chap05 conti

8/8/2019 chap05 conti

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Ch. 5-1

Strategic ManagementConcepts & Cases

8thedition

Fred R. DavidChapter 5:

Looking at Strategies in

Action(Continuation)


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Ch. 5-2

Strategies in ActionStrategies in Action

Means of Achieving StrategiesMeans of Achieving Strategies

Joint Venture/Partnering

Merger/AcquisitionOutsourcing


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Ch. 5-3


DefinedDefined

Two or morecompanies form a

temporary partnershipor consortium for thepurpose of capitalizingsome opportunity

ExampleExample

Property giant Ayala Land Inc.has formed a joint venture with

ACC (El Nido resort) for thedevelopment of eco-friendlyresorts in Northern Palawan.

Joint Venture/Joint Venture/PartneringPartnering


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Ch. 5-4


To improveTo improvecommunicationscommunicationsand networkingand networking

To globalizeTo globalize

operationsoperations

To minimize riskTo minimize risk


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Ch. 5-5

Opportunity

Opportunity

Too complexToo complex uneconomicaluneconomical

Risky for a singleRisky for a single

firm to pursuefirm to pursuealonealone


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Ch. 5-6


RetrenchmentRetrenchment MarketMarketDevelopmentDevelopment


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Ch. 5-7


Common Problems that cause JV to failCommon Problems that cause JV to fail

Managers who must collaborate daily in operatingthe venture are not involved in forming or shaping

the venture. The venture may benefit the partnering companies

but may not benefit customers.

The venture may not be supported equally by bothpartners.

The venture may begin to compete more with one ofthe partners than the others.


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Ch. 5-8


Guidelines for Joint VentureGuidelines for Joint Venture

Combination of privately held and publicly held canbe synergistically combined

Domestic forms joint venture with foreign firm, canobtain local management to reduce certain risks

Distinctive competencies of two or more firms arecomplementary

Overwhelming resources and risks where project ispotentially very profitable (e.g., Alaska pipeline)

Two or more smaller firms have trouble competingwith larger firm

A need exists to introduce a new technology quickly


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Ch. 5-9


DefinedDefined

Two organizations ofabout equal size unite

to form one enterprise A large organization

purchases a smallerfirm, or vice versa

Philip Morris International

announced that it has merged

with Fortune Tobacco

Corporation to form a newcompany called PMFTC that

will control 90 percent of the

Philippines tobacco market

Merger/Merger/AcquisitionAcquisition


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Ch. 5-10


Takeover orTakeover orHostileHostileTakeoverTakeover

Friendly MergerFriendly Merger

Merger/Merger/AcquisitionAcquisition


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Ch. 5-11


Reasons why mergers and acquisitions failReasons why mergers and acquisitions fail

Integration difficulties

Inadequate evaluation of target

Large or extraordinary debt

Inability to achieve synergy

Too much diversification

Managers overly focused on acquisitions Difficult to integrate different organizational cultures

Reduced employee morale due to layoffs andrelocations


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Ch. 5-12


Reasons for mergers and acquisitionsReasons for mergers and acquisitions

To provide improved capacity utilization

To make better use of the existing sales force

To reduce managerial staff

To gain economies of scale

To smooth out seasonal trends in sales

To gain access to new suppliers, distributors,customers, products and creditors

To gain new technology

To reduce tax obligations


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Ch. 5-13


DefinedDefined

Benefits a firmmay achieve byentering a newmarket ordeveloping a newproduct or servicesprior to rival firms

First MoverFirst MoverAdvantageAdvantage

1. Build a firms imageand reputation

2. Prod uce costadvantages

3. Create strongly loyalcustomers

4. Make imitation orduplication by a rivalhard or unlikely


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Ch. 5-14


UnionBank of the Philippines launched the country's first true cyberaccount branded "E-On", patterned after the pure Internet accounts

in the United States that offer 24 x 7 banking from anywhere in theworld. E-On is an Internet-only bank account handled by a virtualInternet branch, with better yields and lower service fees than theregular bank account offered by the "brick-and-mortar" UnionBank

branches


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Ch. 5-15


DefinedDefined

Rapidly growing newbusiness that involves

companies taking overthe functionaloperations of otherfirms

ReasonsReasons(Functional Operations)(Functional Operations)

a.a. Less expensiveLess expensiveb.b. Allows the firm toAllows the firm to

focus on its corefocus on its corebusinessesbusinesses

c.c. Enables the firm toEnables the firm toprovide better servicesprovide better services

