Report On

Chapter Summary

Strategic Management

PREPARED FOR: Dr. Shafiullah Course Instructor

EASTERN UNIVERSITY

PREPARED BY: IMRAN HOSSAIN ID: 103600022 Md. Hasan Mahmud ID: 103600043 SHA !ADA"#N N!SSA ID: 103600006

DATE OF SUBMISSION: September 14, 2011

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Letter of Trans ittal

September 14, 2011 Dr. Shafiullah Course Instru tor F! u"t# o$ Business A%ministr!tion E!stern Uni&ersit#' De!r Sir, (e submit )ere t)e summ!r# report t)!t #ou !s*e% $or !n% +!&e us t)e !ut)ori,!tion to -or* on ert!in $ie"%' T)e topi t)!t #ou )!&e +i&en me is re!""# !n import!nt . interestin+ $! t $or t)e stu%ents' (it) t)e te/tu!" stu%ies, ! 0uirin+ pr! ti !" orient!tion is ne ess!r# o$ -)i ) #ou )!&e re!te% ! bi+ )!n e $or us must )e"p us to -or* -it) e$$i ien # in $uture' 1in%"# ! ept our report !n% ob"i+e us t)ereb#' 2our e/ e""ent po-er o$ t)in*in+ )e"ps us to bui"% up ! &!"u!b"e !rrier in $uture' T)!n* #ou $or en our!+in+ us $or -or*in+ on t)is topi '

2ours3 sin ere"#, --------------------Imr!n 4oss!in M%' 4!s!n M!)mu% S)!#e!%!tun ness!

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Acknowledgement
M!*in+ ! summ!r# report is su ) ! t)in+ o$ p"e!sure' But %oin+ t)is is !"so ! tou+) t)in+' (it) t)e )e"p o$ some peop"e I $in!""# -!s !b"e to $inis) t)e t!s* t)!t -!s !ssi+ne% to us b# t)e ourse instru tor' ()i"e %oin+ t)is summ!r# I $! e% some prob"ems !n% -it) t)e )e"p o$ t)ose peop"e I o&er !me t)ose prob"ems' For t)!t, -e !re re!""# +r!te$u" to some +u#s' An% -e -!nt to ! *no-"e%+e m# +r!titu%e to t)em' First o$ !"" -e -ou"% "i*e to t)!n* t)e !"mi+)t# A""!) -)o )!s +i&en us t)e re0uire% *no-"e%+e !n% t)e po-er to $inis) t)is report' T)en -e -ou"% "i*e to t)!n* t)e ourse instru tor' (e !re !"so &er# +r!te$u" to )im be !use )e $o""o-e% us to t)e ri+)t -!# to omp"ete ! t!s*' 4is !ssist!n e -!s rem!r*!b"e !n% &er# $ruit$u"' 4e pro&i%e% su$$i ient in$orm!tion -)en nee%e%' Fin!""# I -ou"% "i*e to t)!n* !"" t)e re!%er !n% user o$ t)is summ!r# report'

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Executive Summery
For %oin+ t)e Summ!r# report !t $irst, -e )!% to se"e t our )!pter' T)e bro!% ob5e ti&e o$ t)is report is to $in% out t)e )!pter summ!r#' (e summ!ri,e% 12 )!pters o$ str!te+i M!n!+ement' From t)ose )!pter -e m!%e summ!r# on ST6ATE7IC 89ANNIN7, ST6ATE7IC MANA7E6S, ST6ATE7IC 9EADE6S4I8,ST6ATE72 AS AN EME67ENT 86OCESS, ST6ATE7IC 89ANNIN7 IN 86ACTICE, IM86O:IN7 ST6ATE7IC DECISION MA1IN7, STA1E4O9DE6S, T4E MISSION STATEMENT, FI:E FO6CES MODE9, Competiti&e A%&!nt!+e, 7eneri Bui"%in+ B"o *s o$ Competiti&e A%&!nt!+e, AC4IE:IN7 SU8E6IO6 EFFICIENC2, (4AT IS BUSINESS;9E:E9 ST6ATE72<, ST6ATE72 IN F6A7MENTED INDUST6IES, ST6ATE7IES TO MANA7E 6I:A962 IN MATU6E INDUST6IES, 86OFITIN7 F6OM 79OBA9 E=8ANSION, CONCENT6ATION ON A SIN79E BUSINESS, 6E:IE(IN7 T4E CO68O6ATE 8O6TFO9IO, T4E 6O9E OF O67ANI>ATIONA9 ST6UCTU6E, ()!t Is Str!te+i Contro", T)e import!n e o$ str!te+i topi s' ontro" !n% ot)ers

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Chapter 1: he Strategic !anagement "roce## $Summary%

