Strategic Management & Business Policy: 13 Edition

STRATEGIC MANAGEMENT & BUSINESS POLICY
13TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
Benefits of Strategic Management:
Research indicates that organizations that engage in strategic

management generally outperform those that do not.
The aim of the Strategic Management is to provide a fit between

an organization‘s environment and its strategy, structure and
processes. It has positive effects on the organizational performance.
The three most highly-related benefits of strategic management are:

• Clearer sense of strategic vision for the firm
• Sharper focus on what is strategically important
• Improved understanding of a rapidly changing environment
Prentice Hall, Inc. ©2012 5-2

Strategic Management : a set of managerial decisions
and actions that determines the long-run performance
of a corporation.
Strategic Management Process
– The full set of commitments, decisions, and
actions required for a firm to achieve strategic
competitiveness and earn above-average
returns
Includes:
• Internal and external environment scanning
• Strategy formulation
• Strategy implementation
• Evaluation and control
• Environmental scanning involves monitoring, collecting
and evaluating information in order the understand the
current trends in the natural, societal and task
environments. The information is then used to forecast
the opportunities and threats for the company.
We use evaluated information to set proper strategies and

change organization structures and proccess according to
these strategies so the fit between environment-
strategy-structure is correlated with the performance of
the company.

Outcomes from External and
Internal Environmental Analyses
Examine opportunities Examine unique

and threats resources, capabilities,
and competencies
(sustainable competitive
Copyright © 2004 South-Western. All rights reserved. advantage) 3–8 Figure 3.1

Components of Internal Analysis
Copyright © 2004 South-Western. All rights reserved. 3–9 Figure 3.2

Resources, Capabilities and Core Competencies
I. Resources
– Are the source of a firm’s

capabilities
– Are broad in scope
– Cover a spectrum of individual,
social and organizational
phenomena
– Alone, do not yield a
competitive advantage
Copyright © 2004 South-Western. All rights reserved. 3–10

(resources continuation)
– Are a firm’s assets, including people and the value of

its brand name
– Represent inputs into a firm’s production process,
such as:
• Capital equipment
• Skills of employees
• Brand names
• Financial resources
• Talented managers
Copyright © 2004 South-Western. All rights 3–11

reserved.
• 2 types
Tangible resources
• Financial resources
• Physical resources
• Technological resources
• Organizational resources
Intangible resources
• Human resources
• innovation resources
• Reputation resources

reserved.
Tangible Resources
Financial Resources
The firm’s borrowing capacity
The firm’s ability to generate internal funds
Big corporates such as Turkcell, Koc, Sabancı, Doğuş, Anadolu, Yasar,
Yıldız grup
Organizational Resources
The firm’s formal reporting structure and its formal planning, controlling,
and coordinating systems
Some companies using unique ERP Systems and tools strength their competitive
advantage.
Physical Resources
• Sophistication and location of a firm’s plant and equipment
• Access to raw materials
Huge capacity data centers of Youtube and facebook
Cotton Mill Plants and Agricultaral Product plants mostly located in Marmara,
Aegean region because of easy access to Raw Materials
Technological Resources
• Stock of technology, such as patents, trade-marks, copyrights, and trade secrets
Apple took out patents for "There's an app for that « sentence , Thinnovation as
word.There is another patent for iPhone package,
Arcelik which is Turkey ‘s biggest white goods manufacturer has more than 300
patents

Intangible Resources
Human Resources
Knowledge
Trust
Managerial capabilities
Organizational routines
Nokia one of the best companies in terms of Human Resource Applications
Innovation Resources
• Scientific capabilities
• Capacity to innovate
• Ideas
The Japan Patent Office said in 2011, that Panasonic had 6,881 patents. Toyota
Motor Corp. ranked second with 5,027 patents, followed by Canon Inc. at 4,292,
and Toshiba Corp. at 4,042. Arçelik only has 300 patents.
Table 3.2
reserved.
Reputational Resources
• Reputation with customers

• Brand name
• Perceptions of product quality, durability, and reliability
• Reputation with suppliers
• For efficient, effective, supportive, and mutually beneficial
interactions and relationships
Victoria secret with show, Coca Cola with name, Volkswagen with quality
& price optimization in Turkey, very favourite brands.

