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IntroduCtIon: strategIC management for professIonal praCtICe 2 Authors and teaching staff 2 Academic liason 2 Prescribed textbook(s) 3 Accessing UNEonline 5 Unit evaluation 7 Unit aims 7 Overview 8 Studying this unit 9 Discussion/Bulletin Board 1 1 StUDy timEtABlE 1 3 ASSESSmENt 3 1 Assessment details 3 1 General information 4 1 Referencing 0 2 Plagiarism 2 2 marking/Grading system 3 2 Self assessment activities 3 2 Examination 2 5 ASSiGNmENt 1: ON-liNE tESt 2 7 ASSiGNmENt 2 topIC 1: IntroduCtIon to strategIC management 1 learning objectives 1 introduction 1 What is strategic management? 4 the nature of strategic decisions 4 Adapting strategic management to an organisation 5 ACtiVity 7 READING 1.1 (Marren, P. 2004)
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topIC 2: strategIC analysIs: external envIronment — Industry 1 learning objectives 1 introduction 1 Analysing the external environment 2 Analysis of competitive forces in the industry—the Porter model 7 ACtiVity 9 READING 2.1 (Porter, M.E. 1980) 2 7 READING 2.2 (Porter, M.E. 1980) topIC 3: strategIC analysIs: external envIronment — CompetItors 1 learning objectives 1 introduction 1 Strategic groups 2 Key factors for competitive success 3 ACtiVity 5 READING 3.1 (Foster, W. & Bradach, J. 2005) topIC 4: strategIC analysIs: Internal envIronment — organIsatIon sItuatIon analysIs 1 learning objectives 1 introduction 2 Examination of the organisation’s resources and competencies 2 investigation of the organisation’s cost competitiveness 5 ACtiVity 7 READING 4.1 (Miller, D., Eisenstat, R. & Foote, N. 2002) topIC 5: alternatIves to strategIC analysIs 1 learning objectives 1 introduction 1 Emergent strategies 3 ACtiVity 5 READING 5.1 (Mintzberg, H. 1987) 1 7 READING 5.2 (Mintzberg, H. 1994)
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topIC 6: strategy formulatIon: developIng a vIsIon/ mIssIon and settIng objeCtIves 1 learning objectives 1 introduction 1 Developing a strategic vision and mission 2 Setting objectives 2 levels of strategy 5 ACtiVity 7 READING 6.1 (Chatterjee, S. 2005) 2 7 READING 6.2 (Sawhill, J. & Williamson, D. 2001) topIC 7: strategy formulatIon: generIC strategIes and other dImensIons of strategy formulatIon 1 learning objectives 1 introduction 1 Generic competitive strategies 3 Other dimensions of strategy formulation 7 ACtiVity 9 READING 7.1 (Wakeam, J. 2003) topIC 8: strategy formulatIon: InternatIonal strategIes 1 learning objectives 1 introduction 1 Reasons for moving into international markets 2 types of international strategies 5 ACtiVity 7 READING 8.1 (Viljoen, J. & Dann, S. 2000)
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topIC 9: strategy formulatIon: dIversIfICatIon strategIes 1 learning objectives 1 introduction 1 Entering a new business 1 Related and unrelated diversification 3 ACtiVity 5 READING 9.1 (Gopinath, C. 2003) topIC 10: strategy ImplementatIon: budgets and struCture 1 learning objectives 1 introduction 1 the nature of strategy implementation 2 Organisational structure 2 Developing organisational resources via the budgeting process 3 ACtiVity 5 READING 10.1 (Zagotta, R. & Robinson, D. 2002) topIC 11: strategy ImplementatIon: polICIes, systems and rewards 1 learning objectives 1 introduction 1 Organisational policies and procedures 3 ACtiVity 5 READING 11.1 (Freedman, M. 2003)
Graduate School of Business
topIC 12: strategy ImplementatIon and evaluatIon: Culture and leadershIp 1 learning objectives 1 introduction 1 Creating a strategy-supportive organisational culture 2 Exerting strategic leadership 2 Evaluation of strategy 3 ACtiVity 5 READING 12.1 (Finkelstein, S. 2005) 7 READING 12.2 (Roxburgh, C. 2003) topIC 13: strategy and ethICs 1 learning objectives 1 introduction 1 Business ethics 2 Social responsibility 3 ACtiVity 5 READING 13.1 (Skrabec, Q.R. 2003) 1 1 READING 13.2 (Johnson, H.H. 2003) worksheets/ exerCIses
Printed for First trimester, 2010 Copyright © 2010 Graduate School of Business University of New England, Armidale NSW 2351 Australia Printed at the University of New England All rights reserved. No part of this book or related video or audio cassettes or computer disk may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior permission from the copyright owners.
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au For academic queries.edu. GSB staff are here to assist you during office hours. Graduate School of Business . Information for current students can be found at www.une. the Graduate School of Business and this unit of study.edu.gsb. Please read ‘your responsibilities’ in the student details link under current students on the web site.une. details of the Unit Coordinator follow.edu. Please contact us with any administrative queries at: Graduate School of Business University of New England Armidale NSW 2351 Phone: Fax: Email: Web: 02 6773 3382 02 6773 3461 gsb@une. Remember to > > > > > > Check assignment due dates and mark them in your diary Check your UNE email account or forward it to your regular email account Check your myUNE and unit discussion boards regularly Keep in touch with GSB if you are having difficulties that may affect your study Note the GSB principal dates to avoid academic or financial penalty Call us if you have ANY queries. and provides links and directions to general policies and procedures to assist you in your study. We assume that you are familiar with this information in any discussion regarding your studies. This introduction contains information relevant to this unit.gsb. It includes: • • • • • • academic and other support services policies and procedures exams IT/computer requirements and support library services your responsibilities It is imperative that you are familiar with University of New England policies and procedures as well as your responsibilities as a distance education student.au under the current students link.au http://www.IntroduCtIon: strategIC management for professIonal praCtICe Welcome to UNE.
you should not hesitate to seek academic advice if it is required.A.. ISBN 9780073530420. Business and Law University of New England Armidale NSW 2351 prescribed textbook(s) Thompson. David Pearson and Ingrid Bonn. A. Although you are studying this unit by distance education. Strickland A. I have an MBA from UNE and a background in marketing and international business management. J. Graduate School of Business . New York.au Telephone: (02) 6773 2604 Fax: (02) 6773 3148 If you prefer. 17th edn.E. you may write to me at this address: Allastair Hall New England Business School Faculty of Economics. Crafting and Executing Strategy: The quest for competitive advantage—concepts and cases. This unit is taught by Allastair Hall. 2009. McGraw-Hill. I spent 13 years in Southern Africa working for the Shell International Oil Company in various management and marketing roles.J. and have just returned from a two year stint as Director of the UNE operation in China. Allastair Hall academic liason For queries concerning this unit. in general and academically. & Gamble.edu.Introduction:2 authors and teaching staff This study guide was written by Allastair Hall. I am here to help you. Email: ahall4@une. please contact me as follows. Let me introduce myself I am a lecturer in the School of Business Economics and Public Policy at the University of New England.
edu.servicesune.une. all students with a current UNE username and password are automatically loaded into the units in which they are enrolled. At the beginning of each semester. All units in UNEonline contain a range of tools and functions including: • • • • • • • Link to the Course and Unit Catalogue Link to Student Assist Link to e-Reserve Link to e-Submission Message of the day/announcements Discussions/chat Calendar You must be a currently enrolled UNE student and have registered your UNE username and password to access units through UNEonline.net.au Used textbooks are available from the UNE Second Hand Bookshop http://www.htm accessing uneonline UNEonline is the generic name for the Learning Management System (LMS) software application/s that UNE uses to facilitate online and flexible learning.ucb.au/courses/2010/units Textbooks can be ordered from the UNE United Campus Bookshop http://www. Most units offered in the GSB use the Blackboard Learning System CE. Graduate School of Business .au/support/bookshop.com.Introduction:3 Textbook information can also be checked online through MyUNE or via the Courses and Units Catalogue http://www.
Please contact your unit coordinator if you have any concerns. Information on the services and resources outlined below is available on the University Library page at http://www. You can register online at: http://www. you first need to register your username and set a password.Introduction:4 To register To access your myUNE and therefore your online units. Take care to remember the password you create.au List of usernames – disclaimer Please note that your username within UNEonline appears as part of a list in some places.au/register You will need your student number. the appearance and navigation of the online units will be different.une. Any problems with registration and initial online unit access should be directed to the ITD Service Desk: • • Phone: (02) 6773 5000 Email: servicedesk@une. Only students enrolled in the unit have access to this list.edu. and request advice from librarians on search strategies and information tools to use. journals and online resources.une. To access your online units You will need to access your online units via the ‘myStudy’ tab in the myUNE portal. Your login details take effect within three hours and you can access your online units from the first day of teaching. obtain copies of articles and exam papers.au/library Graduate School of Business . however. depending on which Learning Management System (LMS) is being accessed.edu. You can borrow books.edu. Library services The UNE University Library has an extensive collection of books.
You will also be emailed an invitation to participate in an online survey to provide anonymous formal feedback. particularly those that point out problems which can be addressed immediately.Introduction:5 Look down the screen for the blue ‘Services’ heading and choose ‘Local students’ or ‘External students’. click on the ‘Services’ heading and then on ‘New’ to see lots of hints about using the Library. Graduate School of Business . in the second half of the trimester. unit evaluation The University and the Graduate School of Business appreciate your feedback. If you are a new student. A link will also be available through myUNE and feedback will be forwarded to the unit coordinator and Head of School. Your unit coordinator will welcome comments on the Discussion Board during the Trimester.
Graduate School of Business .
> build your skills in conducting strategic analysis in different industries and competitive situations. > improve your ability to manage the organisational processes by which strategies are implemented. values and beliefs held by people) of managing. and > integrate the knowledge gained in earlier post graduate courses. legal studies or gender issues in management. It demands that many functional area variables and situational issues be dealt with simultaneously and calls for judgments about how all the relevant factors relate to each other. its position in the market place and how it can gain sustainable competitive advantage. some concern the ‘hard side’ (e. But none of these courses covers the whole spectrum of managing as does strategic management. It requires integrative thinking and the ability to shape the actions which need to be taken within an increasingly global environment. accounting or human resource management or with a specialised body of knowledge.Introduction:7 guIde to studyIng thIs unIt unit aims This unit aims to: > provide students with a working model of the strategic management process > develop your ability to think strategically about an organisation. Some relate to important concepts and information. These business courses are narrower in scope and somewhat specialised. Graduate School of Business . implementing and evaluating company strategies requires a total enterprise perspective. overview GSB 600—Strategic Management for Professional Practice is designed to be a challenging and exciting unit. It is a course about strategy and about managing for long-term success. for example quantitative analysis.g. GSB 600 is a ‘big picture’ course. Many other courses are concerned with either a specific functional area such as marketing. formalised procedures and analysis of numbers) and others the ‘soft side’ (e. Developing. while others involve skills-building. that is.g.
