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BUSINESS 189 STRATEGIC MANAGEMENT

BUSINESS 189 STRATEGIC MANAGEMENT. FALL 2008 COB, SJSU DR. MARK FRUIN. WHAT IS STRATEGY?. BUSINESS MODEL VS. STRATEGY BUSINESS MODEL = HOW DO WE MAKE MONEY? STRATEGY = WHAT SHOULD BE DONE - MANAGERIALLY, ORGANIZATIONALLY & TECHNICALLY - TO MAKE MONEY?

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BUSINESS 189 STRATEGIC MANAGEMENT

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  1. BUSINESS 189STRATEGIC MANAGEMENT FALL 2008 COB, SJSU DR. MARK FRUIN

  2. WHAT IS STRATEGY? • BUSINESS MODEL VS. STRATEGY • BUSINESS MODEL = HOW DO WE MAKE MONEY? • STRATEGY = WHAT SHOULD BE DONE - MANAGERIALLY, ORGANIZATIONALLY & TECHNICALLY - TO MAKE MONEY? • STRATEGY IS GOOD IDEAS, GOOD PLANNING & GOOD EXECUTION ACROSS AN ORGANIZATION & MARKETPLACE • BUSINESS MODELS ARE A DIME A DOZEN • SUCCESSFUL STRATEGIES ARE RARE

  3. STRATEGY DEFINITION • SHORT DEFINITION • ROB GRANT, “STRATEGY IS WINNING” • LONGER DEFINITION • STRATEGY IS SUPERIOR SUSTAINABLE COMPETITIVE ADVANTAGE RELATIVE TO RIVALS IN THE SAME INDUSTRY • SUPERIOR = RETURN ON INVESTED CAPITAL (BEFORE TAXES) • SUSTAINABLE = LONG LASTING, HARD TO IMITATE • COMPETITIVE ADVANTAGE = SOMETHING YOU’RE CLEARLY BETTER AT; USUALLY COST LEADERSHIP OR DIFFERENTIATION • RIVALS = FIRMS WITH SIMILAR RESOURCES & MARKET POSITIONS

  4. 3 MODELS OF STRATEGY • STRATEGY AS INDUSTRY CHOICE & POSITIONING • MICHAEL PORTER’S MODELS & THINKING • GENERIC COMPETITIVE STRATEGIES MODEL • FIVE FORCES MODEL OR PORTER DIAMOND • STRATEGY AS SUPERIOR CAPABILITIES & COMPETENCIES • RBV OR RESOURCE-BASED VIEW OF THE FIRM • FRUIN’S R-C-C MODEL • DISTINCTIVE VERSUS CORE COMPETENCIES • STRATEGY AS BALANCED SCORECARD/ SUPERIOR CORPORATE GOVERNANCE • DOING BETTER THAN AVERAGE & SATISFYING MORE INSIDE/OUTSIDE STAKEHOLDERS

  5. BASIC CONCEPTS • WHAT IS A FIRM? • POLITICAL V. ECONOMIC V. SOCIOLOGICAL MODELS • SMALL V. LARGE, PRIVATE V. PUBLIC • STAND ALONE V. STAND TOGETHER • WHAT IS AN INDUSTRY? • CLUSTERING OF FIRMS ALONG SEEDS/SOURCES-TO-SALES VALUE CHAIN • INDUSTRY LIFE CYCLE MODELS • WHAT IS COMPETITION? • SATISFICING V. NON-SATISFICING MODELS • MARKET-BASED V. NON MARKET-BASED • WHAT MATTERS MOST FOR FIRM SUCCESS? • INTERNAL V. EXTERNAL FACTORS • SHORT-TERM V. LONG-TERM

  6. STRATEGY STACK • AT LEAST FIVE LEVELS • GLOBAL STRATEGY • CORPORATE STRATEGY • INDUSTRY STRATEGY (BU/DIV OR FIRM- LEVEL VIEW) • PRODUCT/MARKET STRATEGY • FUNCTIONAL STRATEGY • (ORG SUB-UNIT/INDIV STRATEGIES) • HIERARCHICAL OR NON-HIERARCHICAL MODEL?

  7. BEFORE STRATEGY • BEFORE STRATEGY CAN OCCUR • NEEDS SOME HIGHER LEVEL FOLKS WHO AGREE THAT CHANGE IS NECESSARY • NEEDS RESOURCES • NEEDS GAME PLAN FOR HOW CHANGE WILL OCCUR • NEEDS TO ENLIST MAJORITY OF ORGANIZATIONAL MEMBERS, IF A RBV STRATEGY • NEEDS DETAILED, STEP-BY-STEP MANAGERIAL, ORGANIZATION & TECHNICAL MANUAL WITH CONTINGENCY PLANS • NEEDS “NEUTRAL” WAYS OF ASSESSING SUCCESS

  8. FIRST STEPS • VISION, MISSION & GOALS STATEMENTS • LONG-TERM/YEARS 3-5 OR LONGER • MID-TERM/YEARS 2-3 • SHORT-TERM OR NOW/THIS YEAR (QUARTER) • SWOT ANALYSIS • STRENGTHS, WEAKNESSES = ORG-LEVEL • OPPORTUNITIES, THREATS = INDUSTRY-LEVEL • BEYOND SWOT OR THE STATUS QUO • SWOT ANALYSES ARE TOO IDIOSYNCRATIC AND TOO MIRED IN THE STATUS QUO • THINKING OUTSIDE THE BOX IS REQUIRED FOR SUPERIOR, SUSTAINABLE COMPETITIVE ADVANTAGE

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