There are approximately 500 soft drink manufacturing and bottling companies in U.S.A.
The three main players, Coca–Cola, PepsiCo and Dr. Pepper Snapple Group,
account for over 80% of the domestic market share.
Consolidated industry- domination by a few large firms, each

struggles to differentiate products from its competition

II.Capabilities
– Are the firm’s capacity to deploy

resources that have been purposely
integrated to achieve a desired end state
– Emerge over time through complex
interactions among tangible and
intangible resources
– Often are based on developing, carrying
and exchanging information and
knowledge through the firm’s human
capital

reserved.
– The foundation of many capabilities lies in:
• The unique skills and knowledge of a firm’s employees
• The functional expertise of those employees
– Capabilities are often developed in specific functional

areas or as part of a functional area
For example, a company‘s marketing capability can be based on the
interaction among its marketing specialists, distribution channels and sales
people.
If these capabilities constantly being changed and reconfigured to make
them more adaptive to uncertain environment, they are called dynamic
capabilities.

reserved.
Examples of
Firms’
Capabilities

reserved.
Distribution-channel structure- Arçelik ☺
KIPA- founded in İzmir, to be moved by TESCO (one of the biggest English retailers in
the World, HC still in İzmir  and still limited stores as geographically, their operations
lose money in Turkey.
GARANTI  - limited branch offices , Technological capabilities ☺
IS BANKASI ☺- branch offices everywhere, CRM too bad :-)
Human resources - NOKIA ☺ Japon companies such as Mitsubishi, Toyota ☺,

YKK( zippers, buttons and snaps ) because of long term employment policies and
integrated production system.
Ericsson  -in point of local HR view ,

Cukurova Holding companies such as BMC, Çukurova Makine 
Marketing- Polo high price , high discount rates end of the season,
Manufacturing - Lean organization Just in time production Toyota,

YKK UNİQUE manufacturing technics.
Management- IBB its outsource organization
R&D – 2012- Koç group (0,5 of revenue- 151 million euro), Teknosa ( 119 million euro),
Vestel - 58, Ford – 44 , Rodi-41
III. Core Competencies
– Resources and capabilities that serve as a

source of a firm’s competitive advantage:
• Distinguish a company competitively and
reflect its personality
• Emerge over time through an organizational
process of accumulating and learning how
to deploy different resources and
capabilities
- Activities that a firm performs especially well
compared to competitors
– Activities through which the firm adds unique
value to its goods or services over a long period
of time
EXAMPLES OF CORE COMPETENCIES
The core competency of Apple can be said to be “making user friendly user
interfaces and design”.
Let’s examine this statement against our checklist:
Criteria Yes/No
Yes. The customer clearly benefits
Customer benefit?
from great user interfaces
Yes. Companies have been trying for
Difficult to imitate?
years and not yet succeeded.
Yes. This core competency has been
Can be leveraged? rolled out to the iPod, the iPhone, and
most recently, the iPad.
Uniquely identifies the
Yes
organization?
Yes – it’s not just design, but
Difficult to pin down?
marketing, software, hardware etc

The core competency of Walmart can be said to be “Groceries at a low cost”.
Let’s examine this statement against our checklist:
Criteria Yes/No
Yes. The customer gets their goods
Customer benefit?
cheaper than anywhere else
Yes. A company would require huge
Difficult to imitate? scale to replicate, and that is obviously
not an easy thing to achieve.
Yes. Walmart sells all kinds of goods
Can be leveraged?
using the same model
Yes, I think in the US at least, most
consumers would identify Walmart as
Uniquely identifies the organization?
being amongst the cheapest in this
space.
Yes – it’s scale, but also supply chain
Difficult to pin down? management, and high inventory
turnover etc.

