Organizational Strategy Its not always easy to know

Organizational Strategy

It’s not always easy to know when to change… • Organizations can fail to change their strategies because of ________________. In other words, the practices that have been successful in the past are hard to let go of.

Situational Analysis • • Distinctive Competence Core Capability WEAKNESESS OPPORTUNITIES External Internal STRENGTHS • • • Environmental Scanning Strategic Groups Shadow Strategy Task -force THREATS

What Bandwagons Bring • Competitive Advantage: In comparison to competitors, _________________________________________________ • Sustainable Competitive Advantage: A competitive advantage that other companies have tried_______ to duplicate

Beyond Competitive Advantage • In their study of popular management techniques, Staw & Epstein (2000) discussed the pressures pushing organizations to behave in certain ways.

• Legitimacy for the organization and the leader from both insiders and outsiders. • Who is going to notice its implementation? • Who else is doing it? • Who gets credit? • Decoupling: not doing what you say you’re going to do • Is the practice easy to implement? • How do we measure its effectiveness? • How do we know it has been implemented? • Early versus Late Adopters Beyond Competitive Advantage

Results • Companies were more admired, seen as being more innovative, and ___________________when they _________________. • The implementation or mention of ______________ was also related to CEO ___________.

And therefore… • The diversity of organizations is limited because there is pressure to resemble other organizations in the same environment. • The homogenization of organizations is called ________.

Corporate-Level Strategies • What business or businesses are we in or should we be in?

Case: Walt Disney Company • Question 1. With many of Disney’s brands and products clearly suffering, should Disney grow, stabilize, or retrench? • Question 2. Given the number of different entertainment areas that Disney has, what business is Disney really in and which should it be in? Specifically, do you consider Disney a content business that creates characters and stories and should be creating more characters and stories or is Disney a technology or distribution business that finds ways to buy content (e. g. , Pixar) and delivers that content to customers (via DVDs, cable channels, etc. )? • Question 3. How should Disney manage its different entertainment areas? Should there be one grand strategy that every division follows or should each division have a focused strategy for its own market and customers?

Question 1. Corporate-Level Strategies, Grand Strategy Growth: Focuses on _______ profits or market share Stability: Focuses on improving the _______ sales strategy Retrenchment: Focuses on ________very poor company performance Recovery: Actions ____ retrenchment to return to a growth strategy

Question 2. Corporate. Level Strategies, Portfolio Strategy Minimizes risk by diversifying investment Strategies ◦ Developing new businesses internally or looking for ______________ ◦ Reducing risk through ___________________ ◦ Routing investments from mature, slow-growth businesses into newer, faster-growing businesses

Question 2. Corporate. Level Strategies, Portfolio Strategy, BCG Matrix

High Risk Question 2. Corporate. Level Strategies, Portfolio Strategy, BCG Matrix Relationship Between Diversification and Risk Low Single Business Related Diversification Unrelated Diversification

Question 3. How should Disney manage its different entertainment areas? Should there be one grand strategy that every division follows or should each division have a focused strategy for its own market and customers?

Industry-Level Strategy • How should we complete in this industry?

Case: Pepsi & Coca-Cola • Question 1. Map the soft-drink industry using Porter’s five industry forces. • Question 2. What are the risks and opportunities of the strategies followed by Pepsi and those of Coca-Cola?

Porter’s Five Industry Forces

• Character of rivalry: Intensity of _________________in an industry • Threat of new entrants: The degree to which it’s _____ for new start-ups in an industry • Threat of substitutes: How easy customers can find ________ for an industry’s products or services • Bargaining power of suppliers: Influence that suppliers have on the ________ of parts, materials and services • Bargaining power of buyers: Influence that customers have on firm ______ Porter’s Five Industry Forces