It first discusses the complexity and ambiguity strategic management has to deal with and outlines the challenges which are posed by them. mission and objectives. and the investigation of cost competitiveness. in particular external environmental analysis and analysis of the organisation. they provide feedback to us on the extent and rate of your learning of the material. the knowledge and skills you have acquired from the unit.Introduction:8 studying this unit The assignments have three roles: > > they enable us to assess. strategy implementation and evaluation. and competencies. in reality it is a dynamic process with much interplay between the individual parts. The next three topics (2–4) deal with strategic analysis.). the examination of resources. Although strategic management is presented in a step by step approach. analysis of strategic groups. appropriate budgets. that is. This unit begins with a topic which examines the context of strategic management. the development of strategic alternatives. Topic 5 expands the strategic management approach by stating that strategies are not necessarily derived through a formalised process. international strategies and diversification strategies. These topics emphasise the importance of strategy implementation in the strategic management approach of an organisation and place particular importance on the development of a supportive organisational culture. (This enables adjustment of the flexible aspects of the unit to ensure that we maximise its value to you. It then depicts the different components of strategic management and their interrelationship. equitably. Topics 10 to 12 deal with the translation of strategies into action. policies and systems as well as the need for strategic leadership. Topic 13 deals with strategy and ethics in terms of cross-cultural differences and the notion of social responsibilities of an organisation. including generic strategies. the internal environment. > The assignment topics and details for formatting and submission are located towards the end of this Introduction. It emphasises the need to recognise these strategies and to make them work for the organisation. Topics 6 to 9 focus on strategy formulation and discuss the development of a vision. Graduate School of Business . but can emerge within different parts of the organisation. These topics focus on issues such as industry and competitive analysis. and they assist in learning required for the examination.
This is for interaction and information related to the Graduate School and its awards. The second purpose of the Discussion Board is as a forum for discussion among students and with the coordinator. This has two purposes. You can use it for this purpose as much as it suits your interests and situation. and for general issues regarding studying as an external student. The topic notes aim to guide you through the study of strategic management. It is assumed that all students in this unit will check the Discussion Board on a regular basis. Some of the readings also address critical issues which have not been raised in the prescribed text and help you to gain a more balanced understanding of strategic management. discussion/bulletin board An electronic Discussion (or Bulletin) Board is provided for this unit via the Blackboard LMS accessed through your ‘myUNE’. The readings provide additional material which aims to deepen your knowledge gained in the topic notes and to help you explore the concepts and practical application of strategic management further. Unit-specific discussion will not normally appear here and it is not assumed that you will necessarily check this site. You will also find a GSB Student Discussion site near your unit website.Introduction:9 Structure The unit consists of the following components: > > > > > topic notes prescribed text readings activities assignments. Please remember to check your Discussion Board! Graduate School of Business . They outline and discuss the key issues and link the material provided in the prescribed text and the readings into a coherent approach. One is as a source of important news and advice about the unit.
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Systems and Rewards Strategy Implementation and Evaluation: Culture and Leadership Strategy and Ethics Assessment 7 8 9 10 11 12 13 14 15 1 March 8 March 15 March 22 March 29 March 5 April 12 April 19 April 26 April Topic 7: Topic 8: Topic 9: Topic 10: Topic 11: Topic 12: Topic 13: Assignment 1 (on-line test) to be completed by Friday 5 March at 5pm Assignment 2 to be submitted by Monday 12 April Private Revision Examination Period (27 April – 30 April) Graduate School of Business .Introduction:11 study tImetable Week 1 2 3 4 5 6 Commences 18 January 25 January 1 February 8 February 15 February 22 February Topic 1: Topic 2: Topic 3: Topic 4: Topic 5: Topic 6: Topic Introduction to Strategic Management Strategic Analysis: External Environment – Industry Strategic Analysis: External Environment – Competitors Strategic Analysis: External Environment – Organisation Situation Analysis Alternatives to Strategic Analysis Strategy Formulation: Developing a Vision/Mission and Setting Objectives Strategy Formulation: Generic Strategies and other Dimensions of Strategy Formulation Strategy Formulation: International Strategies and Industry/Company Strategy Formulation: Diversification Strategies Strategy Implementation: Budgets and Structure Strategy Implementation: Policies.
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php Assignment 1 Assignment 2 Examination general information Information on all aspects of assessment can be found at http://www. measured against previously specified assessment criteria.au/policies/pdf/assessment.une.edu.pdf This information includes: • • • • • • • • Late submission of work Non-discriminatory language Re-marking and previewing Grading Assignment extensions Special extension of time (SET) Special Examinations Special Consideration Graduate School of Business .edu. 20% 30% 50% 100% The University uses criterion-referenced assessment of your work.une. Further information can be found at http://www.Introduction:13 assessment assessment details Assessment for this unit comprises two compulsory assignments and a compulsory examination. Performance will be weighted as follows.au/policies/alphabetic. This approach involves the assessment of the extent to which a student has achieved the learning outcomes of a unit.
Deviations beyond 10% either way may be penalised at the discretion of the unit coordinator. unless otherwise indicated by your unit coordinator: • • Title page – showing your name. unit name. intentional or otherwise. This should include: > > > • a margin of at least 4cm on the left hand side Double spaced in 12 point type A4 paper References – alphabetical listing of works to which you have referred.pdf Graduate School of Business . If you do not do this properly. you are engaging in plagiarism—the theft. You can find information on this at: http://www/tlc/students/publications/referencing. and to facilitate marking. The referencing system preferred by the GSB is the Author-date (Harvard) System. essay topic and word count Essay – divided into subsections with appropriate subheadings. They also provide a good indicator of the depth to which you are expected to go. (See Plagiarism below) Referencing also enables the reader to access material you have used. referencing Correct referencing is essential in all GSB units. but most importantly they encourage good academic writing.Introduction:14 Word limits You are required to comply with set word limits. Presentation Assignments are to comply with the following format. They have a dual role – they limit the burden on the person marking them. You must properly recognise the contribution of the work of others to your assignment. to help you organise your work. of the intellectual or creative work of others.
Introduction:15 Citing page numbers from the topic material in this unit guide If you are citing page numbers from the topic material in this guide. use the page number from the original book or article. ‘Human resource management and the American dream’. pp. For example: ‘…according to Harrison (1999:98-99)…’ In the reference list full details will be listed as: Harrison. 27. Armidale. Boston and Guest. However. you should reference them as you would from a book or article.F. and you should check with your unit coordinator if unsure. no. A. D. GSB 600—Strategic Managment for Professional Practice. 1990. Graduate School of Business.. Graduate School of Business . For example.. E. vol. 5th edn. not from the unit study guide. Houghton Mifflin. Journal of Management Studies. University of New England. ‘. The Managerial Decision-Making Process. 1999. the full details for that reference will be listed as: Hall. 2010.E. 337-397 Referencing for law units may differ..’ In the reference list at the end of your assignment. 4. you should reference them as you would a book or article.. Citing page numbers from readings in this study guide If you are citing page numbers from a reading in this study guide.according to Hall (2010 1:7).
When a file is submitted to TurnItIn. Assignment cover sheets e-Submitted assignments do not require assignment cover sheets as these are generated automatically by the e-Submission system when you submit your assignment. All assignments that are submitted in hard copy should have an assignment cover sheet attached. This can occur as many times as you require in order to receive a satisfactory report.Introduction:16 Submission All assignments that can be. you will then submit your assignment for marking. the software compares the text in the submitted files with text from a range of electronic sources including online journals. download an Assignment Cover Sheet and post it to the Teaching and Learning Centre. This software is called TurnItIn and is completely integrated into the e-Submission process. it will be submitted to TurnItIn for final checking by UNE. Graduate School of Business . This submission will generate a report for the unit coordinator. TurnItIn UNE uses a software application to determine the originality of assessable work submitted by its students. You can submit your assignment to TurnItIn to check your own work before submission. e-Submission is accessible via UNEonline by clicking on the e-Submission link in your online unit or in the myUNE student portal. If you have trouble e-Submitting. Once the assignment has been e-submitted for marking. Any strings of text that occur in both the submitted document and in one or more of the electronic sources are identified by the software with a unique number and colour in what TurnItIn calls the ‘originality report’. must be submitted electronically via the University’s e-Submission system. These can be accessed from myUNE. Once you are satisfied with your report. the Internet and the TurnItIn database. and clicking on the ‘myStudy’ tab and then the icon in the Assignments list. online databases. you will receive your assignment cover sheets in the mail. If you have received an exemption from the requirement to have computer access.
Extensions will be granted on the basis of unavoidable or unforeseen circumstances. The maximum possible extension that may be granted is two weeks. such as a medical certificate. Requests that relate to avoidable time management issues such as ‘heavy work commitments in other units’ or ‘leaving my run a little late’ will not be considered favourably. Assignment extensions If you find that you cannot meet the due date for an assignment. and only one extension is available per assignment. because you are expected to plan ahead. Normal occupational commitments and extracurricular activities are not accepted as grounds for extra time. should be provided at the same time. except under exceptional circumstances. Any supporting information. Graduate School of Business .Introduction:17 Post Assignments that are being submitted in hard copy should be mailed to: Assignment Section Teaching & Learning Centre University of New England Armidale NSW 2351 DO NOT FAX Faxed assignments will not be accepted. you must contact the unit coordinator in writing prior to and no later than the due date to request an extension.
and the unit coordinator will moderate the marking process to ensure competence. the published due date. Of course. Please note. If a problem arises that you feel will affect or cause you to fall behind in your studies to the extent that it will be difficult to catch up. or (ii) they are submitted after an assignment extension date previously negotiated with the unit coordinator. we will return internal assignments only to their author. Failure to do so may result in an NI (fail incomplete) grade for the unit. If you are unable to submit your assignment on time. you must contact the lecturer before the due date and again if you cannot meet the agreed extension date. Graduate School of Business .Introduction:18 Late assignments Assignments are deemed to be late if (i) they are not submitted (in accordance with the submission requirements outline above) on. no student will be permitted to pick up assignments for other students. If this is the case. Return of assignments The unit coordinator will endeavour to have a student’s assignment marked and either (i) available for collection by internal students. you should speak to the GSB about your options. Marking of assessment tasks Students are advised that their assessment tasks may be marked by someone other than a member of the teaching team. the Head of School will approve the appointment of all casual markers. if you receive an assignment extension you can expect the return of your work to be later than assignments submitted on time. or (ii) returned to the Teaching and Learning Centre within four (4) weeks of receiving the assignment. This means that in some cases assignments may not be returned before the next assignment is due or before the exam. fairness and consistency. You should contact your lecturer about any difficulties you are having with the unit. or before.
au/policies/academic. Full details are available at: http://www. It must be accompanied by a medical certificate or other relevant independent evidence.edu.une. or 2.edu.au/policies/pdf/studentappealspolicy. should consult the University’s Student Appeals Policy at: http://www. withdrawal without failure (by making a documented case) a special extension of time In seeking a special extension of time.pdf Special extensions of time Students must submit the required work by the date specified by the unit coordinator.Introduction:19 Appeals Students wishing to lodge an appeal in relation to unit assessment. practical and/or professional experience assessment. attach all documentation and forward it to the GSB no later than five working days after the student’s final examination in that examination period. A student who has been prevented through illness or other unforeseen or unavoidable circumstances from completing an assignment or other assessable work and submitting it prior to the commencement of the examination period in the relevant trimester may seek from the GSB either 1. Special Examinations. the application of faculty policies. and Special Extensions of Time. a student must have complied with the late assignment policy of the relevant school/faculty and must apply in writing.php Graduate School of Business .une.
