Chapter 6 Formulating Strategy

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SESSION 7
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Chapter 6Formulating Strategy
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Strategic Planning and Strategy

• Strategic Planning
• Strategy
• The basic means by which the company
• competes
• operates
• differentiates itself from its competitors
• Example

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Reasons for Going International

• Reactive or defensive
• Proactive or aggressive
• Threat of competition

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Strategic Formulation Process

• First phase is the planning phase company
  establishes mission and overall objective
• Second part is the implementation phase
  requires the establishment
• Structure
• Systems
• Processes

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FUNCTIONAL DEPARTMENTATION
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PRODUCT DEPARTMENTATION
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MATRIX DEPARTMENTATION
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GEOGRAPHIC DEPARTMENTATION
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Mission and Objective

• Mission of an organization is its overall raison
  detre or the function it performs in society
• Objectives flow from mission and guide the
  formulation of international strategy

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Environmental Assessment

• Gathering information and forecasting relevant
  trends
• Political instability
• Currency instability
• Nationalism
• International competition
• Environmental scanning

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Internal Analysis

• Strengths and weaknesses are evaluated to
  determine the key success factors

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Competitive Analysis

• Assess key success factors
• This stage is often called a SWOT (Strengths,
  Weaknesses, Opportunities, and Threats) analysis

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Approaches to World Markets

• Globalization refers to the establishment of
  worldwide operations standardized
  products/marketing
• Regionalization (or multi-local) is where local
  markets are linked together within a region

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Noam Chomsky is one of America's most prominent
political dissidents. A renowned professor of
linguistics at MIT, he has authored over 30
political books dissecting such issues as U.S.
interventionism in the developing world, the
political economy of human rights and the
propaganda role of corporate media
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Integrative Strategies

• Multinational Corporations
• Both vertical and horizontal
• Includes suppliers, productive facilities,
  marketing and distribution outlets, and
  contractors

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Using E-business for expansion

• Our research reveals that the Internet is
  driving
• global marketplace transformation and paradigm
  shift
• in how companies get things done, how they
• compete and how they serve their customers.
• - www.IBM.com

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Entry Strategy Alternatives
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• CASE (IF THERE IS TIME)
• VODAFONE IN 2004/2005 CHANGING COMPETITION
  ANDGLOBAL STRATEGIES
• Discussion Questions
• 1. What are your views of Vodafones position
  in the global mobile phone industry?
• Analyze and evaluate Vodafones market niche in
  global markets by charting SWOT (strengths,
  weaknesses, opportunities and threats) analysis.

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• 3. What specific global strategies does Vodafone
  need to undertake in the next three years to be
  one of the major key players in the wireless
  industry?
• Compare and contrast Vodafone and other major
  wireless companies from Europe, North America and
  Asia regarding their global strategies,
  expansion, and new products.