Str!te+i p"!nnin+ is inten%e% to ! omp"is) t)ree import!nt t!s*s: 1'To "!ri$ies t)e out omes t)!t !n or+!ni,!tion -is)es to ! )ie&e? 2'To se"e ts t)e bro!% str!te+ies t)!t -i"" en!b"e t)e or+!ni,!tion to ! )ie&e t)ose out omes? @'To i%enti$ies -!#s to me!sure pro+ress' B!si Str!te+i 8"!nnin+ Mo%e" De$inin+ t)e Mission !n% Settin+ Top;9e&e" 7o!"s, o&er t)e E/tern!" An!"#sis o$ Opportunities !n% T)re!ts !n% Intern!" An!"#sis o$ Stren+t)s !n% (e!*nesses, o&er t)e Se"e tion o$ Appropri!te Str!te+ies !n% Imp"ement!tion o$ C)osen Str!te+ies' E/tern!" !n!"#ses i%enti$# str!te+i opportunities !n% t)re!ts in t)e oper!tin+ en&ironment' Str!te+i M!n!+ers !n be t-o t#pes: 1' 7ener!" m!n!+ers: 6esponsib"e $or t)e o&er!"" Astr!te+i B per$orm!n e !n% )e!"t) o$ t)e tot!" or+!ni,!tion'2' Oper!tions m!n!+ers: responsib"e $or spe i$i business $un tions or oper!tions' Str!te+i 9e!%ers)ip pro&i%es t)e &ision !n% %ire tion $or t)e +ro-t) !n% su ess o$ !n or+!ni,!tion' To su ess$u""# %e!" -it) )!n+e, !"" e/e uti&es nee% t)e s*i""s !n% too"s $or bot) str!te+# $ormu"!tion !n% imp"ement!tion' Str!te+i "e!%ers)ip b!si !""# me!ns usin+ str!te+# in t)e m!n!+ement o$ -or*ers' An emer+ent str!te+# is ! p!ttern o$ ! tion t)!t %e&e"ops o&er time in !n or+!ni,!tion in t)e !bsen e o$ ! spe i$i mission !n% +o!"s, or %espite ! mission !n% +o!"s' Emer+ent str!te+# is sometimes !""e% re!"i,e% str!te+#' An emer+ent str!te+# or re!"i,e% str!te+# %i$$ers $rom !n inten%e% str!te+#' Emer+ent str!te+# is ! set o$ ! tions, or be)!&ior, onsistent o&er time, ! re!"i,e% p!ttern -!s not e/press"# inten%e% in t)e ori+in!" p"!nnin+ o$ str!te+#' E$$e ti&e str!te+i business %e isions brin+ to+et)er t)e ri+)t resour es $or t)e ri+)t m!r*ets !t t)e ri+)t time' Co+niti&e bi!ses s#stem!ti !""# in$"uen e t)e r!tion!"it# o$ %e ision m!*ers'

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Chapter &: Stakeholder# and the corporate !i##ion $Summary%

St!*e)o"%er is ! person -)o )!s somet)in+ to +!in or "ose t)rou+) t)e out omes o$ ! p"!nnin+ pro ess, pro+r!mme% or pro5e t' Intern!" st!*e)o"%ers !re peop"e -)o !re !"re!%# ommitte% to ser&in+ #our or+!ni,!tion !s bo!r% members, st!$$, &o"unteers, !n%Cor %onors' For e/!mp"e Bo!r% members, Former bo!r% members, St!$$ members et ' E/tern!" st!*e)o"%ers !re peop"e -)o !re imp! te% b# #our -or* !s "ientsC onstituents, ommunit# p!rtners, !n% ot)ers' It is import!nt to +et t)e perspe ti&es o$ bot) +roups' For e/!mp"e Competitors, In%ustr# tr!%e +roups, C"ients, Communit# p!rtners, Customers, Supp"iers, Du!"it# !ssessors, Me%i!, Ot)ers' St!*e)o"%ers !re t)e *e# to t)e su ess o$ omp!n#' I$ t)eir "!ims !re not onsi%ere%, st!*e)o"%ers -it)%r!- support' St!*e)o"%ers !re in !n e/ )!n+e re"!tions)ip -it) t)e omp!n#' T)e# supp"# !n or+!ni,!tion -it) ontributions in e/ )!n+e $or in%u ements' Mission st!tement est!b"is)e% t)e +ui%in+ prin ip"es $or str!te+i %e ision m!*in+' A()!t t)e omp!n# %oesB, -)o is bein+ s!tis$ie% A-)!t ustomers +roupsB, -)!t is bein+ s!tis$ie% A-)!t ustomer nee%s, 4o- ustomer nee%s !re bein+ s!tis$ie% Ab# -)!t s*i""s, *no-"e%+e, or ompeten esB' Mission st!tement is ! $orm!" ommitment to st!*e)o"%ers t)!t t)e $irm3s str!te+# in orpor!tes !n% re o+ni,es t)eir "!ims on t)e or+!ni,!tion' It pro&i%es ! sense o$ %ire tion !n% purpose' It %ri&es str!te+i %e ision m!*in+ !n% resour e !""o !tions' It $or es t)e see*in+ o$ si+ni$i !nt per$orm!n e impro&ements to !tt!in +o!"s' Corpor!te +o&ern!n e !n be re+!r%e% !s ! s#stem o$ )e *s !n% b!"!n es so t)!t &!"ue is re!te% b# t)e or+!ni,!tion in et)i !" -!#s' It ensures t)!t t)e omp!n# ! )ie&es its str!te+i ob5e ti&es !n% meets its ob"i+!tions in t)e ri+)t m!nner' T)e bo!r% o$ %ire tors is responsib"e $or imp"ementin+ orpor!te +o&ern!n e in ! orpor!tion' 7oo% orpor!te +o&ern!n e is ! on$i%en e bui"%in+ !n% !ut)enti !tin+ me )!nism, -)i ) )e"ps t)e omp!n# to ! )ie&e its str!te+i ob5e ti&es, in p!rtners)ip -it) its st!*e)o"%ers' T)e "in*!+e bet-een orpor!te +o&ern!n e !n% orpor!te str!te+# is t)!t o$ "e+itim! # -)i ) ommuni !tes t)e mess!+e to st!*e)o"%ers t)!t -)!te&er ! ti&ities !n% resu"ts t)e omp!n# )!s ! )ie&e% in t)e p!st, it )!s %one t)rou+) $!ir me!ns !n% !t !n optimum "e&e"' T)e purpose o$ business et)i s is to pro&i%e t)e too"s $or %e!"in+ -it) mor!" omp"e/it# in str!te+i %e isions'