Introduction:20 plagiarism You must comply with the University’s policy on Plagiarism and Academic Misconduct (go to http://www. familiarise yourself with the conventions of referencing for your discipline(s). theses. and where an idea which appears elsewhere in any form is used or developed without reference being made to the author or the source of that idea. sentences. Graduate School of Business . Plagiarism is the action or practice of taking and using as one’s own the thoughts or writings of another without acknowledgment. a single sentence or significant parts of a sentence are copied directly. understand and respect the policy on Plagiarism and Academic Misconduct found at the website above. and the source of the material is not referenced within the text of the paper. avoid all acts which could be considered plagiarism.pdf for details). but are paraphrased or summarised.au/policies/pdf/plagiarismcoursework. computer stored data and software. are not enclosed in quotation marks and appropriately referenced. WWW material. where direct quotations are not used. lecture notes or tapes. journals.une.edu. • • Your responsibility You need to: • • • read. Some examples of this are books. The following practices constitute acts of plagiarism and are a major infringement of UNE’s academic values: • where paragraphs. Your work will be checked for originality.
• Avoiding Plagiarism You should refer to the following websites or to academic units for further advice and assistance: eSKILLS UNE Keeping Track http://www.une.pdf Graduate School of Business . report. be aware that when you submit an assignment electronically.Introduction:21 • • seek assistance from appropriate sources with any academic writing areas where you are aware you need more knowledge and skills.une.au/policies/pdf/plagiarismstudentinfocw. you are deemed to have signed the declaration.edu. submit a separate signed and dated Plagiarism Declaration Form with every task.au/library/eskillsune/keeping/index.php Avoiding Plagiarism and Academic Misconduct (Coursework): Information for Students http://www.edu. dissertation or thesis submitted for assessment or examination.
achieves all basic and most higher-order intended goals for the assessment tasks. demonstrated very high level of interpretive and/or analytical ability and intellectual iniative. Good performance indicating reasonable and well-rounded understanding and/or application of the subject matter. adequate level of competence. very high level of competence. clear and unambiguous evidence of possession of an adequate level of an acceptable number of required skills. 85% or above High Distinction (HD) between 75% and 84% Distinction (D) between 65% and 74% Credit (C) between 50% to 64% Pass (P) less than 50% Fail (N) The marking process will not compare your performance to other students. demonstrated high level of interpretive and or analytical ability and intellectual iniative. achieves all basic and higher-order intended goals for the assessment tasks. Satisfactory performance indicating adequate but incomplete or less well-rounded understanding and/or application of the subject matter. clear and umanbiguous evidence of possession of a reasonable level of most required skills. clear and unambiguous evidence of non-possession of most or all required skills. demonstrated adequate level of interpretive and/or analytical ability and intellectual initiative. several serious flaws or many minor ones. Unsatisfactory performance indicating inadequate and insufficient understanding and/or application of the subject matter. omission and/or application present. achieves all basic but only a few higher-order intended goals for the assessment tasks. high level of competence. insufficiently demonstrated level of interpretive and/or analytical ability and intellectual initiative. clear and unambiguous evidence of possession of a very high level of required skills. Graduate School of Business . Very good performance indicating reasonably complete and comprehensive understanding and/or application of the subject matter. some minor flaws.marking/grading system Mark Grade Description Excellent performance indicating complete and comprehensive understanding and/or application of the subject matter. omission and/or application present. it will compare your performance against a standard set of expectations about material mastery at various levels of depth—the greater the depth and sophistication of your knowledge demonstrated in an assessment task. inadequate level of competence. achieves many basic but very few or none of the higher-order intended goals for the assessment tasks. clear and unambiguous evidence of possession of a high level of required skills. minimal or no errors of fact. the higher your grade will be. a few more serious flaws or several minor ones. reasonable level of competence. demonstrated reasonable level of interpretive and/or analytical ability and intellectual initiative. numerous substantive errors of fact. achieves few or none of the basic and higher-order intended goals for the assessment tasks.
If you have not received details for your examination by the beginning of week thirteen (13) of the trimester. contact the GSB immediately. you will not be permitted to take the text or any other printed or written material into the exam. It will cover the entire course. Sample exam questions may be included. These are to help you consolidate concepts and unit information and will not be marked. You must obtain a pass mark or better in this exam. examination Examinations are held in the fifteenth week of trimester.Introduction:23 self assessment activities You may find an exercise or activity at the end of some topics. at exam centres throughout Australia and overseas. You will be notified by the Student Centre through myUNE on the location. Overseas students may have to travel up to 300 kms. The final examination in this unit is worth 50%. Graduate School of Business . or if you have any queries regarding the examination timetable. to pass the unit. Students in Australia need to be able to travel up to 120 kms to an established exam centre if there is not one in the town where you live. You may also find some previous exams on the library website. With the exception of law units. or may be posted on the discussion board prior to the exams. Books will be provided in which to write your answers. The exam will be of two hours duration. as well as overall. A guide to the exam is included after the final topic in your unit material. date. time and supervision arrangements for your exam prior to the examination period for the trimester. preceded by 15 minutes reading time.
Graduate School of Business .
The on-line test is designed to assess your understanding of theories and concepts that are presented in the course.00am Monday 1 March 2010 until 5. Graduate School of Business . from 9. The on-line test will be available to students on the unit’s website. Students should choose a time that is convenient to them. and > automatically logged out of this test site after 60 minutes has elapsed.Introduction:25 assIgnment 1: on-lIne test external students Value: Start date: Complete by: 20% of assessment Monday 1 March at 9am Friday 5 March at 5pm Assignment one is a multiple choice on-line test. noting that they will be: > only able to access this test site once during the availability period specified above. More details of the specific test content will be posted on the website for this unit on the first day of the trimester.00pm Friday 5 March 2010.
Introduction:26 Graduate School of Business .
is required for this Assignment 2. Option One Word length: Value: Submission date: Topic Choose an organisation with which you are familiar and address the following: (Using the worksheets at the back of this guide. as appendices are not included in the word count. you may find them of assistance with this assignment. Also. (It may be beneficial to provide a brief overview of the organisation and to briefly mention your relationship with it. consideration of material covered in all topics.) 1. Describe the ‘strategic management’ of this organisation. Students should make use of the worksheets provided at the back of this guide in developing their reponse.) To achieve a high mark for this assignment you will need to make explicit reference to the course material. 2 500 words 30% of assessment Monday 12 April Graduate School of Business . Discuss the advantages and disadvantages of this approach to ‘strategic management’. 3. Hence. this assignment will not be marked and returned to you prior to the final exam. Recommend potential changes in order to improve this approach. 2. Please note that due to the benefit of having an assignment that allows for consideration of the majority of the topics in Strategic Management. that is Topics 1–12 of the unit notes and associated readings.Introduction:27 assIgnment 2 students must choose either option one or option two.
1. 2 500 words 30% of assessment Monday 12 April The marking template which will be employed to assess your assignment is presented overleaf. this assignment will not be marked and returned to you prior to the final exam. The case study will be available from the bulletin board at the start of the trimester. To achieve a high mark for this assignment you will need to make explicit reference to the course material. Recommend potential changes in order to improve this approach. that is Topics 1–12 of the unit notes and associated readings. Describe the ‘strategic management’ of this organisation. consideration of material covered in all topics. Also. Hence. 2. 3. Discuss the advantages and disadvantages of this approach to ‘strategic management’. as appendices are not included in the word count. you may find them of assistance with this assignment. Please note that due to the benefit of having an assignment that allows for consideration of the majority of the topics in Strategic Management. is required for this Assignment 2.Introduction:28 Option Two Word length: Value: Submission date: Topic Students are required to complete a case analysis using the analytical exercises (worksheets at the back of this guide) provided and to answer the following questions. Graduate School of Business .
e.e. quality of analysis. title page. examples. identification of relevant issues Depth of answer. i.e. word limit Total Maximum Marks 40 40 10 10 100 Your Mark Graduate School of Business . layout.e. appropriate referencing Presentation. i. i. logic of argument Use of supporting evidence. i.Introduction:29 Aspect Breadth of answer.
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and > distinguish between strategic and operational decisions.topIC 1: IntroduCtIon to strategIC management learning objectives At the end of this topic. Study Reading 1. what is strategic management? As mentioned in the overview of this course. Every aspect of the organisation plays a role in this process. It deals with the decisions and actions involved in formulating organisation-wide strategies and in managing an organisation’s operations in a way that effectively carries these strategies out. because it has to deal with many variables and issues simultaneously and has to take conflicting interests and approaches into consideration. > explain the difference between strategic planning and strategic management. This is one reason why strategic management is such a complex and often ambiguous process. production methods. environment and organisational culture. organisation structure. for example its people. strategic management is concerned with managing an organisation from a total enterprise perspective. Graduate School of Business . finances. you should be able to: > describe the strategic management process within an organisation. Introduction This topic introduces the concept of strategic management. It addresses two main issues: ‘What is strategic management?’ and ‘The nature of strategic decisions’.1 (Marren 2004).
implementation and evaluation. The aim of strategy implementation is to translate the strategies into action. it is a dynamic process with much interplay between the individual parts. Strategic management aims to help an organisation respond effectively to the challenges of this competitive landscape. to achieve competitiveness in the market place. while formulating strategies. for example. strategic management has to deal with changes in the nature of competition in many industries. formulation. objectives and strategies so that it can leverage its exsisting resources. This term is widely applied to management’s plan for making money in a particular business. Good implementation looks at issues such as resource allocation. however. has reduced the product life cycles of many products and requires organisations to introduce new products and services at a much faster rate than in previous decades. it is important to assess and evaluate the strategic performance to enable the company to undertake strategic adjustment and corrective action. The rate at which new technologies become available. Consider. For example. the strategic management process consists of four main components: strategic analysis. Finally. and the design of policies. Hence. capabilities and core competencies. This analysis helps the organisation to formulate its strategic vision/mission. as well as create new ones. how the economic development of Asian countries has influenced the competition in Australia. Another term that is often used in relation to business model is that of key economic driver of the proposed strategy. managers need to think about how to implement them. as well as support and reward systems. problems during the implementation phase might Graduate School of Business . Similarly. A term closely related to the concept of strategy is that of a company’s business model. The term business model deals with whether the revenues and costs flowing from the strategy demonstrate business by ability. Technological changes and trends have created further challenges and altered significantly the nature of competition. Instead. It is. the appropriateness of the organisational culture and organisation structure. It calls for undertaking a sound strategic analysis in order to identify the threats and opportunities in the market place and to determine how to use the company’s strengths to achieve the desired strategic outcomes. The strategy-formulation process has to be combined with good strategy implementation to achieve long-term success. important not to regard the strategic management process as a sequence of steps which starts with strategic analysis and finishes with evaluation.1:2 Furthermore. for example.