• LCWaikiki (textile) ( because of low price strategy
and by forward integration they open many stores for
economy of scale )
• ULKER and ETI ( consumer good producers)

Building Sustainable Competitive Advantage
• Four Criteria of Sustainable

Competitive Advantage
– Valuable
– Rare
– Costly to imitate
– Non-substitutable

reserved.
Valuable capabilities
– Help a firm neutralize threats or exploit opportunities
Rare capabilities
– Are not possessed by many others
Costly-to-Imitate Capabilities
– Historical
• A unique and a valuable organizational culture or brand name
Like Pepsi and Coca Cola
– Social complexity
• Interpersonal relationships, trust, and friendship among
managers, suppliers, and customers
Like Çalık, Ülker
Nonsubstitutable Capabilities
– No strategic equivalent
Outcomes from Combinations of the Criteria for
Sustainable Competitive Advantage
Table 3.5
reserved.
Using Resources to Gain Competitive
Advantage
1. Identify and classify resources in terms of strengths and

weaknesses
2. Combine the firm’s strengths into specific capabilities and
core competencies
3. Appraise profit potential- Are there any distinctive
competencies?
4. Select the strategy that best exploits the firm’s capabilities
and competencies relative to external opportunities
5. Identify resource gaps and invest in upgrading weaknesses

Determining the Sustainability of an Advantage
Transparency- the speed at which other firms under the

relationship of resources and capabilities support a
successful strategy (???)
Transferability- the ability of competitors to gather the

resources and capabilities necessary to support a
competitive challenge
Replicability- the ability of competitors to use duplicated

resources and capabilities to imitate the other firm’s
success
Prentice Hall, Inc. ©2012
Explicit knowledge- knowledge that can be easily
articulated and communicated
Tacit knowledge- knowledge that is not easily

communicated because it is deeply rooted in
employee experience or in the company’s
culture

Business model
Is a company’s method for making money in
the current business environment
Includes:
• Who the company serves
• What the company provides
• How the company makes money-profit
• How the company differentiates and sustains
competitive advantage
• How the company provides its product/service

Business models Types (9 types)
Consulting model (Customer solutions model )

IBM prefers to sell its expertise for operation of
customer than its products.
Profit pyramid model

GM offers a full line automobiles in order to close out
any niches where a competitor might find a position.
The key is to get customers to buy in at the low-cost
and low- margin entry and move them up to high
priced, high-margin products where to company make
profit.

Multi-component system/installed model
Gillette invented this classical model to sell razors at
break-even pricing in order to make money on higher-
margin razor blades. HP does the same with printers
and printer cartidgers.
Advertising model
Newspaper; price of Hurriyet is very low in order to
increase sales and get advertisement to make profit
Time model ( Pioneer model)

Being the first to market with a new innovation allows a
pioneer like Sony to earn high margins.

Blockbuster model
In some industries such as pharmaceuticals profitability is
driven by a few key products. The focus is on high investment
in a few products with high potential payoffs.
Profit multiplier model

The idea of this model is to develop a concept that may or may
not make money on its own but, through synergy, can spin off
many profitable products. Walt disney invented this concept by
using corton characters to develop high-margin theme park,
merchandise and licensing opportunities.

Entrepreneurial model
A company offers specialized products/services to market
niches that are too small to to be worthwhile to large
competitors but have potential to grow quickly,
Air span , facebook
De Facto industry standard model

A company offers product free or at very low price in order to
saturate the market and become the industry standard. Once
users are locked in, the company offers higher margin
products using this standard. Microsoft packaged Internet
explorer free with its windows in order to take market share
from Netscape ‘s web browser.

Value Chain Analysis
Allows the firm to understand the parts of its

operations that create value and those that do not
Value chain:
a linked set of value creating activities that begin with basic
raw materials coming from suppliers, moving on to a series of value-
added activities involved in producing and marking a product or
service, and ending with distributors getting the final goods into the
hands of the ultimate consumer

reserved.
Very few corporations include a products entire value chain.
Example :
Ford Motor Company did when it was managed by its founder Henry
Ford during 1920s and 1930s.
At that time ford was completely vertically integrated that is,
it controlled (usually by the ownership) every stage of the value chain from the iro
n mines to the retailers.

