工商管理专业MBALectu(2)

1、REVISION LECTURE MONDAY精选pptVertical Integration Definitions Vertical Integration: refers to a firmss ownership of the vertically related activities. The greater the firms ownership extends over successive stages of the value chain for its product, the greater the degree of vertical integration. The

2、 extent of vertical integration is indicated by the ratio of a firms value added to its sales revenue: the more a firm makes rather than buys, the greater its value added relative to its sales revenue.Vertical integration can be either backward, where the firm takes ownership and control of producin

3、g its own or other inputs, or forward, where the firm takes ownership and control of activities previously undertaken by customers.Vertical integration may be full or partial. Some Wineries are fully integrated: they produce the wine from the grapes they grow, and the sell it all through direct dist

4、ribution. Some wineries in California and France do this. Most are partially integrated: home grown grapes supplemented with purchased grapes; they sell some wine through own tasting rooms, but most through independent distributors.精选pptStrategies: DIVERSIFICATIONDiversification two broad types:Rela

5、ted diversification is development beyond the present product and market, but still within the broad confines of the industry. For Example Unilever is a diversified corporation, but virtually all its interests are in the consumer goods industry.(a) Backward integration refers to inputs into the curr

6、ent business further back in the value system e.g. Raw materials, machinery, labour(b) Forward integration refers to activities which are concerned with the companys outputs e.g. Transport, distribution, repairs, and servicing. These are further forward in the value system(c) Horizontal integration

7、refers to activities which are competitive with or directly complementary to a companys present activitiesUnrelated diversification refers to activity development beyond the present industry into products/markets, which at face value, may bear no clear relationship with present products/markets. 精选p

8、ptSome Reasons for related DiversificationPossible advantagesExamples /Comments1. Control of suppliesQuantityQualityPriceTea Processors own plantations to secure continuity of Supply. Components for motor cars may need to be manufactured by the companyPrinting facility can be cheaper in -house2. Con

9、trol of marketsUK shoe manufacturers own retail outlets to gain guaranteed distribution3. Access of informationManufacturers are involved in machinery development companies to keep abreast of development4. Cost savingsFully integrated steel plants save cost on reheating and transportBuilding on: Exp

10、ertiseTechnologyAccountancy Firms moving into tax advice or corporate recovery Transfer to similar technical requirements in another field6. Spreading RiskAvoid overreliance on one product/market, but build on related experience7. Resource UtilisationUnder-utilised manufacturer acquires company with

11、 compatible products to fill capacity精选pptSome reasons for unrelated diversificationPossible AdvantagesExamples/CommentsNeed to use excess cash or safeguard profitsBuying a tax loss situation2. Personal values or objectives of powerful figuresPersonal image locally or nationally may be a strong moti

12、veExploiting underutilised resourcesFarmers use fields for camp sites, festivalsCompanies hire their conferences facilities4. Escape from present businessA companys products may be in decline and unrelated diversification is the only escape5.Spreading riskSome companies believe it is good sense to h

13、ave all their eggs in one basket.6. Even out cyclical effects in a given sectorToy manufacturers make a subcontract for plastic mould products for industry.7. Benefits from synergistic effectsPositive cash flow from one business used to funding requirements of another5精选pptPortfolio AnalysisMarket P

14、ower and Market Share are important concepts for a strategic business unit to consider. Relative market share means the amount of market share a firm has relative to it competitorsThere is an established relationship between market power and performance in commercial organisations.Useful to break do

15、wn market share by segments and to examine market share within those segmentsWhat is important is to see which market segments are important from corporate/profit point of view.Segment may be more competitive or growing more or bigger6精选ppt?Low unstable, analyse to see Whether business can be grown

16、into a star or will it degenerate into a DOGSTARHigh, stable growingInvest for growthDOGSLow UnstableCash flow neutralOr negativeCash CowsHigh Stable High EarningsGood Cash flowANNUALRATeOFMARKETGROWTH(%)nHighLOW Low Relative Market Share High THE BCG GROWTH SHARE MATRIX精选pptA star is an SBU which h

17、as a high market share in a growth market. The firm may be spending heavily to gain that share , but experience curve benefits should mean that costs are reducing over time and at faster rate than competitorsThe question mark is an SBU with high growth but does not have a high market share. Firm cou

18、ld be spending heavily but not reducing costs and not making inroads on competitionThe Cash Cow has a high market share in a mature market.Low growth market conditions stable,need to spend is less. High relative market share means SBU able to maintain unit cost levels below competitors.Dogs have low