thoughts and feelings of those with whom they work and thus guide the organisation in ways which facilitate the development and implementation of appropriate strategies. From the above discussion it should be clear that there is an important difference between strategic planning and strategic management. It is through effective strategic leadership that organisations are able to use the full potential of the strategic management process. Organisational culture consists of a complex set of core values and beliefs which are shared throughout the organisation and which have a strong influence on the way the business is conducted. It deals with the management of the organisation as a whole and hence includes the implementation and evaluation processes of strategic management. Hence leadership includes consideration of the way the organisation does business and reinforcing ethical behaviour throughout the organisation. objectives and strategies. Thus. To achieve successful outcomes from a strategic management process. Graduate School of Business . often embodied in a document called a strategic plan.1:3 require further strategic analysis to be undertaken. Effective leaders influence the behaviour. In reality. In contrast strategic management is a wider more complex task. A strong fit between organisational culture and strategy promotes strategy implementation. Read Chapter 1 of the text. It is also important to acknowledge the importance of leadership throughout the strategic management process. and managers have to rely less on policies and rules to enforce what employees should and should not do. In other words. namely strategic analysis and the formulation of vision. Effective organisational cultures are grounded in principles which enforce social responsibility and ethical business behaviour. Strategic planning constitutes only one small part in the strategic management process. these different sets of action allow the firm to achieve its desired strategic outcomes only when they are carefully integrated. mission. strategic leaders need to pay a great deal of attention to the culture of their organisation. the separation of the four elements in strategic management are for discussion purposes only. the culture of an organisation must be in close alignment with its strategies. A central task of leadership is to shape the internal environment of the organisation.
from this comprehensive process. A good starting point is to identify the numerous stakeholders and their relationship with the organisation. They are not about day-to-day or operational decisions. For example an organisation may raise money from a number of sources. Long-term decisions deal with questions such as ‘Which business are we in or should we be in?’ and ‘Which geographic markets should we serve?’. it is unlikely that all the issues raised by this process will be relevant to a particular organisation. This includes the need to understand which stakeholders are most likely to switch to and why. Strategic decisions affect several or all areas of the organisation. such as government funding but also membership payments and donations. As such these issues are the same as those considered by private sector organisations. others only of minor importance whilst others may even be irrelevant. And for each of these stakeholders there is the need to consider the benefits of the product and costs of its production. for example through offering products or services which are unique. or translating. the application of strategic management requires the art of adapting.1:4 the nature of strategic decisions There are three main characteristics associated with strategic decisions: > Strategic decisions are concerned with the long-term direction of an organisation. as in so many other businesses. Strategic decision making requires a good understanding of the different functions and activities within the organisation and how they relate to each other. An example of this translation is with not-for-profit organisations which include many public sector organisations. Most organisations will find that some of the issues raised are extremely important. Thus. > > adapting strategic management to an organisation This Unit Guide and its prescribed text provide a comprehensive process for strategic management. However. Strategic decisions aim to search for effective positioning within the competitive landscape to give the organisation advantage over its rivals. Thus. the competitors are other organisations that compete for time and money from these stakeholders. Graduate School of Business .
implementation and evaluation—which is usually the most difficult to achieve and why? Graduate School of Business .1:5 aCtIvIty Of the four components of strategic management—strategic analysis. formulation.
You might work in an organisation which has a formalised planning system and an elaborate strategic plan. we will address these issues and. by the end you will have a good knowledge of how to improve the calibre of strategy implementation. Maybe the ‘human condition’ has not been taken into consideration. Throughout the course. In other words. Graduate School of Business . hopefully. Maybe the policies and systems do not support your strategic plan. Why? Maybe the organisational culture in the organisation is not supportive of the strategies that have been developed. but you might find that this plan never gets implemented. Maybe the politics in the organisation are not conducive to the strategic plan. there are many possible reasons why some of the best plans are not implemented.1:6 guIde to aCtIvIty The most difficult component in strategic management is usually the implementation of the strategic plan. Maybe the organisation lacks the necessary leadership to get the strategies implemented.
For example. Introduction The aim of strategic analysis is to understand the various influences which affect the organisation and hence its strategic situation. Technological changes have altered the way of doing business and require the development of more timely and effective competitive actions. you should be able to: > explain the importance of studying and understanding the external environment. A major aim of the analysis is to identify the opportunities and threats which exist in the external environment. many organisations now compete in global rather than domestic markets. Moreover.topIC 2: strategIC analysIs: external envIronment — Industry learning objectives At the end of this topic. deregulation has removed protective barriers from certain industries and requires organisations to meet world standards. We will be looking at two different areas in strategic analysis: > > the external environment (Topics 2 and 3). and the internal environment of the organisation (Topic 4). The environmental conditions which organisations face can change. Graduate School of Business . whereas the internal analysis aims to identify strengths and weaknesses of the organisation. analysing the external environment Trying to understand the external environment is not an easy task. and > identify the five competitive forces and explain how they determine an industry’s profit potential.
Managers are challenged to deal with uncertainty and ambiguity and to find ways to respond to the environmental changes in ways that increase their operational efficiency and enhance their competitive position in the market place.2:2 It is vital for decision makers to have an accurate understanding of this turbulent and complex environment. According to this model. 2. The analysis of industry structure is based on the framework of Michael Porter. however. the state of competition in an industry depends on five competitive forces: > > > > > potential entrants suppliers buyers substitutes the intensity of rivalry among competitors. A sound environmental analysis consists of the following tasks: 1. definition of the industry’s dominant economic features analysis of competitive forces in the industry (Porter’s 5 forces model) identification of forces driving industry change analysis of strategic groups analysis of strategic moves of individual competitors identification of key factors for success. due to the importance of Porter’s 5 forces model it will be discussed in detail. Graduate School of Business . 3. His model focuses on the stable. 5. 6. underlying characteristics of an industry. it is not concerned with short-term factors such as fluctuations in economic conditions. All of these tasks are relevant in strategic analysis. Read Chapter 3 of the text. A sound understanding of the industry structure is essential to identify the basis for possible competitive advantage and to develop appropriate long-term strategies. 4. analysis of competitive forces in the industry—the porter model Analysis of the competitive forces in the industry helps to determine the intensity of competition and the profit potential of the industry.
Such advantages include proprietary technology. Entry barriers exist when it is difficult to enter into a new industry or when firms entering a new industry are at a competitive disadvantage. Starting small may mean that the firm faces losses for a number of years before it can build up its size to reap the economies of scale. new entrants must allocate significant resources over a long period of time to overcome these customer loyalties. Product differentiation is another means by which firms in an industry can build up barriers to entry. unit costs decline with increases in the absolute volume produced during a given time period. marketing activities and other business functions. Typically. Loyal dealers and retailers can offer substantial advantages to existing firms and it may be difficult for a new entrant to establish a competitive distribution network. the more limited the number of potential entrants. Another barrier to entry is access to distribution channels. Graduate School of Business . Established companies in the industry might also have cost and experience advantages independent of economies of scale which are difficult for new entrants to duplicate. Thus new entrants must either invest in large-scale production or start small with considerable cost disadvantage. access to raw materials and location.2:3 The threat of new entrants The likelihood that firms will enter an industry depends on two factors: barriers to entry and the expected retaliation from firms within the industry. patents. Established firms in many industries have loyal customers with strong brand identification. The larger the capital requirement needed to enter the market. Competing in a new industry requires resources for physical facilities. With economies of scale. Porter differentiates between the following six major sources of barriers to entry: > > > > > > economies of scale product differentiation capital requirements cost and experience advantages of existing firms access to distribution channels government regulations. inventories.
suppliers’ goods are critical to the industry’s success. Bargaining power of suppliers Suppliers can exert power over firms competing within an industry by increasing prices and reducing the quality of their products and services. In international markets. substitutes are not available. Bargaining power of buyers Buyers can bargain for higher quality. greater levels of service and lower prices. They are powerful when: > > > > > the buyers are concentrated or purchase in large volumes.2:4 Governments can limit entry into an industry with controls such as licence requirements. the industry’s product is unimportant to the quality of the buyers’ products or services. and suppliers are a threat to integrate forward into the buyers’ industry. standards for air and water pollution. Potential entrants might pursue entry into the market if only passive resistance is anticipated. Graduate School of Business . A supplier group is powerful when: > > > > > > it is dominated by a few large companies and is more concentrated than the industry to which it sells. and the buyers pose a credible threat to integrate backward into the sellers’ industry. whereas they might decide against entry if incumbent firms are expected to aggressively defend their market positions. New entrants also need to consider possible reactions from existing competitors. If unable to recover cost increases. the industry is not important to the supplier group. standards for product testing and safety regulations. foreign investment applications need to be approved by the host government. a firm’s profitability is reduced by the suppliers’ actions. substitutes are available and the buyers can switch to another product at little or no cost. the product being purchased from the industry accounts for a significant portion of the buyers’ costs. the effectiveness of suppliers’ products has created high switching costs for the firms.
the need for strategies which are based on unique activities and the importance of fit between the different activities of an organisation.2 (Porter 1996) examines the above issues in great detail. An unattractive industry has low entry barriers. Porter places particular emphasis on the difference between strategic and operational effectiveness. The intensity of competitive rivalry among firms is a function of the following factors: > > > > > numerous or equally balanced competitors slow industry growth lack of differentiation or low switching costs high fixed costs high exit barrier. suppliers and buyers with strong bargaining power. when the price is lower and quality is equal or better than the industry’s product. The threat of substitutes is strong when customers face few or no switching costs. Graduate School of Business . the lower the profit potential for firms in the industry. strong threats from substitutes and intense rivalry among competing firms. few threats from substitutes and relatively moderate rivalry. Rivalry occurs when one firm seeks to improve its position at the expense of others through price cuts. an attractive industry has high entry barriers. Reading 2. the stronger the competitive forces. unique advertising campaigns. Intensity of rivalry among competitors The final competitive force is rivalry among existing firms. suppliers and buyers with little bargaining power. product innovation.2:5 Threat of substitutes Substitutes are different products or services that perform the same or a similar function as the original product or service. or extended product warranties.1 (Porter 1980) discusses the five forces model in great detail. for example the existence of specialised assets. Reading 2. In general. Alternatively.
However.2:6 Limitations of the Porter Model Porter’s five forces model makes a relevant contribution to our ability to analyse the industry. it is important to be aware of its limitations. Graduate School of Business . it provides a static picture of competition and hence does not explicitly include the potentially major role that innovation may have. The two main limitations are: firstly. it de-emphasises the significance of individual organisation differences. and secondly.
as well as those organisations that act as suppliers and buyers to the industry. Select an organisation that you are familiar with and provide a detailed discussion of its industry.2:7 aCtIvIty A fundamental assumption underlying the use of the Porter’s 5-Forces model is the identification of an industry in which the organisation operates. Graduate School of Business . This should include identification of those organisations that are competitors. those in the same industry. that is.
or… Such alternative industry definitions would lead to different. or bicycles. or leisure. or self propelled transport. or fashion. Cannondale is a leader in what is generally referred to as the ‘mountain bike industry’. These organisations generate different views on their relationship to customers and who are their competitors. However. and perhaps more relevant. a Porter’s 5-Forces analysis would provide a very different picture if the industry was defined differently.2:8 guIde to aCtIvIty The key starting point in relation to answering the question is the definition of the industry in which the organisation exists. For example. strategic conclusions. such as outdoor recreation. Graduate School of Business . Often the revolutionary strategies and hence successful organisations are those that take different views on where industry boundaries lie.
topIC 3: strategIC analysIs: external envIronment — CompetItors
At the end of this topic, you should be able to: > define strategic groups and describe how they influence a firm’s competitive action; and > describe key sucess factors for a variety of industries.