OutsourcingOutsourcing(BPO)(BPO)


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Allow the firm to align itself with the nest in worldsuppliers

Provides the firm flexibility

Allows the firm to concentrate on other internal valuechain activities

2001 Prentice Hall

Ch. 5-16


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Ch. 5-17


Strategic Management in Nonprofit andStrategic Management in Nonprofit andGovernmental OrganizationsGovernmental Organizations

Educational Institutions

Medical Organizations

Governmental Agencies and Departments


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Ch. 5-18

Educational InstitutionsEducational Institutions


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Ch. 5-19

Medical OrganizationsMedical Organizations


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Ch. 5-20

Government Agencies and DepartmentsGovernment Agencies and Departments


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Ch. 5-21


Strategic Management in Small FirmsStrategic Management in Small Firms

A major conclusion is that a lack of strategic managementknowledge is a serious obstacle for many small

business owners. Other problems encountered by thefirm are a lack sufficient capital to exploit externalopportunities and a day-to-day cognitive frame of

reference.


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Ch. 5-22

Strategic Management is more informalStrategic Management is more informal

Firm engaging in strategic management outperform thoseFirm engaging in strategic management outperform those

that do notthat do not


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Ch. 5-23

Thank You!Thank You!


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2001 Prentice Hall

Ch. 5-24


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Ch. 5-25


Sample product frompasttopresent(year)

Beeper- iphoneTypewriter-ipad

Telegram-emails/text/chat

Floppydisk- flash drive


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Ch. 5-26


DefinedDefined

Some industriesthat are changingso fast

ExampleExample

Telecommunications,medical,biotechnology,pharmacueticals,computer hardware,

software, industries astoys, phones, banking,defense, publishing &communication

Turbulent, HighTurbulent, High--Velocity MarketsVelocity Markets


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Ch. 5-27

Meeting the Challenge of High Velocity ChangeMeeting the Challenge of High Velocity Change

ReactingTo

Change

LeadingChange

AnticipatingChange

Introduce better products inresponse to new offerings of

rivals

Respond to unexpected

changes in buyer needs &

preferences

Adjust to new governmentpoliciesAnalyze the prospects formarket globalization

Research buyer needs,

preferences , and

expectations\

Monitor closely new

technological developmentsto predict future path

Defensiv

e

Offensiv

e

Pioneer new and bettertechnologies

Introduce innovative

products that open new

markets and spur the

creation of whole new

industries

React and respond

as needed

Defend and protect

the companys

positionPlan ahead for

expected futurechanges

Add/adapt

resources &

competitive

capabilities

Improve productline

Strengthen

distribution

Seize the offensiveBe the agent of

industry change; set

the pace

Influence the rules of

the game

Force rivals to follow


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This is the game that will test on howeach group will strategize to acquire

that certain spot.

The objective of the game is bring allthe blindfolded members in their

respective spot, color and word throughfollowing the instruction given by theteam leader.

2001 Prentice HallCh. 5-28


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Only the team leader can speak.He/She cant touch his/her group

member to guide him/her to the rightspot. Hence, the group is given afreedom to strategize.



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GAMEGAME

They will be grouped according to thereporting groups.

Each group ahs its own color ( red,green, yellow)

There will be one representative that

will serve as their team leader.

(chosen as volunteers of the group)



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They will be given a time to strategize.

The team leader will also given a timeto do an environmental scanning.

Once the blindfolded member enter theplace, the game will start. There will be

the go signal.



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There will be 3 blows. Each blow will begiven 5 min.

Each group will be given starting pointsof 100, 90,80 based on the rankingfrom last game.

If each member will sat at the rightplace, color and word additional 5pts, ifnot, deduction of 5pts.



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The winning group at each blow will begiven a power to exchange member

from losing group or stay at ease.

The one who gather the highest pointswill be the winner.


chap05 conti

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