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Chapter ': External Analy#i#: T)e I%enti$i !tion o$ In%ustr# Opportunities !n% T)re!ts ASumm!r#B
An!"#ti str!te+i too"s su ) !s t)e $i&e $or es mo%e" )e"p m!n!+ers $ormu"!te !ppropri!te responses' 8orterEs $i&e $or es in "u%e ; t)ree $or es $rom E)ori,ont!"E ompetition: t)e b!r+!inin+ po-er o$

ompetition: t)re!t o$ substitute pro%u ts, t)e t)re!t o$ est!b"is)e% ri&!"s, !n% t)e t)re!t o$ ne- entr!nts? !n% t-o $or es $rom E&erti !"E supp"iers !n% t)e b!r+!inin+ po-er o$ ustomers' T)e on ept o$ str!te+i +roups is -it)in !n in%ustr#, ! ompetitor +roupin+ usin+ simi"!r str!te+ies t)!t %i$$er $rom ot)er in%ustr# +roups' Str!te+i 7roups -it)in In%ustries !re +roups o$ omp!nies -it)in !n in%ustr# t)!t pursue ! simi"!r str!te+#' Str!te+i +roups !n +ener!""# be r!n*e% in ! rou+) )ier!r )i !" or%er bui"t on t-o %imensions, pri e !n% per$orm!n e' For e/!mp"e in t)e !r m!nu$! turin+ in%ustr#, t)e "u/ur# !r se+ment !n% t)e e onom# !r se+ment !re t-o sep!r!te str!te+i +roups' ()en tr#in+ to re onstru t m!r*et boun%!ries, omp!nies s)ou"% "oo* ! ross str!te+i +roups -it)in t)eir in%ustr# !s bu#ers m!*e tr!%e;o$$s bet-een o$$erin+s $rom %i$$erent str!te+i +roups !n% not so"e"# on pri e' 8orters Fi&e For es Mo%e" )!s some m!5or "imit!tions in to%!#3s m!r*et en&ironment' It is not !b"e to t!*e into ! ount ne- business mo%e"s !n% t)e %#n!mi s o$ m!r*ets' T)e &!"ue o$ 8orters mo%e" is more t)!t it en!b"es m!n!+ers to t)in* !bout t)e urrent situ!tion o$ t)eir in%ustr# in ! stru ture%, e!s#;to;un%erst!n% -!# !s ! st!rtin+ point $or $urt)er !n!"#sis' A or%in+ to 8orter t)e F $or es mo%e" is inten%e% $or !n in%ustr# "e&e" !n!"#sis !n% it is not inten%e% to be use% $or !n !n!"#sis o$ !n in%ustr# se tor' For e/!mp"e, p)!rm! euti !"s m!# be onsi%ere% one in%ustr# !n% bio;te )no"o+# !not)er but t)e# bot) be"on+ to t)e 9i$e S ien es in%ustr# se tor' 7"ob!"i,!tion +"ob!""# %isperse% pro%u tion "o-ers osts !n% in re!ses 0u!"it#' 7"ob!" m!r*ets !re rep"! in+ n!tion!" m!r*ets' Str!te+i m!n!+ement is omprise% o$ &!rious business str!te+ies, -)i ) !n be ombine% to uti"i,e pro$its !n% +!in t)e upper )!n% in t)e business -or"%' T)ese str!te+ies in "u%e +"ob!" str!te+ies su ) !s e/p!nsionC"o !tion str!te+ies !n% intern!tion!" str!te+ies in !%%ition to intern!" str!te+ies su ) !s orpor!te str!te+ies' E! ) o$ t)ese str!te+ies is ! *e# omponent to +!inin+ ! ompetiti&e !%&!nt!+e in ! p!rti u"!r in%ustr#'

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Chapter (: )nternal Analy#i#: 6esour es, C!p!bi"ities, Competen ies !n% Competiti&e A%&!nt!+e A Summ!r#B
Competiti&e !%&!nt!+e is ! $irm3s !bi"it# to outper$orm its ompetitors Ae!rn )i+)er pro$itsB' T)e sour e o$ ompetiti&e !%&!nt!+e is &!"ue re!tion $or ustomers' Sust!ine% ompetiti&e !%&!nt!+e omes $rom m!int!inin+ )i+)er pro$its t)!n ompetitors o&er "on+ perio%s o$ time' Business $un tion is ! pro ess or oper!tion t)!t is per$orme% routine"# to !rr# out ! p!rt o$ t)e mission o$ !n or+!ni,!tion' :!"ue C)!in is ! )i+);"e&e" mo%e" o$ )o- businesses re ei&e r!- m!teri!"s !s input, !%% &!"ue to t)e r!- m!teri!"s t)rou+) &!rious pro esses, !n% se"" $inis)e% pro%u ts to ustomers' :!"ue; )!in !n!"#sis "oo*s !t e&er# step ! business +oes t)rou+), $rom r!- m!teri!"s to t)e e&entu!" en%;user' T)e +o!" is to %e"i&er m!/imum &!"ue $or t)e "e!st possib"e tot!" ost' Distin ti&e Competen #, In +ener!", !n or+!ni,!tionEs %istin ti&e ompeten # is t)e set o$ stren+t)s, )!r! teristi s !n% 0u!"ities in "u%in+ s*i""s, te )no"o+ies, or resour es t)!t %istin+uis) it $rom ompetitors' ()en t)e stren+t) pro&i%es superior !n% uni0ue ustomer &!"ue !n% is %i$$i u"t to imit!te t)en t)e %istin ti&e ompeten e re!tes ! sust!in!b"e ompetiti&e !%&!nt!+e' T)e Dur!bi"it# o$ Competiti&e A%&!nt!+e imit!tin+ 6esour es !n% imit!tin+ C!p!bi"ities' Sometime omp!nies $!i" be !use o$ Inerti!, 8rior str!te+i ommitments' A&oi%in+ $!i"ure !n% sust!inin+ ompetiti&e !%&!nt!+e omp!n# s)ou"% $o us on t)e bui"%in+ b"o *s o$ ompetiti&e !%&!nt!+e, institute ontinuous impro&ement !n% "e!rnin+, tr! * best in%ustri!" pr! ti e !n% use ben )m!r*in+, o&er ome inerti!'