19、 share in static or declining markets, worst of all combinations, may drain cash and use disproportionate amount of time and resources.Growth Share Matrix for Portfolio Analysis8精选pptCollaborative arrangements are there for all to see they include: Strategic alliances; joint ventures; public private

20、 partnerships;Co-ordinated service delivery; supply chain agreements; joint marketing arrangements; research and development partnerships etc. Public and voluntary sectors have many examples as well, from joint delivery of services, co-ordinated delivery of services ; partnerships to tackle social c

21、are issues to economic development精选pptRapid economic and technological changeA declining growth rate and competitive pressuresGlobal interdependenceBlurred boundaries among business, government and labourShrinking federal revenues for social programmesDissatisfaction with the judicial process for s

22、olving complex problemsDiffering perceptions of environmental riskGrays Seven Factors that contribute to Collaboration25/07/202210精选pptLeader Behaviour StyleParticipative: a consultative style that involves seeking suggestions and ideas from subordinates and involving them in decisions.Directive: su

23、bordinates are told clearly what is expected of them, and given specifics about how to achieve thatSupportive: falls between the two previous, and is characterised by the creation of a warm, friendly atmosphere in the group and consideration for the needs of sub-ordinates Achievement orientated: Usi

24、ng non directive ways to set challenging goals and seeking improved performance. Often using excellent standards as a model to be achieved and showing confidence that these can be achieved by employees.11精选pptKey point leadership occurs when one attempts to influence the behaviour of an individual o

25、r groupThree core skills involvedDiagnosing cognitive skillAdapting a behavioural skillCommunicating a process skillSome Key Internal Skills of Leaders.Management of Attention : Communicate direction and objectives to othersManagement of meaning: ability to create and communicate meaning so that oth

26、ers understandManagement of Trust: authenticity and consistency in messagesManagement of Self: knowing oneself and to work with thatManagement of the situation and the task精选pptBroad Categories are: Set Strategic Direction, Set and Communicate the Values; Support the implementation through resource

27、allocation and problem solvingDesign systems in support of action; review structuresFocus on the manageable; Develop skills in peopleSymbolise the company to the outside worldPreserve what makes the company specialSet the standard for performanceMotivate employees and develop new skills and competen

28、cesProvide role modelsMake success attainable and humanEnsure that their are resources available Lets look at some tools leaders have精选pptPlanning & Design School.The design school is based on the idea of rational planning, based on strategic analysis of the internal and external environment. The id

29、ea is that managers engage in deliberate, rational analysis. The design school does allow for the idea of creativity. This is in terms of the original conception of the idea/ concept/ strategy, and how it alters overtime as the realities of the internal and external environment are considered by the

30、 strategists. A good way to think of this is if you were designing and building a house. Concept alters as the concept and ideas become realities. Tools you use are SWOT analysis see slides Lecture 2 , and next 2 slides Key points Design schoolConsistency: the strategy must not present mutually inco

31、nsistent goals and policiesConsonance: the strategy must represent an adaptive response to the external environment and to the critical changes occurring within it.Advantage: the strategy must provide for the creation/maintenance of competitive advantage in the selected area of activityFeasibility:

32、The strategy must neither overtax available resources nor create unsolvable sub problems14精选pptEntrepreneurs EmergentHere the emphasis is on the leader and on mental states such as: judgement, intuition, wisdom, experience, insight.Vision and perspective are key ideas here ( remember the working def

33、inition of creativity by Sternberg and Lubart (1991) SLIDE 12Vision serves as both an inspiration and a sense of what needs to be done a guiding idea.Entrepreneurial concept comes for economics in particular Joseph Schumpeter (1950) Schumpeter was concerned with how organisations keep surviving in c

34、hanging situations.He was concerned with how the leader created ideas, new ways of doing things: within this he introduced the notion of creative destructionSchumpeter was aware that economists like to deal with such things as money, machinery, land. He was concerned with things that are less tangib

35、le.Schumpeter held the view:That entrepreneurs have not accumulated any kind of goods, nor created original means of production but have employed existing means of production differently, more appropriately, more advantageously. They have carried out new combinations. And their profit, the surplus t

36、o which no liability corresponds, is an entrepreneurial profit.The key thing here is doing things in new ways and the capitalist bore the risk.Importantly Schumpeter thought that once the founder /leader ceased to innovate he/she was no longer an entrepreneur.Richard Branson is someone who fits the

