MGT320 Ch 11 Strategic Management

PARC Video Example
1. What is the one unique thing you’re going to do? (Create Value)

2. How do you create business value. Turn that idea into cash.

What are the unique things we can do and how can we turn those ideas into money?

The decisions and actions that determine the long-run performance of an organization.
(The culmination of ideas)
Father of Strategic thinking
Porter Strategy vs. Operational Effectiveness
We mistake being good at something with being Strategy positioned.

We are the best…We make 8-track tapes…

More Nasty Principal
You need to do something else
Bigger, better, bolder
You need to differentiate yourself
The Necessity of Choice (Trade-offs)
You need to choose you can’t do everything. Fast, Quality, or Cheap pick 2
“Fit” in the Driver’s Seat
You need to find a trade-off that fits who you are. Fit matters.
Strategic Management Process…
When we make decisions without looking at your cards you make bad decisions.
We need to look at our cards
Strategic Management is hard you need to look at your cards
Netflix fiasco
SWOT Analysis
We need to look at our weaknesses
Small bets
The companies that make small bets win.
Five Forces Analysis
May or may not have power

20 railroads to 4 railroads

New Entrants
Threat of New Entrants railroads
Ease of getting in
When there are barriers you make more money.
May or may not have power
Walmart calling general mills for different self size
Cable company vs. netflix. online vs traditional
Coke vs. Pepsi intense Rivalry
Blue Ocean Strategy
Red Ocean- Sharks in the water feeding
Blue Ocean- Be where other competitors aren’t. When you go into markets there are competitors.
White Space- be where people aren’t yet
Curves- Women’s only gym
Did great because they found the blue ocean. They found a market that wasn’t being served.
Don’t go where the competition is go where its going to be.
Corporate Portfolio Analysis: BCG Matrix
BCG Matrix

Cash cows- Windows and office


Question marks- Bing

Dogs- Zune

Dilbert Video Example
Not losing money fast enough
Corporate Strategies
Stability Strategy
maintenance of the status quo
It it ain’t broke don’t fix it.
Renewal Strategy
Examination of organizational weaknesses that are leading to performance declines
Blackberry,GM. Was good in the past
Growth Strategy
Seeking to increase the organization’s business by expansion into new products and markets.
Google fast growing
Focus on a certain area that you’ve worked on in the past.
Head to head competing
Vertical integration
Supply Chain
Do what they’re doing or buy them buying chips from intel
Horizontal integration
Your competitors
GE makes everything
Sustainability Competitive Advantage:
An organization’s distinctive competitive edge (Sustainability is Key).
Cost Leadership Strategy
Walmart- be the cheapest
Low Prices everyday
Dollar stores
Differentiation Strategy
Apple they’re own products
Putting in the R&D to make the product

They will pay more for the better different product
More Nasty principal

Stuck in the Middle Strategy
When you’re in the middle you’re competing with everyone.
Focus Strategy
Focus on White space. Walmart in the city Local market in a city.
Southwest airlines went
System Lock-in Strategy
Get developers to make applications to get people locked into product.

Be first to market

Barrier reductions. Think Microsoft making it easy for programmers to develop for windows

Walmart Plano Texas
1. there are people who want to look rich

2. Only by trying things out is how you learn

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