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Chapter *: +uilding Competitive Advantage hrough ,unctional -evel Strategy $Summary%

8ro%u tion e$$i ien # is t)e !bi"it# to pro%u e ! +oo% usin+ t)e $e-est resour es possib"e' E$$i ient pro%u tion is ! )ie&e% -)en ! pro%u t is re!te% !t its "o-est !&er!+e tot!" ost' Or+!ni,!tion 8ro%u tion e$$i ien # re$"e ts b# E onomies o$ s !"e, 9o-er unit osts %ue to "!r+e s !"e pro%u tion &o"umes, 9e!rnin+ e$$e ts, Cost re%u tions %ue to "e!rnin+ b# %oin+', F"e/ib"e m!nu$! turin+ te )no"o+# A"e!n pro%u tionB,6e%u e% setup times, In re!se% m! )ine uti"i,!tion, Impro&e% 0u!"it# ontro", 9o-er in&entor# "e&e"s, M!ss ustomi,!tion, 9o- ost !n% pro%u t ustomi,!tion, F"e/ib"e m! )ine e""s, In re!se% &!riet# o$ oper!tions' M!r*etin+ is !t t)e )e!rt o$ e&er# enterprise' ItEs t)e pro ess o$ e$$i ient"# $in%in+, !ttr! tin+, !n% ret!inin+ pro$it!b"e ustomers ; t)e "i$eb"oo% o$ !"" businesses, -)et)er t)e#Ere se"$;$un%e%, &enture;b! *e% or pub"i "# )e"%' M!r*etin+ str!te+#: 8ro%u t %esi+n; 8ro%u t m!r*etin+ %e!"s -it) t)e $irst o$ t)e GH8GEs o$ m!r*etin+, -)i ) !re 8ro%u t, 8ri in+, 8"! e, !n% 8romotion, 8! *!+in+, 8ositionin+ . 8eop"e' A%&ertisin+; A%&ertisin+ is ! $orm o$ ommuni !tion' 8romotion; 8romotion is one o$ t)e $our e"ements o$ m!r*etin+ mi/' 8ri in+ ;8ri e is t)e on"# re&enue +ener!tin+ e"ement !mon+st t)e $our 8s, t)e rest bein+ ost enters' A "o- pri e !n be ! &i!b"e substitute $or pro%u t 0u!"it#, e$$e ti&e promotions, or !n ener+eti se""in+ e$$ort b# %istributors' Distribution; Distribution is !"so ! &er# import!nt omponent o$ 9o+isti s . Supp"# )!in m!n!+ement' Distribution in supp"# )!in m!n!+ement re$ers to t)e %istribution o$ ! +oo% $rom one business to !not)er' M!teri!" m!n!+ement is +ettin+ m!teri!"s into !n% t)rou+) t)e pro%u tion pro ess !n% out t)rou+) t)e %istribution s#stem to t)e en% user' Iust;In;Time AIITB is 6e%u e in&entor# )o"%in+ osts b# )!&in+ m!teri!"s !rri&e IIT to enter t)e pro%u tion pro ess' 4um!n 6esour e Str!te+# !n% E$$i ien # in re!se emp"o#ee pro%u ti&it# !n% "o-er unit osts t)rou+) 8ro&i%e tr!inin+ t)!t up+r!%es emp"o#ee s*i""s' Est!b"is) se"$;m!n!+in+ te!ms to +!in ! more $"e/ib"e -or* $or e !n% in re!se% pro%u ti&it#' TDM, Bui"% or+!ni,!tion!" ommitment to 0u!"it# !n% Impro&e supp"ier re"!tions' For A )ie&in+ Superior Customer 6esponsi&eness omp!n# s)ou"% %e&e"op ! ustomer $o us' S!tis$#in+ ustomer nee%s: Customi,!tion o$ t)e $e!tures o$ pro%u ts !n% ser&i es to meet t)e uni0ue nee% o$ +roups !n% in%i&i%u!" ustomers' /

