...Chapter 1 Summary * A strategy is a set of related actions that managers take to increase their company’s performance goals. * The major goal of companies is to maximize the returns that shareholders receive from holding share in the company. To maximize shareholder value, managers must pursue strategies that result in high and sustained profitability and also in profit growth. * The profitability of a company can be measured by the return that it makes on the capital invested in the enterprise. The profit growth of a company can be measured by the growth in earnings per share. Profitability and profit growth are determined by the strategies mangers adopt. * A company has a competitive advantage over its rivals when it is more profitable than the average for all firms in its industry. It has a sustained competitive advantage when it is able to maintain above-average profitability over a number of years. In general, a company with a competitive advantage will grow its profits more rapidly than its rivals. * General managers are responsible for the overall performance of the organization, or for one of its major self-contained divisions. Their overriding strategic concern is for the health of the total organization under their direction. * Functional managers are responsible for a particular business function or operation. Although they lack general management responsibilities, they play a very important strategic role. * Formal strategic planning models stress...
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...the 20th century, there have been intensive discussions about knowledge and its implications on organisations and business success. Knowledge is now widely considered to be a source of competitive advantage. Technology has been continuously improving, among Turkish contractor firms. By the evaluation of the causes high business pressures that affect organizations’ field survey findings, Turkish contractor firms’ current and future competitiveness. These pressures use of IT, their main objectives on the use of IT, benefits cause common and rapid changes on all industries. To achieve competitive advantage, firms need to constantly focus on the identification of differential product strategies, building or reshaping core competencies, acquiring unique technologies, and accumulation of intellectual property, all of which can all be harnessed to make the company successfulin a highly competitive marketplace. Due to the emergence and widespread use of information and communication technologies (ICTs), organizations have faced many challenges that have led to several changes in their business practices in recent times, particularly in the last two decades. Findings After investigating the literature in strategic technology usage, and interviewing key decision-makers, a conceptual framework was proposed. IT innovation adoption occurs at the functional/operational level by enhancing various aspects of efficiency, effectiveness and resiliency. In order to select a few customer to be...
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...Business-level strategy defines an organization’s approach to competing in its chosen markets Major business-level strategic management responsibilities: Direction setting Establishment & communication of mission, vision, ethics, & long-term goals of a single business unit Creation & communication of shorter-term goals & objectives Analysis of business situation Compilation & assessment of information from stakeholders, broad environment analysis, & other sources Internal resource analysis Identification of strengths, weaknesses, opportunities, threats, sources of sustainable competitive advantage Selection of strategy Selection of a generic approach to competition – cost leadership, differentiation, focus, or best value Selection of a strategic posture – specific strategies needed to carry out the generic strategy Management of resources Acquisition of resources &/or development of competencies leading to a sustainable competitive advantage Ensuring development of functional strategies & an appropriate organizational design (management structure) to support business strategy Development of control systems to ensure that strategies remain relevant & that the business unit continues to progress toward its goals The generic strategy types proposed by Michael Porter are perhaps the most widely used & understood A sustainable competitive advantage is related to the amount of value a firm creates for its most important stakeholder, the customer...
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...when Gary Hamel, then a lecturer at London Business Schooi, and C.K. Prahalad, a University of Michigan professor, wrote "Strategic lntent,"the article signaled that a major new force had arrived in management Hamel and Prahalad argue that Western companies focus on trimming their ambitions to match resources and, as a result, search only for advantages they can sustain. By contrast, Japanese corporations leverage resources by accelerating the pace of organizational learning and try to attain seemingly impossible goals. These firms foster the desire to succeed among their employees and maintain it by spreading the vision of global leadership. This is how Canon sought to "beat Xerox"and Komatsu set out to "encircle Caterpillar." This strategic intent usually incorporates stretch targets, which force companies to compete in innovative ways. In this McKlnsey Award-winning article, Hamel and Prahalad describe four techniques that Japanese companies use: building layers ofadvantage, searching for "loose bricks," changing the terms of engagement, and competing through collaboration. Strategic Intent by Gary Hamel and C.K. Prahalad oday managers in many industries Most leading global companies started with ambitions that were far bigger than their resources and capabilities. But they created an obsession with winning at ail levels of the organization and sustained that obsession for decades. 148 working hard to match the compete advantages of their new global rivals. They are moving...
