Chapter 7 Part 5

Formulating Functional-Level Strategies

Functional-Level Strategies • Plan of action to improve the ability of an organization’s departments to create value • It is concerned with the actions that managers of individual departments can take to an organization’s product • The more customers value a product, the more they are willing to pay for it

Two Ways to Add Value to an Organization’s Products • Keeping Prices lower than its competitor’s price • Finding ways to differentiate it from the products of other companies

Four goals to add value or lower the costs of creating value 1. Attain superior sufficiency 3. Attain superior quality 5. Attain superior innovation 7. Attain superior responsiveness to customers.

Planning and Implementing Strategy

Strategy Implementation Process 1. 2. 3. 4. 5.

Allocating responsibility for implementation to the appropriate individuals or groups Drafting detailed action plans that specify how a strategy is to be implemented Establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan Allocating appropriate resources to the responsible individuals or groups Holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals