UCS BA in Management

1. UCSBA in Management Organisational Strategy Session 9

2. Aims and Objectives • By the end of this session candidates should be able to : • Demonstrate understanding of strategic options and implications of choice

3. Bases of Strategic Choice R1 strat wk 9.ppt R10 parent matrix.ppt

4. Strategic Business Units A strategic business unit is a part of an organisation for which there is a distinct external market forgoods or services that is different from another SBU Elements of Business level strategy • Bases of competition - • Achieving competitive advantage – • Detailed choices

5. Bases of Competitive Advantage • Competitive strategy • The bases for achieving competitive advantage • The bases for providing best value • Porter’s 3 generic strategies • Overall Cost leadership • Differentiation • Focus • Avoiding middle ground • R2 strat wk 9.ppt

6. Activity • R3 strat wk 9 porter.doc

7. The Strategy ClockBowman and D’Aveni’s market facing strategies Provide customer needs better or more effectively than competitors R4 strat wk 9.ppt “No Frills” Strategy (routes 1+2) • Low price / Low perceived product/service benefits • Focus on price-sensitive market segment • Commodity-like products or services • High buyer power and/ or low switching costs • Small number of providers with similar market shares • Avoiding the major competitors • R5 strat wk 9.ppt

8. Hybrid Strategy (route 3) Simultaneously achieving differentiation and a price lower than competitors • Appropriate Circumstances - • Able to achieve greater volumes than competitors, • Clarity about activities on which differentiation can be built (core competences) • Entry strategy in market with established competitors

9. Differentiation Strategies (route 4) Offering benefits different from competitors Widely valued by buyers Better products/services at same or higher price Public sector - centre of excellence – attract higher funding • Success depends on • Identification of strategic customers and knowing what they value • Knowing the competitors • Narrow competitor base – focused differentiation • Wide competitor base – address bases of differentiation valued by customers

10. Focused Differentiation ( route 5) High perceived product/service benefits to selected market segment (niche) Premium products, heavily branded • Choice to be made between focused differentiation and broad differentiation if growth required ( new ventures) . • Difficult when the focus strategy is only part of an organisation’s overall strategy. • Possible conflict with stakeholder expectations • Market situation may change, reducing differences between segments

11. Failure Strategies ( routes 6,7,8) Do not provide perceived value-for-money in terms of product features, price or both • Increase price without increasing product/service benefit • Raise price without increasing benefits • Reduce benefits / increase price • Reduce benefits whilst maintaining price

12. Activity – Strategic clock • R7

13. Strategies of differentiation (Mintzberg) • Price - lower price. • Image • Support • Quality • Design different by design, unique features • Undifferentiation If enough room in market – copycats

14. Sustaining Competitive Advantage

15. Competitive Strategies in Hypercompetitive Conditions • Hypercompetitive • Competitive advantage is temporary • Competitive advantage relates to an organisation’s ability to change

16. Competitive Strategies in Hypercompetitive Conditions

17. Game Theory The inter-relationships between the competitive moves of a set of competitors • Strategist must anticipate competitor reactions • Core assumptions: • Competitor will behave rationally and try to win • Competitor is in an interdependent relationship with other competitors • Competitors are aware of the interdependencies and of the moves that competitors could take

18. Case study • R11