• Primary activities involved with:
– A product’s physical creation
– A product’s sale and distribution to buyers
– The product’s service after the sale
• Support activities
– Provide the support necessary for the primary
activities to take place

reserved.
• Value chain
– Shows how a product moves from raw-material stage
to the final customer
To be a source of competitive advantage, a resource or

capability must allow the firm:
– To perform an activity in a manner that is superior to
the way competitors perform it, or
– To perform a value-creating activity that competitors
cannot complete

reserved.
The Basic Value Chain

reserved.
The Value-Creating Potential of
Primary Activities
• Inbound logistics
– Activities used to receive, store, and disseminate inputs to a
product (materials handling, warehousing, inventory control,
etc.)
• Operations
– Activities necessary to convert the inputs provided by inbound
logistics into final product form (machining, packaging,
assembly, etc.)
• Outbound logistics
– Activities involved with collecting, storing, and physically
distributing the product to customers (finished goods
warehousing, order processing, etc.)
reserved.
• Marketing and sales
– Activities completed to provide means through which
customers can purchase products and to induce them to do so
(advertising, promotion, distribution channels, etc.)
• Service
– Activities designed to enhance or maintain a product’s value
(repair, training, adjustment, etc.)
Each activity should be examined relative to

competitors’ abilities and rated as superior,
equivalent or inferior

reserved.
The Value-Creating Potential of
Primary Activities: Support
• Procurement
– Activities completed to purchase the inputs needed to produce
a firm’s products (raw materials and supplies, machines,
laboratory equipment, etc.)
• Technological development
– Activities completed to improve a firm’s product and the
processes used to manufacture it (process equipment, basic
research, product design, etc)
• Human resource management
– Activities involved with recruiting, hiring, training, developing,
and compensating all personnel

reserved.
• Firm infrastructure
– Activities that support the work of the entire value chain
(general management, planning, finance, accounting, legal,
government relations, etc.)
• Effectively and consistently identify external opportunities

and threats
• Identify resources and capabilities
• Support core competencies
Each activity should be examined relative to

competitors’ abilities and rated as superior,
equivalent or inferior
Outsourcing
The purchase of a value-creating
activity from an external supplier
– Few organizations possess the resources and

capabilities required to achieve competitive
superiority in all primary and support activities
• By forming and emphasizing fewer capabilities
– A firm can concentrate on those areas in which it
can create value
– Specialty suppliers can perform outsourced
capabilities more efficiently
Corporate Value Chain Analysis
• Examine each product line’s value chain in terms of the

various activities involved in producing the product or
service: Which activities can be considered strengths ( core
competencies) or weakness (core deficiencies) Do any of
the strengths provide competitive advantage and can they
thus be labeled distinctive competencies ?

• Examine the linkages within each product line’s value chain:
Linkages are the connections between the way one value activity
( for example marketing)is performed and cost the performance of
another activity (for example quality control).
For example, quality inspection of %100

of output by the workers themselves instead of the usual %10 by quality contr
ol inspectors might increase production costs,
but that increase could be more offset by the savings obtained from reducing t
he number of repair people needed to fix defective products and increasing th
e amount of salespeople’s time devoted to selling instead of exchanging alrea
dy-sold but defective products.

• Examine the potential synergies among the value chains
of different product lines or business units:
Each value element such as advertising or manufacturing

has an inherent economy of scale in which activities are c
onducted at their lowest possible cost per unit of output.
If a particular is not being produced at
a high enough level to reach ecoomies of scale in distributi
on, another product could be use the share the same distri
bution channel.