This is the second of two topics which consider analysis of the external environment. The previous topic considered analysis of competitive forces in the industry in detail. This topic considers strategic groups and key success factors. Reread pp. 75–82 in Chapter 3 of the text.
A strategic group analysis is used to analyse competition within an industry. It is based on the assumption that some organisations are more significant, from a competitive point of view, to a particular organisation than others. The strategic group analysis should be carried out as follows: • • • Identify the two major competitive characteristics that differentiate organisations in the industry. Plot individual organisations on a two-dimensional graph by using the two variables as the vertical and horizontal axes. Vary the size of the circle for each organisation in proportion to the group’s share of the total industry revenue.
It is important to note that there may be a number of variables that could be used and hence a number of different strategic group maps—each offering a relevant strategic perspective.
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Strategic group analysis is useful to strategists because it enables them to gain a better understanding of the competitive rivalry. Strategic group analysis helps to identify the most direct competitors and the basis on which competitive rivalry is likely to take place. Strategic group analysis also raises the question of how possible it is for an organisation to move from one strategic group to another, especially if the current strategic group is adversely affected by strong competitive pressures. Finally, strategic group analysis might be used to identify strategic opportunities, in particular if the strategic group diagram suggests a number of ‘vacant spaces’ in the competitive landscape.
key factors for competitive success
Key factors for competitive success are commonly referred to as key success factors (KSFs). They arise out of the observation that there are only a limited number of competencies, that is, things an organisation is competent at, in each industry. Thus, in order to last for the long term in an industry an organisation must have, or develop, competencies in these areas. The organisation may have competencies in other areas, however, these will only enhance competitive success, they will not ensure it. Key success factors vary widely. For example, a technology company may require competency in Research and Development whilst a manufacturer of retail products will require competency in relation to managing distribution channels. Study Reading 3.1 (Foster & Bradach 2005).
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Choose an industry you are familiar with and identify the strategic groups existing in that industry. Draw a strategic group map. What distinguishes them from each other? What strategic conclusions can you draw?
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it is important that you have identified all the major players in the industry and that you have selected variables for the horizontal and vertical axes which are not correlated with each other. alternatively they may indicate alternatives where it is impossible to create a sustainable competitive position. Graduate School of Business . In general. Perhaps the blank spaces in the diagram indicate areas of opportunity.3:4 guIde to aCtIvIty The answer to this question depends on the industry you have chosen. The strategic conclusions depend very much on how your diagram looks. From the resulting diagram it should become clear what distinguishes the strategic groups from each other.
> identify and analyse the potential of competencies and resources. and > apply the analytical tools of value chain analysis and benchmarking within an organisation and between competitors. it determines what an organisation might choose to do. an organisation decides what it can do — that is. However. This environment creates both opportunities and threats for strategy development. Introduction The last two topics have underlined the importance of analysing and understanding the external environment in which an organisation operates. Through an analysis of the internal environment. Graduate School of Business . the competitive actions permitted by its unique strengths in terms of resources. successful strategies are also dependent on the internal situation of the organisation itself. you should be able to: > explain the importance of analysing the internal environment of an organisation.topIC 4: strategIC analysIs: Internal envIronment — organIsatIon sItuatIon analysIs learning objectives At the end of this topic. Read Chapter 4 of the text. An internal analysis centres around the following issues: • • analysis of the organisation’s competencies and resources analysis of the organisation’s cost structure using value chains and benchmarking. capabilities and core competencies.
In addition.4:2 examination of the organisation’s resources and competencies An analysis of resources — sometimes called audits — identifies the resources available to the organisation and provides a framework for the study of their potential. A value chain analysis is a systematic way of examining the costs of activities performed by the organisation. training and experience of employees).g. Eisenstat & Foote 2002). This is done by performing a strategic cost analysis. human resources (e. Primary activities are concerned with a product’s creation.1 (Miller.g. physical resources (e. Study Reading 4. The value chain divides the organisation internally into strategically relevant activities. organisational resources (e.g.g.g. technological resources (e. whilst a core competence is a competence that is critical to the competitiveness of the organisation and. Examples of resources include financial resources (e. patents. The unique combination of the organisation’s resources are often referred to as capability or competence. The primary tool of this analysis is the value chain. for example brand name and perceptions of product quality. equipment. controlling and coordinating systems). it stimulates managerial thinking about how these resources may be exploited strategically. The value chain is divided into primary and support activities. In addition. a resource is typically not a source of competitive advantage. formal planning. a distinctive competence is a core competence that the organisation performs better than its competitors. The aim is to understand the individual costs in performing these activities and to locate potential sources of competitive advantage. A competence is something that the organisation is good at. borrowing capacity). Individually. However. its Graduate School of Business . finally. access to raw materials). copyrights and trade-secrets) and reputation with customers. distributors and customers are considered. interactions between the organisation’s activities and those of its suppliers. when they are integrated with other resources they may create a competitively valuable asset. Investigation of the organisation’s cost competitiveness An important part in the internal analysis for an organisation is to look at its cost position in comparison to its rivals.
operations. Graduate School of Business . Support activities provide the support necessary for the primary activities to take place.4:3 sale and distribution to buyers. This involves inclusion of both the suppliers’ value chain and the buyers’ value chain. and service. The concept of a value chain may also be applied to a whole industry. human resources management and general administration. Consideration of the value chain for the entire industry may assist in a number of ways. technology and systems development. customers and indeed the whole industry. This analysis may lead to identification of areas for gaining competitive advantage. Thus value chain analysis allows for a comparative analysis of the value chains of other organisation’s competitors. in addition to focussing attention on both buyers and suppliers (such as from the Porter’s Five Forces model) this enables consideration of the issue of vertical integration in both the forward and backward direction. and its service after the sales. For example. They consist of product R & D. Finally. Such a comparison (or benchmarking) will indicate whether the organisation is performing particular activities in an efficient way. Primary activities are purchased supplies and inbound logistics. A significant aspect of the value chain analysis is the examination of its various components as well as the links between the value chain of the organisation and the value chains of its suppliers. it should be noted that competitive advantage is relative. sales and marketing. Further. distributors. outbound logistics. opportunities to reduce costs for more than one organisation in the value chain through some cooperative efforts may be identified.
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Graduate School of Business .4:5 aCtIvIty It is interesting to ponder the value of resources in terms of competitive success. From your own experience provide examples of unique resources that have provided organisations with sustained competitive success.
4:6 guIde to aCtIvIty Although in Strategic Management we place a big emphasis on resources that an organisation is able to create. named Broken Hill. Graduate School of Business . they have a head start in the competitive race. there are examples of organisations where their resources are unique. The mining industry provides examples of the value of unique resources. Success is. determined by having access to the raw material. to a large extent. and why was a company called Broken Hill Proprietary Limited the largest company in Australia for many years—because of a mine that at its peak supplied 30% of world silver production. Why is there a town in western New South Wales. These organisations are in a somewhat shielded competitive position.
Observation of strategic management in organisations has identified a less defined approach. 69). you should be able to: > discuss differences between emergent and deliberate strategies. 70). These strategies can ‘show up in the strangest places and develop through the most unexpected means’ (p. 68). the ability to recognise them and to use them for the benefit of the organisation. emergent strategies Mintzberg (1987) argues that most of the strategic management literature describes strategy-making as a deliberate process which follows a stepby-step approach: ‘First we think. this approach has been criticised as being inadequate for the development of strategies.topIC 5: alternatIves to strategIC analysIs learning objectives At the end of this topic. He argues that deliberate and emergent strategies may be conceived as two end points of a continuum along which real world strategies lie. Introduction The strategic management approach we have discussed so far assumes that strategies are derived from a fairly formalised process of strategic analysis. We formulate. However. Strategists must be able to use both approaches or — in his words — they need to walk ‘on two feet. the other emergent’ (p. and > discuss the contribution of ‘paralysis by analysis’ and ‘extinction by instinct’ to the strategic management process. He considers this view as restrictive and introduces the concept of emergent strategies to describe strategies which ‘appear without clear intentions — or in spite of them’ (p. then we implement’ (p. This involves a recognition of the importance of emergent strategies. often operating in conjunction with the formal activities associated with strategy. 69). Graduate School of Business . then we act. the creation of an organisational culture within which a variety of strategies can grow. one deliberate. for example as a response to a particular situation.
assist managers to find patterns and strategies within the organisation. should: 1. and question conventional wisdom and assumptions and encourage managers to think strategically. 107). 3.5:2 Reading 5. He argues that ‘strategic planning often spoils strategic thinking. causing managers to confuse real vision with the manipulation of numbers’ (p. Different organisations require different approaches. Mintzberg contends that the development of strategy should be the task of business-unit managers. In his view. 107). In one of his more recent publications. 2. Mintzberg (1994) goes a step further and contends that strategic planning has ‘fallen from its pedestal’ (p. Graduate School of Business . on the other hand. These alternative approaches highlight an important aspect of strategic management. Reading 5. 109). namely that there is no one best way to develop strategies. it is important for managers to be aware of the different ways strategies can be formed and to create the conditions in their organisations to facilitate an appropriate approach towards strategy formulation and implementation. an organisation in a growing industry might need to approach its strategy development processes differently from an organisation in a mature or declining industry. carry out formal analyses and supply the hard data.1 (Mintzberg 1987) explores the concept of emergent strategies and shows their relevance for organisational learning. because it confuses strategic planning with strategic thinking. whereas strategic thinking is about synthesis which involves intuition and creativity and tends to invent new categories. Similarly. Planners. For example an organisation which operates in a highly turbulent environment might need a totally different approach compared to an organisation operating in a stable environment.2 (Mintzberg 1994) discusses the above issues in great detail. strategic planning is about analysis which tends to ‘depend on the preservation and rearrangement of established categories’ (p. Hence.
5:3 aCtIvIty Choose an organisation you are familiar with and explore to what extent it uses the ‘emergent’ approach towards strategy development. Graduate School of Business .
experience indicates that strategies tend to be created from a combination of formal analytical processes working in conjunction with ideas that emerge from various parts of an organisation on an ad-hoc basis. Graduate School of Business .5:4 guIde to aCtIvIty The answer to this question depends on the organisation you have chosen. However.
