《企业战略识》课件.ppt

1、Ch 5-1Chapter5 Strategic Generation,Evaluation,and SelectionHenan Agricultural University ZhengCh 5-2Chapter OutlineMichael Porters Generic StrategiesTypes of StrategiesIntegration StrategiesHenan Agricultural University ZhengCh 5-3Chapter Outline(contd)Intensive StrategiesDiversification Strategies

2、Defensive StrategiesHenan Agricultural University ZhengCh 5-4Corporate Level-Concentration strategynA firm directs its resources to the profitable growth of a single product,in a single market,with a single dominant technologynThe firm thoroughly develops and exploits its expertise in a delimited co

3、mpetitive arenaHenan Agricultural University ZhengCh 5-5Corporate Level-Concentration strategynConcentrated growth strategies lead to enhanced performance.qThe ability to assess market needs,knowledge of buyer behavior,customer price sensitivity and effectiveness of promotionqConcentrating in the pr

4、oduct-market segment it knows bestqGrowth that results from increased productivity,better coverage of its actual product-market segment,and more efficient use of its technologyHenan Agricultural University ZhengCh 5-6Risk and rewards of concentrated growthnUnder stable conditions,concentrated growth

5、 poses lower risk than any other grand strategy,but in a changing environment,a firm committed to concentrated growth faces high risksqa single product market makes a firm particularly vulnerable to changes in that segment qHigh opportunity costs that result from remaining in a specific market and i

6、gnoring other options that could employ the firms resources more profitableHenan Agricultural University ZhengCh 5-7Corporate Level Integration StrategiesVertical IntegrationStrategiesForward IntegrationBackwardIntegration HorizontalIntegration Henan Agricultural University ZhengCh 5-8Integration St

7、rategiesGain Control Over-DistributorsSuppliersCompetitorsHenan Agricultural University ZhengCh 5-9Forward Integration StrategiesGain Control Over-DistributorsRetailersgaining ownership or increased control over distributors or retailers Henan Agricultural University ZhengCh 5-10Forward Integration

8、StrategiesGuidelines-Current distributors expensive or unreliableAvailability of quality distributors limitedFirm competing in industry expected to grow markedlyFirm has both capital&HR to manage new business of distributionCurrent distributors have high profit marginsHenan Agricultural University Z

9、hengCh 5-11Backward Integration StrategiesOwnership or Control-Firms suppliersnBackward integration is a strategy of seeking ownership or increased control of a firms suppliers.This strategy can be especially appropriate when a firms current suppliers are unreliable,too costly,or cannot meet the fir

10、ms needs Henan Agricultural University ZhengCh 5-12Backward Integration StrategiesGuidelines-Current suppliers expensive or unreliableThe number of suppliers is small;The number of competitors is largeHigh growth in industry sectorFirm has both capital&HR to manage new businessStable prices(raw mate

11、rials&products)are importantCurrent suppliers have high profit marginsHenan Agricultural University ZhengCh 5-13Horizontal Integration StrategiesOwnership or Control-Firms competitorsnHorizontal integration refers to a strategy of seeking ownership of or increased control over a firms competitors.Th

12、e increased use of horizontal integration as a growth strategynMergers,acquisitions,and takeovers among competitors allow for increased economies of scale and enhanced transfer of resources and competencies Henan Agricultural University ZhengCh 5-14Horizontal Integration StrategiesGuidelines-Gain mo

13、nopolistic characteristics Competes in growing industryIncreased economies of scale major competitive advantagesFaltering due to lack of managerial expertise or need for particular resourceHenan Agricultural University ZhengCh 5-15Diversification StrategiesLess Popular-More difficult to manage diver

14、se business activitiesHowever-The greatest risk of being in a single industry is having all your eggs in one basketHenan Agricultural University ZhengCh 5-16nTypes of StrategiesnDiversificationStrategiesnConcentricDiversificationnConglomerateDiversificationnHorizontalDiversificationHenan Agricultura

15、l University ZhengCh 5-17nDiversification StrategiesnLess Popular-More difficult to manage diverse business activitiesHenan Agricultural University ZhengCh 5-18nConcentric Diversification StrategiesnAddition-New&related products/servicesDell computer pursed concentric diversification by manufacturin

16、g and marketing consumer electronics products such as flat-panel televisions and MP3 playersHenan Agricultural University ZhengCh 5-19nConcentric Diversification StrategiesnGuidelines-Compete in no/slow growth industryNew&related products increases sales of current productsNew&related products offer