Chapter .: +u#ine##- -evel Strategy $ Summary%

Business "e&e" str!te+# is t)e ! tion? $irms use to +!in ! ompetiti&e !%&!nt!+e b# e/p"oitin+ ore ompeten ies in spe i$i pro%u t m!r*ets' Business;9e&e" Str!te+ies !re $our t#pes: Cost 9e!%ers)ip, Di$$erenti!tion, Fo use%, !n% Inte+r!te% Cost 9e!%ers)ipCDi$$erenti!tion' Business;9e&e" Str!te+# is import!nt $or !n or+!ni,!tion be !use J Business "e&e" str!te+# bui"%in+ e$$i ient s !"e $! i"ities, Ti+)t"# ontro""in+ pro%u tion osts !n% o&er)e!%, Minimi,in+ osts o$ s!"es, 6.D !n% ser&i e, Bui"%in+ e$$i ient m!nu$! turin+ $! i"ities, Monitorin+ osts o$ ! ti&ities pro&i%e% b# outsi%ers, Simp"i$#in+ pro%u tion pro esses, De&e"opin+ ne- s#stems !n% pro esses, S)!pin+ per eptions t)rou+) !%&ertisin+, A%!pt 0ui *"# to en&ironment!" )!n+es, 9e!rn nes*i""s !n% te )no"o+ies more 0ui *"#, E$$e ti&e"# "e&er!+e its ore ompeten ies -)i"e ompetin+ !+!inst its ri&!"s' Imp"i !tions $or business;"e&e" str!te+# is imme%i!te ompetitors !re omp!nies pursuin+ s!me str!te+# -it)in t)e s!me str!te+i +roup !n% %i$$erent str!te+i +roups !n )!&e ! %i$$erent st!n%in+ -it) respe t to t)e e$$e ts o$ t)e $i&e ompetiti&e $or es' First mo&er !%&!nt!+e is bene$its !re $irst )oi e o$ ustomers !n% supp"iers, settin+ st!n%!r%s, bui"%in+ entr# b!rriers' In&estment str!te+# is t)e resour es A)um!n, $un tion!", !n% $in!n i!"B re0uire% +!inin+ sust!in!b"e ompetiti&e !%&!nt!+e'

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Chapter /: Competitive Strategy and the )ndu#try Environment $Summary%

Fr!+mente% in%ustr# is An in%ustr# in -)i ) no sin+"e enterprise )!s "!r+e enou+) s)!re o$ t)e m!r*et to be !b"e to in$"uen e t)e in%ustr#Es %ire tion' Fr!+mente% in%ustr# )!r! teristi s !re 9o !"i,e% m!r*ets -it) "o- entr# b!rriers Ae'+', Mom3s DinerB' Fee onomies o$ s !"e opportunities e/ist' 4i+) tr!nsport!tion osts Ae'+', s!n%B $or pro%u ts' Fo us str!te+ies pre%omin!te Ae'+', ustomer +roup, re+ionB' Competin+ in $r!+mente% in%ustries re0uires str!te+i onso"i%!tion b#: C)!inin+ A(!";M!rtB, Fr!n )isin+ AM Don!"%3sB, 4ori,ont!" mer+ers ADi""!r%3sB, usin+ t)e Internet AeB!#B' T)ree str!te+ies $or !n inno&!tor ompetin+ in ! ne-"# emer+in+ m!r*etCin%ustr#: 1'De&e"op !n% m!r*et t)e te )no"o+# itse"$' 2' De&e"op !n% m!r*et t)e te )no"o+# 5oint"# -it) !not)er omp!n# t)rou+) ! str!te+i !""i!n e' @' 9i ense t)e te )no"o+# to e/istin+ omp!nies !n% "et t)em %e&e"op t)e m!r*et' Str!te+ies to M!n!+e 6i&!"r# in M!ture In%ustries Comp!n# s)ou"% +o $or 8ri e si+n!"in+: 9e!%in+ ompetitors use pri e )!n+es to on&e# t)eir intentions to ot)er ompetitors Ai'e', tit;$or;t!tB' 8ri e "e!%ers)ip: One omp!n# sets t)e in%ustr# pri e? ot)er ompetitors re$eren e t)eir pri es to t)!t pri e' Non pri e ompetition: Competition b# !n# me!ns ot)er t)!n pri e' Inte+r!tion nee% $or Supp"# !n% Distribution Str!te+# in M!ture In%ustries' C)oi e o$ inte+r!tion %epen%s on: Nee% $or "ose re"!tions)ips -it) supp"iers' AI!p!nese &s' Ameri !n st#"esB' Nee% to ensure ustomer re"!tions)ips' Str!te+ies in De "inin+ In%ustries !re 9e!%ers)ip str!te+#: A $irm see*s to be ome %omin!nt in t)e in%ustr#' Ni )e str!te+#: Fo uses on %em!n% po *ets %e "inin+ more s"o-"# t)!n t)e in%ustr# !s ! -)o"e' 4!r&est str!te+#: 9imits in&estment !n% optimi,es !s) $"o-' Di&estment str!te+#: Comp!n# e/its t)e in%ustr# b# se""in+ out e!r"# to ot)ers, !&oi%in+ "i0ui%!tion'

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Chapter 0: Strategy in the 1lo2al Environment $Summary%

