1、 Business Strategy What if I say. You risk failures when you: Start business with the wrong reasons Do bad management Do bad marketing Dont consider competitors Lack of capital Spend too much Choose the wrong location Get too big too fast Dont have a website? Have a BAD BUSINESS PLAN! Strategies.Wha

2、t is Strategy?it is an in of decisions accross the different functions within an organizationto achieve its objectivesStrategy adalah seni dalam menformulasikan, mengimplementasikan dan mengevaluasiBerbagai keputusan lintas fungsional yang memungkinkan organisasi mencapai tujuannya.formulateimplemen

3、tevaluateEnviromental Scanning Gathering Information External: pportunities and hreats Societal Enviromental: General Forces Task Environment: Industry Analysis Internal: trengths and eaknesses Structure: Chain of Command Culture: Beliefs, expectations, values Resources: Assets, skills, competence,

4、knowledgeStrategy FormulatingDeveloping Long-range PlansStrategy ImplementationPutting Strategy into Evaluation and ControlMonitoring PerformanceReasons for existenceWhat results to accomplish by whenPlan to achieve the mission & objectivesBroad guidelines for decision makingActivities needed to

5、 accomplish a planActual resultsCost of programsSequence of steps needed to do the jobEconomicSocialCulturalDemographicEnvironmentalPoliticalLegalGovernmentalTechnologicalCompetitive trendsEventsTarget ScopeAdvantageLow CostProduct UniquenessBroad (Industry Wide)Cost Leadership StrategyDifferentiati

6、on StrategyNarrow (Market Segment)Focus Strategy (low cost)Focus Strategy (differentiation)Points: A firm positions itself by LEVERAGING its strengths Porter argued that a frims strengths ultimately fall into 2 of 2 headings: cost advantage and differentiation It is called “generic” because it is no

7、t firm or industry dependent, it is a strategy that everyone can apply with some measuresIf the primary determinant of a firms profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industryThis generic strategy calls

8、for being:Low cost producer in an industry for a given level of qualitySelling products either at average industry prices to earn a profit higher that that of rivals, or below the average industry prices to gain market shareIn price war, the firm can maintain some profitability while the competition

9、 suffers lossesAs industry matures and prices decline, firms that can produce more cheaply will remain profitable for a longer period of time Choices that determine costs: If competing firms are unable to lower their costs by a similar amount, the firm may be able to sustain a competitive advantage

10、based on cost leadershipEconomies of scaleAsset utilizationCapacity utilization pattern seasonal, cyclicalInterrelationshipsorder processing and distributionValue chain linkagesAdvertising & salesLogistics & operationsProduct featuresPerformanceMix & variety of productsService levelsSmal

11、l vs large buyersProcess technologyWage levelsHiring, training, motivationThis generic strategy calls for being:Development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competiti

12、onThe value added by the uniqueness of the product may allow the firm to charge a premium price for it as the firm hopes that the higher price will more than cover the extra costs incurred in offering the unique productBecause of the products unique attributes, if suppliers increase their prices, th

13、e firm may be able to pass along the costs to its customers who cannot find substitute product easily With low cost strategy, as technology improves, the competition may be able to leapfrog the production capabilities, thus eliminating the competitive advantage Even with differentiation, risk may in

14、clude imitation by competitors and changes in customer tastes In focused market, even imitation and changes may ocur in target segments, furthermore, broad market cost leader may adapt its product in order to compete directly Finally, other focusers may be able to carve out sub-segments that they ca

15、n serve even betterThreats of New EntrantsBargaining Power of SuppliersBargaining Power of BuyersThreat of Substitute Products or ServicesRivalry Among Existing CompetitorsIndustry ForcesGeneric StrategiesCost LeadershipDifferentiationFocusEntry BarriersAbility to cut price in retaliation deters pot

16、ential entrantsCustomer loyalty can discourage potential entrantsFocusing develops core competencies that can act as an entry barrierBuyer PowerAbility to offer lower price to powerful buyersLarge buyers have less power to negotiate because of few close alternativesLarge buyers have less power to ne

17、gotiate because of few alternativesSupplier PowerBetter insulated from powerful suppliersBetter able to pass on supplier price increase to customersSupplier have power because of low volumes, but a differentiation-focused firm is better to pass on supplier price increasesThreat of SubstituesCan use

18、low price to defend against substitutesCutomers become attached to differentiating attributes, reducing threats of substitutesSpecialized products & core competency protect against substituteRivalryBetter able to compete on priceBrand loyalty to keep customers from rivalsRivals cannot meet differentiation-focused customer needsDevelop Vision and Mission StatementsEstablish Long Term ObjectivesGenerate, Evaluate and Select StrategiesImplement Strategies VS IssuesMeasure and Evaluate PerformancePerf