Outsourcing Decisions
A firm may
outsource all or
only part of one or
more primary and/or
Human Resource Management

support activities. Service
Technological Development
Outsourced Marketing and Sales
Firm Infrastructure
activity
Outbound Logistics
Procurement
Operations
Inbound Logistics

reserved.
Strategic Rationales for Outsourcing
• Improve business focus

– Outsourcing Lets a company focus on broader
business issues by having outside experts handle
various operational details
• Provide access to world-class capabilities

– The specialized resources of outsourcing providers
makes world-class capabilities available to firms in a
wide range of applications

reserved.
• Accelerate business re-engineering benefits
– Achieves re-engineering benefits more quickly by
having outsiders—who have already achieved world-
class standards—take over process
• Sharing risks
– Reduces investment requirements and makes firm
more flexible, dynamic and better able to adapt to
changing opportunities
• Frees resources for other purposes

– Redirects efforts from non-core activities toward those
that serve customers more effectively

reserved.
Outsourcing Issues
• Greatest value
– Outsource only to firms possessing a core
competence in terms of performing the primary or
supporting the outsourced activity
• Evaluating resources and capabilities

– Do not outsource activities in which the firm itself can
create and capture value
• Environmental threats and ongoing tasks

– Do not outsource primary and support activities that
are used to neutralize environmental threats or to
complete necessary ongoing organizational tasks
• Nonstrategic team of resources
– Do not outsource capabilities that are critical to the
firm’s success, even though the capabilities are not
actual sources of competitive advantage
• Firm’s knowledge base

– Do not outsource activities that stimulate the
development of new capabilities and competencies

reserved.
Basic Organizational Structures
Simple
Has no functional or product categories and is appropriate for
small companies.
Functional
Employees tend to be specialists in the business functions that
are important to that industry.
Divisional
İs appropriate for a large corporation with many product lines in
several related industries. General Motors for example its various
auto lines into separate divisions of saturn, chevrolet, pontiac,

Strategic Business Units
Are modification of divisional structure. SBUs are divisions
composed of independent product-market segments that are
given primary responsibility and authority for the management
of their own functional areas. An SBU must have:
1-a unique mission
2-identifiable competitors
3-an external market focus and control of its business functions. For
example rather than organize products on the basis of packaging technology
like frozen foods, canned foods and banned foods general foods organized its
products into sbu s on the basis of consumer oriented menu
segments. Breakfest food, main mail, dessert and pet food.
Corporate
Turkcell, Koc, Sabancı
Different companies ( subsidiaries), each company has its
board of directors.

Corporate Culture: The Company Way
Corporate culture- the collection of beliefs,

expectations and values learned and shared by
a corporation’s members and transmitted from
one generation of employees to another.

Functions of Corporate Culture
• Conveys a sense of identity for employees

• Generates employee commitment
• Adds to the stability of the organization as a social
system
• Serves as a frame of reference for employees to
understand organizational activities and as a guide
for behavior

Cultural intensity- the degree of which members of a unit accept
the norms, values and other cultural content associated with
the unit
Shows the depth of the culture
Quality at BMW have intensive culture whereas new firms have
weaker intensive culture.
Cultural integration- the extent of which units throughout the

organization share a common culture
Shows the breadth of the culture.
For example a military unit have highly integrated culters. In
contrast, a company that is structured into diverse units by
functions or divisions usually exhibits some strong
subcultures. ( For example R&D versus Manufacturing )

A culture emphasizing constant renewal may help a
company adapt changing, hypercompetitive environment.
To the extent that a corporation ‘s distinctive competence is
embedded in an organization culture. It will be a form of tacit
knowledge and very difficult for a competitor to imitiate.
*ABB ( Zurich based Builder of power plants and electrical equipment

) created a set of 500 hundred global managers who could adapt to local
cultures while executing ABB global strategies in 140 countries. They were
very successful however Matsushita ( panasonic, MEI) third largest electrical
company became instituonalized in the corporate culture- a culture that was
more focused on japanese values than on cross-cultural globalization.

Strategic Marketing Issues
Market position- Who are our customers?
It refers to the selection of specific areas for marketing
concentration and can be expressed in terms of market,
product and geographic locations.
Marketing Mix- the particular combination of key variables under a

corporation’s control that can be used to affect demand and to gain
competitive advantage.