17、ed at competitive pricesCurrent productsdecline stage of product life cycleStrong management teamHenan Agricultural University ZhengCh 5-20nHorizontal Diversification StrategiesnAddition-New&unrelated products/services for current customersNot as risky as conglomerate diversification because a firm

18、already should be familiar with its present customersHospitals create miniature malls by offering banks,bookstores,coffee shops,restaurants,and other retail stores within their buildingsHenan Agricultural University ZhengCh 5-21nHorizontal Diversification StrategiesnGuidelines-Adding new products/se

19、rvices would significantly increase revenuesHighly competitive and/or no-growth industry;low margins&returnsCurrent distribution channels can be usedNew products have counter cyclical sales patternsHenan Agricultural University ZhengCh 5-22nConglomerate Diversification StrategiesnAddition-New&unrela

20、ted products/servicesBattery company Energizer Holdings,acquired the Schick-Wilkinson Sword razor businessthe second largest shaving products company with 18%global market share in the wet-shaving businessHenan Agricultural University ZhengCh 5-23nConglomerate Diversification StrategiesnGuidelines-D

21、eclining annual sales&profitsCapital&managerial ability to compete in new industryFinancial synergy between acquired and acquiring firmsCurrent markets for present products-saturatedHenan Agricultural University ZhengCh 5-24Mergers&AcquisitionsnA merger in business or economics refers to the combina

22、tion of two companies into one larger company.Such actions are commonly voluntary and often involve stock swap.In many instances a merger resembles a takeovernAcquisitions:A corporate action in which a company buys most,if not all,of the target companys ownership stakes in order to assume control of

23、 the target firm.nA takeover is technically the same as an acquisition,but the term is often taken to mean that the approach of the larger acquiring company is unwelcome from the point of view of the smaller target companyHenan Agricultural University ZhengCh 5-25Mergers&AcquisitionsProvide improved

24、 capacity utilizationBetter use of existing sales forceReduce managerial staffGain economies of scaleSmooth out seasonal trends in salesGain new technologyAccess to new suppliers,distributors,customers,products,creditorsHenan Agricultural University ZhengCh 5-26Risks for M&AsnNot all M&As are effect

25、ive and successfulnAbout half of mergers produced negative returns to shareholders-by Business Week and the Wall street Journals studynToo-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business development-Warren Buffett n Henan Ag

26、ricultural University ZhengCh 5-27Reasons why Mergers and Acquisitions FailnIntegration difficultiesnInadequate evaluation of targetnLarge or extraordinary debtnInability to achieve synergynToo much diversificationnManagers overly focused on acquisitionnToo large an acquisitionHenan Agricultural Uni

27、versity ZhengCh 5-28Reasons why Mergers and Acquisitions FailnDifficult to integrate different organizational culturesnReduced employee moral due to layoffs and relocationsnM&As can yield great benefits,but thepriceandreasoning must be rightHenan Agricultural University ZhengCh 5-29CO-OPETITIONnGame

28、 theory:A branch of applied mathematics that provides a systematic way to develop strategies when one persons fortune depends on what other people do Henan Agricultural University ZhengCh 5-30CO-OPETITION nCO-OPETITION is a new way of thinking about business.Some people see business entirely as comp

29、etition.They think doing business is waging war and assume they cant win unless somebody else loses.Other people see business entirely as co-operation-teams and partnerships.But business is both co-operation and competition Henan Agricultural University ZhengCh 5-31CO-OPETITIONnStrategic Alliance is

30、 a formal relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations Henan Agricultural University ZhengCh 5-32CO-OPETITIONnPartners may provide the strategic alliance with resources such as products,dis

31、tribution channels,manufacturing capability,project funding,capital equipment,knowledge,expertise,or intellectual property.nThe alliance is a cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual

32、efforts.nThe alliance often involves technology transfer(access to knowledge and expertise)shared expenses and shared risk.Henan Agricultural University ZhengCh 5-33CO-OPETITIONnEquity strategic alliance is an alliance in which two or more firms own different percentages of the company they have for

33、med by combining some of their resources and capabilities to create a competitive advantage.nNonequity strategic alliance is an alliance in which two or more firms develop a contractual-relationship to share some of their unique resources and capabilities to create a competitive advantage Henan Agri

34、cultural University ZhengCh 5-34CO-OPETITIONnJoint venture is a strategic alliance in which two or more firms create a legally independent company to share some of their resources and capabilities to develop a competitive advantage nIncreasingly globalization in many industry may require greater con