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...ACTIVITIES 7 2. APPROPRIATE PERFORMANCE MANAGEMENT TOOLS 7 IV. MANAGING PERFORMANCE TO IMPROVE DECISION-MAKING 9 1. BUSINESS LEVEL STRATEGY OF SEAPRODEX 9 2. STRATEGY FOMULATION 9 3. PERFORMANCE OBJECTIVIES OF SEAPRODEX 10 4. BALANCED SCORECARD IMPLEMENTATION OF SEAPRODEX 10 5. TOOLS TO INFORM DECISION MARKING THROUGH PERFORMANCE 11 V. CONCLUSION AND RECOMENDATION 11 1. REVIEW AND RESULT FINDING 11 2. RECOMMENDATION FOR AREA IMPROVEMENT 12 VI. APPENDICES 15 INVESTIGATION RESULT SUMMARY 23 SEAPRODEX BACKGROUND 23 Performance Management at strategic level 24 Performance Objective 25 VII. REFERENCES 27 I. INTRODUCTION It is realized that the most of manufacturing company is to get competitive advantage in the industry, or to get high quality in products and services. To get these competitive edges and maintain the position in the market, company needs to have an excellent operation management system or strategic performance management within the organization, as supported by Fryer et al. (2009). It is no doubt about the benefits and advantage of the strategic performance management system because De Waal (2007, p. 19) offers his perception of strategic performance management (SPM): All activities and operations of an organization are processed, based on its vision, objectives and these can be measurable through performance measurement tools or the organization criteria for performance and fix any hazards and problems in performance...
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...performance (or competitive advantage) of the firm * Building Blocks of Competitive Advantage (another way of identifying resources and capabilities): * Does the firm have resources or capabilities that explain one of the following building blocks? * Superior Efficiency * Superior Innovation * Superior Quality * Superior Customer Responsiveness * If so, then they are distinctive and create a COMPETITIVE ADVANTAGE (either differentiation or low cost) * Quality divided into two components: excellence & reliability * Quality as excellence - features, functions or services that support the "excellence" perception * Quality as reliable - rarely breaks down and performs intended function This Week's Lecture: Chapter 5 NOTE: product offering--> can refer to actual product, advertising, features, quality, etc. * Economies of Scale - producing more units reduces unit costs * Driven from fixed costs and division of labour (more specialized --> efficient at performing their tasks) * Unit Cost = (Variable Costs + FC) / Total # of products * Learning Effect (very different from Economies of Scale) * Process innovation drives the learning effect * As workers become more experienced at producing a product, they learn/identify a better way of producing the product * Identify a better process * Porter argues there are only two generic business strategies ...
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...Journal of Small Business and Enterprise Development Emerald Article: Differentiation for competitive advantage in a small family business Alex Douglas, Jacqueline Douglas, John Davies Article information: To cite this document: Alex Douglas, Jacqueline Douglas, John Davies, (2010),"Differentiation for competitive advantage in a small family business", Journal of Small Business and Enterprise Development, Vol. 17 Iss: 3 pp. 371 - 386 Permanent link to this document: http://dx.doi.org/10.1108/14626001011068680 Downloaded on: 19-04-2012 References: This document contains references to 30 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 1910 times. Access to this document was granted through an Emerald subscription provided by UNIVERSITY OF MALAYA For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Additional help for authors is available for Emerald subscribers. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com With over forty years' experience, Emerald Group Publishing is a leading independent publisher of global research with impact in business, society, public policy and education. In total, Emerald publishes over 275 journals and more than 130 book series, as well as an extensive...
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...Table of content 1.0 Background of the Company’s case……………………………………...…3 2.0 SWOT Analysis………………………………………………………………3 3.0 Citibank’s Distinctive Competencies………………………………………..7 3.1 Resources……………………………………………………………...8 3.2 Capabilities………………………………………………………...…9 3.3 Core Competence, Competitive Advantages and Sustainable Competitive Advantages……………………...…………………….10 4.0 Citibank’s strategies in place………………………………………………11 4.1 Corporate-Level…………………………………………………….11 4.2 Business-Level………………………………………………………12 4.3 Functional-Level…………………………………………………….13 5.0 Recommendation……………………………………………………………13 References…………………………………………………………………………...14 1.0 Background of the Company’s case On June 16, 1812 City Bank of New York (now called Citibank) opened for business in New York City—with only $2 million of capital. Through many different leaders and economic environments over the course of its rich history, Citibank continues to grow and prosper. On October 8, 1998, all Citicorp and Travelers Group divisions merged to become Citigroup Inc. Citigroup is today’s pre-eminent financial services company, with some 200 million customers accounts in more than 100 countries. Citigroup is the first US bank with more than $1 trillion in assets, offering a variety of deposits and loans, credit cards, investment banking, brokerage, and a host of other retail and corporate financial services. 2.0 SWOT Analysis STRENGHTGlobal networkThrough its operation in around 100 countries...