Product life cycle- product monetary sales over time
from introduction through growth and maturity to
decline

Brand- a name given to a company’s product which
identifies that item in the mind of the consumer.
Over time and with proper advertising, a brand connotes various
characteristics in the consumer’s minds.
For example; Disney stands family entertainment
BMW – mean high performance autos
The value of Coca cola brand is 65 billion usd
Corporate brand- a type of brand in which the

company’s name serves as the brand. The value of a
corporate brand is that it typically stands for consumers ‘
impressions of a company and can thus be extended onto
products not currently offered.
For example Caterpillar a manufacturer of heavy earth –moving equipment,
used Consumer associations with the Caterpillar brand to market work
boots.

Strategic Financial Issues
• All strategic issues have financial implications.
• Cash must be raised from internal or external sources

and allocated for different uses.
• A firms capital structure can influence its strategic

choices.
For example, increased debt tends to increase risk aversion
and decrease the willingness of management to invest in
R&D .
Exp: JACK WELCH , fired 40.000 employee when he was

appointed as CEO of GM to fund its investments for new
business areas. He saved 400.000.000 usd annually.
• Capital budgeting- also called investment decision, is the
allocation and reallocation of capital and resources to
projects , products and assests and divisions of an
organization.
• Once strategies are formulated, capital budgeting

decisions are required to succesfully implement.
Definition of 'Weighted Average Cost Of Capital - WACC'

A calculation of a firm's cost of capital in which each
category of capital is proportionately weighted. All capital
sources - common stock, preferred stock, bonds and any other
long-term debt - are included in a WACC calculation.

Strategic Research and Development Issues
R & D intensity- R & D costs as a percentage of sales revenue-

U.S. Computer Industry spends %13,5 of its sales revenue for
R&D whereas the paper and forest products industry spends %1
of its revenue.
Technological competence- the development and use of
innovative technology. Simply spending money on R&D and
new projects does not mean that the money will produce
useful results. It is a indicator of Technological competence
in both the development and use of innovative technology.
Arçelik, Aselsan, Havelsan,
Technology transfer- the process of taking new technology from
the laboratory to the marketplace.
Pixar, 3D Movies,

Technology discontinuity- when a new technology cannot be
used to enhance current technology, but substitutes for the
technology to yield better performance.
• Moore’s Law which state that siliconchips double in

complexity every 18 months. The presence of a
technological discontinuity in the world’s steel industry
during the 1960s explains why the large capital expenditures
by U.S. Steel companies failed to keep them competitive
with the Japanese firms that adopted the new technologies.

Strategic Operations Issues
Experience curve- unit production costs decline by some

fixed percentage each time the total accumulated
volume of production units doubles.
For example in an industry, with an %85 experience curve means

a corporation might expect to %15 reduction in unit costs for
every doubling of volume.
85$ cost for 100 $ volume for 10 units production
145$ cost for 200$ volume for 20 units production

Economies of Scale: in which unit costs are reduced by
making large numbers of the same product in
manufacturing.
Operating cost of unit= fixed cost + variable cost
For example: IKEA, Wall –Mart,

Strategic Human Resource Issues
The primary task of the manager of HR is to

improve the match between individuals and jobs. Well
defined job description. What each job needs
to Accomplish in terms of quantity and quality.
Teams
Autonomous (self-managed)- a group of people working

together without a supervisor to plan, coordinate and
evaluate their work. Over two-thirds of large U.S. Companies
are successfully using autonomous work teams.
Cross-functional work teams- various disciplines are

involved in a project from the beginning.

Virtual Teams- groups of geographically or organizationally
dispersed coworkers that are assembled using a
combination of telecommunications and information
technologies to accomplish organizational tasks-
Internet , Intranet and extranet systems are combining with
other new technologies such as videoconferancing and
collabrative software to create a new workplace.
More than half of the companies in USA having over 5000

employees use virtual teams. %12 of US workforce has no
permanent office at their companies.