Top m!n!+ers t#pi !""# %e&e"op +"ob!" str!te+ies? t)e# re"# on !"" "e&e"s o$ m!n!+ement in or%er to imp"ement t)ese str!te+ies su ess$u""#' 7"ob!"i,!tion in re!ses pro$its b#: E/p!n%in+ t)eir m!r*et;Se""in+ +oo%s %e&e"ope% !t )ome into intern!tion!" m!r*ets -)ere in%i+enous ompetitors "! * omp!r!b"e pro%u ts' E onomies o$ S !"e; K Spre!% %e&e"opment . pro%u tion $i/e% osts o&er ! +"ob!" m!r*et' K Uti"i,e !p! it# more intensi&e"#' K In re!se b!r+!inin+ po-er -it) supp"iers $or "o-er osts' 9o !tion E onomies; K 8er$ormin+ &!"ue re!tion ! ti&ities in optim!" "o !tions to "o-er osts $or r!- m!teri!"s, po-er, "!bor, et ' !n%Cor to impro&e pro%u t %i$$erenti!tion' 9e&er!+e S*i""s o$ Subsi%i!ries; K En our!+e "o !" subsi%i!ries to %e&e"op ne- ompeten es' Support tr!ns$er o$ &!"u!b"e ompeten es t)!t !rise -it) oper!tions !t ot)er "o !tions' T-o m!in pressures $or ost re%u tion !n% be "o !""# responsi&e' T)ese pressures p"! e on$"i tin+ %em!n%s on ! omp!n#' K Cost re%u tions !re ommon in: J In%ustries -)ere pri e is t)e m!in ompetiti&e -e!pon' Comp!nies m!# ! )ie&e ost re%u tion b# pro%u tion in ! "o-; ost "o !tion or b# o$$erin+ ! st!n%!r%i,e% pro%u t' T)e more t)!t ustomer pre$eren es &!r#, t)e more "o !" responsi&eness is re0uire%' T)e str!te+i )oi es !re; 7"ob!" St!n%!r%i,!tion Str!te+#; Fo uses on in re!sin+ pro$it!bi"it# b# pursuin+ ! "o-; ost str!te+# on ! +"ob!" s !"e' It -or*s best i$ t)ere is: J Stron+ pressure $or ost re%u tion' J 9o- pressure $or "o !" responsi&eness' 9o !"i,!tion Str!te+#; Customi,es +oo%s or ser&i es to pro&i%e ! +oo% m!t ) to t!stes !n% pre$eren es in %i$$erent n!tion!" m!r*ets' It -or*s best i$ t)ere is: J 9o- ost pressure' Tr!nsn!tion!" Str!te+#; Attempts to ! )ie&e "o-; ost, %i$$erenti!te% pro%u ts ! ross m!r*ets !n% to $oster ! $"o- o$ s*i""s bet-een %i$$erent subsi%i!ries' It -or*s best i$ t)ere is simu"t!neous: J 4i+) ost pressures J 4i+) "o !" responsi&eness pressures' Intern!tion!" Str!te+#;Centr!"i,es pro%u t %e&e"opment, but m!nu$! tures !n% m!r*ets +"ob!""#' It -or*s best i$ t)ere is: 9o- ost pressure, 9o- pressure $or "o !" responsi&eness, ! uni&ers!" nee% pro%u t, No si+ni$i !nt ompetitors' T)ere !re %i$$erent )oi es o$ entr# mo%e !re; E/portin+, "i ensin+, $r!n )isin+, 5oint &entures, -)o""# o-ne% subsi%i!ries' Str!te+i !""i!n e is import!nt $or p!rtner se"e tion' A +oo% p!rtner )e"ps $irm ! )ie&e its str!te+i +o!"s'

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Chapter 3: Corporate Strategy- 4ertical )ntegration5 Diver#ification5

Strategic Alliance# $ Summary%
Corpor!te str!te+# est!b"is)es t)e o&er!"" %ire tion t)!t t)e or+!ni,!tion )opes to +o' Con entr!tion on ! Sin+"e Business A""o-s ! Comp!n# to $o us 6esour es !n% C!p!bi"ities in Iust one Are!' Does Not Di&ersi$# Into Are!s T)!t It 1no-s 9itt"e About !n% ()ere 6esour es !n% C!p!bi"ities A%% 9itt"e :!"ue' But :erti !" Inte+r!tion M!# Be 6e0uire% to Cre!te :!"ue !n% Est!b"is) ! Competiti&e A%&!nt!+e !n% Opportunities M!# Be Misse%' :erti !" Inte+r!tion onsi%ere% ! +ro-t) str!te+# be !use t)e $irm3s oper!tions !re e/p!n%e% be#on% prim!r# business :erti !" Inte+r!tion; Bui"%in+ B!rriers to Entr#, F! i"it!tin+ In&estments in Spe i!"i,e% Assets, 8rote tin+ 8ro%u t Du!"it#, !n% Impro&e% S )e%u"in+' Ar+uments !+!inst :erti !" Inte+r!tion !re ; Cost Dis!%&!nt!+es, Te )no"o+i !" C)!n+e !n% Dem!n% Un ert!int#' A"tern!ti&es to :erti !" Inte+r!tion Bui"%in+ ! 9on+;Term Cooper!ti&e 6e"!tions)ip' M!int!in M!r*et Dis ip"ine' Business Cre!te :!"ue t)rou+) Di&ersi$i !tion' A str!te+# in -)i ) ! $irm e/p!n%s its oper!tion b# mo&in+ into ! %i$$erent in%ustr#' It !n be b# A 0uirin+ !n% 6estru turin+, Tr!ns$errin+ Competen ies, E onomies o$ S ope' A "imit o$ Di&ersi$i !tion is Coor%in!tion !mon+ Businesses' Str!te+i A""i!n e !s !"tern!ti&e %i&ersi$i !tion )!s some A%&!nt!+es: Firms M!# Cre!te :!"ue b# 6e!"i,in+ E onomies o$ S ope, En!b"e Comp!nies to S-!p Comp"ement!r# S*i""s' An% Dis!%&!nt!+e is ; 8ro$its Must Be Sp"it, 6is* T)!t One Firm M!# 7i&e A-!# Criti !" 1no-;4o- T)!t M!# Cre!te ! Competitor $rom t)e A""i!n e 8!rtner'

