Nick krest - business strategy formulation and implementation
- 1. Business Strategy Formulation and Implementation Nick krest
- 2. 8-2 Strategy Formulation and Implementation 1. DISCUSS meaning, needs, benefits, approaches of strategic planning process for MNCs 2. UNDERSTAND tension between pressures for global integration and national responsiveness; 4 basic international strategy options 3. IDENTIFY basic steps in strategic planning 4. DESCRIBE how MNCs implement strategic plan 5. REVIEW three major functions of marketing, production, finance used in strategic plan implementation 6. EXPLAIN specialized strategies for emerging markets and international new ventures
- 3. 8-3 Strategic Management • Strategic Management: the process of determining an organization’s basic mission and long-term objectives, then implementing a plan of action for pursuing the mission and attaining objectives
- 4. 8-4 Strategic Management • Growing need for strategic management related to increasingly diversified operations in continuously changing international environment
- 5. 8-5 Benefits of Strategic Planning • 70 percent of 56 A.U MNC subsidiaries had comprehensive 5 to 10-year plans according to one study • Evidence for effectiveness of planning is mixed. Strategic planning does not always result in higher profitability
- 6. 8-6 Benefits of strategic management • Establish the mission • Formulate philosophy • Establish policies • Setting objectives • Developing strategy • Plan the organizational structure • Provide personnel • Establish procedures • Provide facilities • Provide capital • Set standards • Establish programs and plans • Control information • Activate people
- 7. 8-7 STRATEGIC MANAGEMENT Types Of Strategies • Strategy – a comprehensive plan guiding resource allocation to achieve long-term organization goals. • Strategic Intent – focuses organizational energies on achieving a compelling goal. • Competitive Advantage – operating in successful ways that are difficult to duplicate
- 8. 8-8 TYPES OF STRATEGIES Corporate Strategies • Corporate Strategy – Sets long-term direction for the total enterprise • Business Strategy – Identifies how a strategic business unit or division will compete in its product or service domain • Functional Strategy – Guides activities within one specific area of operations
- 9. 8-9 TYPES OF STRATEGIES Corporate Strategies
- 10. 8-10 TYPES OF STRATEGIES Growth And Diversification Strategies • Growth Strategy – Expansion through current operations • Concentration – Expansion within an existing business area • Diversification – Expansion occurs by entering new business areas • Vertical Integration – Expansion by acquiring existing suppliers or distributors
- 11. 8-11 TYPES OF STRATEGIES Restructuring and Retrenchment Strategies • Retrenchment – Changes operations to correct weaknesses – Liquidation •An extreme form of retrenchment wherein the business closes and sells off its assets • Restructuring – Reduces the scale or mix of operations • Downsizing – Decreases the size of operations • Divestiture – Sells off part of the organization to focus on core businesses
- 12. 8-12 Steps to strategic management • Environmental analysis • Establish organizational direction • Strategy formulation • Strategy implementation • Strategic control