However. and > understand the difference between financial and strategic objectives and explain their importance in the strategy-making process. their quality is extremely variable. Study Reading 6. Introduction This topic looks at two issues which are important for strategy formulation. Read Chapter 2 of the text. This is a pity. because vision and mission statements can be very important in providing an overall direction for the organisation. namely the development of a vision or mission and the setting of objectives. Some authors make a distinction between what constitutes a vision statement versus a mission statement. developing a strategic vision and mission Mission and vision statements are popular. This distinction is not of importance in this subject.1 (Chatterjee 2005).topIC 6: strategy formulatIon: developIng a vIsIon/ mIssIon and settIng objeCtIves learning objectives At the end of this topic. phrases or even a few short sentences that fulfill Graduate School of Business . There are a number of different definitions for vision and mission statements in the literature. you should be able to: > explain why vision/mission statements are important for an organisation. What is important is that the strategic management process generates words.
objectives need to be quantifiable areas of activity and to include a time for completion. In the same manner a good vision/mission sets the direction for the organisation. A good example of a strategic objective is ‘superior product quality within five years’. Reading 6. which are measurable performance targets. As performance measures.6:2 the role of a vision/mission statement. This statement has the potential to make a major contribution to the organisation by setting the direction for strategy and hence all organisational activities. is the term used in strategy for this. the top stone of the pyramid sets the direction for all of the stones that are below it. Although pyramids are not built from the top down. whilst not universally applicable. return on investment. The four levels proposed are: corporate strategy. does give a relevant framework for thinking about the numerous components of strategy. operating strategy. functional strategy. 2001) discusses the importance of relating vision and objectives in non-profit organisations. below this are the business unit strategies which interact with the functional and operational strategies. Financial objectives relate to the financial performance of the organisation and typically focus on measures such as earnings growth. Organisations need both financial and strategic objectives. Objectives. This concept. In contrast strategic objectives are concerned with strengthening an organisation’s overall business and competitive position. The greater the harmony between these. At the top level in a multibusiness organisation there are corporate strategic issues. The goal is to achieve consistency with the strategies and objectives set at all these levels of the organisation. Objectives should be set for all organisational units. At the highest Graduate School of Business .2 (Sawhill & Williamson. Strategic issues exist at many levels in an organisation. levels of strategy It is possible to think of strategy at a number of levels in the organisation. Hence they measure what and by when. business strategy. and. finally. the more efficient the organisation will be in achieving its overall strategic direction. setting objectives The vision/mission of the organisation needs to be translated into action. and cash flow.
Graduate School of Business . for example. The final level of strategy is that of the operational strategy. marketing or human resource strategies represent examples of functional strategies. that of corporate level strategy. corporate strategy and business strategy are the same. the issues considered concern the allocation of resources between the different business units in the organisation. business strategies. For example. For single businesses. The next level. relates to the managerial plan for a single business. that of functional strategy. hence. These four levels of strategies typically exist in large diversified organisations. The operating strategy concerns activities within the functional strategies. or strategic business unit as used in some areas. The next level. The advertising campaign and its associated strategy is. an operating strategy within the broader functional strategy of marketing. This is where emphasis is given to the external environment for the business and its internal resources resulting in the pursuit of sustainable competitive advantage. they have only three levels of strategies.6:3 level. relates to the managerial game plan for a particular functional activity or business process.
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why. why not? Graduate School of Business .6:5 aCtIvIty Choose an organisation you are familiar with and evaluate its mission statement. Do you think it is adequate? If yes. if not.
In general.6:6 guIde to aCtIvIty The answer to this question depends on the organisation you have chosen. That is: > differentiate the organisation from the competitors > clearly define the business > be relevant for all stake holders > be inspiring. Graduate School of Business . the mission statement should avoid banalities and superlatives and comply with the four criteria addressed in this topic.
outsourcing and internet strategies. low cost or differentiation. It takes an in-depth look at the five generic competitive strategies. and a middle position of ‘best cost’ strategy. Typically this involves driving costs down in each activity of the value chain.topIC 7: strategy formulatIon: generIC strategIes and other dImensIons of strategy formulatIon learning objectives At the end of this topic. Graduate School of Business . focussed cost leadership. Low cost strategy Under this strategy the organisation aims to be the overall low cost provider of a product or service while serving a broad cross-section of the market. broad differentiation. Type of competitive advantage In the context of generic strategies there are two types of competitive advantage that may be pursued. There are five generic strategies. > identify which of these strategies is most likely to be sucessful in particular situations. Introduction This is the first topic in strategy formulation. The five generic strategies are broad cost leadership. generic competitive strategies Read Chapter 5 of the text. focussed differentiation. you should be able to: > describe the characteristics of the five generic strategies. and > understand the potential from vertical integration.
the buyers are very price sensitive and the competition is fierce. A broad or mass market strategy is when everyone is a potential customer and is commonly used by organisations that have grown to become dominant in their industry. specialised requirements in using the product or special product attributes. The market segments can be defined in terms of geographic location. when multi-segment competitors do not meet the needs of the market niche. Target market In the context of generic strategies there are two extremes in terms of the target market: broad or mass market as opposed to narrow or niche market. However.7:2 A low cost leadership strategy can be used to compete in almost any industry. It is the most—and perhaps the only—appropriate strategy for competing in commodity industries. product quality and comprehensive customer service. A differentiation strategy works best when products or services can be differentiated in many ways and customers perceive these differences as being valuable. it is particularly useful if the products are undifferentiated. In addition. when the needs of customers are diverse and when few competitors follow a similar approach. To be sustainable. A focus or niche strategy can be applied in most industries. again serving a broad cross-section of the market. and when an organisation lacks the resources to target the whole market. an organisation aims to offer a unique product or service to its customers. differentiation usually has to be linked to internal capabilities and core competencies which are difficult for competitors to match. customers usually perceive them as adding extra value to the product or service. Differentiation strategy With a differentiation strategy. This strategy targets a narrow segment of the market. Such attributes require considerable skills and expertise and are more difficult to imitate. Differentiation may provide a lasting competitive advantage when it is based on technical superiority. It is particularly useful if the industry consists of many different segments. Graduate School of Business .
offensive strategies. outsourcing strategies. as organisations simultaneously pursue cost management as well as elements of differentiation. Further. This may in part be due to the scale and scope of many new market opportunities such as the desirability to be a global player and the speed at which the technology race is unfolding. These cooperative strategies may be termed strategic alliances or collaborative partnerships where the participants implement their own strategic initiatives and strengthen their competitiveness through working with other organisations. defensive strategies and strategies concerned with the timing of strategic moves. Strategic alliances and collaborative partnerships Competition has been an important aspect of many sections of the economy. Read Chapter 6 of the text. It is a strategy that is very common. This section considers alliance strategies. vertical integration strategies. and with varying degrees of success. they service an existing market whilst developing new markets. Somewhat in contrast to the perception of the importance of competition many organisations are pursuing strategies that demonstrate aspects of cooperation rather than competition. other dimensions of strategy formulation In addition to the 5-Generic strategies there are many other dimensions of strategy that may be used to secure a competitive advantage. The best-cost provider strategy is particularly useful in markets with price and value sensitive buyers where product differentiation is the norm. This relates back to the seminal work of Adam Smith and his notion of ‘the invisible hand’ of competition and the benefits that it provides. Competition has been introduced to varying levels.7:3 ‘Best cost’ generic strategy This strategy combines an emphasis on low cost with an emphasis on quality and may be referred to as a ‘best-cost’ strategy. in many industries previously seen as a monopoly. Graduate School of Business .
The notion of partial integration. absorbs another. However.1 (Wakeam 2003). An interesting aspect of vertical integration is the notion of full versus partial integration. the acquirer. The offensive strategies may be characterised as guerilla offensives which use Graduate School of Business . A merger is combination of two organisations of approximately the same size to create one new organisation. higher flexibility and a concentration of particular resources. Merger and acquisition strategies Strategic alliances and collaborative partnerships generally exist where fundamentally separate organisations operate together for a relatively small part of their total activities. This requires consideration of what activities are core to the organisation and hence what activities are potential candidates to be provided by other organisations or outsourced. outsourcing is a useful strategy for creating lower costs. suggests that the organisation only participates in select stages or in a select amount of these stages.7:4 Reading 7. An acquisition is where one organisation. Vertical integration strategies Vertical integration strategies. With full integration the organisation totally controls all the suppliers or buyers in the adjacent stage of the distribution channel. or taper integration. Offensive and defensive strategies It has been suggested that competitive advantage is nearly always achieved by successful implementation of offensive strategic moves. They are only useful if they strengthen the organisation’s competitive position. usually smaller organisation. into its operations. extend the scope of the organisation within the industry. The biggest danger with outsourcing is the potential for the organisation to outsource the wrong activities and lose control of them. Outsourcing strategies Somewhat the opposite of integration is the notion of disintegration or unbundling strategies. There is also the danger of outsourcing too many activities and creating ‘organisational anorexia’. In situations where there are advantages in having the operations of the two organisations more closely intertwined mergers and acquisitions offer an appropriate strategic alternative. both forward and backward.
7:5 the hit and run principle. they merely fortify it. which is between the two extremes. Another approach is to dissuade competitors from attacking by signalling strong retaliation. the extent to which they use the internet. that of a defensive strategy. where the organisation maintains the traditional retail outlets and gain additional sales from the internet. Obviously a key consideration for pre-emptive strikes is considering who to attack and when to attack them. that is. Internet strategies The pervasiveness of the internet and its increasing use by both organisations and individuals has led to another strategic choice for organisations. Defensive strategies include moves to fortify the organisation’s present competitive position. Timing of strategic moves Finally. Graduate School of Business . is common. The opposite of an offensive strategy. Sometimes organisations which move first gain advantages. The opposite extreme is using an internet web site only to provide information about the products for sale. other times it might be better to be a late-mover. Another offensive strategy is the notion of a pre-emptive strike which involves moving to stake out a position that results in competitors being discouraged from duplicating. Many organisations are using a ‘click and brick’ strategy. however. At one extreme the internet may be used as the sole channel for accessing buyers and completing sales transactions. it is important to know when to move. for example by signing exclusive agreements with suppliers or distributors. defensive strategies normally don’t enhance an organisation’s competitive position.
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7:7 aCtIvIty Consider 10 products and classify them in terms of the 5-Generic strategies. Graduate School of Business .