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Chapter 16: Corporate Development $ Summary%

T)e BC7 m!tri/ met)o% is b!se% on t)e pro%u t "i$e # "e t)eor# t)!t !n be use% to %etermine -)!t priorities s)ou"% be +i&en in t)e pro%u t port$o"io o$ ! business unit' It )!s t-o %imensions: M!r*et s)!re !n% M!r*et +ro-t)' T)e b!si i%e! be)in% it is t)!t t)e bi++er t)e m!r*et s)!re ! pro%u t )!s or t)e $!ster t)e pro%u t3s m!r*et +ro-s t)e better it is $or t)e omp!n#' 8"! in+ pro%u ts in t)e BC7 m!tri/ resu"ts in $our !te+ories in ! port$o"io o$ ! omp!n#: 1' St!rs: 4i+) +ro-t), )i+) m!r*et s)!re' T)e# !re "e!%ers in t)e business so t)e# s)ou"% !"so +ener!te "!r+e !mounts o$ !s)' 2' C!s) Co-s: 9o- +ro-t), )i+) m!r*et s)!re' 8ro$it !n% !s) +ener!tion s)ou"% be )i+)' @' Do+: 9o- +ro-t), "om!r*et s)!re' Be-!re o$ e/pensi&e Lturn !roun% p"!ns3' De"i&er !s), ot)er-ise "i0ui%!te' 4' Duestion M!r*s: 4i+) +ro-t), "o- m!r*et s)!re' Some "imit!tion o$ t)e BC7 in "u%e: 4i+) m!r*et s)!re is not on"# su essor $! tor' M!r*et +ro-t) is not t)e on"# in%i !tor $or t)e !ttr! ti&eness o$ ! m!r*et' Intern!" Ne- :enturin+: Comp!n# )!s ! set o$ &!"u!b"e ompeten ies in its e/istin+ businesses' Competen es "e&er!+e% or re ombine% to enter ne- business !re!s' 8it$!""s o$ Ne- :entures !re: 9!r+e;s !"e entr# is initi!""# more e/pensi&e t)!n sm!"";s !"e entr#, but it brin+s )i+)er returns in t)e "on+ run' Commer i!"i,!tion: Te )no"o+i !" possibi"ities s)ou"% not o&ers)!%o- m!r*et nee%s !n% opportunities' 8oor imp"ement!tion: Dem!n%s on "! *s import!nt ompeten ies to !s) $"o-, Nee% "e!r str!te+i ob5e ti&es, Anti ip!te time !n% osts' A 0uisitions !n be entr# str!te+# -)en Comp!n# ompete in !n !re!' Comp!n# !n pur )!se !n in umbent omp!n# t)!t )!s t)ose ompeten ies !t ! re!son!b"e pri e' Ioint :entures !n be entr# str!te+# -)en Comp!n# !n in re!se t)e prob!bi"it# o$ su ess b# te!min+ up -it) !not)er omp!n# -it) omp"ement!r# s*i""s' Ioint &entures !re pre$erre% -)en ris*s !n% osts o$ settin+ up ! ne- business unit !re more t)!n omp!n# !n !ssume' 6estru turin+ is t)e pro ess o$ %i&estin+ businesses !n% e/itin+ in%ustries to $o us on ore %istin ti&e ompeten ies in or%er to in re!se omp!n# pro$it!bi"it#' 6estru ture re0uire $or response to $!i"e% ! 0uisitions, Di&ersi$i !tion $or t)e -ron+ re!sons, in&estors see )i+)"# %i&ersi$ie% omp!nies !s "ess !ttr! ti&e' T)e M!in Steps o$ Turn!roun% !re re%e$inin+ t)e Str!te+i Fo us, C)!n+in+ t)e 9e!%ers)ip, Asset S!"es, !n% Impro&in+ 8ro$it!bi"it#, ! 0uisitions'

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Chapter 11: De#igning 7rgani8ational Structure $Summary%

