competitors, customers, and the organization's internal strengths and weaknesses to identify opportunities and fix internal competencies accordingly. The levels of strategy are corporate level strategy, which focuses on what industries a firm competes in, and business unit level strategy, which focuses on how a specific business unit competes within its industry.

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    SPM CH 02 - Introd To Strategy

    Uploaded by

    Helmy Fitria Sagita
    28 views11 pages
    The document provides an introduction to corporate strategy. It discusses that corporate goals are determined by senior management and the board of directors, with the main goals being profitability, maximizing shareholder value, and balancing risk. It also notes that strategy fulfills the goals of multiple stakeholders. Strategy is defined as the general direction an organization plans to move to attain its goals. Strategy formulation involves analyzing the environment, competitors, customers, and the organization's internal strengths and weaknesses to identify opportunities and fix internal competencies accordingly. The levels of strategy are corporate level strategy, which focuses on what industries a firm competes in, and business unit level strategy, which focuses on how a specific business unit competes within its industry.

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    SPM CH 02_Introd to Strategy

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    The document provides an introduction to corporate strategy. It discusses that corporate goals are determined by senior management and the board of directors, with the main goals being profitability, maximizing shareholder value, and balancing risk. It also notes that strategy fulfills the goals of multiple stakeholders. Strategy is defined as the general direction an organization plans to move to attain its goals. Strategy formulation involves analyzing the environment, competitors, customers, and the organization's internal strengths and weaknesses to identify opportunities and fix internal competencies accordingly. The levels of strategy are corporate level strategy, which focuses on what industries a firm competes in, and business unit level strategy, which focuses on how a specific business unit competes within its industry.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    28 views11 pages

    SPM CH 02 - Introd To Strategy

    Uploaded by

    Helmy Fitria Sagita
    The document provides an introduction to corporate strategy. It discusses that corporate goals are determined by senior management and the board of directors, with the main goals being profitability, maximizing shareholder value, and balancing risk. It also notes that strategy fulfills the goals of multiple stakeholders. Strategy is defined as the general direction an organization plans to move to attain its goals. Strategy formulation involves analyzing the environment, competitors, customers, and the organization's internal strengths and weaknesses to identify opportunities and fix internal competencies accordingly. The levels of strategy are corporate level strategy, which focuses on what industries a firm competes in, and business unit level strategy, which focuses on how a specific business unit competes within its industry.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 11

    Introduction to Strategy

    • Goals
    • A company never has goals, but the persons/the
    members of the organization.
    • Corporate goals are determined by CEOs with the
    advice of other members of senior management,
    and they are usually ratified by the board of
    directors.
    Goals

    • Profitability
    ▫ The most important goals for a business

    Revenue – Expenses x Revenues = Return on Investment


    Revenues Investment

    • Maximizing Shareholder Value


    • Risk,
    ▫ An organization’s pursuit of profitability is affected by
    management’s willingness to take risk.
    Multiple Stakeholder Approach

    • Management should fulfil the goals of different


    stake holders
    ▫ Capital Market Stakeholders
    ▫ Product Market Stakeholders
    ▫ Factor Market Stakeholders
    The Concept of Strategy

    • A strategy describes the general direction in


    which an organization plans to move to attain its
    goals
    • Levels of Strategy
    ▫ Corporate Level Strategy,
     Strategies for a whole organization
    ▫ Business Unit Level Strategy,
     Strategies for business units within the organization
    Strategy Environmental Internal analysis
    Formulation analysis Technology know-how
    Competitor Manufacturing know- how
    Marketing know-how
    Customer
    Distribution know-how
    Supplier Logistic know-how
    Regulatory
    Social/Political

    Opportunities Strength and


    and threats weaknesses
    Identify opportunities Identify core competencies

    Fix internal competencies with


    external opportunities

    FIRM’S STRATEGIES
    Corporate Level Strategy

    • is being in the right mix of business


    • is concerned with the question of where to
    compete than how to compete in particular
    industry.
    • The main issues are:
    1. The definition of business in which the firm will
    participate
    2. The deployment of resources among those
    business.
    Decision: what business to add, what business to retain,
    what business to emphasize, what business to de-
    emphasize, and what business to divest.
    Industrial Mix Strategy Types
    • Single Industry Firms
    ▫ Firms which totally commit and compete in only one industry
    ▫ The firms uses its core competencies to pursue growth within that
    industry.
    ▫ Example: McDonald’s
    • Unrelated Diversified Firms
    ▫ Firms which operate in a number of a different industries
    ▫ Totally autonomous businesses in very different markets
    ▫ Conglomerates
    ▫ Example: Indogroups
    • Related Diversified Firm
    ▫ Firms that operate in a number of industries and their businesses are
    connected to each other through operating synergies.
    ▫ Share common resources and common core competencies.
    ▫ Example: Unilever, P&G
    Business Unit Strategies
    • All the strategies applying in a business unit
    • The strategies depend on:
    1. Its mission (what are its overall objectives)
    2. Its competitive advantage (how should the
    business unit compete in its industry to
    accomplish the mission)
    Business Unit Mission: The BCG Model
    (Boston Consulting Groups)

    Cash source
    High Low
    High High
    “Star” “Question mark”
    Market Hold Build Cash
    growth use
    rate
    “Cash cow” “Dog”
    Harvest Divest
    Low Low
    High Low
    Relative market share
    Business Unit Competitive Advantage

    Potential Entrants

    Existing
    Buyers Competitive Suppliers
    Rivalry

    Substitutes

    Michael Porter’s Five Forces Model


    Competitive Advantage Questions in Activities
    Conducted
    1. Can we reduce costs but holding value
    (revenues) constant?
    2. Can we increase value (revenue) but holding
    costs constant?
    3. Can we reduce assets but holding costs and
    revenues constants?
    4. Can we do 1, 2, and 3 simultaneously?

    Jadwal Presentasi

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