Its value lies in providing a template that highlights directions in which organisations may choose to move in relation to the strategy for their products. Graduate School of Business .7:8 guIde to aCtIvIty For many people the classification of these 10 products will show a relatively high frequency of ‘Best cost provider’ strategies. The relative absence of products fitting into the other four strategies is not to suggest that the 5-Generic strategies concept is irrelevant.
topIC 8: strategy formulatIon: InternatIonal strategIes learning objectives At the end of this topic. such as research and development or to achieve economies of scale from a large investment in production infrastructure. In addition. and > identify the main risks associated with international expansion. It focuses on reasons to internationalise. > describe the characteristics of licensing. multicountry strategy and global strategy. different international strategies. overseas markets may offer location advantages such as lower raw material or labour costs. Graduate School of Business . Organisations that are successful in their domestic market and achieve a level of market saturation often move into new overseas markets as a means of sustaining growth. Introduction This topic discusses the importance of international strategies as a source of strategic competitiveness. and the risks in the international environment. exporting. reasons for moving into international markets One of the primary reasons for pursuing an international strategy is that international markets yield potential new opportunities. This growth may offer an opportunity to increase the return on a large expense. you should be able to: > explain the main reasons for organisations to pursue international strategies. The most obvious of these is access to a larger market. In addition this topic reviews the contribution that industry environment and organisation situation make to strategy form Read Chapter 7 of the text.
after the licence expires. Many organisations start their international expansion by exporting their products or services to other countries. it lacks responsiveness to local markets and is difficult to manage because of the need to coordinate the strategies across country boundaries. In addition. Licensing and exporting A licensing agreement allows a foreign firm to purchase the right to manufacture and sell the organisation’s product within the host country. It is centralised and controlled by the head office. These include where the product is made which gives rise to licensing versus exporting. a global strategy can make use of economies of scale and learning experience. Further. the strategic and operating decisions are decentralised to the business unit in each country in order to customise the products and services to the local market. Its disadvantage is that it provides the organisation with very little control over the manufacture and marketing of its products in other countries. In addition. The licenser is normally paid a royalty on each unit sold. Thus. the exporter has less control over the marketing and distribution of its products in the host country—unless it establishes its own distribution and sales organisations in the foreign market. the organisation’s strategy is similar in all host countries. the licensee may learn the technology and. Multi-country strategy versus global strategy In a multi-country strategy. produce and sell a similar product. a multi-country strategy does not allow the achievement of economies of scale. In a global strategy. This is an important strategy when the customers’ needs and preferences differ significantly from country to country. Its disadvantages are the often high costs of transportation and possible tariffs placed on the products. However. Graduate School of Business . where decisions are made gives rise to multi-country versus global strategy. However. offering standardised products across all markets. Exporting involves less risks than a multi-country or global strategy. Licensing is a valuable strategy when an organisation with a unique product does not have the organisational capabilities or resources to market the product itself in foreign markets.8:2 types of international strategies There are a number of dimensions of international strategies.
8:3 Read Chapter 7 of the text. Further. The first four of these follow the life cycle concept: > > > > > > emerging industries turbulent high velocity markets maturing industries stagnant or declining industries fragmented industries sustaining rapid company growth.1 (Viljoen & Dann 2000) suggests a range of possible strategies for public sector organisations. In deciding which strategic alternative to choose. The three types of situations an organisation might be in are: > > > industry leaders runner-up organisations weak businesses. the relative position of the organisation in that industry impacts upon the types of strategies that are available. Another dimension to strategy formulation is consideration of the conditions in the industry. Graduate School of Business . it is important to investigate the industry environment and the situation of the organisation in that industry to identify what strategic alternatives are feasible. Reading 8.
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How do the results from this analysis influence the strategic choices that are available to it? Graduate School of Business .8:5 aCtIvIty Consider an organisation that you are familiar with in relation to its industry environment and specific situation within that industry.
using them is more problematic. the strategic choices for each product may differ. many organisations have a range of products that exist in different industries. Thus. Graduate School of Business . Hence. Although the concepts are relatively straightforward. For example.8:6 guIde to aCtIvIty The answer to this question identifies a number of interesting issues. the industry environment for each product differs. however. the organisational situation is the same. which may lead to differing views on the industry environment. Further. the definition of the industry boundary is somewhat arbitrary.
This is followed by discussion of related and unrelated diversification prior to consideration of key strategic decisions in a diversified organisation. cost.1 (Gopinath 2003). > identify related and unrelated diversification. Read Chapter 8 of the text. you should be able to: > identify the different ways for entering a new business. Introduction This topic begins by discussing the strategies for entering new businesses. Execution of this requires an appropriate business and a willing vendor. and control. entering a new business Diversification implies the addition of new activities to the organisation. The first of these is by acquisition where the new business is purchased. Graduate School of Business . The difficulty of finding this may lead to undertaking an internal startup or seeking a joint venture. There are three broad means by which new businesses may be entered. and > analyse the advantages and disadvantages of these diversification strategies.topIC 9: strategy formulatIon: dIversIfICatIon strategIes learning objectives At the end of this topic. Each of these alternatives has advantages and disadvantages in terms of timing. Study Reading 9. related and unrelated diversification The main diversification strategies are related diversification and unrelated diversification.
Unrelated diversification is not concerned with a strategic fit between the organisation’s core business and the new business. are the difficulty of managing many different businesses in a competent way and of being without the added source of competitive advantage that strategic fit provides. however. The main advantage of this strategy is that business risk is spread over a variety of businesses or industries. Managing a diversified organisation A diversified organisation may be considered as a portfolio of businesses or business units.9:2 Related diversification strategy Organisations with a related diversification strategy have diversified into businesses with some kind of strategic fit or synergy between them. Often these may be termed their core businesses. and indeed many do this. Unrelated diversification strategy This strategy involves the diversification into any business that has good profit potential. The remaining revenue is accounted for from several unrelated groups of businesses. Graduate School of Business . The main focus is only with the potential financial gain of the new business as a stand-alone unit or from the learning that is associated with managing the newly acquired business. star. Combination of related and unrelated diversification strategies A company may pursue both related and unrelated diversification. The allocation of resources between business units is an important strategic issue for managers of these organisations. Its disadvantages. This strategic fit is a common activity anywhere along the businesses’ respective value chains. Many businesses have a range of activities that are related. The industry attractiveness/business unit strength matrix (which is a more sophisticated version of the Boston Consulting Group matrix with its cash cow. dog and question mark) is a useful tool for assisting in this task.
9:3 aCtIvIty Consider two public listed companies. Would you consider them to be single businesses or diversified organisations? If they are diversified. are the business activities related or unrelated? Graduate School of Business .
9:4 guIde to aCtIvIty It is interesting to look at the financial reporting of the revenue for the organisation and to compare this to the text written in Annual reports and other sources such as reports from Stock Brokers. Graduate School of Business . This will provide information on the extent to which others consider the activities of the organisation to be diversified or not.
information systems and employee rewards.1 (Zagotta & Robinson 2002). It is often the most difficult part in the strategic management process. you should be able to: > explain the different tasks in strategy implementation. Topic 12 focuses on the importance of organisational culture and leadership. the nature of strategy implementation Strategy implementation deals with the conversion of strategic plans into strategic actions. the demanding people-management skills required. Topic 11 investigates organisational policies. Study Reading 10. This topic addresses the need to build organisational resources via appropriate budgets and organisational structure. Introduction After completing the formulation of strategies the next step is to translate them into action. 11 and 12 deal with this strategy implementation. Graduate School of Business . the many ways managers can proceed. and > outline the importance of organisational structure in relation to strategy implementation.topIC 10: strategy ImplementatIon: budgets and struCture learning objectives At the end of this topic. > discuss the importance of appropriate resource allocation via budgets in strategy implementation. and the perseverance it takes to get them done. Topics 10. Read Chapter 10 of the text. Some of the reasons for this are the wide array of managerial activities that have to be attended to.
when this organisation takes the first step in expansion. An appropriate allocation of funds and resources signals commitment to implementing the strategic plan and is necessary to provide credibility to the whole strategic management process. The financial budget. decisions regarding organisational structure are required. or contact managers in order to improve communication across organisational boundaries. The organisation should be structured in a manner that is congruent with the strategy selected. a significantly different strategy may require major changes to the organisational structure. Hence. In a very small organisation one person may perform all the tasks. Its primary manifestation is in the organisational chart. budgets for access to human resources and other key scarce resources are also relevant to strategy implementation. However. This is necessary to facilitate its execution. developing organisational resources via the budgeting process Budgets are a key source of influence for managers. It might be necessary to shift resources from one area to another. Graduate School of Business . to downsize or upsize particular areas or to develop new projects and to cancel others. Does the organisation have joint managing directors or does it have one managing director and one employee? Obviously complexity increases along with organisational size. provided on an annual basis with monthly performance updates in most organisations. To illustrate with a simplistic example. An important issue in strategy implementation is the allocation of resources according to the priorities indicated by the strategic plan. cross-functional task forces. However the chosen organisational structure may be supplemented with special coordinating devices such as project teams. However.10:2 organisational structure The concept of organisational structure relates to the way in which tasks and responsibilities are allocated to individuals and how these individuals are grouped. directs activities in the organisation.
10:3 aCtIvIty Choose an organisation you are familiar with and analyse to what extent its budgets are aligned with its strategic plan. Graduate School of Business .
10:4 guIde to aCtIvIty The answer to this question depends on the organisation you have chosen. Graduate School of Business . If there are big gaps between budgets and the strategic plan it indicates that the implementation of the plan may run into difficulties.
and > outline the relevance of reward systems in relation to implementing strategy. > identify the information systems that are required for the strategy. channel actions. Introduction This topic addresses the need to ensure that organisational processes are consistent with the strategy and its implementation. Study Reading 11. Read Chapter 11 of the text. They provide guidance. organisational policies and procedures Changes in strategy usually call for changes in organisational policies. Graduate School of Business . behaviour and decisions and enforce consistency within the organisation.1 (Freedman 2003). information support systems and finally. It is difficult to find the balance between too much and too little policy. Policies clarify what should and should not be done in the organisation. The specific areas are organisational policies and procedures. Often the best policy is to empower appropriate employees. systems and rewards learning objectives At the end of this topic you should be able to: > discuss the importance of policies in terms of strategy implementation. Too much policy may stifle employee activities and initiative.topIC 11: strategy ImplementatIon: polICIes. where as too little policy may lead to uncoordinated and inconsistent efforts across the organisation and a sense of chaos. employee reward systems.
An information system that provides the right people with the right information at the right time is very valuable and has the power to generate competitive advantage. From the strategy implementation perspective it is important to ensure that the rewards are consistent with performance of the strategic goals. Examples of information support systems include customer information systems and organisational intranets. interesting assignments as well as more or less responsibility in the organisation. Graduate School of Business . Employee reward system Organisations need motivational practices and reward systems which facilitate strategy implementation. Non-monetary incentives include praise and constructive criticism. performance bonuses. Incentives can be of both monetary and non-monetary nature. These incentives should be linked to the performance targets indicated in the strategic plan. access to participation in the success of the organisation via shares.11:2 Information support systems Organisations also need information support systems in order to carry out successful strategy implementation. or retirement benefits. Monetary incentives include salary increases which may include a promotion. including electronic mail as well as organisation web pages.
Are there areas in which this could be changed to enhance strategy implementation? Graduate School of Business .11:3 aCtIvIty Choose and organisation that you are familiar with and consider the degree of alignment between its strategy and its information support systems.
