Management 2/13

Chapter 6 Organizational Strategy

Strategic management
the set of decisions and actions used to formulate and implement strategies that will provide a good fit between and organization and its environment so as to achieve organizational goals
competitive advantage
providing greater value for customers than competitors can
core competence
something the organixation does especially well in comparison to its competitors
Developing synergy
1+1=2; having additional value through utilizing their resources
Creating value for customers
at the heart of strategy because customers are recipients of products
Corporate level strategy
what business are we in?
business l strategy
how do we compete?
Functional Level Strategy
how do we support the business-level strategy

Managers ask questions such as:
1. What changes and trends are occurring
2. Who are our costumers?
3. what products or services should we offer?
4. How can we offer these products or services more efficiently?

Purposes of Strategy

    Dealing with the environment
    Helping the organization attain its goals
    achieve a competitive advantage

to remain competitive

    core competence
    developing synergy
    Creating value for customers

    Three levels of strategy

  • Corporation (Corporate)
  • Consumer products unit/Biotechnology unit/Media unit(Business level)
  • Finance/R&D/Manufacturing/Marketing (Functional level strategy)

Process of strategic management
1. Evaluate Current mission, goals, strategies
2. scan and evaluate environment
-internal environment: core competence, synergy, value creation
-external environment: National, Global
3. Identify strategic factors
-internal: weakness and strengths
-external: opportunities, threats
4. Define New mission, goals and strategy
5. Formulate strategy (at corporate, business and functional)
6. Implement strategy

SWOT analysis
Strengths (internal)
Weaknesses (internal)
Opportunities (external)
Threats (external)


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