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Mark Fuller St. Francis Xavier University

BSAD 471: Strategic Management. Strategies • Tactics • Results. Mark Fuller St. Francis Xavier University. Corporate Strategy. Types of Strategies. Corporate strategies Strategic vision, strategies and objectives for conglomerates. .  . Business strategies

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Mark Fuller St. Francis Xavier University

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  1. BSAD 471: Strategic Management Strategies • Tactics • Results Mark Fuller St. FrancisXavier University

  2. Corporate Strategy

  3. Types of Strategies • Corporate strategies • Strategic vision, strategies and objectives for conglomerates.   • Business strategies • Strategic mission, strategies and objectives for individual strategic business units (SBUs)  • Functional and operating strategies • Tactical plans that operationalize strategies

  4. Large Conglomerates • Bombardier • General Electric • Onex Corporation • Siemens AG • Tata Group • Walt Disney Company The Tata Nano, by the Tata Group

  5. Corporate-Level Strategic Issues • Globalization / Market Management • Diversification / Portfolio Management • Growth Issues • Capital Allocation • Retrenchment / Restructuring

  6. Business Level Strategic Choices

  7. The External Value Chain Channel Buyer Supplier SBU Channel Buyer Supplier Channel Buyer Supplier Channel Buyer Supplier SBU Channel Buyer Supplier Channel Buyer Supplier Channel Buyer Supplier SBU Channel Buyer Supplier Channel Buyer Supplier The Value Chain of a Single Industry Firm Channel Buyer Supplier Firm Channel Buyer Supplier Channel Buyer Supplier The Value Chain of a Diversified Firm External value chains may provide synergies, cost internalisation and risk reduction benefits.

  8. The BCG Portfolio Matrix Earnings: High, stable and growing Strategy: Invest Earnings: Low, unstable but growing Strategy: Varies with expectations Low Industry Growth Rate High Earnings: High, Stable Strategy: Milk Earnings: Low, unstable, declining Strategy: Divest High Relative Market Share Low

  9. Microsoft on the BCG Portfolio Matrix Low Industry Growth Rate High High Relative Market Share Low

  10. Industry Attractiveness Test How attractive is each industry in the portfolio? How attractive is each industry within the portfolio relative to each other? How attractive is the entire portfolio?

  11. Industry Attractiveness Test

  12. Competitive Strength Test Relative market share Cost proximity Differentiation proximity Power of vertical integration Technological and innovative capacity Value chain advantages Distinctive competencies Relative profitability

  13. Competitive Strength Test

  14. Strategic Fit Test Cost-saving opportunities Intellectual property sharing opportunities Branding and goodwill Knowledge and technology transfer Enhanced corporate value chains Increase core or distinctive competencies and release the strategic potential energy of resources

  15. Strategic Fit Test

  16. Resource Fit Test Enhancing Porter’s five forces Value chain cost reduction and differentiation Capital under-funding and over-funding Resource allocation and utilization Product-service diversification Market development and expansion

  17. Resource Fit Test

  18. Ranking SBU Performance

  19. Resource Allocation • Resources need to be allocated based upon a principle or policy. Examples include: • Winners support everyone – The more profitable SBUs contribute more resources than they receive from corporate headquarters; the less successful SBUs receive more resources than they contribute. • Everyone supports the winners – The more profitable SBUs receive more resources than they contribute to corporate headquarters; the less successful SBUs receive fewer resources than they contribute.

  20. Prioritize Resource Allocation for SBUs Funding allocation based upon winners supporting everyone equally approach:

  21. Prioritize Resource Allocation for SBUs Funding allocation based upon everyone supports the winners approach:

  22. Upcoming Case Discussions • We have four upcoming case discussions: • Coral Divers Resort • Henry Birks and Sons • Imax • Loblaw’s • Be prepared - read the case prior to class and complete the assigned strategic analysis tasks. • Be able to demonstrate your preparedness - Come prepared with ideas and opinions and be willing to discuss and defend them. • Full participation – Everyone in class should be ready to answer questions, state opinions and further the class discussion.

  23. Questions? • Email: mfuller@stfx.ca • Internet: www.markfuller.ca • Office Tue 1:00 pm - 2:15 pmHours: Wed 1:00 pm - 2:15 pm Thu 9:30 am - 12:00 pmThu1:00 pm - 2:15 pm

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