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...“Linking Corporate Strategy and HR Strategy: Implications for HR Professionals,” In R. Padaki, N.M. Agrawal, C. Balaji and G. Mahapatra (eds.) Emerging Asia: An HR Agenda, New Delhi: Tata McGraw-Hill, 2005, pp. 215-223. Linking Corporate Strategy and HR Strategy Rishikesha T. Krishnan Associate Professor of Corporate Strategy Indian Institute of Management Bangalore Recognition of the link between corporate and business strategies and strategies related to the people function is not new. McKinsey’s 7-S framework that emphasised the need for the alignment of seven organisational variables (superordinate goals, strategy, structure, systems, staff, skills, and style) for organisational effectiveness is about twenty years old. But, during this time, the importance of people to organisational success has, if anything, only multiplied as businesses have become more knowledge- and technology-driven. As a result, even strategy gurus, who typically talk about esoteric topics like transnational corporations and integrated networks, today emphasise the importance of the “individualised corporation”. 1 In this paper, we attempt to integrate multiple perspectives on the links between corporate strategy and human resources strategy with the objective of giving HR professionals working within an organisational context some pointers on how they can contribute to better integration of corporate and business strategy with HR strategy. Corporate and Business Strategy Corporate strategy refers to decisions...
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...Study Guide Chapter 1: What is Strategy and why is it important? What is Competitive Advantage? Competitive advantage. It is a superior performance relative to other competitors in the same industry or the industry average. Sustainable - competitive advantage. When a company is able to outperform its competitors or the industry average over a prolonged period of time. Competitive disadvantage Underperformance relative to other competitors in the same industry or the industry average. Competitive Parity Performance of two or more firms at the same level. The firm that possesses competitive advantage provides superior value to customers at a competitive price or acceptable value at a lower price. What is strategy? Strategy describes the goal – directed actions a firm intends to take in its quest to gain and sustain competitive advantage. Strategy is about creating superior value, while containing the cost to create it. Strategy is not a zero-sum game. It is not always the case that one party wins while all others lose. Win- win scenarios: when competitors cooperate, occasionally, with one another to achieve strategic objectives, we call this co-opetition. Strategic positioning is staking out a unique position in an industry that allows the firm to provide value to customers, while controlling costs. Strategy as a Theory of How to Compete. It provides managers with a roadmap to navigate the competitive territory. A firm´s strategy can be seen as its managers’ theory...
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...“Linking Corporate Strategy and HR Strategy: Implications for HR Professionals,” In R. Padaki, N.M. Agrawal, C. Balaji and G. Mahapatra (eds.) Emerging Asia: An HR Agenda, New Delhi: Tata McGraw-Hill, 2005, pp. 215-223. Linking Corporate Strategy and HR Strategy Rishikesha T. Krishnan Associate Professor of Corporate Strategy Indian Institute of Management Bangalore Recognition of the link between corporate and business strategies and strategies related to the people function is not new. McKinsey’s 7-S framework that emphasised the need for the alignment of seven organisational variables (superordinate goals, strategy, structure, systems, staff, skills, and style) for organisational effectiveness is about twenty years old. But, during this time, the importance of people to organisational success has, if anything, only multiplied as businesses have become more knowledge- and technology-driven. As a result, even strategy gurus, who typically talk about esoteric topics like transnational corporations and integrated networks, today emphasise the importance of the “individualised corporation”. 1 In this paper, we attempt to integrate multiple perspectives on the links between corporate strategy and human resources strategy with the objective of giving HR professionals working within an organisational context some pointers on how they can contribute to better integration of corporate and business strategy with HR strategy. Corporate and Business Strategy Corporate strategy refers to decisions...