35、sideration of the joint venture approach,if the historical national firms are to remain viable,Joint ownership has become increasingly appealing for domestic firms to join foreign firms Henan Agricultural University ZhengCh 5-35CO-OPETITIONnJoint ventures present opportunities with risksqLimiting di

36、scretion,control,and profit potential of partnersHenan Agricultural University ZhengCh 5-36Corporate level-StrategiesDefensiveStrategiesRetrenchmentDivestitureLiquidationHenan Agricultural University ZhengCh 5-37Retrenchment StrategiesRegrouping-Cost&asset reduction to reverse declining sales&profit

37、Henan Agricultural University ZhengCh 5-38Divestiture StrategiesSelling a division or part of an organizationHenan Agricultural University ZhengCh 5-39Liquidation StrategiesCompanys assets,in parts,for their tangible worthSellingHenan Agricultural University ZhengCh 5-40Liquidation StrategiesGuideli

38、nes-Retrenchment&divestiture failedOnly alternative is bankruptcyMinimize stockholder loss by selling firms assetsHenan Agricultural University ZhengCh 5-41Generic StrategiesnAccording to Michael Porter,strategies allow organizations to gain competitive advantage from three different bases:cost lead

39、ership,differentiation,and focus.So he calls these bases generic strategyHenan Agricultural University ZhengCh 5-42Generic StrategiesStuck in the middleHenan Agricultural University ZhengCh 5-43Cost leadershipnCost leadership:being the lowest cost producer of a product or service to earn above avera

40、ge profitsHenan Agricultural University ZhengCh 5-44Cost LeadershipnWays of ensuring total costs across value chain are lower than competitors total costsqPerform value chain activities more efficiently than rivals and control factors that drive costs1.Revamp the firms overall value chain to elimina

41、te or bypass some cost-producing activitiesHenan Agricultural University ZhengCh 5-45Cost LeadershipnThe way to pursue cost leadership successfullyqcopying rather than originating designsqusing cheaper materials and other resourcesqproducing products with no“frills”qreducing labour costs and increas

42、ing labour productivityqachieving economies of scale qhigh volume sales by advertising and promotion,investment in modern technologyqusing high volume purchasing to obtain discounts for bulk buying qlocating activities where costs are low or government help is availableqobtaining learning curve econ

43、omiesHenan Agricultural University ZhengCh 5-46Cost LeadershipnCan be especially effective when:qThe market is composed of many price-sensitive buyers and the price competition among rivals is vigorousqRivals products are identical and supplies are readily availableqThere are few ways to achieve dif

44、ferentiationqMost buyers use the product in the same wayqBuyers have low switching costsqBuyers are large and have significant power1.Industry newcomers use low prices to attract buyersnEHenan Agricultural University ZhengCh 5-47DifferentiationnCreating a customer perception that a product or servic

45、e is superior so that a premium price can be chargedHenan Agricultural University ZhengCh 5-48DifferentiationnThe way to pursue differentiation successfullyqcreating products which are superior to competitors by virtue of design,technology,performance etcqoffering superior after sales serviceqsuperi

46、or distribution channelsqcreating a strong brand name through design,innovation,advertising,and so onqby product packagingHenan Agricultural University ZhengCh 5-49DifferentiationnCan be especially effective when:qThere are many ways to differentiate and many buyers,who are price-insensitive perceiv

47、e,and consider the value of the differencesqBuyer needs and uses are diverseqFew rival firms are following a similar differentiation approach1.Technology change is fast paced and competition revolves around evolving product featuresHenan Agricultural University ZhengCh 5-50Focused StrategiesnConcern

48、ed with the scope of the strategy，use differentiation or cost leadership in narrow scope segment or nicheHenan Agricultural University ZhengCh 5-51Focused Strategy nCan be especially effective when:qThe target market niche is large,profitable,and growingqIndustry leaders do not consider the niche cr

49、ucialqIndustry leaders consider the niche too costly or difficult to meetqThe industry has many different niches and segments1.Few,if any,other rivals are attempting to specialize in the same target segmentnEHenan Agricultural University ZhengCh 5-52nA firm that engages in each generic strategy but

50、fails to achieve any of them is“stuck in the middle”.It possesses no competitive advantagenA firm that is stuck in the middle will be much less profitable than rivals achieving one of the generic strategiesnAchieving cost leadership and differentiation are usually inconsistent,differentiation is usu