Business Strategies 2
Terms
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- Strategic Planning: What is CORE COMPETENCY?
- the activities that the company has expertise in and performing very well, WHAT ARE YOU BEST AT?
- Core competencies of Walmart, Target, IBM, Pappas
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-Distribution, low prices, supply chain managment (retail dictates manufacturer)
-good merchandiser
-tech comp svcs & tradtl consulting
-food,service,location (big cities) - Strategic Planning: What are strategic alliances?
- a win-win strategy where all parties benefit from the relationship
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Strategic alliances of:
UH Bauer & _____
Toyota & _______
Busch beer & ______ -
-Methodist hospital, New MBA taught at hospital
-Nissan, share R&D costs
-Tsingtao beer, distribution benefits of huge Chinese market - Strategic Planning: What are noncore strategies?
- Outsourcing - letting an outside organization perform some company function, Offshoring - moving your entire plant overseas, INSOURCING - letting your transportation expert repair your warranty defects
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Sustainable Adv: LOCATION
EX. - location can be used as a sustainable advantage when competitors cannot match your location, Specs liquor Store, UH Bookstore, Flying Y Truck Stops
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Strategic Options: Contrasting Business Models
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Traditional Business model-highly structured, many levels of management, rules are very important, focus on command & control
Entrepreneurial model-highly flexible, few levels of management, rules are guideline, focus on recognition & response -
Strategic Options: Strategic Decision Choices
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Optimizing: or maximizing is where you are trying to get the one correct answer, MC=MR
Satisficing: trying to get a satisfactory(best) answer, given the existing alternatives in your analysis -
Strategic Options: SWOT ANALYSIS
Controllable vs Uncontrollable -
Controllable by management: strengths of the business, weaknesses that can directly control
Uncontrollable by management: Opportunities & Threats - Strategic Options: Dynamic Information Changes
- Internet, email, web, scanning data, RFID data, search engines, cell phones
- Future Business Careers: Needed?
- better integrate your business analysis & creative skills, need networking & group dynamic skills, need oral & written comm skills, will be working w/ people from multiple cultures
- Threatened Business Models?
- Airlines - Hub&Spoke, Department Stores - lots of services, telephone companies - physical phone lines, brokerage firms - execute orders, financial advice
- Strategic Options: Changing Business models?
- Southwest Airlines, Toyota, Dell, Starbucks
- Southwest Airline Model
- Use one type of plane, avoid hub airports for secondary airports, concentrate on short-haul flights, use low fare prices, no frill service, fast turnaround time for planes
- Toyota Business Model
- faster turnaround for new cars, outsource manufacturing & assembly to low cost countries, close high cost manufacturing plants, revolutionize traditional inventory & supply chain systems
- Dell Business Model
- assembly firm, minimal R&D, no intermediaries, minimize inventory, low operating costs
- Starbucks Business Model
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-6500 company years since 2yrago
-kiosks within retail stores
- sysco-wholesale distributor
-kraft - distributor of coffee in supermarkets
- breyer - distributer of starbucks ice cream
-pepsi cola- distributor of frappuccino - Global Market Driven strategies (4)
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1 push for healthy competition
2 meaningful incentives
3 rules for the system
4 move to common standards - Push for healthy competition
- Japanese retailers with protection from intl competitors, moscow roadblocks for IkEa, rewarding friends in Thailand and Indonesia, China breaks up a state power monopoly into 7 companies to promote more competition
- Meaningful Incentives
- cut bureaucratic cost of starting a new business in Mexico, change the incentives of US Ceo's to inflate short term profits which will maximize the value of their stock options, cheaper labor costs in India and the Phillipines gives businesses incentives to move call center from Houston
- Rules for the system
- Russia-Mafia, Indonesia-family licenses, japan-banking off book losses, United States-Enron stretching CPA audits
- Move to Common Standards
- English is the business language of the world, Common metric system measurements except for US, Euro monetary system, DVD formats, global accounting standards
- Resistance to Standardization
- Microsoft vs Linux, HP Printer Cartridges vs refill cartridges, apple mac imac g% vs overseas grey markets
- Major marketing strategies
- Intensive growth within the organization, concentrated niche (one target segment), multiple niches (more than one target market), market positioning, multiple revenue streams
- Intensive growth
- Market penetration-existing products in existing markets, product development-new products in existing markets, market development-existing products in new markets
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Market penetration
EX -
use more of the product, cross-sell products/services,take competitor's business
Green Ketchup, Arm& Hammer baking soda, Prestone antifreeze - Product development
- new improved products, new yearly products, new technical products, modified products
- market development
- expand from Houston to Dallas, expand from Houston to all major US cities, expand overseas, develop new market for existing products
- Intensive growth of blue bell ice cream
- market penetration-increasing share of market for existing prducts in Houston, produc devel- introducing new line of diet bluebell ice cream, mkt devel-entering OK and KS w/ existing product
- Concentrated Niche
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marketing to one market segment rather than the whole market for a product/service
Cliff notes, Jolt soda, Long haul blue jeans, Mayo clinic, curves - Multiple niches
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marketing to more than one market segment rather than the whole market for a product/service
Proctor&gamble, anheuser-busch, GM, Kraft foods -
Market positioning
EX -
the perception that a potential customer has about your product versus your competitor's product
Lite beer, Gerber, HEB, Barbie doll - Gerber's positioning statement
- "Babies are our business"
- Multiple Revenue streams
- Sterling mccall-buy the entire product line, wellsfargo, CPAs audit consult taxes, UH football, Harry Potter
- Sterling McCall Toyota MRS
- new, used autos, service & finance contracts, service dept, leasing dept, rental cars