Graduate School of Business .11:4 guIde to aCtIvIty The importance of information support systems means that they generally receive a lot of attention from senior management and resources from the organisation. as they are always evolving to include technological advances as well as to meet changing customer and organisational uses. However. it is likely that there will continue to be opportunities to improve them.
an adaptive culture. shaping its organisational culture—is a central task of top management. Graduate School of Business . and hence on the implementation of strategy. you should be able to: > explain the importance of organisational culture in strategy implementation.topIC 12: strategy ImplementatIon and evaluatIon: Culture and leadershIp learning objectives At the end of this topic. Organisational culture consists of a complex set of ideologies. Introduction This topic focuses on two important strategy implementation and evaluation tasks. and > explain the tasks of strategic leadership. in terms of strategy implementation. Read Chapter 12 of the text. Thus. is desirable. A close alignment between the chosen strategy and the organisational culture promotes implementation and can be a source of competitive advantage. symbols and core values that is shared throughout the organisation and influences the way it conducts business. Creating a strategy-supportive organisational culture Organisational culture is the pattern of how individuals interact in the organisation. namely the need to create a strategy supportive culture and to exert strategic leadership. shaping the context within which the organisation formulates and implements its strategies—that is. > discuss the importance of evaluating strategy. a culture that is supportive of change. However. Different cultures suit different organisations. It has a profound influence on the communication patterns within the organisation.
revising objectives or policies. which might vary significantly by department. Study Reading 12. not because the strategy itself is flawed. and undertake corrective action as soon as problems arise. but have multiple cultures or subcultures.2 (Roxburgh 2003). evaluation of strategy Strategy evaluation is essential in order to receive information about changes in the internal and external environment and potential problems which they might cause. allocating resources in a different way or developing new performance incentives.12:2 Companies typically do not have a single culture. exerting strategic leadership It has been suggested that implementation is the most difficult task in strategic management. Strategy evaluation should be undertaken on a continuing basis. A sensitive awareness of these subcultures will enhance strategy implementation. Study Reading 12. Perhaps the most important leadership characteristic is the determination to complete implementation of the strategy. replacing key individuals. Graduate School of Business . but because the leadership required to implement it is not forthcoming. Taking corrective action is necessary to reposition an organisation in case of external or internal changes or failure to achieve the objectives as spelled out in the strategic plan. be aware of the organisation’s progress.1 (Finkelstein 2005). including its politics. Further. as well as changing conditions in the external environment. division or business unit. This may involve actions such as altering the organisation structure. This determination will force the individual to stay on top of what is happening in the organisation. many strategies fail. because it helps strategists to: > > > stay close to what is happening inside and outside the organisation. geographic location. or failure to achieve progress.
12:3 aCtIvIty Do you agree with the suggestion that many strategies fail due to inadequate implementation? Graduate School of Business .
Graduate School of Business . whilst others disappear. Strategic management offers some suggestions for how to increase the likelihood that an organisation will prosper. other organisations merely survive. These differences may range from poor strategic analysis. There are many reasons for the failure of an organisation and individuals will differ in views on what the causes were.12:4 guIde to aCtIvIty Some organisations prosper. formulation of unrealistic strategies through to failed implementation.
Employees of an organisation may come from different cultural and religious groups or the organisation may operate in different countries. One area in which ethical tradeoffs occur is with respect to the environment. what level of change to the natural environment does society expect from the mining companies? Ethical conflicts and compromises also occur in organisations where there is a cross-cultural element.topIC 13: strategy and ethICs learning objectives At the end of this topic. Introduction The previous 12 topics have provided a sequential process for the undertaking of strategic management in an organisation. > discuss the variation in ethical standards across cultures. it relates to what are the right and wrong things to do. and > discuss the importance of social responsibility for organisations and identify examples. There are cross-cultural variations in business ethics and these are derived from different historical traditions and social customs. Read Chapter 9 of the text. integrity and fairness. These ethical standards include dealing with honesty. Graduate School of Business . For example. This topic provides a brief review of the ethical issues that relate to strategic management. business ethics The concept of business ethics is no different from general ethical standards. you should be able to: > identify issues that have an ethical dimension and evaluate their impact on business outcomes. the difficulty arises when these generally accepted moral standards are in conflict with goals in the organisation. However.
1 (Skrabec 2003).13:2 Study Reading 13. There are strong ethical reasons for an organisation to take social responsibility seriously. Business ethics may be seen as doing the right thing. both existing and potential. Graduate School of Business . These include the reputation of the organisation with government and employees. Charitable contributions to community service activities is an example of a social responsibility.2 (Johnson 2003). Study Reading 13. It suggests that organisations have a responsibility to minimise harm to all their stakeholders. however. social responsibility The concept of social responsibility goes beyond that of business ethics. they are expected to work towards the betterment of society. In addition. there are also strong business reasons. social responsibility means making a positive contribution to society.
13:3 aCtIvIty What role should moral values and social responsibility play in strategic decision making? Justify your position. Graduate School of Business .
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worksheets/ exerCIses Worksheet 1: Identify the present mission and future vision of the organisation Organisation mission Organisation vision Defines what business the organisation is currently in Defines what business the organisation should be in • Who are we? • What do we aspire to be? • What do we do? • How will we get there? • Where are we now? • How will we measure our performance? (Chapter two of the textbook) Graduate School of Business .
worksheets/exercises:2 Worksheet 2: Conduct a cursory financial review Financial category Revenues Analysis Expenses Earnings Assets Liabilities (Chapters two and four of the text) Graduate School of Business .
worksheets/exercises:3 Worksheet 3: What are the industry’s dominant economic features? Economic factors • Market size • Scope of competitive rivalry • Market growth rate • Stage of life cycle • Number of companies in the industry • Number of customers • Degree of vertical integration Economic factors • Ease of entry/exit • Technology/innovation • Product characteristics • Scale economies • Learning and experience effects • Capacity utilisation • Industry profitability (Chapter three of the text) Graduate School of Business .
and (ii) the likely reaction of incumbent firms to new entry • Competitive pressure from substitute products – (i) price of substitutes. (ii) quality of substitutes. and (iii) ease of substitution among products • Competitive pressure from supplier bargaining power & supplier-seller collaboration – (i) number of suppliers. (ii) quality and/or (iii) other attributes • The potential entry of new competition – (i) barriers to entry.worksheets/exercises:4 Worksheet 4: What is competition like and how strong are each of the competitive forces? Porter’s ‘Five Forces’ model • The rivalry among competing sellers – (i) price. and (ii) tendency for strategic partnerships (Chapter three of the text ) Graduate School of Business . and (ii) tendency for strategic partnerships • Competitive pressure from buyer bargaining power & seller-buyer collaboration – (i) number of buyers.
Step 2: • • • • (Chapter three of the text) Graduate School of Business .worksheets/exercises:5 Worksheet 5: What is causing the industry’s competitive structure and business environment to change? What are the major underlying causes of change in the industry? • Step 1: Assess the impact of these changes will have on the industry.
regional. ________________________________________ h. Degree of service offered (no-frills. narrow) e.worksheets/exercises:6 Worksheet 6: What companies are in the strongest/weakest position? Steps involved in creating a strategic group map 1. Degree of vertical integration (none. full) g. Geographic coverage (local. (Chapter three of the text) Worksheet 7: What strategic moves are rivals likely to make? Profiling the objectives and strategies of competitors Competitor Competitive scope Strategic intent Market share Competitive objective position Strategic posture Competitive strategy (Chapter three of the text) Graduate School of Business . making the circles proportional to the size of the group’s respective share of total industry sales. national. all) f. some. ________________________________________ Plot the firms on a two-variable map using pairs of these differentiating characteristics. medium. 3. Identify the competitive characteristics that differentiate firms in the industry a. limited. Use of distribution channels (one. low) b. full) d. Price/Quality range (high. partial. Draw circles around each strategic group. Product-line breadth (wide. 2. Assign firms that fall in about the same strategy space to the same strategy group. global) c. 4.
worksheets/exercises:7 Worksheet 8: What are the key factors for competitive success? Common types of key success factors • Technology-related KSF’s • Manufacturing-related KSF’s • Distribution-related KSF’s • Marketing-related KSF’s • Skills-related KSF’s • Organisation capability • Other types of KSF’s (Chapter three of the text) Graduate School of Business .
worksheets/exercises:8 Worksheet 9: Is the industry attractive and what are its prospects for above-average profitability? Factors to consider when determining industry attractiveness • The industry’s growth potential • Whether competition currently permits adequate profitability and whether competitive forces will become stronger or weaker • Whether industry profitability will be favourably or unfavourably affected by prevailing driving forces • The company’s competitive position in the industry and whether its position is likely to grow stronger or weaker • The company’s potential to capitalise on the vulnerabilities of weaker rivals • Whether the company is able to defend against or counteract the factors that make the industry unattractive • The degree of risk and uncertainty in the industry’s future • The severity of problems confronting the industry as a whole Graduate School of Business .
return on investment. product innovation. slower or about the same pace as the market (equating with rising. getting newly developed products to market quickly. number of stock-outs. or other relevant factors on which buyers base their choice • • Whether the company’s overall financial strength and credit rating are improving or on the decline (Chapter four of the text) Graduate School of Business . and economic value added and how these trends compare with other companies in the industry • Whether the company can demonstrate continuous improvement in such internal performance measures as unit costs.worksheets/exercises:9 Worksheet 10: How well is the present strategy working? Factors to consider in evaluating a company’s strategy • Whether the firm’s sales are growing faster. short times from order to delivery. and inventory turnover etc . product quality. defect rates. eroding or stable market share) • Whether the company is acquiring new customers at an attractive rate as well as retaining existing customers • Whether the firm’s profit margins are increasing or declining and how well margins compare to rival firms • Trends in the firm’s net profit. employee motivation and morale. e-commerce. customer back orders. • How shareholders view the company based on trends in the company’s share price and shareholder value • The firm’s image and reputation with its customers • Whether the company is regarded as a leader in technology. having the best prices.
worksheets/exercises:10 Worksheet 11: What are the company’s strengths. weaknesses. opportunities and threats? Potential resource strengths and competitive capabilities Strengths Potential resource weaknesses and competitive deficiencies Weaknesses • • Potential company opportunities Opportunities Potential external threats to company’s well-being Threats • • (Chapter four of the text) Worksheet 12: Are the company’s prices and costs comparable? Identify the key activities in the value chain • Step 1: Identify the costs of performing each activity Step 2: Benchmark the firm’s activity costs with the activity costs of rival companies Step 3: • • • • • (Chapter four of the text) Graduate School of Business .
worksheets/exercises:11 Worksheet 13: How strong is the company’s competitive position? Unweighted competitive strength analysis Key success factors • • • • Company _______ _______ _______ _______ _______ _______ Weighted competitive strength analysis Key success factors • • • • Weight Company ______ ______ ______ ______ ______ ______ (Chapter four of the text) Graduate School of Business .
A broad differentiation strategy 3. A best-cost provider strategy 4. A focused strategy based on lower cost 5.worksheets/exercises:12 Worksheet 14: What strategic issues does the company face? Questions that can help the identification of the relevant strategic issues Worksheet 15: Assess the appropriateness of each of the five generic strategies to the case study organisation The five generic competitive strategies 1. A focused strategy based on differentiation (Chapter five of the text) Graduate School of Business . A low-cost producer strategy 2.
market opportunities and threats. (See page 13 of the text) Worksheet 17: Describe how you would implement the chosen strategy Things to consider • Financial objectives • Strategic objectives • Who is going to do what and by when? (Chapter thirteen of the text) Graduate School of Business . At the same time it has to be tailored to the company’s resource strengths and weaknesses. competencies. Two kinds of performance improvements are the most telling of a strategy’s calibre: (i) gains in profitability and (ii) gains in the company’s competitive strength and long-term market position. • The ‘competitive advantage’ test – a good strategy leads to sustainable competitive advantage. • The ‘performance’ test – a good strategy boosts company performance.worksheets/exercises:13 Worksheet 16: Choose the most appropriate generic strategy for the case study organisation Appropriate strategy tests • The ‘goodness of fit’ test – a good strategy has to be well matched to industry and competitive conditions. and other aspects of the enterprise’s external environment. and competitive capabilities.
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