37、idea of an Entrepreneur.精选pptKey points of EntrepreneurshipsStrategy exists in the mind of the leader as perspective, this is a long term direction, a vision of the organisations future.The process of strategy formation is semiconscious at best, rooted in leaders experience and intuition, the strate

38、gy may be conceived or adopted from others, but the Leader will internalise it in his or her own behaviour.The Leader promotes the vision single-mindedly, maintained close personal control of implementationThe strategic vision is thus malleable, the strategy can be deliberate and emergent, deliberat

39、e in vision and emergent is how it unfolds.The organisation is equally malleable, responsive to the leaders directives, many of the procedures and power relationships are suspended to allow leader to manoeuvreEntrepreneurial strategy tends to form of a niche, one or more positions in market protecte

40、d form the forces of outright competitionRichard Branson CEO Virgin Corporation classic Entrepreneur精选pptAn issue we return to Intentionality versus emergent strategiesIntentionality implies;, planning, thinking, writing things down, monitoring and reporting on plan, learning and adaptationA way of

41、demonstrating clear doing, direction, commitment etc. Emergence implies: a pattern of thinking and doingFlexibility, opportunism, adaptive, flexibility/ alternatives/optionsEntrepreneurshipStrategic IncrementalismNew strategies emerge over timeFlexibility, shapingGradually blend a coherent set of ac

42、tions over time.精选pptStrategy Formation Key PointsStrategy formulation is primarily concerned with the how question, with process:How are strategies formed, implemented and changed?We have discussed several ways of thinking about strategies a broad perspective would suggest the process is seen vario

43、usly:Rational, Intentional, Goal- directed , as well as Intuitive.What is clear is that their in not one unifying theory of how it is. Not necessarily a problemFOUR PHASES OF FORMULATIONIdentification, Mission Setting, Agenda SettingDiagnosis: External Assessment Internal AssessmentConception: Optio

44、n Generation, Option selectionRealisation : Action taking, Performance control ( SEE PYRAMID DIAGRAM) Performance Management精选pptRoles of StrategyStrategy as a planning tool which gives direction to the organisation- a plan of what to do and aim for.Strategy as a support to decision making , strateg

45、y gives coherence to the decisions of an individual and the organisation. Bounded Rationality of our decisions. We are limited by the amount of information the human brain can handle. Strategy helps in several ways: Simplifies decision by constraining the range of decision alternativesBy acting as a

46、 heuristic rule of thumb that reduces the search for suitable solutionsA strategy making process permits the knowledge of different people to be polled and integratedA strategy making process facilitates the use of analytic tools and frameworks ( SWOT, PEST)Strategy as a co-ordinating device: The gr

47、eatest challenge of managing an organisation is co-ordinating the actions of different organisational members. Communicating the vision, goals, objectives and position of the company is an important role of the CEO and Top Management Team. The strategic planning process can provide a forum for this

48、to take place. Here it is important that all groups in the organisation take part. Once this is implemented then the next phase is to ensure that all organisation members are working and moving forward in the same direction. The name for this is performance management, which is a series of goals, ta

49、rgets, and performance measures for individuals and groups, divisions, department , throughout the organisations.精选pptPERFORMANCE MANAGEMENT FRAMEWORKSERVICE/BUSINESS PLANSDIRECTORATE PLANS & STRATEGIESCORPORATE PLANS & STRATEGIES STRATEGIC PLANORGANISATIONWIDELOCALSTRATEGICOPERATIONALCOMPETITIVE AD

50、VANTAGEINDIVIDUAL STAFF PERFORMANCE , ACCOUNTABILITY & APPRAISALS精选pptStrategic Change Key pointsStrategic Change is an intellectual challenge in terms of thinking through the approach to be adopted, as well as a process of assisting people to deal with change and uncertainty.In broad terms strategi

51、c change is concerned with findings ways of successfully dealing with changes in markets, government policies, competitiveness, technologies etc.Key to change is the ability of the firm to maintain position in the market while undergoing a major change process. The challenge of dual strategies how a

52、 company manages its existing activities while also nurturing new initiatives that will form the basis for its business in the future. Key concern can be the existing capabilities of the firm and the individual competencies of employees e.g. Management systems and employee skillsExample: British Air

53、ways and Continental failed to establish low budget airlines. Others like Google and 3M have managed dual strategies.HSBC Banking has managed the dual strategy of cost leadership and differentiation in full service banking and internet banking精选pptA Framework for a Change architecture Clarity in gover