Effective Functional Strategies Implementation Guide for Managers

1. Strategic Management in Action 5 Functional Strategies

2. Learning Objectives 1.Describe what happens after the SWOT analysis is completed. 2.Define functional strategies. 3.Discuss the various production-operations management strategies. 4.Describe the various marketing strategies. 5.Explain high-performance work activities and why they’re important. 6.Discuss the various human resource management strategies. 7.Describe the various research and development strategies. (continued on next slide)

3. Learning Objectives 8.Describe a cross-functional team. 9.Describe the types of information systems and their characteristics. 10.Describe the various financial-accounting strategies. 11.Explain how the functional strategies are implemented, evaluated, and changed. 12.Discuss the importance of coordinating the functional strategies with the other organizational strategies.

4. WHY ARE WE LOOKINGaT FUNCTIONAL STRATEGIES FIRST? • • • • Strategic management in action process What happens after the SWOT analysis?

5. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-1 Possible Production-Operations Management Strategies Production Process Strategies • • • Process focused Product focused Repetitive focused Capacity Strategies • • Size of facility Efficient use Location Strategies • Location selection

6. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-1 Possible Production-Operations Management Strategies (continued) Work Design Strategies • • • • • • • Job specialization Job enlargement Job enrichment Ergonomics Work methods Motivation-incentive systems Standards-output levels

7. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-1 Possible Production-Operations Management Strategies (continued) Layout Strategies • • • • • • Fixed position Process oriented Office Retail-service Warehouse Product oriented

8. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-1 Possible Production-Operations Management Strategies (continued) Production-Operations Management Strategies • • • • • • • • Aggregate planning techniques Just-in-time systems Purchasing management procedures Inventory management systems Materials requirement planning techniques Short-term scheduling techniques Project management procedures Maintenance management

9. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-1 Possible Production-Operations Management Strategies (continued) Current Production-Operations Strategies • • • • Integrated manufacturing Advanced manufacturing technology Total quality management Just-in-time inventory control

10. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-2 Possible Marketing Strategies Segmentation Strategies • • • • Geographic Demographic Psychographic Behavioral Target Market Selection Strategies • • • • • Single-segment concentration Selective specialization Product specialization Market specialization Full market coverage

11. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-2 Possible Marketing Strategies (continued) Differentiation Strategies • • • • Product itself Services Personnel Image Positioning Strategies • • • • • • • Attribute positioning Benefit positioning Use-application positioning User positioning Competitor positioning Product category positioning Quality-price positioning

12. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-2 Possible Marketing Strategies (continued) Marketing Mix Strategies • Product • New-product development • Product line • Brand • Packaging-labeling • Product life cycle decisions

13. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Introduction Growth Maturity Decline • Product • Life • Cycle • Figure 5-2 Sales Time

14. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-2 Possible Marketing Strategies (continued) Marketing Mix Strategies (continued) • Pricing • Markup pricing • Target-return pricing • Perceived-value pricing • Value pricing • Going-rate pricing • Sealed-bid pricing • Geographical pricing • Price discounts-allowances • Promotional pricing • Discriminatory pricing • Product mix pricing

15. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-2 Possible Marketing Strategies (continued) Marketing Mix Strategies (continued) • Promoting • Advertising • Billboards • Point-of purchase displays • Symbols and logos • Packaging inserts • Sales promotion • Public relations • Personal selling • Direct marketing

16. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-2 Possible Marketing Strategies (continued) Marketing Mix Strategies (continued) • Place • Channel choice • Market logistics • Inventory • Transportation modes-carriers Current Marketing Strategies • Relationship marketing • Financial • Social • Structural • Mass customization • Database marketing

17. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-4 Possible Human Resource Management Strategies Work Flows • • • • Organize for efficiency or innovation Organize for control or flexibility Use specialized or broad job categories Use detailed or loose work planning Staffing • • • • Use internal or external recruitment Who makes hiring decision What’s important in hiring Formal or informal approach

18. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-4 Possible Human Resource Management Strategies (continued) Employee Separations • • • • How to downsize Hiring freeze Support for terminated employees Preferential or non-preferential rehiring process Performance Appraisal • • • • Customized or uniform appraisals Appraisal for developmental or control purposes Multipurpose or focused appraisals Use multiple or one input

19. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-4 Possible Human Resource Management Strategies (continued) Training and Development • • • • Buy or develop skills Individual or team-based training On-the-job or external training Job-specific or generic training Compensation • • • • Fixed-pay or variable pay system Job-based or individual pay Seniority-based or performance-based system Centralize or decentralize pay decisions

20. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-4 Possible Human Resource Management Strategies (continued) Employee and Labor Relations • • • Top-down or bottom-up communications Interactions with labor unions Adversarial or cooperative relationship Employee Rights • • • Use discipline as control or learning Protect organization’s or employee’s rights Formal or informal ethics program Current HRM Strategies • • Employees as significant resource High-tech human resources approach

21. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-5 Possible Research and Development Strategies R&D Emphasis • • • Basic scientific research Product development Process development R&D Timing • • First mover Follower

22. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-6 First Mover Advantages-Disadvantages Advantages Disadvantages •• •• •• •• Reputation for being innovative and industry leader Cost and learning benefits resulting from moving along experience curve first Control over scarce assets preventing competitors from having access to them Opportunity to begin building customer relationships and customer loyalty Uncertain over exact direction technology and market will go Risk of competitors imitating innovations (free-rider effect) Financial and strategic risks High development costs

23. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-5 Possible Research and Development Strategies (continued) Product and Process Development • • Who? • Separate R&D department • Cross-functional team • Some variation How? • Formal or informal process • Use prototypes • Use product tests • Use design reviews • Use test markets • How to implement new design • How to evaluate success of new design

24. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-5 Possible Research and Development Strategies (continued) Current R&D Strategies • • Employee suggestion systems Risk taking and innovative culture

25. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-7 Possible Information Systems Strategies System Technology • Manual or computer based Types of Information Systems • • • • • • (TPS) Transaction processing system (OAS) Office automation system (KWS) Knowledge work system (MIS) Management information system (DSS) Decision support system (ESS) Executive support system

26. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-7 Possible Information Systems Strategies (continued) Current Information Systems Strategies • • • Electronic data sharing Customer call centers Internet and World Wide Web

27. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-9 Possible Financial-Accounting Strategies Evaluating Financial Performance • • How often How much analysis Financial Forecasting, Planning, and Budgeting • • • Percent of sales forecast Discretionary financial needed model Sustainable rate of growth model Financing Mix • • • Financial structure-capital structure Short-term versus long-term fund sources Permanent or long-term sources

28. WHAT ARE THE VARIOUS FUNCTIONAL STRATEGIES AND HOW ARE THEY IMPLEMENTED? Table 5-9 Possible Financial-Accounting Strategies (continued) Other Financial Management Decisions • • • • • • • • Capital budgeting choices Stock dividend policy Capital budgeting Cash flow management Working capital management and short-term financing Cash and marketable securities management Accounts receivable and inventory management Use term loans or leases Current Financial-Accounting Strategies • • • Controlling costs Cash flow management by all employees Valuing intangible assets

29. NOW WHAT? Implementing the various functional strategies Evaluating strategies and making changes Coordinating with other organizational strategies • • • • • •

30. Chapter Five ? Questions

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