Goals And Strategies

Business strategy Prof. GURU PRASAD FACULTY MEMBER INC GUNTUR [email protected]

Goals and Strategies For most of the organizations, profitability is the main goal.  Conceptually broadest and soundest definition of profitability is given by Revenues-Expenses X Revenues Revenues Investment 

 Maximizing

shareholder value

 Risk  Other high

goals

productivity, good organizational leadership, high morale, good organizational reputation, high organizational efficiency, profit maximization, organizational growth, organizational stability, value to local community, and service to public

The concept of strategy  Strategies

are plans, big plans, and important plans. They show the general direction in which the organization would achieve its goals. Strategies emerge from goals.

Strategy Formulation Internal Analysis

Environmental Analysis

Technology Know-how Manufacturing Knowhow Marketing know-how Distribution Know-how Logistics Know-how

Competitor Customer Supplier Regulatory Social/Political

Strengths and Weaknesses

Opportunities an Threats Identify opportunities

Identify core competencies

Fit the core competencies with external opportunities

Firm’s Strategy

Corporate Level Strategy  Single

industry firms  Related Diversified firms  Unrelated diversified firms

Business Unit Strategies High Market Growth Rate

“Star” Hold

“Question mark” Build

“Cash cow” Harvest

“Dog” Divest

Low Low

High Relative market share

GE&MC Kinsey Model High Industry Me attractiv diu eness m Low

Winners

Winners

Question Marks

Winners

Average Businesses

Losers

Profit Producers

Losers

Losers

Medium

Low

High

Business strength

Michael Porter’s Five Factor Analysis  Intensity

of rivalry among existing competitors  Bargaining power of customers  The bargaining power of suppliers  Threat from substitutes  The threat of new entry

Generic competitive advantages Relative

High

Product Differentiatio n Low

Cost-CumDifferentiation Advantage

Differentiation Advantage

Low Cost Advantage

Stuck-inThe-middle

Inferior

Superior