Stru ture is t)e est!b"is)ment p!ttern o$ re"!tions)ip !mon+ t)e omponents or p!rts o$ !n or+!ni,!tion' Or+!ni,!tion!" Stru ture is ! $r!me-or* t)rou+) -)i ) t)e or+!ni,!tion oper!tes' 6o"e o$ or+!ni,!tion!" Stru ture re$ers to ! set o$ e/pe te% be)!&ior p!tterns !ttribute% to someone o up#in+ ! +i&en position in ! so i!" unit' It )!s T-o Dimensions: 1' 4ori,ont!" ADep!rtmentsB, 2' :erti !" A4ier!r )# o$ !ut)orit#B' Di$$erenti!tion ; !""o !tion o$ peop"e to t!s*s' :erti !" ; %istribution o$ %e ision;m!*in+ A"e&e"sB, 4ori,ont!" ; %istribution o$ $un tions' :erti !" %i$$erenti!tion is reportin+ re"!tions)ips t)!t "in* peop"e, t!s*s !n% $un tions' :erti !" %i$$erenti!tion %etermines i$ ! stru ture is $"!t or t!""' :erti !" %i$$erenti!tion !n be t-o t#pes: 1' Centr!"i,!tion: e!sier oor%in!tion o$ ! ti&ities, %e isions $it or+!ni,!tion!" str!te+#, spee%# %e ision m!*in+' 2' De entr!"i,!tion: re%u es o&er"o!% $or TMT A !n $o us on str!te+#B, moti&!tion . ! ount!bi"it# in re!se, $e-er m!n!+ers !re nee%e%' 4ori,ont!" %i$$erenti!tion is !""e% t)e %e+ree to -)i ) #ou sep!r!te t!s*s or s*i""s in t)e or+!ni,!tion Aspe i!"i,!tion or $i tion!"i,!tionB' 4ori,ont!" %i$$erenti!tion $orm !n be: Fun tion!" stru ture ; +roups3 peop"e on t)e b!sis o$ ommon e/pertise . resour es' Mu"ti;Di&ision!" Stru ture: 8ro%u t "ines or business unit is se"$; ont!ine% ; orpor!te 4D est!b"is)e% $or support . ontro"' M!tri/ Or+!ni,!tion: B!se% on t-o $orms o$ )ori,ont!" %i$$erenti!tion: $un tion!" !n% pro5e tCpro%u t' Te!m Stru ture: M!n# omp!nies use perm!nent ross; $un tion!" te!ms' Inte+r!tion me!ns e/tent to -)i ) t)e or+!ni,!tion -!nts to oor%in!te &!"ue re!tion ! ti&ities Ainter%epen%en eB' More %i$$erenti!tion re0uires more ont! t;S!"es !n% pro%u tion inte+r!tion' Inte+r!tin+ Me )!nisms re$ers to ! 6e"!tions)ip bet-een %i$$erenti!tion !n% inte+r!tion' Forms o$ Inte+r!tin+ Me )!nisms: Dire t m!n!+ers, 9i!ison ro"es;Assist!nt s!"es !n% p"!nt m!n!+ers, T!s* $or es;6epresent!ti&es $rom s!"es, pro%u tion, !n% rese!r ) !n% %e&e"opment, Te!ms;Or+!ni,!tion!" e/e uti&e ommittee, inte+r!tin+ ro"es;Assist!nt &i e presi%ent $or str!te+i presi%ent -it)out port$o"io, M!tri/; A"" ro"es !re inte+r!tin+ ro"es' p"!nnin+ or &i e

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Chapter 1&: De#igning Strategic Control Sy#tem# $Summary%

Str!te+i ontro" !n be %e$ine% !s pro ess o$ monitorin+ !s to -)et)er to &!rious ontro" pro esses !""o- m!n!+ers to e&!"u!te !

str!te+ies !%opte% b# t)e or+!ni,!tion !re )e"pin+ its intern!" en&ironment to be m!t )e% -it) t)e e/tern!" en&ironment' Str!te+i omp!n#Es pro+r!m $rom ! riti !" "on+;term perspe ti&e' T)is in&o"&es ! %et!i"e% !n% ob5e ti&e !n!"#sis o$ ! omp!n#Es or+!ni,!tion !n% its !bi"it# to m!/imi,e its stren+t)s !n% m!r*et opportunities' Str!te+i ontro" is t)e se"e tion o$ !n or+!ni,!tion!" str!te+# !n% m!t )in+ stru ture $or t)e or+!ni,!tion' Str!te+i Contro" S#stems !n be: Fin!n i!" Contro"s: Sto * pri e, 6OI' Output Contro"s: Di&ision!" +o!"s, Fun tion!" +o!"s, In%i&i%u!" +o!"s' Be)!&ior Contro"s: Bu%+ets AA b"ueprint $or t)e use o$ or+!ni,!tion!" resour esB, St!n%!r%i,!tion ASt!n%!r%i,!tion o$ inputs !n% outputB, 6u"es !n% pro e%ures' Or+!ni,!tion!" Cu"ture: :!"ues, Norms, So i!"i,!tion' M!n!+ement b# Ob5e ti&es AMBOB est!b"is)es spe i$i +o!"s !n% ob5e ti&es !t e! ) "e&e" in t)e or+!ni,!tion' Or+!ni,!tion!" Cu"ture is t)e o""e tion o$ &!"ues !n% norms s)!re% b# peop"e !n% +roups in !n or+!ni,!tion !n% s)!re% &!"ues !n% ommon u"ture in re!se inte+r!tion !n% impro&e oor%in!tion' :!"ues: be"ie$s !n% i%e!s !bout ommon +o!"s !n% proper be)!&iors' Norms: ! t !s +ui%e"ines or e/pe t!tions t)!t pres ribe ! ept!b"e be)!&ior b# or+!ni,!tion!" members' Initi!" u"tur!" &!"ues !n% m!n!+ement st#"e is embosse% on t)e or+!ni,!tion b# its $oun%er' A%!pti&e u"tures !re inno&!ti&e !n% en our!+e !n% re-!r% initi!ti&e b# mi%%"e !n% "o-er;"e&e" m!n!+ers' Str!te+i 6e-!r% S#stems !re t-o t#pes: 1' In%i&i%u!" re-!r% s#stems A8ie e-or* p"!ns, Commission s#stems, Bonus p"!ns, 8romotionB, 2' 7roup !n% or+!ni,!tion!" re-!r% s#stems A7roup;b!se% bonus s#stems, 8ro$it s)!rin+ s#stemsB'

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/&iii