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...Capabilities: A source of strategic advantage Introduction Competitive advantage can be termed as the fuel of sustainable corporate growth in face of competition and can only emerge from effective strategy. Strategy, is about “...superior skills in understanding and satisfying customers” (Day, 1990 cited in Wit et al. 2004, p. 278). In the last few decades as the business environment has taken new twists, the perspectives on strategy have evolved using the framework of various eclectic schools of thought within two broad approaches: the prescriptive approach and the descriptive/emergent approach (Mintzberg et al., 1999). Some schools propose that strategy formation is the outcome of systematic analysis and logical planning. It is a deliberate process that is carried out by specialists who ensure that strategy implementation is the direct translation of the planned strategy. Others, like the learning school, argue that strategy is emergent. It takes shape as the result of learning that happens during organisational functioning at all levels. “...strategists can be found throughout the organisation, and so called formulation and implementation intertwine” (Mintzberg et al., 1999, p.25) but is facilitated and enabled by a ‘strategy champion’ – usually the CEO (Stalk et al., 1992, p.62). One supporter of the latter approach is Henry Mintzberg who argues that “Strategy is pushed along by sheer creativity of managers, because they explore new ways of doing things” (Mintzberg et...
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...undertaking by McDonalds 7 – 8 b. What is Segmentation and Three criteria for McDonalds 8 c. The Target Market of McDonalds 8 - 9 d. What is buyer Behavior and benefit to McDonalds 9 4. Marketing Mix a. Analyses how McDonalds gain competitive advantage through 9 -10 their products b. Distribution Strategy used by McDonalds 10 c. Explain how prices set by McDonalds reflect their objectives and 10 - 11 marketing condition d. Methods McDonalds used to promote their products/services and how 11 effective they are. 5. Marketing Segments and Contexts a. Choose one McDonalds product and devices two marketing mixes 12 for the product b. Difference between marketing to organization rather than consumers 12 - 13 c. Explain how and why International Marketing differs from 14 - 15 Domestic Marketing for McDonalds 6. Bibliography and References 16 Introduction I am currently employed as an administrative assistant at G.B.I. Logistics Company Limited, located in Kingston, Jamaica. In my current capacity I am integrally involved in the maritime logistics surrounding the management of transnational product movements. Our core business involves freight forwarding, customs brokerage and road haulage....
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...Bank: Achieving a Competitive Advantage in the Marketplace Mountain Bank is involved in several sectors within the banking industry. These are consumer lending, real estate and mortgage banking, corporate banking and retail banking. Retail banking in consumer lending has been the largest area of the bank’s business, yet not the most profitable. Mountain Bank could gain more stable accounts and profits through real estate and mortgage and corporate banking. In order to increase its business into these areas, Mountain Bank must develop and implement strategies that will give the business a competitive advantage within the market. Two strategies that the organization can use are the competitive business and human resource strategies. Competitive Business Strategy A competitive strategy “focuses on different ways to provide goods and services to meet customer needs” (Brown & Stewart, 2009, p. 40). Mountain Bank should incorporate the differentiation strategy in order to attract more real estate and corporate clients. The company should strive to set itself apart from other banks through its utilization of optimal customer service by its bank tellers. “Recent studies have found that bank tellers are critical to the success of Mountain Bank. In fact, one study found that customer’s experiences with tellers is the single most important driver of customer satisfaction” (Brown & Stewart, p. 69). Customers will be more inclined to expand their business with Mountain Bank...
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...Strategic MT Study Sheets Chapter 1 A strategy consists of competitive moves and business approaches used by managers to run the company. It is their action plan to grow the business, attract and please customers, compete successfully, conduct operations and to achieve target levels of organizational performance. It needs to appeal to customers and to help the company carve out its own market position. It uses efficiency and effectiveness to guide a company using as few resources as possible. It deals with initiatives. Strategic management is setting a company’s strategy to differentiate itself within the industry and developing a competitive advantage, as well as altering it as needed. A company achieves a sustainable competitive advantage when an attractive number of buyers prefer its products/services over those of rivals and when the basis for this preference can be maintained over time. Four ways to attain that strategic advantage: low-cost provider, product differentiation, focusing on a narrow market niche/distinctive competency, develop specialties that are hard to duplicate. Three strategic questions: 1) What is the company’s present situation? Use SWOT and “where are we now?” 2) Where does the company go from here? What is its direction? 3) How will we get there? This is the strategy. Strategies evolve because of shifting market conditions, technological breakthroughs, competitors’ moves, evolving customer preferences, emerging market opportunities...
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