文本讲义成果chap001what is strategy and why it important

1、What Is Strategy andWhy Is It Important?1ChapterScreen graphics created by:Jana F. Kuzmicki, Ph.D.Troy State University-Florida and Western Region “Without a strategy the organization is like a ship without a rudder.”Joel Ross and Michael KamiChapter RoadmapWhat Is Strategy?Identifying a Companys St

2、rategyStrategy and the Quest for Competitive AdvantageStrategy Is Partly Proactive and Partly ReactiveStrategy and Ethics: Passing the Test of Moral ScrutinyThe Relationship Between a Companys Strategy and Its Business ModelWhat Makes a Strategy a Winner?Why Are Crafting and Executing Strategy Impor

3、tant?Thinking Strategically:The Three Big Strategic Questions1. Where are we now?2. Where do we want to go?Business(es) to be in and market positions to stake outBuyer needs and groups to serve es to achieve3. How will we get there?A companys answer to “how will we get there?” is its strategyWhat Is

4、 Strategy?Consists of the combination of competitive moves and business approaches used by managers to run the companyManagements “game plan” toAttract and please customersStake out a market positionCompete successfullyGrow the businessAchieve targeted objectivesHow to please customersHow to respond

5、 to changing market conditionsHow to pete rivalsHow to grow the businessHow to manage each functional piece of the business and develop needed organizational capabilitiesHow to achieve strategic and financial objectivesStrategy is HOW to . . .The Hows ThatDefine a Firms Strategy What Are a Companys

6、Strategic Choices?Trial-and-error organizational learning aboutWhat has worked andWhat has not workedManagements appetite for taking risksManagerial analysis and strategic thinking about how best to proceed, given prevailing circumstancesStrategic choices are based on . . .Key Elements:Southwest Air

7、lines StrategyGrow the business by gradually adding more flights on existing routes and initiating service to new airportsMake friendly service a company trademarkMaintain an aircraft fleet of only Boeing 737sEncourage customers to make reservations and purchase tickets at the companys Web siteAvoid

8、 flying into congested airportsEmploy a point-to-point route systemEconomize onAmount of time it takes terminal personnel to check passengers in and on-load passengersCostsFig. 1.1: Identifying a Companys StrategyStriving forCompetitive AdvantageTo achieve sustainable competitive advantage, a compan

9、ys strategy usually must be aimed at eitherProviding a distinctive product or service orDeveloping competitive capabilities rivals can not matchAchieving a sustainable competitive advantage greatly enhances a companys prospects forWinning in the marketplace andRealizing above-average profitsWhat sep

10、arates a powerful strategy from an ordinary strategy is managements ability to forge a series of moves, both in the marketplace and internally, that produces sustainable competitive advantage!Strategic Approaches to Building Competitive AdvantageStrive to be the industrys low-cost provider pete riva

11、ls on a key differentiating featureFocus on a narrow market niche, doing a better job than rivals of serving the unique needs of niche buyersDevelop expertise, resource strengths, and capabilities not easily imitated by rivals Examples: Strategies Basedon Distinctive Capabilities Sophisticated distr

12、ibution systems Wal-MartProduct innovation capabilities 3M CorporationComplex technological process MichelinDefect-free manufacturing Toyota and HondaSpecialized marketing and merchandising know-how Coca-ColaGlobal sales and distribution capability Black & DeckerSuperior merce capabilities Dell Comp

13、uterPersonalized customer service Ritz Carlton hotelsFig. 1.2: A Companys Strategy Is Partly Proactive and Partly ReactiveA companys strategy is a work in progressChanges may be necessary to react toFresh moves of competitorsEvolving customer preferencesTechnological breakthroughsShifting market con

14、ditionsCrisis situationsWhy Do Strategies Evolve?Crafting Strategy Is anExercise in EntrepreneurshipStrategy-making is a market-driven activity that involvesStudying market trends and competitors actionsKeen observation of customer needsScrutinizing business possibilities based on new technologiesBu

15、ilding firms market position via acquisitions or new product introductionsPursuing ways to strengthen firms competitive capabilitiesProactively searching out opportunities toDo new things orDo existing things in new or better waysEthical and moral standards go beyondProhibitions of law and the langu

16、age of “thou shalt not” to issues ofDuty and “right” vs. “wrong”Ethical and moral standards address“What is the right thing to do?”Two criteria of an ethical strategy:Does not entail actions and behaviors that cross the line from “can do” to “should not do and “unsavory” or “shady” andAllows managem

17、ent to fulfill its ethical duties to all stakeholdersLinking Strategy With EthicsA Firms Ethical Responsibilitiesto Its StakeholdersOwners/shareholders Rightfully expect some form of return on their investmentEmployees - Rightfully expect to be treated with dignity and respect for devoting their ene

18、rgies to the enterpriseCustomers - Rightfully expect a seller to provide them with a reliable, safe product or serviceSuppliers - Rightfully expect to have an equitable relationship with firms they supply and be treated fairlyCommunity - Rightfully expect businesses to be good citizens in their comm

19、unityRole of Senior Executives: Linking Strategy with EthicsForbid pursuit of ethically questionable business opportunitiesInsist all aspects of company strategy reflect high ethical standardsMake it clear all employees are expected to act with integrityInstall organizational checks and balances toM

20、onitor behaviorEnforce ethical codes of conductProvide guidance to employees in gray areasDisplay genuine commitment to conduct business activities ethicallyWhat Is a Business Model? A business model addresses “How do we make money in this business?”Is the strategy capable of deliveringgood bottom-l

21、ine results?Do the revenue-cost-profit economicsof the strategy make good business sense?Look at revenue streams the strategy is expected to produceLook at associated cost structure and potential profit marginsDo resulting earnings streams and ROI indicate the strategy makes sense and the company ha

22、s a viable business model for making money?Strategy - Deals with a companys competitive initiatives and business approachesBusiness Model -Concerns whether revenues and costs flowing from the strategy demonstrate the business can be amply profitable and viableStrategyBusinessModelRelationship Betwee

23、n Strategy and Business ModelMicrosoftsBusiness ModelEmploy a cadre of highly skilled programmers to develop proprietary code; keep source code hidden from usersSell resulting OS and software packages to PC makers and users at relatively attractive prices and achieve large unit salesMost costs in de

24、veloping software are fixed; variable costs are small - once breakeven volume is reached, revenues from additional sales are almost pure profitProvide technical support to users at no costRedhat LinuxsBusiness ModelRely on collaborative efforts of volunteer programmers to create the softwareAdd valu

25、e to free, downloadable version of Linux by offering users Red Hat Linux systems containing upgraded and tested featuresCharge a modest fee to those preferring to subscribe to Red Hat Linux versionRelease updated versions of Red Hat Linux every 4-6 months to small users and every 12-18 months to cor

26、porate users Make source code open and available to all usersMake money by providing fees-based training, consulting, support, engineering, and content management services Tests of a Winning StrategyGOODNESS OF FIT TESTHow well does strategy fitthe firms situation?COMPETITIVE ADVANTAGE TESTDoes stra

27、tegy lead to sustainablecompetitive advantage?PERFORMANCE TESTDoes strategy boost firm performance?Other Criteria for Judging the Merits of a StrategyInternal consistency and unity among all pieces of the strategyDegree of risk the strategy poses as compared to alternative strategiesDegree to which the strategy is flexible and adaptable to changing circumstancesWhile these criteria are relevant, they