Strategic change * Operational change: maintaining business systems * Strategic change: renewing business system * Strategic renewal: realigns (재편성) organization with their marketplace
McDonalds – reason why slowed in growth in the 1990s * What’s wrong with McDonalds pamphlet (health accusations (고소)) * Lawsuits with coffee cups * Profit decreased * Tastes changed * Increasing competition * Products were misaligned (조정불량) with emerging taste so their rigid products no longer fit
Strategic renewal process must be avoided and fix strategic drift (gets far from environment rather than changing its system) * Areas (Where does change need to take place, the business and organizational system) * The Business System (how a firm makes money): The specific configuration (구성) of resources, value-adding activities and product/service offerings directed at creating value for customers * Organizational System (how a firm is organized): How a firm gets its people to work together * Organizational structure: the clustering of tasks and people into smaller groups (what criteria used to differentiate tasks and cluster? – depending on span of control… many layers of management)
Business system is supported by the organization system
What are structuring criteria? * Output-based * Market segment structure – different groups of clients served * Account-based structure – different major client served * Business unit structure – different product-market combinations being focused on * Product group structure – different products being focused on * Brand-based structure – different brands being used * Channel-based structure – different distribution channel being used * Throughput-based * Functional structure – different