The use of virtual teams to replace traditional face to face work
group is being driven by six trends.
1. Flatter organizational structures with increasing cross

functional coordination need.
2. Turbulent environments requiring more inter
organizational cooperation
3. Increased employee autonomy and participation in
decision making
4. Higher knowledge requirements derived from a greater
emphasis on service
5. Increased globalization of trade and corporate
activity
6. Increased employee decision making

Human diversity- the mix in the workplace of people
from different races, cultures and backgrounds
• Provides a sustainable competitive advantage

Strategic Information Systems/Technology Issues
• Information must be collected, stored and syntehized in

such a manner that it will answer an important operating
and Strategic questions.
• It can not only aid in environmental scanning and in

controlling a company’s many activities, it can also be
used as a strategic weapon in Gaining competitive
advantage.

Information systems/technology contributions to performance:
• Automation of back office processes of accounting,

human resource,
• Automation of individual tasks such as keeping tracks of
clients expenses,
These two contributions tend to focus on reducing costs.
• Enhancement of key business functions is used for
marketing and operations and contribution focuses on
productivity improvements. The system provides customer
support and help in distribution and logistics.
• Web based applications for package- tracking service ( fed ex,
yurt içi cargo) save money to cargo firms.
• Development of a competitive advantage by using internet.

SAAP, ORACLE, IBM, HP examplers for well known ERP systems
RFIS Technology started to use.
Supply chain management- networks for sourcing raw

materials, manufacturing products or creating services,
storing, and distributing goods, and delivering them to
customers and consumers.
Research indicates that supply network resources have a

significiant impact on firm performance.
Wal mart, Dell and Toyata who are known to be exemplars
İn supply chain management spend only %4 of their revenues on
supply chain costs compared to %10 by the average firm.

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STRATEGIC MANAGEMENT & BUSINESS POLICY

Research indicates that organizations that engage in strategic

The aim of the Strategic Management is to provide a fit between

The three most highly-related benefits of strategic management are:

Prentice Hall, Inc. ©2012 5-2

We use evaluated information to set proper strategies and

Prentice Hall, Inc. ©2012 5-7

Examine opportunities Examine unique

Prentice Hall, Inc. ©2012 5-8

Copyright © 2004 South-Western. All rights reserved. 3–9 Figure 3.2

Prentice Hall, Inc. ©2012 5-9

– Are the source of a firm’s

Prentice Hall, Inc. ©2012 5-10

– Are a firm’s assets, including people and the value of

Copyright © 2004 South-Western. All rights 3–11

Copyright © 2004 South-Western. All rights 3–12

Prentice Hall, Inc. ©2012 5-14

Nokia one of the best companies in terms of Human Resource Applications

• Reputation with customers

Prentice Hall, Inc. ©2012 5-16

Consolidated industry- domination by a few large firms, each

Prentice Hall, Inc. ©2012 5-17

– Are the firm’s capacity to deploy

Copyright © 2004 South-Western. All rights 3–18

– Capabilities are often developed in specific functional

Copyright © 2004 South-Western. All rights 3–19

Copyright © 2004 South-Western. All rights 3–20

GARANTI  - limited branch offices , Technological capabilities ☺

IS BANKASI ☺- branch offices everywhere, CRM too bad :-)

Human resources - NOKIA ☺ Japon companies such as Mitsubishi, Toyota ☺,

Ericsson  -in point of local HR view ,

Manufacturing - Lean organization Just in time production Toyota,

Management- IBB its outsource organization

– Resources and capabilities that serve as a

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• ULKER and ETI ( consumer good producers)

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• Four Criteria of Sustainable

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1. Identify and classify resources in terms of strengths and

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Transparency- the speed at which other firms under the

Transferability- the ability of competitors to gather the

Replicability- the ability of competitors to use duplicated

Tacit knowledge- knowledge that is not easily

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Consulting model (Customer solutions model )

Profit pyramid model

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Time model ( Pioneer model)

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Profit multiplier model

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De Facto industry standard model

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Allows the firm to understand the parts of its

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To be a source of competitive advantage, a resource or

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